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Wall Street Journal By Rick Schmitt - July 17, 2000
Lawyers vs. the Internet
For some non-lawyers, the Web is a cure for
what ails the legal profession. Many attorneys object.
DAVID PALMER has a very active law practice. He has a law library with more than 800 volumes and large and diverse client base, derived mostly from the Internet, where he advertises his services.
"There have to be hundreds of thousands, if not millions, of people who have legal questions, and they just don't know where to go," says Mr. Palmer, who lives near Toledo, Ohio. Through the miracle of new technology, he says, "I can give them options."
What Mr. Palmer doesn't have is a law degree or license. His formal legal training consists of a 12-week course in court reporting taken while he was in the Army more than 30 years ago.
Now, Ohio's lawyer-disciplinary counsel is investigating him and his site __ armoralethics.com -- to determine whether he is violating a state law that bans the practice of law without a license. The prove, which could lead to a court order forcing Mr. Palmer to fold his tent, may emerge as an early test case on the issue of legal services on the Internet.
Constitutional Law
Mr. Palmer says he is indeed fulfilling needs "that according to the rules on (the unlicensed practice of law)…would require one to go to a lawyer. I will readily admit that I am doing that. On the other hand, my argument is, I think their rules and laws are unconstitutional," a restraint of trade and of free speech, he says.
To the likes of Mr. Palmer, the Web is the perfect antidote for lawyers who charge too much or don't return phone calls. Over the past year or so, scores of Web sites have cropped up, making numerous virtual law offices available to consumers. Bast online law libraries, along with basic, fill-in-the-blank various of wills, prenuptial agreements and other documents, are helping individuals tackle some legal problems on their own.
Most lawyers want the public to believe that "you need a brain surgeon for every legal problems," says Richard Granat, one of the new breed of cyber-lawyers. He operates several self-help websites from his home in Baltimore, including a U.S. version of an electronic divorce service that became a big hit in England last year. The Internet is demystifying the law, Mr. Granat argues, and lawyers may soon "lose their monopoly."
Actually, lawyers have long faced competition from nonlawyers. For years, legal secretaries and clerks have set up services that help consumers with do-it yourself bankruptcies, wills and the like. Nolo Press, of Berkeley, California, began publishing self-help reference materials in the 1970s.
Bar groups and prosecutors have periodically hauled some of the nonlawyers to court. A Florida woman was cited for contempt of court in the early 1980s for operating an independent paralegal business; ultimately, she had to agree to suspend her business to avoid jail time. Since that time, lawyers have mostly accepted these nonlawyers, albeit grudgingly. But periodically, do-it yourselfers still face opposition.
Two years ago, Nolo was investigated by Texas authorities who felt some of the company's legal-oriented software crossed the line; that probe ended only after the state's Legislature enacted a new law shielding do-it-yourself publishers from prosecution under the Texas unauthorized-practice-of-law statute.
Now, the pervasive and transcendent nature of the Internet is raising the stakes exponentially. Providers such as Nolo, now known as Nolo.com Inc., are turning to the Web themselves for its ability to widely disseminate legal services. Bar groups and lawyers of the old school are nervously rattling sabers, tightening ethical rules and warning of the dire effects of Internet amateurs who aren’t trained as lawyers dispensing even the most general information about peoples’ rights.
Some lawyers are tackling the new competition head on, offering online advice and getting referrals though the Internet. And financial ties between the Web operators and lawyers are also coming under scrutiny. Nearly all states prohibit lawyers from operating law businesses or sharing legal fees with nonattorneys.
Match Maker
Arthur Miller, a professor at Harvard Law School in Cambridge, Mass., has a stake in AmeriCounsel.com Inc., a Web site where consumers can hook up with lawyers who offer basic legal services for a reduced fee. Especially for small firms and solo practitioners, the Web may be a more efficient marketing tool than, say, the Yellow Pages.
The site operators say they’re meticulous about ethics. AmeriCounsel, based in Nedham, Mass., says it avoids the fee-splitting issue by charging consumers a service fee that is separate from money paid to the attorneys it recommends. Mr. Miller adds that the prohibition against nonlawyers investment doesn’t apply, because the site doesn’t directly provide legal advice. “There is an under-provision of legal services in this country,” he says, adding that the Web offers “a new and accessible delivery system.”
But most of the profession seems troubled by the high-velocity change. Here’s a headline from a trade publication describing a recent American Bar Association conference on Internet start-ups: “Technology from Hell Challenges Lawyers, Scars ABA.”
“There are a lot of folks who want to dot-com the legal profession,” says Catherine Lanctot, a law professor at Villanova University in Villanova, PA., who has studied online legal services. “And they’re pushing the envelope in a lot of different directions.”
A Palo Alto, Calif., company, for instances, is running a kind of eBay for legal services: LiveKnowledge.com Inc. operates online auctions where consumers post questions on their legal woes, and registered service providers – including both lawyers and nonlawyers, with no particular experience necessary – bid for the right to advise them.
In theory, such ideas make legal services more widely affordable. Many people can’t afford a licensed attorney at $200 or $300 an hour, so they welcome the chance to buy a simple, do-it-yourself will for a fraction of that. Down the road, the online legal movement may also make a lot of money for Web entrepreneurs, who so far have spent an estimated $100 million developing legal sites.
“I am 100% confident that there is going to be a billion-dollar company [in market capitalization] in the Internet law space,” says Neal Simon, chief executive of USLaw.com Inc., a Silver Spring, MD., outfit.
Round the Clock
Mr. Simon’s firm features an online “Ask-a-Lawyer” service. Visitors are greeted by a team of lawyers – many hired from a temp agency – who respond to e-mailed queries with general information from getting an immigration greed card to the implications of signing noncompetition agreements.
Mary Blackstock, a recent virtual visitor, says she logged on after getting in a dispute with her partner in a Web-design business. The partner wanted out of the venture and wanted Ms. Blackstock to giver her back her entire investment. USLaw.com sent Ms. Blackstock, who lives in New York, a primer on how to dissolve a small business. Ultimately, she says she ended up saving several hundred dollars in buying out her partner, though she did hire a lawyer to help with some of the paperwork. “I definitely felt empowered,” she adds.
Sound breathtakingly simple. But while the advice is free right now, it remains to be seen whether customers will come once the company starts charging for its service – possibly as soon as next year.
Down the streets from USLaw.com, Silver Spring attorney Jules Fink, 71 years old, has mixed feelings about these developments. The solo practitioner says he is asked regularly to untangle trust or estate matters that have been bungled by untrained lay people attempting to handle things without an attorney.
“People content they can’t afford to hire a lawyer,” he says. “My question is, can you afford not to?”
“I feel like I am in the 19th century,” says Mr. Fink. He relies principally on word-of-mouth for business, along with a reputation for business, along with a reputation for in-person conferences, deliberate service and reasonable, if not cut-rate fees. He says he has all the work he can handle.
As for Mr. Palmer, 56, the Toledo practitioner, his Web presence was born of frustration with lawyers. He started the site last year after his wife was seriously injured in an auto accident. Legal fees, he says, ate up a large share of her settlement. Many people who are drawn to his site also have had problems with lawyers. For them, he offers information on how to file a complaint against a judge and a “Top 10” list of lawyers with disciplinary records.
Amateur Standing
He also invites visitors – roughly 22,000 to date – to contact him for “free legal advice.” Candid about his own lack of training, Mr. Palmer nonetheless advertises that he feels competent in most areas of the law, including contracts, personal injury and attorney malpractice. He doesn’t appear in court, but he regularly e-mails tips on how to prepare legal arguments and court filings.
So far, demand for his services has been strong. He figures he gets a dozen or more requests for help every day. In recent months, he has counseled one client on filing a court appeal over a divorce decree and another caught in a fee dispute with a lawyer whose license turned out to be suspended. He considers it all a public service and doesn’t charge a fee, although he says he may in the future to cover his costs. A military pension helps pay the bills.
Some authorities fear that Mr. Palmer’s operation is an accident waiting to happen. They say the Internet is a risky way to get legal advice, party because the law in the state of the provider may be much different that that of the recipient’s state. Adding lay advisers to the equation makes the exercise even more perilous.
Jonathan Coughlin, Ohio’s lawyer-disciplinary counsel, who is overseeing the investigation of Mr. Palmer, says consumers who look to unlicensed Internet advisers are “risking getting bad information.” The investigation, which began after an attorney in another state complained about Mr. Palmer’s site, is in its early stages.
But Mr. Palmer welcomes the change to make his case. Far from endangering consumers, he says, the Internet is giving them the tools to understand the law, make informed decisions and even save money.
Lawyers are understandably upset, Mr. Palmer adds, because in their eyes, “there goes the gravy train.”
Mr. Schmitt is a staff reporter in The Wall Street Journal’s Washing DC Bureau.
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