Hello everyone and welcome to this Ethics Alert, which will discuss recent approval of Rocket lawyer and other entities to participate in Utah’s pilot regulatory “sandbox program.
On September 8, 2020, Rocket Lawyer announced that it was one of the first entities approved by the Utah Supreme Court to participate in the regulatory “sandbox” program permitting, inter alia, nontraditional legal service providers. Rocket Lawyer’s website is here: https://www.rocketlawyer.com/
As I previously blogged here: https://jcorsmeier.wordpress.com/2020/08/18/utah-supreme-court-authorizes-pilot-program-which-inter-alia-permits-non-lawyers-to-own-law-firms-and-share-fees-with-lawyers/, the Utah Supreme Court approved the regulatory “sandbox” pilot program as the primary part of a regulatory reform package which was designed to allow the testing of innovative approaches to serving legal consumers will ultimately improve the public’s access to justice. The Court’s August 14, 2020 Standing Order is here: http://www.utcourts.gov/utc/rules-approved/wp-content/uploads/sites/4/2020/08/FINAL-Utah-Supreme-Court-Standing-Order-No.-15.pdf
A total of five entities were approved for participation in the sandbox program. The other approved applicants were:
- LawHQ: A Salt Lake City law firm which plans to offer equity ownership to certain software developers in the firm and a software application called CallerHQ, which is designed to allow consumers to report spam telephone calls, text messages and voicemails. Consumers who sign up may then be included in a mass tort litigation brought by LawHQ against the spammers.
- 1Law: An entity which plans to provide no-cost and low-cost legal services to assist clients in completing court documents and also offer related legal advice using chatbots, instant messaging, automated interviews, nonlawyer staff and technology-assisted lawyers. 1Law plans to have more than 50% nonlawyer ownership.
- LawPal: An entity which plans to provide a TurboTax-like technology platform to generate legal documents in contested and uncontested divorce and custody cases, eviction cases and debt-related property seizure cases. It expects to feature 50% nonlawyer ownership.
- Blue Bee Bankruptcy Law: The sole owner of this law firm states that he will give his paralegal employee a 10% ownership interest in the firm as an incentive to remain with the firm.
The Utah Supreme Court’s Order creating the pilot sandbox program states that participants must demonstrate that the activities and services “do not cause levels of consumer harm above threshold levels established by” the Court’s innovation office. Successful sandbox participants may also ultimately receive approval to exit the sandbox program and continue practicing the services after the pilot program ends.
After the two-year pilot program period, which began on August 14, 2020, is over, the Utah Supreme Court will evaluate whether the program should continue “based on a review of data collected from those entities and individuals participating in the program.” If not approved to continue, the program will sunset after the 2 year period.
As I previously blogged, the Arizona Supreme Court recently approved rule revisions which will permit alternative legal business structures. The Arizona rule revisions become effective January 1, 2020 and there are no provisions for a regulatory “sandbox program”. My blog is here: https://jcorsmeier.wordpress.com/2020/09/02/arizona-becomes-first-u-s-state-to-authorize-non-lawyer-ownership-of-law-firms-and-fee-sharing/
Bottom line: As I have said before, if this trend continues, this could become the wave of the future in other states and jurisdictions.
Stay safe and healthy and be careful out there.
Disclaimer: this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.
Joseph A. Corsmeier, Esquire
Law Office of Joseph A. Corsmeier, P.A.
2999 Alt. 19, Suite A
Palm Harbor, Florida
Office (727) 799-1688
Fax (727) 799-1670
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