Jump to Navigation | Jump to Content
American Bar Association

ABA Section of Business Law

Volume 12, Number 3 - January/February 2003

Some Call It eLawyering
Is It a Brave New World or an Ethical Quagmire?
    By Erin Walsh

Your fingers are still doing the walking, only now it's across a keyboard. And it looks like the legal profession is poised to become the next big beneficiary.

Despite the seeming overabundance of lawyers in this country, there is still a huge market of low- to middle-income potential clients with unmet legal needs. While the increasing availability of the Internet has enabled lawyers to start tapping into this latent market — providing legal services to clients at a much more affordable cost while upping their own incomes at the same time — they've still got a long way to go.

"The potential market is huge in terms of the number of potential users and the amount of money to be made," said Bill Paul, former president of the American Bar Association. "It's really unknown at this point."

The practice that Paul describes as "the utilization of the Internet and e-mail networks for the delivery of legal services" has been dubbed by many as eLawyering. It is a broad term that includes Web- based companies as well as existing law firms that have supplemented their traditional practices with online services. James Keane, co-chair of the ABA Law Practice Management Section's Task Force on eLawyering, said that the eLawyering "boom and bust cycle" has already started — some early ventures have failed while others have found ways to succeed.

It is now common for firms to advertise on the Web and even put up Web sites with the names of their partners and a map to their office. Many, however, have taken it further, experimenting with innovative approaches to delivering legal services. An ABA eLawyering Web site divides eLawyering ventures into three categories, one of which is law firms.

LegalAdviceLine, both an administrative company and an actual law firm, is one of the early success stories. Neil J. Ruther and Mark Cauchon co- founded the company out of Towson, Md., in 1997, on a test basis and then put it into full operation in January 1998. The company has seen "enormous growth" in just the past few years and now serves tens of thousands of people a year, Ruther said.

The Web site, LegalAdviceLine.com, offers several innovative services at flat rates. For $34.95, customers can talk to and get specific legal advice from a lawyer licensed in their jurisdiction. They can also submit questions online and choose to receive their answer either by phone or by e-mail, although Ruther said the bulk of the business is still in phone calls.

Customers can have a lawyer licensed in the appropriate jurisdiction review a document for $49.95 or can create their own state-specific legal document using the company's Document Assessment at Hyperspeed (DASH) program. The program works like a logic tree, with a smart questionnaire form adapting to each answer the customer provides. The company also offers professional arbitration services for $99.

However, Ruther warned that the Internet can sometimes do clients more harm than good by giving them the false impression that they can handle their own legal representation. "In pro se law, most people never achieve their goal of bringing the file to conclusion," he said. "This is what lawyers have always brought to the table, and the Internet hasn't changed that."

Leza Griffith, who works in LegalAdviceLine's call center and trains new lawyers, added that while clients may be capable of handling certain cases on their own — simple divorces that don't involve children or much property, for example — most are too complex. Part of LegalAdviceLine's service, then, is explaining to clients why they need a lawyer. Then they make referrals. In order to build credibility, the firm prohibits its own lawyers from taking the representation themselves.

LegalAdviceLine keeps six lawyers on staff in its call center and employs more than 100 lawyers in all 50 states. Ruther said that while eLawyering usually isn't a full-time job, many of the lawyers who do it are involved in alternative practices. The ABA eLawyering Web site explains:

These technologies will increase opportunities for communication and mentoring among solos and small firm practitioners, while improving the quality of life and economic viability of practitioners who want to work on "people" problems and still make a decent living. This is the heart of what eLawyering is all about.
Ruther said some of LegalAdviceLine's lawyers are "trailing spouses" — they have followed a spouse to another state where they are not licensed to practice law. Others are raising families or are retired. The majority are part-time small practitioners looking to supplement their incomes. What they have in common is that they can't or simply don't want to work the traditional 7 a.m. to 7 p.m. day required of most lawyers, Ruther said.

"The lawyers that come to us usually have eight, nine, 10 years of experience or more practicing law," he said. "Their skills would go unused without our service."

Griffith started off with the company five years ago as a "phone lawyer" herself. "If it's December and you're a solo, you don't get paid that month," she said. "Working at LegalAdviceLine allowed me to supplement my practice. Since I was in a busy area, I could count on x number of calls each month and a steady income."

Griffith said eLawyering is flexible, enjoyable and convenient. "You can do it anywhere as long as you have a phone," she said.

Ruther said he believes electronic law is a multi-billion dollar a year market. His company delivers limited services and thus has a limited ability to tap into that market, but it has become efficient at what it does. "At $34.95, we don't make tons of money on every single call, but since we've found a way to service large numbers of people, it adds up," Ruther said.

Moreover, LegalAdviceLine's efficiency makes it possible to keep costs down. But the company not only saves its customers from paying much more for traditional legal service, it also attracts many clients who otherwise would not have sought out professional help at all. Lawyers, then, aren't the only ones benefiting from its success.

"Essentially, it's the underutilized serving the underserved," said Keane, explaining the premise of eLawyering. The buzzword, he said, is "access to justice."

Ron Staudt, a professor at Chicago Kent School of Law and member of the eLawyering Task Force, holds that the Internet — along with millions of dollars in grant money provided by legal service corporations — can stimulate pro bono legal aid to the poor where it never existed before.

Pro bono aid can come in the form of document assembly, pro se assistance and more. It can also be as simple as providing information on legal topics free of charge. James Whalen, a family lawyer in Flint, Mich., with 25 years of experience, does just that. Whalen was getting tired of people calling with the same divorce and child custody questions again and again when it occurred to him that there had to be a way to better educate people about their rights.

After many late nights of writing, he transferred his expertise to the Internet — a project he began in early 1996 and has been adding to ever since. The Web site now gets more than 2,000 unique hits every week. Whalen himself sometimes gets up to 50 e-mails a day with questions and thanks — which he always answers for no charge.

"I have been receiving love letters from people all over the country," he said. "I've even been getting thank you's from lawyers all over the country for making their jobs easier."

Whalen said the site has been beneficial to his clients because they no longer have to pay him by the hour to answer basic legal questions. Now when they call, they can get right to the point and ask more specific questions without wasting time. That helps Whalen, too. "Now I get the right kind of business," he said. "My clients are more informed, and it's a pleasure to deal with educated clients."

Staudt, however, said that 80 percent of the need is still being left unmet. The biggest problem is the digital divide. Lawyers can offer free legal services on the Web all they want, but if low-income people don't have access to the Web, then it's all for naught. The key, Staudt said, is figuring out the most efficient way to reach the most needy clients.

"You need to ask, 'Where do these people go for help?'" he said. "Then you put a computer there, not in every poor person's home."

In rural communities, Staudt said, courthouses are often part of civic complexes that offer additional services. Since many people pass through, it makes sense to make courthouses access points in those communities. Public libraries and even Laundromats are also practical locations to provide Internet access, he said. Some areas, however, have taken unconventional approaches. Ventura County, Calif., for example, has a "Mobile Unit" that travels to different communities within the county to serve as an extension of the courthouse.

Another category of eLawyering ventures is lawyer/client marketplaces — sites where clients can "shop" for legal services. One of these is LegalSeek.com.

Molly George, president of Legal Voice, a marketing and PR consulting firm in Minneapolis for companies and law firms selling legal services and products, said some lawyers have concerns about such Web sites.

"Lawyers are afraid these Web sites will turn legal work into a commodity and lower standards," said George, author of "Getting on the Short List with Bionic Proposals," an article published in the November 2001 issue of Marketing for Lawyers. "Another criticism is that the Internet eliminates the collegiality of law — it limits the human interaction that is so often needed in this practice."

George acknowledged that a little personal touch is necessary in legal bidding. "There has to be chemistry," she said. "You can't just hire someone out of the blue."

However, she thinks it's possible to achieve this chemistry over the Internet. While the initial contact between a corporation and law firm may be facilitated over the Net, a more personal dialogue between the two will eventually occur until the firm is chosen. She said another way to create more human interaction is to use video-conferencing to set up meetings from the onset. George added that law is far too complex to ever become a commodity.

She said legal bidding on the Web can be a wonderful thing for all parties involved. Since corporations no longer have to rely on word of mouth, they get a much broader scope of firms to choose from. Moreover, firms get exposure to new clients as well as assistance in preparing their proposals. The whole process is faster and more efficient.

"Everything's becoming electronic," George said. "Any law firm that wants to grow should research which of these sites are the best and see what works for them."

The final category of eLawyering is law-related organizations. SquareTrade is one such organization that specializes in online dispute resolution. In the '90s, small claims courts just weren't doing the trick in handling many of the problems arising from e-commerce. When a buyer from Nebraska and a seller from Chile needed arbitration, which law applied? And if it were possible for the parties to agree on a time and place to meet, was the dollar amount of the claim worth the hassle and the lawyer fees?

President and CEO Steve Abernethy, San Francisco, saw the opportunity for a new business solution. He developed SquareTrade in August 1999 with the vision of "reinventing law" and making e-commerce disputes a thing of the past. SquareTrade launched a partnership with eBay in February 2000 and the rest, as they say, is history.

The company now has 30 employees and a network of 250 mediators and lawyers (many bilingual) in 100 different countries. Within about two years, SquareTrade has settled more than 250,000 disputes worldwide. It has also formed partnerships with companies such as VeriSign, PayPal, eLance and the California Association of Realtors.

One of its services is the SquareTrade Seal Program, which provides background checks on merchants and pre-approves those that have a track record of providing good customer service. Buyers dealing with sellers that display the seal, then, are insured for $450 against fraud transactions. The seal is shown on more than 300,000 eBay listings every day.

"Since most disputes are about miscommunication and lack of trust, the seal program lowers the risk of purchasing and helps e-businesses promote buyer confidence," Abernethy said.

The second service is online dispute resolution, which SquareTrade provides to customers through its partnerships with eBay and other companies. An interactive, password-protected chat room allows most users to resolve their disputes directly and free of charge. If the dispute escalates, SquareTrade charges each party a small flat fee (which eBay subsidizes) and assigns a mediator to the case based on language requirements and other factors. Most disputes are settled within two weeks.

Part of SquareTrade's success comes from the fact that it doesn't arbitrate — it mediates. This eliminates jurisdictional questions and yields a solution without assigning blame. Use of the Internet also helps move cases to closure much faster than with traditional arbitration.

Cybersettle is another example of a company that has been successful in online dispute resolution. Where SquareTrade focuses on e-commerce, Cybersettle focuses on insurance claims. It offers an online, computer- assisted method for settling insurance claims that also reduces the time and expense of the traditional settlement process. According to its Web site, Cybersettle has helped clients settle more than $80 million in claims, with more than 475 insurance companies using the service either directly or through their third-party administrators.

MyLawyer.com, another law-related site, specializes in providing users with automated legal documents. "Let us help you handle your own divorce action, resolve your legal problem or address your legal matter without incurring the expense of an attorney," the site reads. It offers more than 250 form kits on everything from name-change forms to business and human resource documents. Each kit contains detailed instructions on how to use the documents and even how to file them in court.

Keane was quick to point out, however, that these "legal information sites" are not actual law firms. LegalZoom.com, a similar legal documentation service co-founded by O.J. Simpson lawyer Robert L. Shapiro, is what Keane calls a "paralegal site." It urges users to take care of common legal matters like divorce, prenuptials, wills, trademarks, copyrights and taxes by completing a questionnaire to prepare their legal documents online.

At the bottom of the page, however, is a disclaimer: "The information provided in this site is not legal advice, but general information on legal issues commonly encountered. LegalZoom's Legal Documentation Service is not a law firm and is not a substitute for an attorney."

Keane, co-chair of the ABA task force, said that the ethics of eLawyering is still largely a gray area. "There is an ethical boundary line or scrimmage line between providing legal assistance and performing actual legal services," he said. "LegalZoom has the perception that what they're doing isn't crossing that line."

So how do clients know if they're getting good legal advice? No coherent set of ethical guidelines yet exists, leaving states to handle the matters individually. In order to provide some kind of consistency, however, the ABA Task Force on eLawyering put out a set of Best Practice Guidelines. The guidelines advocate consumer protection and urge law-related organizations to identify what they do and who they are, address jurisdictional questions, and provide disclaimers if necessary.

Although Web sites aren't required to follow these recommendations, Keane said clients should be wary of sites that skirt these issues and should research sites first in order to make more informed decisions.

"If eLawyering isn't done by responsible lawyers in a carefully crafted way, there is certainly the potential for a breakdown in the area of ethical standards," said former ABA President Paul.

Keane acknowledged that many organizations are currently straddling the line between ethical and unethical practice. However, he also warned against stifling innovation.

"A defensive posture is not the right posture for bar associations to take right now," Keane said. "We should try to see the Internet as an opportunity for innovations and making justice available to more people."

It's important to allow for some ethical "safe harbors," he said. That's why the Best Practice Guidelines aren't disciplinary — they don't punish lawyers for trying out new ideas. The guidelines do, however, address many ethical issues as they apply to eLawyering such as advertising, competence and duty to inform, confidentiality, conflicts of interest, legal fees and duties to prospective clients, the unauthorized practice of law as well as multijurisdictional practice.

The Task Force on eLawyering has also worked with the Organization for the Advancement of Structured Information Standards (OASIS) to establish a set of technology standards that are helpful to lawyers. OASIS was founded in 1993 as a not-for-profit, global consortium to push for the development and adoption of e-business standards. In order to address the emergence of eLawyering and create industry standards, OASIS developed a LegalXML framework now used by many software developers.

Despite these guidelines and ethical considerations, the experts suggest that the potential for growth in using Internet technology in the legal profession is still large.

"I see the Internet as reaching millions of potential users," Paul said. "It is not a substitute for the hands-on attention that an individual client should receive and I never saw it as replacing what we're doing now, but it can definitely fill voids in existing practice."

Certain areas of law such as dispute resolution, divorce proceedings and simple contracts naturally lend themselves to eLawyering. In the future, Keane said, firms and corporations could have a number of dot-com lawyers among their ranks, hired specifically to develop knowledge systems and new business models rather than work with clients.

And SquareTrade's Abernethy predicted that small claims courts might eventually give parties the option of settling their disputes online. "That, however, is a long ways away," he said.

Other areas of law — criminal law the most obvious — will never be able to be handled solely through the Internet. Abernethy added that his online dispute resolution services aren't taking business away from anyone; they're just offering opportunities where they didn't exist before. In other words, while eLawyering may be the wave of the future, traditional courtrooms won't be disappearing anytime soon.

"In the Internet heyday, some people predicted that eLawyering would eventually replace the traditional practice of law," Keane said. "Now we know that's not true."

Nevertheless, traditional lawyers shouldn't get comfortable quite yet. Flat-fee, no-hassle legal service over the Internet sounds mighty appealing to many clients jaded by outrageous hourly fees, and lawyers may be forced to re-evaluate their billing systems and ways of communicating with clients in order to compete. Keane said divorce law, general practice, banking and collections, and other segments of the legal profession that "use a lot of forms" will likely be the most affected. In Montgomery County, Md., 60 percent of divorce action is already being handled pro se, he said.

"Who's going to pay $1,000 for an uncontested divorce when they could go on the Internet and handle it themselves for $40?" Keane said. "I wouldn't say lawyers are in jeopardy of being replaced, but there will definitely be economic consequences for firms that aren't very wired and don't understand how to use technology."

These consequences won't really be seen until 10 or 20 years down the road, he said. Abernethy predicted that eLawyering will "organically evolve" as the market matures. When managers of organizations are ready for change and the time is appropriate, the market will naturally adopt new technologies. SquareTrade is just waiting for the right time to expand its mediation services to real estate, insurance, larger manufacturers and even health care.

"It's always tough to get people to try new things," Abernethy said. "But once they do, they'll wonder why they didn't do it in the first place."

Walsh is a freelance writer in Champaign, Ill.

Back to Top