“Apps” and the Waning of the Solicitor-Client Relationship

“Apps’” (as used herein, means the application of software to create electronic systems, programs, processes, devices, etc., in relation to legal services) are being developed in many locations. They appear to be an important part of the Law Society of Upper Canada’s (LSUC’s) response to the unaffordable legal services problem (“the problem”). It exists because the method of producing legal services dictates that there can be no economies-of-scale in the practice of law, i.e., the cost of production cannot be lowered by greater volumes of production. To gain the necessary economies of scale, support services methods are used in all other forms of the manufacture of goods and services. An example is legal research as done in the law office, in contrast to the way legal research can be done in a highly specialized, high volume support service such as LAO LAW; see: Access to Justice—Unaffordable Legal Services’ Concepts and Solutions” (sections 8-10 (pp. 41-81) (SSRN, August, 2017, pdf. download).

And, there is this authoritative caution about apps:

… . Notwithstanding growing excitement about the potential presented by legal apps, there has been no comprehensive study regarding the range of such apps currently available to Canadians, nor has there been a concrete exploration of what these apps purport to do and whether they have the capacity to actually improve justice. [footnote omitted]

All responses by law societies to the problem are based upon preserving these factors as unchanging:

1. law society management structure—management by part-time managers (“benchers”) who have only a lawyer’s expertise to apply to the problem, i.e., like a government without a civil service, which therefore cannot govern effectively;

2. the method by which legal services are produced;

3. benchers being able to assign top priority to being good lawyers rather than being good benchers—the nature of the major problems of law society means that it is no longer possible to be both, e.g., the unaffordable legal services problem obviously being beyond their abilities; see: “No Longer Is It Possible to Be Both a Good Lawyer and a Good Bencher” Slaw, May 29, 2017;

As a result, it is not possible for law societies to be able to solve the problem, unless apps can somehow bring sufficiently large economies-of-scale to the production of legal services. To date, they show no such ability. And, reliance upon apps raises these issues:

1. By what model will apps be incorporated into the practice of law— to facilitate the creation and use of external support services, or merely to enhance cost-efficiency within the law office? For example, the support services methods used by the medical profession and automobile manufacturers provide the necessary economies-of-scale. The entire medical services infrastructure is made up of mutually interdependent support services, like a honeycomb of interrelated cells. There are specialized doctors, technicians, technical tests, drugs, and hospital services. There are no “generalists,” including the family doctor. As a result, each cell is highly specialized to produce the high production volumes that enable the highest degree of competence in regard to every factor of production and therefore the greatest economies-of-scale. As a result, no doctor’s office provides all treatments and all remedies for all patients as does a lawyer’s office for all clients. The innovation never stops. In the legal profession it never started.

And the many “special parts companies” of the “parts industry” serve the same purpose for the automobile manufacturers. In the legal profession, there are no such support services. And so it is that there are no economies-of-scale in the production of legal services. So the problem exists and persists.

2. Are law societies promoting apps because of a mistaken belief that they can end the problem, or merely to enhance the appearance of law societies’ adequately responding to the problem? Making law offices more cost-efficient by the use of apps will not end the problem. Increasing a producer’s own internal cost-efficiency cannot by itself produce sufficiently large economies-of-scale to make a product or service affordable. That is why support services methods of production are used to produce almost everything, everywhere. A law office’s cost-efficiency is not enough to produce affordable legal advice services (as distinguished from routine legal services).

3. In regard to law society prosecutions for the unauthorized practice of law (UPL), the great diversity of sources and kinds of apps blurs the line between what is legal information, and what is legal advice, and between which apps can deliver such legal assistance directly to consumers, and which require their use by lawyers. Some tasks that have traditionally been performed by lawyers can now more efficiently and perhaps more effectively be executed by technological means. And technology is replacing the traditional lawyer in some areas where routine or predictable matters can be resolved without recourse to a lawyer. If these differences cannot be effectively policed by UPL prosecutions, lawyers markets will be unjustifiably eroded and reduced by apps, particularly so the market of the general practitioner.

4. If apps cannot render legal services affordable, law societies will not be able to prevent, by way of UPL prosecutions, the commercial producers of legal services (LegalZoom, RocketLawyer, and LegalX, etc.) from successfully targeting the market of the general practitioner, as has been proved by their great success in the U.S. There, such commercial producers are bringing relief to the victims of the problem which law firms cannot do nearly as economically, and law societies won’t try to do. Such commercial producers very quickly gained a very large volume of customers, such that UPL prosecutions may be judged as attempting to remove a market competitor rather than protecting the public from incompetently provided legal services. The commercial producers do use lawyers, but in a much reduced, “last check of the product” way, and to answer customers’ questions “free,” such that almost all of the work is done by non-lawyers. They are large, well financed organizations, using sophisticated advertising. LegalZoom’s advertising is everywhere (a webpage describing the weather in Machu Picchu, Peru).

5. Whether law society prosecutions will thus be hindered is made even more complex by the alternative business structures (ABSs) issue, i.e., law firms allowed to become investment properties. As a first step, the legalizing of various “non-profit and charity ABSs” was approved in principle at LSUC’s September meeting. See LSUC’s Alternative Business Structures webpage. Because law societies are not trying to solve the problem, a strong argument can be made that they shouldn’t be allowed to prevent other organizations from trying to bring some relief to the victims of the problem. Therefore, to allow an “ABS exception from UPL prosecution,” can force a similar exception to be created for the commercial producers; see: Alternative Business Structures’ “Charity Step” to Ending the General Practitioner (revised version, SSRN, October 3, 2017, pdf. download).

6. If law societies cannot effectively regulate the use and development of those apps upon which lawyers become dependent, the resulting dependence upon many commercial and institutional producers of apps will weaken the independence of the legal profession and law societies. For example, one of the effects of the creation of CanLII was to limit dependence upon the high priced publications of the law book companies. (See: “About CanLII”). In 2010, CanLII moved from a representative board of directors comprised of appointees from each of the provincial and territorial law societies, to a skills-based, expert board that would assume responsibility for determining CanLII’s strategic direction. In order to cope with problems like the problem of unaffordable legal services, law society management structure needs a similar transition.

7. What all apps do not in themselves provide, is the solicitor-client relationship with its many benefits, which benefits cannot be provided by the buyer-seller relationship of transactions involving apps when used without lawyers. But if legal services are not affordable, law societies cannot advertise and otherwise promote the important advantages of using lawyers because their services remain unaffordable.

All of beneficial uses of technology should be made available to the production of legal services. But that development should also be occurring within the context of the law office, in the way that it does within the doctor’s office and hospitals, and under the close regulation of law societies. Instead, lawyers and law societies are standing passively on the sidelines watching a parade of apps flow by. But in fairness, one must acknowledge that LSUC’s TAG is part of the parade, i.e., young lawyers and law students commendably doing TAG’s “technology and access to justice” work, but which cannot possibly compensate their very expensive legal education with more than a severely financially depressed career. In this way, LSUC embellishes its appearance of an adequate response to the problem, but those young people do not gain what only a law society-sponsored solution to the problem can give them, which is a financially adequate and stable career, with a high probability of an adequate return on the large investment necessary to obtain a law degree and “call to the bar.”

Not only have law societies not attempted to solve the problem, they haven’t attempted to learn its cause. Therefore we see for example, LSUC embracing apps, with no assessment as to: (1) their relation to, and impact upon solving the problem; (2) their ability to bring about the economies-of-scale so badly needed in the production of legal services; (3) their ability to serve and sustain the continued existence of the general practitioner; (4) the prevalence (frequency and availability) of the solicitor-client relationship among all of the many and fast-moving developments in the provision of legal services; and, (5) the issues set out above.

If the legal profession is to retain its dominate position in society in the provision of legal services, support services methods of production as well as legal apps must be made available to general practitioners. They constitute well over half the lawyer-members of a law society. When they are gone, lawyers and law societies, courts and judges, will lose presence, purpose, and influence in the minds of the majority of society. The civil courts will be used to decide the disputes of institutions and the rich.

The unyielding, inflexible preservation of law society management, being that of amateurs with part-time employment as benchers, along with the present method by which legal services are provided, without proven justification, fixes in place the lack of expertise in dealing with major law society problems such as the unaffordable legal services problem. Therefore, as members of law societies, we must be more observant of, and demanding of law society management. And therefore, bencher elections must correspondingly and quickly evolve beyond being mere popularity contests based only upon name-recognition and candidate-endorsements. They produce a populist style of management without strong leadership. The concept of a bencher and law society “institutional culture” has not evolved beyond its 19th century origins. There being no pressure to do so, there has been no innovation that can do so.

In spite of the lack of a comprehensive study in Canada to determine: (1) the full range of apps available; (2) what they purport to do; and, (3) whether they can actually improve access to justice, there is a substantial population of law society, commercial, academic, and independent, keen advocates of apps as being the way to the solution to the problem, including displacing some lawyers. That’s throwing apps at a problem without knowing its cause. And according to the following published announcement, money is being provided by the Ontario Government to do so—the first four paragraphs of which announcement state:

Toronto, ON – September 27, 2017 – Last night, the Legal Innovation Zone (LIZ) at Ryerson University, in partnership with the Ministry of the Attorney General (MAG), announced the Ontario AI Legal Challenge, which includes $80,000 in seed funding to advance the use of artificial intelligence in technology solutions for the consumers of legal services.

“I believe artificial intelligence has the potential to revolutionize the justice system and simplify difficult processes,” said Attorney General Yasir Naqvi. “I am proud that our government is supporting this great initiative that will open doors for people who would otherwise not have access to justice.”

Applications for the Challenge are due Friday November 10 and finalists will be chosen to pitch to a panel of judges the week of November 20 at the LIZ. Six of these teams will be awarded working space at the LIZ for four months, including access to mentors, advisors and other resources and will compete for $80,000 in seed funding.

“Ontario has long been recognized as a leader and pioneer when it comes to AI and more recently has been playing a similar leadership role in legal technology” said Chris Bentley, Managing Director of the Legal Innovation Zone. “The LIZ along with MAG are now looking to bridge the gap between those two sectors and drive innovations in the delivery and access to legal services to benefit consumers.”

To learn more about the nature and scope of the LIZ’s activities, see its “Startups,” and “Initiatives.”

Lacking is emphasis given to the importance of one human being’s helping another with the devotion that is unique to the solicitor-client relationship in the provision of legal services. It will never lose its value and critically important purpose. And so technology should be used to enhance its availability, and not to replace it. Might we find such a policy statement and commitment within the minutes of law society bencher meetings (“convocations”), and in benchers’ reports to convocation?

The solicitor-client relationship provides these advantages beyond those of the mere buyer-seller and other relationships that the majority of uses of apps might provide:

(1) the, solicitor-client privilege as to the confidentiality of communications between lawyer and client;

(2) the fiduciary duty and devotion of lawyer to client;

(3) law society oversight and discipline as to a lawyer’s competence, ethical practice, financial management, compliance with a code of professional conduct, and with all of the many requirements that the “relationship to clients” requires;

(4) mandatory professional insurance to compensate damage done to a client; and,

(5) continuing professional development (CPD/CLE) educational requirements by way of various conferences, seminars, teaching, lecturing, and, writing, etc.

And in, Canada (Attorney General) v. Federation of Law Societies of Canada, 2015 SCC 7, [2015] 1 SCR 401, although the Supreme Court of Canada found it unnecessary to determine whether the wider definition of, “the independence of the bar,” is a “principle of fundamental justice” (Canadian Charter of Rights and Freedoms section 7), i.e., that lawyers, “are free from incursions from any source, including from public authorities,” the majority judgment of Cromwell J., held that the narrower definition is a principle of fundamental justice, i.e., “that the state cannot impose duties on lawyers that interfere with their duty of commitment to advancing their clients’ legitimate interests.” (See paragraphs 77-84). Apps without a lawyer cannot provide that.

Blog articles have to be short. And so I’ve dealt with these issues and the supporting authorities much more fully in the articles cited above. – Ken Chasse.

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(1.) See: (1) Suzanne Bouclin, Jena McGill, Amy Salyzyn “Mobile and Web-Based Legal Apps: Opportunities, Risks and Information Gaps” Canadian Journal of Law and Technology, Fall 2017, Forthcoming. SSRN abstract: “In this paper, we offer a preliminary taxonomy of the legal apps available in Canada, of which we have identified approximately 50. This taxonomy seeks to identify developers, targeted users and the functions that legal apps are designed to perform. ….”; (2) the promotion of apps by LSUC’s TAG (Thc Action Group on Access to Justice), see in particular TAG’s Inclusive Technology, and, “Background Paper: Developing Guidelines for Using technology to Advance Access to Justice,” October 2016; and, “Draft Guidelines for Using Technology to Advance Access to Justice, October 2016; (3) The Legal Innovation Zone (LIZ), at Ryerson University, Toronto; and, (4) the Winkler Institute for Dispute Resolution at Osgoode Hall Law School at York University, Toronto.

(2) Steven J. Harper, The Lawyer Bubble (Basic Books, 2013), “Part II BIG LAW FIRMS” at p. 114. Part II deals with what causes big law firms to fail. For a Canadian example of a big law firm failure, see: Norman Bacal, Breakdown, an insider account of the rise and fall of Heenan Blaikie (Barlow Books, 2017).

(3) The critical importance of economies-of-scale to the growth and longevity of businesses, economies, living organisms, and cities is explained by Professor Geoffrey West in, Scale, the Universal Laws of Growth, Innovation, Sustainability, and the Pace of Life (Penguin Press, 2017).

(4) LAO LAW at Legal Aid Ontario (LAO), is a centralized legal research service for Ontario lawyers in private practice who do legal aid cases. By its ninth year of development, 1988, LAO LAW was producing legal opinions at the rate of 5,000 per year. Lawyers used the service because it helped them make money and serve their clients better. Because of its high degree of specialization of every factor of production and volume of production, its technology of centralized legal research produces economies-of-scale that enable such products to be much more cost-efficiently produced than can be achieved by any law office.