Florida makes moves towards ABS licencing

On the 28th of June 2021, the Florida State Supreme Court’s Special Committee to Improve the Delivery of Legal Services (formulated by the Bar Board of Governors in November 2019), released their final report on changes in the legal sector.  The report is calling for further study on allowing some nonlawyers to have an ownership interest in law firms and fee-splitting with non-lawyer entities, as well as calling for the creation of a legal “lab” to allow testing of innovative ways of providing legal services.

Former Bar President John Stewart, chair of the special committee, said the report is a recognition that the legal marketplace is changing and an attempt to allow the legal profession to help design and control those changes, which it now is largely unable to do. Saying: “This committee and this report is part of the profession and the Bar being the architect of the changes that are happening in the legal profession and the legal services marketplace, before outside forces dictate changes we may not want. We don’t think change should happen for the sake of change or because people think there should be change. We think change should happen because of data.”

The committees work focused on the risk of the development of an unregulated market where bad actors can take advantage of the public. This led to calls for the creation of a sandbox, whereby services can be tested to better understand public protection goals. Members of the committee also discussed the impact of reforms on low-income consumers, suggesting that regulatory reform could improve access to justice within the state.

The only firm recommendation of the report was the formulation of the legal lab sandbox project, the lab, titled the Law Practice Innovation Lab Program, under the committee’s conceptual outline would be overseen by a Supreme Court commission and would run for at least three years. It would be based on a similar program in Utah. Ontario, British Columbia, and the United Kingdom.

The report included calls for further study into a range of regulatory reforms including lawyer advertising; referral fees; fee-splitting; entity regulation; regulation of online service providers; and regulation of nonlawyer providers of limited legal services including paralegals and other limited licence professionals.

Read more about the report and access the full report here.

Law Society of Ontario approves new regulatory sandbox

On April 22, 2021, the Convocation of the Law Society of Ontario approved the Technology Task Force’s “Regulatory Sandbox for Innovative Technological Legal Services” Report.  As a result, a five-year pilot project will be launched in Q4 of 2021. In the pilot approved participants will be granted express permission by the Law Society to serve consumers using innovative technological legal services (ITLS). The participants will be required to comply with specialised requirements for risk-based monitoring and reporting.

The Technology Task Force is composed of lawyer, paralegal and publicly-appointed lay benchers, and has the mandate to consider the role of technology in the delivery of legal services, as well as to examine the role of the Law Society as a regulator in a changing, tech-enabled environment, and explore how the Law Society can encourage innovation.

The sandbox project has been designed to help fulfil these responsibilities by:

  • Facilitating access to justice: eliminating regulatory uncertainty around ITLS, and removing barriers to the development of ITLS, allowing products to be developed that can address unmet legal need.
  • Protecting the public: The pilot project provides a mechanism to ensure ITLS consumers receive competent and ethical services and have access to recourse, as well as the information to make informed choices about the providers of the services.
  • Informing future regulatory development: The pilot project will provide evidence to inform longer-term decision-making about ITLS regulation.

Read the full report about the pilot here, or read more on the Law Society’s website.

 

California Bar moves towards regulatory sandbox

The Board of Trustees of the State Bar of California took a 9-2 decision on the 14th May 2020 to form a working group to look into forming a regulatory sandbox in which innovative legal service providers would be subject to fewer regulations. This could include limiting unauthorised practice of law rules, as well as removing limits on fee sharing and partnership between lawyers and non-lawyers.

The decision is a major step forward in a potential move towards innovative business structures in California, following a vote to delay the decision by the Board in March, with board members saying they needed more time to consider the proposals.

Following the board meeting, which was held over Zoom, Chairman Alan Steinbrecher (who as Chairman did not vote) said: “This is a significant step and I think it will lead to an exciting future,”.

For more information see: