Why Legal Professionals Should Embrace a Legal Regulatory Lab

The Washington Supreme Court’s Practice of Law Board recently met with the Washington Supreme Court justices to update justices on the latest version of the Board’s Blueprint for a Legal Regulatory Lab, a new framework for regulating innovative legal services and business models.

A legal regulatory lab is not a physical place; rather, it is a process that uses Supreme Court orders to define a set of customized regulations to allow legal professionals and entrepreneurs to safely test new services. Visit TVW to watch the Practice of Law Board’s March 2 meeting with the Washington Supreme Court.

Under the Blueprint, legal regulatory lab participants identify the benefits and risks of their proposed new legal services to consumers. A proposed service might be online or Internet-based or, perhaps, an alternative business structure for lawyers, limited license legal technicians, or their firms. Risk/benefit analysis drives creation and testing of appropriate regulations for each proposed legal service. Operating under customized regulations—effectively in the lab—the participant supplies legal service performance data, including all complaints from consumers to measure whether the benefits are achieved and at what level of risk.

If, after operating in the legal regulatory lab for two years, the data shows benefits with no harm to consumers, the Supreme Court may authorize the new legal service to continue, so long as it complies with the regulations proven effective in the lab.

In short, a legal regulatory lab helps determine the right level of regulation for new services and innovations, providing a faster and better pathway to authorization. It’s a data-driven approach to legal regulatory reform, and it makes new, often more affordable, legal services available to consumers with legal problems.

Better Opportunities?

Many legal professionals ask: Will the lab introduce unregulated competition to the market for legal services?

First, and most importantly, while operating in the lab, and if approved to continue to offer services after successfully completing a term in the lab, the legal services are regulated. The legal services are subject to regulation by court order, the Rules of Professional Conduct, and relevant statutes.

Second, a legal regulatory lab on which the Practice of Law Board’s proposal is based has been operating in Utah for some time. Most participants in Utah’s legal regulatory lab (which Utah calls a “sandbox”) are legal professionals testing alternative business structures. For example, the legal professional participating in the sandbox may be looking for the right regulation around nonlegal professional investment in a law firm or in associating with other professionals to offer bundled legal and professional services to clients.

The Practice of Law Board is a Washington Supreme Court board administered by the Washington State Bar Association. Under GR-25 it is charged with bringing innovative new legal services to the Supreme Court for its consideration. A data-driven legal regulatory lab is such an innovation. Therefore, it encourages legal professionals, entrepreneurs, and the public to review its Blueprint for a Legal Regulatory Lab and think about how they might use the legal regulatory lab and data-driven legal regulatory reform, to address the access-to-justice gap in Washington and provide consumers with greater choice in how they acquire competent and regulated legal services.