Fingers Crossed for a Sandbox!

What makes for an effective and efficient law society? This isn’t a question without controversy. The last several decades abound with debate about what exactly Canadian law societies should be doing and how they should be doing it. Two propositions, however, strike me as relatively uncontroversial: (1) law societies should engage in evidence-based policy making; and (2) law societies should continually evolve their approaches in response to changes in the legal services environment. In short, we need smart and relevant regulation.

The regulatory “sandbox” that will be considered by Law Society of Ontario (LSO) Benchers next week is a prime example of smart and relevant regulation. The proposed sandbox involves a five-year pilot project that will permit individuals or entities to deliver innovative technological legal services (ITLS) to the public in a monitored environment without fear of adverse regulatory action by the LSO. As summarized in a background report prepared by the LSO Technology Taskforce:

In the proposed sandbox pilot, approved participants will receive permission from the Law Society to serve consumers through ITLS while complying with requirements for risk-based monitoring and reporting. Amendments will be required to create a new category of permitted exception from licensure in the Law Society’s By-Laws…The Law Society will determine whether, and under what conditions, participants should receive a permit to continue providing the services after their participation in the sandbox has ended. During the pilot the Law Society will gather critical information about the operation of ITLS and will use that information to inform policy and regulatory decisions, including possible changes to professional conduct rules.

Currently, those who wish to use technology to deliver legal services in new ways often have concerns about being prosecuted for the unauthorized practice of law. If lawyers are involved, they may also worry about discipline for breaching professional conduct rules that were not created with technologically-driven service models in mind. These concerns are not merely notional. In a research project that I conducted with a team at UOttawa, developers of new, public-oriented legal digital tools pointed to the prospect of law society regulation as a source of anxiety and said that the fear of after-the-fact law society regulation was a significant disincentive to innovation.[1]

Why does it matter if there are disincentives to develop new, technologically-innovative methods of legal service delivery? Here is where the plethora of reports about access to justice and the unmet legal needs of Canadians come into play. I won’t reiterate the well-known statistics here; suffice it to say it is abundantly clear that we need new, more cost-effective and accessible ways of meeting people’s legal needs.

To be sure, it is important not to vaunt technology as an access to justice panacea. We can’t “app-ify” our way to a world where all Canadians have all their legal needs met. Legal services are too costly and inaccessible for a complex set of reasons, which means that diverse and multiple responses are required. Needed responses also vary depending on the context: the reasons that a majority of Canadians don’t have a will are different from the reasons that many litigants in family law proceedings are self-represented. Also, technological solutions that work well for some may create barriers for others: for example, the fact that not everyone has adequate and equitable access to the Internet in Canada makes web-based innovations useful for some but not others. Finally, not everything that legal types might classify as a “legal need” is necessarily best resolved through a solution that involves legal services. As Rebecca Sandefur has observed, “[e]vidence shows that only some of the justice problems experienced by the public benefit from lawyers’ services or other legal interventions, while others do not.” Providing the public with more digital tools delivering legal services is no more of a A2J silver-bullet than would be flooding the marketplace with a heap of more lawyers.

But just because the development of innovative technological legal services won’t solve all our access to justice problems doesn’t mean that it won’t help any of them or otherwise improve the experience of Canadians in meeting their legal needs. There are plenty of examples of specific and helpful tools. In the United States, UpSolve, a free online web app that assists users in filing for bankruptcy has helped relieve more than $250 million (USD) in debt since launching in 2018 and was named one of Time Magazine’s “Best Inventions of 2020”. Technology has the capacity to generate new and creative ways to help people with legal issues. As technology advances, even more opportunities will exist. Artificially suppressing what is possible because of a regulatory chill is indefensible.

A law society that ignores these possibilities or passively dissuades innovation is likely, in the long term, to lose public confidence. While the legal profession’s ability to self-regulate doesn’t turn on the whims of public opinion on a particular issue, governments have intervened in other jurisdictions in circumstances where lawyer regulators have suffered significant losses of credibility in the public eye. As goods and services become more readily accessible online, there is likely to be public frustration and accusations of protectionism if a law society seems to be precluding innovative ways to digitally deliver legal services. This is particularly the case given moves by other lawyer regulators in North America to facilitate the introduction of new models of legal service delivery.

Theoretically, one policy option to encourage new, technologically-innovative legal service delivery would be for the LSO to simply give a blanket waiver and promise not to take any regulatory action against individuals or entities engaged in innovative technological legal services delivery. This is a bad idea. For one, it would be an abdication of the LSO’s responsibility to regulate the provision of legal services in Ontario. The LSO has a mandate to regulate not only all persons “who practice law” but also all persons who “provide legal services”. Moreover, the LSO also has a statutory duty to protect the public interest. Digital legal tools for the public use can be very helpful but also carry potential risks related to quality, security and privacy. As I’ve recently written elsewhere:

Poor quality tools can be highly consequential in the legal context: a tool providing incorrect information or misdirecting an individual in navigating a legal process can result in an individual losing money, time, or even their liberty. The specialized, complex nature of much legal information and the status of legal services as a “credence good” can result in it being very difficult for an individual to self-assess the quality of the tool that they are using. A related concern is the possibility that public-use legal technology tools may engage in “dark pattern” marketing that “manipulate(s) consumers into making bad decisions about what they want or need to do in relation to a legal problem” [see here for more detail on concerns about dark pattern marketing].…Lawyers have duties of candour and fiduciary duties that would prevent such tactics, whereas digital tools do not. Even if the quality and mechanics of a tool are relatively transparent, users may not be inclined to engage in their own thorough self-assessment. A study of health care app users found that in assessing the trustworthiness of an app, most users are more influenced by the design and appeal of a website than the currency and accuracy of its information.

… Privacy and security threats can also arise given the potential sensitivity of user information involved in legal technology tools. For example, “the simple fact that a user is consulting a legal app about initiating divorce proceedings or obtaining a criminal pardon may be sensitive personal information.”…[I]t can be challenging for users to fully understand how their information is being used once inputted into a tool. A recent large-scale study of mobile apps revealed that 59.5 per cent had discrepancies between the data practices declared in their privacy policy and what the app was actually doing.[2]

The delivery of legal services, whether through “traditional” or technological means, should be regulated. Right now, law societies do not have a firm handle on how best to regulate the digital delivery of legal services. Regulatory models and methods built for the “bricks and mortar” context are not necessarily transferrable. We need to develop new models of re-regulation.

This is where a regulatory sandbox can be particularly useful. Specific methods of technologically-innovative legal service delivery can be “test run” in a monitored environment before they are given a “green light”. At a systemic level, data can be collected to determine what, if any, changes need to be made to law society rules and regulations to address issues specific to the delivery of legal services through new technologies. To achieve good results, a regulatory sandbox needs to be well-designed and operated. If approved, only time will tell how well this project is run but the LSO Background Report suggests good design. A project of this type also seems to be well-within the LSO’s operational capacity. Certainly, the general concept is sound: lawyer regulators in other jurisdictions, like Utah and British Columbia, have moved to create regulatory sandboxes and, so far, these efforts seem to be proceeding well.

In a previous Slaw.ca column late last year, Jordan Furlong noted that some have argued that it is inappropriate to create regulatory sandboxes because it “[risks] lawyers’ livelihoods by opening the market to non-lawyer providers.” The answer to such an objection is, of course, that a law society is not a members-only club or advocacy organization that exists to advance the interests of lawyers (financial or otherwise) but, rather, is a regulator with a statutory mandate to protect the public interest and facilitate access to justice. More pragmatically, it must also be pointed out that there no army of robo-lawyers waiting in the wings to replace our society’s significant need for human legal help. Some innovative technological solutions can replace certain tasks currently done by lawyers – the use of automated forms is a prime example – but there remains plenty of legal work “to go around”. In many cases, technology can be used by lawyers to complete mundane and repetitive tasks, freeing up time for lawyers to focus on the more interesting and rewarding aspects of legal practice.

Next week, the LSO has a chance to exercise leadership and make a smart and relevant regulatory move by approving a regulatory sandbox for innovative technological legal services. I’ll be watching this vote. More importantly, it is not hyperbole to say that “the world” will be watching too. Deciding not to adopt a regulatory sandbox would be out of step with global developments that have seen lawyer regulators actively seeking out new ways to facilitate the technologically-innovative delivery of legal services (see, here and here for a few examples). Fingers crossed that the LSO decides to ride this exciting wave, too.

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[1] Teresa Scassa, Amy Salyzyn, Jena McGill & Suzanne Bouclin, “Developing Privacy Best Practices for Direct-to-Public Legal Apps: Observations and Lessons Learned” (2020) 18:1 C.J.L.T. 1 at 23.

[2] Amy Salyzyn, “AI and Legal Ethics” Artificial Intelligence and the Law in Canada, in Florian Martin-Bariteau & Teresa Scassa, (eds) Toronto: LexisNexis Canada, 2021 (footnotes omitted).