Online law firms have been disrupting the legal sector for some time now, opening up the possibility of fast, cost effective access to legal support to millions of Americans. However, regulatory issues have thus far somewhat curtailed the industries growth but signs are afoot that this may be about to change.
Practising law is kind of like entering the magic circle. Even though the robes and gowns have gone (at least here in the US), the strange words and arcane incantations remain and a good lawyer can, simply by utterfing a few carefully chosen words, make all (well some) of your problems disappear as if by magic.
Yes, the law is indeed confusing and mysterious for us mere muggle and therefore it is no surprise that we leave it to the professionals, trusting our lives in our lawyers hands and happily paying them their hefty retainers.
But what if I told you that the law doesn’t always have to be like that? What if I even dared to suggest that the image of the law as something of a “dark art” is an image that is carefully cultivated by the industry for its own benefit? Well, what I am telling you is that the rise of the Online Legal sector is making the law more accessible than ever.
Law Meets Internet
The tech revolution has touched pretty much every aspect of our lives and made pretty much everything a hell of a whole lot more convenient. No more standing in line at your bank when you can manage your money from the comfort of your smartphone. And what was once obscure hard to find knowledge (be it music production, stock trading or egg cracking) is now accessible to everybody via YouTube and e-tutorials for free.
Yet for the longest time there was little sign of an online law revolution. It was just accepted that legal matters were things you had to do in person. But, the reality is that quite a lot of what a lawyer does isn’t all that complex. For example, making wills, filing affidavits and even property conveyancing are all largely tick-box/form filling exercises.
The genesis of online law firms was around the late 2000’s when a number of firms began offering simple legal documents like Wills as downloadable forms. Since then the sector has grown and there are a number of startups and established players offering thousands of legal documents online ranging from tenancy agreements to company incorporation instructions. What would once have cost hundreds or thousands of dollars, can now be done for $50.
As we enter the 2020’s, the online law sector is progressing beyond documents too. There are now tech-law companies using AI and algorithmical software to research case law. In a true feat of innovation Rocket Lawyer recently announced the launch of an app that allows users to upload evidence of abuses of authority by law enforcement officers!
However, whereas the equally disruptive fin-tech sector is now readying itself to take on the big banks, the online law sector is still kind of struggling to square up. One reason is that a lot of Americans are still uneasy about trusting an online lawyer and believe that some things are just better best handled face to face.
However, another reason is regulation and red tape. A number of states still forbid the ownership of legal firms and business practising law by non-lawyers. This means that in some parts of the US, only fully qualified, licensed law practitioners are allowed to own an online legal business. Of course, lawyers are not (usually) tech entrepreneurs and tech entrepreneurs are (usually) not lawyers which made this impossibly problematic in a lot of cases.
To give this arcane regulation some context, even the UK (one of the most concerbative legal cultures on earth) amended its Solicitors Regulation Act way back in 2007 to allow non-lawyers to own or co-own law firms. Therefore it is quite anomalous that so many states are still resisting the pace of the change.
But this is changing. The states of both Arizona and Utah are both trialling non-lawyer ownership of legal firms. Utah began permitting
Late last summer, the state of Utah agreed to allow the legal tech firm Rocket Lawyer to begin operations in the state on a trial, “sandbox” basis. It is anticipated that success here will pave the way for the changes to nationwide deregulation. Indeed, last August Arizona even removed its legal ethics rule 5.4, which had previously prevented nonlawyers from having any kind of economic interest in a law firm or any other legal services provider. This change was accompanied by a number of other regulatory tweaks and changes all designed to help make access to lawyers easier and modernise the archaic sector.
This really has been a case of industry leading the way, and Rocket Lawyer in particular worked very hard to persuade state lawmakers to give them a chance to prove the efficacy of their sector. Launched in 2008, Rocket Lawyer is one of the biggest and most innovative legal tech firms in the world today and was voted number one in the top 10 will makers list by OnlineWillMakers.com amongst other glittering achievements.
Rocket Lawyer has long been established in the eastern state of Pennsylvania and offers its full raft of online documents to state residents. However, Pennsylvania remains conservative in its regulatory framework for now and does not allow non-lawyer owned firms in. Still, rumours abound around the water cooler, that this may change soon.
The Final Judgement
Investment in the legal tech sector is at an all time high and private equity firms injected a staggering $1.8 billion into startups during the first half of 2021. That tells us that the big money (which is often the smart money) is betting big that the Utah and Arizona sandbox programmes will be a resounding success and will be rolled out from New York to California before too long.