Since inception of statehood, the Washington Supreme Court has had inherent authority to license and regulate the practice of law and—for more than a century—the Court’s standards have been steadfast, aimed squarely at protecting the public: Only individuals with a state bar card are allowed to own law firms, share legal fees, and practice law here.
But a lot has changed in the ensuing decades. Think about the evolution of just about everything in daily life—from taxis to Ubers, from textbooks to Chromebooks, from department stores to Amazon—and it’s easy to understand the revolution that’s already underway in delivery models for legal services. Wills, divorces, traffic ticket disputes—there’s an app for that! So, is it time for Washington’s rules about who can offer legal services to change, too? What are the opportunities? What are the challenges? And what is the harm of doing nothing, considering these innovations and technologies will surely advance by leaps and bounds in coming years?
These are the questions behind a proposed pilot project to test entity regulation that is being advanced by leaders of the Practice of Law Board (POLB) and the Washington State Bar Association (WSBA). Under the Court’s guidance, the POLB has been working on this concept for years, and by the end of September 2024, they plan to present their proposal to the Court in the form of a draft order.
“The proposal is to have a time-bound, carefully monitored test of what this new type of entity regulation would look like,” said WSBA Executive Director Terra Nevitt. “It’s a data-driven approach to determine what a framework could look like for regulating the practice of law in this new age of technology and options for the public. … What we’re talking about is a shift to licensing not just individuals but also licensing entities. What it might look like is regulating businesses, or perhaps nonprofits, who want to utilize legal technology or other people beyond lawyers to better serve their customers.”
To do nothing in the face of rapidly changing innovation, POLB and WSBA leaders analogize, would be like an ostrich sticking its head in the sand—potentially the most harmful path forward for consumers and legal practitioners alike.
“Online companies and innovative business models are already delivering legal services to the public and they’ll undoubtedly expand in prevalence and sophistication in coming years,” said Craig Shank, a member of the POLB who is leading the pilot proposal. “Recognizing the profound implications of these changes—and to better understand the opportunities and the threats of these emerging technologies in terms of safety, quality, and access to legal help for Washingtonians—we believe it’s imperative to gather data to inform us how to move forward and to inform the Court.”
Shank said he first encountered the limits of the traditional regulatory model—at the detriment of justice—while working as a lawyer in the technology industry in Paris and trying to help immigrants coming to Europe in droves.
His team developed “a chatbot that would be enabled via mobile phone,” Shank said. “The technologies were all there, and the legal support was all there to be able to deliver it. We came up with a solution. … We were informed it was not going to be made available because the delivery would constitute providing legal services without a license,” meaning the unauthorized practice of law.
“That I found very frustrating in the moment, but I had a chance to go out and learn a little bit more about it. I understood these are the rules, and rules are made to be navigated.”
The concept behind the pilot started forming in 2020, when the POLB, grappling with how to handle the influx of new online legal service providers, began discussing next steps, including the notion of a regulatory sandbox or laboratory modeled after Utah’s regulatory sandbox launched that year. The POLB’s work soon grew into a broader proposal to test entity regulation through the development of the Blueprint for a Legal Regulatory Lab, a framework to test entity regulation. Its intent is to create a controlled testing environment for entity regulation that assists the Court in making a data-driven determination regarding whether to implement permanent regulatory reforms.
The pilot test aims to explore whether and how regulating these new legal service providers and innovative business models could lead to better outcomes for clients with more affordable options. The pilot is specifically designed to gather sufficient data and information to determine the effectiveness and feasibility of such a regulatory framework in Washington.
Throughout the pilot, the WSBA will collect data on how this form of regulation impacts the consuming public. Metrics may include the effectiveness of compliance programs, the incidence of ethical violations, client satisfaction, and overall firm performance. The results will provide valuable insights into whether entity regulation track whether there is harm to the consuming public and whether such regulation increases access to justice.
If the Court adopts the proposed order in coming weeks, the pilot could begin by inviting new legal service providers to apply to operate in the state under time-bound, limited exemptions from the otherwise applicable rules and statutes governing entities practicing law. In addition to proposing a new legal service or business model, applicants will propose specific regulatory rules that they would like to test and a study that produces data to determine how the public is being served. Once applicants are selected for the pilot, the POLB and the WSBA will seek authorization for their participation from the Court.
The pilot is structured to assess the potential risks and benefits of entity regulation, using the scientific method and data-driven processes. The POLB’s framework for data-driven legal regulatory reform allows innovators, regulators, access-to-justice advocates, and the public to use a consistent set of processes for designing, maintaining, and participating in a test of legal regulatory reform.
Nevitt said that one of the goals is to provide adequate guardrails to protect the public and others while legal reforms are tested and relevant data is collected, rather than implementing reform before its impact is fully understood. After several years of collecting and reviewing the data, the Bar will be well positioned to make a recommendation to the court. According to Nevitt, there are pronounced access-to-justice gaps in rural areas, among certain populations, where technology and new business models might pave the way for innovation and real progress to shore up those gaps.
“The need is here,” Nevitt said. “Innovations in legal technology and new business models are necessary to extend legal options and access to justice to people who aren’t being served by the current system … . Prior to coming the Bar, I was really focused on the access-to-justice gap not only for low-income individuals but even for the moderate-income population. Sadly, it doesn’t really feel like we’ve made a lot of progress despite a lot of effort, despite a lot of resources … It just seems like our models aren’t reaching everybody they need to reach. … I hope that this (pilot) will meaningfully help us to close the access to justice gap, to make sure that all Washingtonians can afford the level of legal services they need and they can get high-quality legal services.”
Want to learn more and submit feedback? Visit www.wsba.org/about-wsba/entity-regulation-pilot.
Noel Brady. Noel is a former newspaper reporter on the criminal justice beat. He has worked in WSBA’s Communications Department for nine years. He can be reached at noelb@wsba.org
