The Pennsylvania Lawyer 18 March/April 2015

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1 A Hit Between t The Pennsylvania Lawyer 18 March/April 2015

2 he EyesBy Heidi Rai Stewart The Danger of Treating Legal Practice as a Commodity oon Oct. 27, 2014, the ABA Journal hit the traditional legal profession between the eyes with two announcements evidencing the ever-increasing commoditization of legal services. The first announcement came from LegalZoom regarding its new venture with Sam s Club to offer exclusive savings on LegalZoom products. The partnership promised to launch multiple legal solutions for Sam s Club members beginning with the basic suite of estate planning products priced at $299, including a will, living trust, power of attorney and a living will. Not only was the package of forms discounted, but Sam s Club members could obtain unlimited revisions and independent attorney consultations of up to half an hour each on first-time legal matters. Additional legal work was discounted at 25 percent off the attorney s regular rates. On the same date the ABA Journal also announced Avvo Inc. s launch of Avvo Advisor, an on-demand service providing legal advice at fixed rates. The service was available in 15 states, including Pennsylvania. Nine areas of law, including bankruptcy/debt, business, criminal defense, divorce/separation, employment/ labor, family, immigration, landlord/tenant and real estate, were covered. The Avvo Advisor site offered customers Fast, professional advice. No receptionist, no waiting. Pay online and an attorney calls within minutes. Attorneys could sign up to give 15-minute consultations for $39. A 100 percent refund was available if the customer was not fully satisfied. Curiously, the document-heavy area of estate planning was not addressed by Avvo Advisor, perhaps because Avvo s focus is not on do-ityourself (DIY) documents. New approaches to providing low-cost legal services have been slowly infiltrating the legal profession since LegalZoom entered the marketplace in Over the past 14 years LegalZoom and similar providers have given the impression that preparing an estate plan or incorporating a business requires only putting names and dates in blanks on forms, so there is little reason to pay an attorney $300 an hour to fill in blanks. This approach presumes that if all an individual wants is a will and all wills are the same, why is buying a will any different than shopping for a car or TV? While this perception is sadly misguided, it does not appear that LegalZoom, Avvo Advisor and similar companies are going away. Lawyers know that all wills, contracts and leases are not the same. These documents differ not only in the arrangement of the words used in them but in the thought and knowledge of the individual who creates them. The value in the document is not the document itself but in the attorney s skill in analyzing the client s facts in light of known legal principles. This learned craft sets each attorney apart as he or she creates a document that specifically benefits each client. DIY document-preparation packages fall short in this regard. A program can ask only a limited number of The Pennsylvania Lawyer 19 March/April 2015

3 A fill-in-the-blank document program simply cannot address the possible eventualities that a skilled attorney will bring to a client s attention. questions in the process of generating a fill-in-the-blank document. In many instances a program cannot adequately address issues that clients face. For example, does a layperson know what options exist in his or her will to protect a child who is a spendthrift or a beneficiary with drug-addiction problems? Clients have complicated problems in their lives that would require innumerable questions in a document program to address properly. Will laypersons using DIY will programs know if the programs have provided solutions to all possible issues in their estate plans should death not happen in the anticipated order? How many times have practitioners raised a potential consequence in a legal matter that never occurred to the client? Who will advise clients about consistency in asset titling and beneficiary designations relative to the distributive provisions of their estate plans? A fill-in-the-blank document program simply cannot address the possible eventualities that a skilled attorney will bring to a client s attention. Although attorneys use forms, a skilled lawyer does not simply fill in blanks. It s About More Than a Document To be sure, a skilled lawyer can start with a form and then, using all of the attorney s knowledge and experience, modify the document to suit the client s particular situation. Often, separate paragraphs ad- The Pennsylvania Lawyer 20 March/April 2015

4 dressing particular situations the attorney has faced in the past are used and even further modified to match that client s needs. Nonlawyers are likely to rely on the document as having addressed all necessary issues since they lack the knowledge and experience to know what may need modification. Think of documents you may have drafted when you were first out of law school and those that you may now draft 20 years later. It is likely that your documents have been refined over the years. DIY programs do not grow in wisdom and knowledge over time. Commoditization of legal services and documents induces the mindset of the cheaper the better. Although the adage that you get what you pay for rings true, the reduced cost of DIY documents and services such as those from Avvo Advisor are still likely to have significant effects upon those firms and practitioners whose clientele are generally on limited budgets and shop only by cost. More than ever, attorneys will be facing the question, What do you charge? Firms of all sizes may soon see plummeting fees as they continue to compete with each other as well as with companies such as Legal- Zoom and Avvo Advisor, where price is the only concern. There has long been a perception, reflected oftentimes in negative humor, that attor- Commoditization of legal services and documents induces the mindset of the cheaper the better. The Pennsylvania Lawyer 21 March/April 2015

5 neys are solely concerned with making money. Commoditization will only add to that perception. That perception must change, and if that perception is reality for some, it may be time for introspection. Yes, law is a business. However, in the business of law today, attorneys must better communicate the value of the breadth of their knowledge and wisdom if they want to remain competitive in a marketplace where clients and potential clients are inundated with the message that fees are the only concern and that all documents are created equal. Most lawyers have experienced situations where they have had to remedy a problem caused by an individual who did his or her own legal work, whether in preparing a document or representing himself or herself pro se to the court. The cost to the client (or to the estate) of remedying the problem is usually much higher at both the financial and emotional levels than the cost of retaining a knowledgeable attorney. Self-representation often leads to litigation, if not now, then in the future. Ethical Issues Tied to Commoditization Not only is the general public being trained to focus purely on cost, but ethical issues exist. How does LegalZoom run its conflict checks? Not having made that inquiry of the company, one is left to guess that no conflict checks are run. LegalZoom would likely respond that it is not a law firm and is not subject to the same rules of professional conduct as attorneys. Louisiana Legal Ethics examined whether LegalZoom was engaged in the unauthorized practice of law in a 2013 article by Dane S. Ciolino titled Is LegalZoom Engaged in the Unauthorized Practice of Law in Louisiana? The article stated that LegalZoom represented the participating bankruptcy attorney in Louisiana as being Daniel Ruggiero of the Law Offices of Prince & Associates LLC, a national law firm with attorneys licensed in all 50 states, but the firm is not registered with the Louisiana secretary of state, and no attorney from the firm is listed in the Louisiana State Bar Association s member directory. In the business of law today, attorneys must better communicate the value of the breadth of their knowledge and wisdom. The Pennsylvania Lawyer 22 March/April 2015

6 LegalZoom has been sued for the unauthorized practice of law a number of times. The case of Jonathan McIllwain v. Legal- Zoom Inc., U.S. Supreme Court case No , was originally a class action alleging the unauthorized practice of law in Arkansas by LegalZoom.com Inc. In creating a will the plaintiff agreed to the terms and conditions that included binding arbitration to settle all disputes and claims rising out of or relating to any aspect of the relationship between us, whether based in contract, tort, statute, fraud, misrepresentation or any other legal theory. The agreement also stated that class actions were not permitted. The trial court held that mandatory arbitration was unconscionable because it prevents the court from addressing the issue of the unauthorized practice of law. The Arkansas Supreme Court split 5-2 in reversing and remanding the case to arbitration because the company is not a law firm and the documents at issue were computer-generated. Early in 2014 the U.S. Supreme Court denied certiorari. Gmerek v. State Ethics Com n., 751 A.2d 1241 (Pa. Cmwlth. 2000) cited the Pennsylvania Supreme Court s attempt to define the parameters of the practice of law. In so doing the court stated that a lawyer applies the knowledge he or she has acquired over the years to three principal domains of professional activity: 1. He/she instructs and advises clients in regard to the law so that they may properly pursue their affairs and be informed as to their rights and obligations. 2. He/she prepares for clients documents requiring familiarity with legal principles beyond the ken of the ordinary layman for example, wills and such contracts as are not of a routine nature. 3. He/she appears for clients before public tribunals to whom is committed the function of determining the rights of life, liberty and property according to the law of the land in order that he/she may assist the deciding official in the proper interpretation and enforcement of the law. Shortz v. Farrell, 327 Pa. 81, 84, 193 A. 20, 21 (1937). Thus, although the practice of law may be difficult to define, it most assuredly encompasses: advising clients regarding the law; preparing documents for clients which require a familiarity with legal principles beyond the ken of the ordinary layman, such as wills and contracts; and appearing for clients before public tribunals charged with the power of determining liberty or property rights. Id. Are companies that provide DIY legal documents engaging in the unauthorized practice of law in Pennsylvania? That case has not been heard yet. However, on a Pennsylvania Bar Association listserv one attorney shared his opinion in reaction to the announcement of LegalZoom s partnership with Sam s Club. He stated that DIY document companies were engaged in the unauthorized practice of law and that the Pennsylvania legal community was ignoring it. He further pointed out that we do not have to let this happen and that it is in our hands to lodge complaints for clients who have used such programs. The fear is that if we do nothing the practice of law will become nothing more than a corporate profit center. Is the practice of law more than that for Pennsylvania attorneys now? The choice belongs to each of us as to how to manage the new landscape of legal services. Do we distinguish ourselves by rising to the occasion with our integrity, skills, knowledge and wisdom? Or do we just continue on the path already trod while the public continues to search for the cheapest way to deal with life s most important issues? Heidi Rai Stewart is a director at the law firm of Houston Harbaugh in Pittsburgh. She concentrates her practice in estate planning, estate and trust administration, special needs planning, elder law and Orphans Court matters. She can be reached at If you would like to comment on this article for publication in our next issue, please send an to The Pennsylvania Lawyer 23 March/April 2015

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