Thanks again to Stanford CodeX and the Stanford Center on the Legal Profession for inviting me out there to share my thoughts on these topics. I am introduced by Tony Lai, one of the founders of LawGives, a legal tech startup working with CodeX and StartX, that I also had the pleasure of spending time with while in Palo Alto. Below is the video from my talk.

Writing a book on limited scope services seemed like a logical next step in the process of reevaluating how the legal profession can adapt to the changes it faces as a result of disruptive technology, economic recession, Internet-empowered consumers and other factors that I discuss in the book. In my opinion, unbundling is a concept that underlies and works with all of the changes that legal visionaries like Richard Susskind, Jordan Furlong and others have been preaching to us for the past several years. I was grateful to Jordan Furlong for writing a wonderful Foreward for the book.

The goal of this book is to educate lawyers and law firms on the processes they should to go through to responsibly add limited scope services as part of restructuring their delivery methods to adapt to changes in our legal marketplace. Whereas my other book on virtual law practice was geared more towards solos and firms that were interested primarily in online delivery methods, this book on unbundling is applicable to almost every firm structure from traditional to a hybrid virtual law firm, from solos to large firms and in-house counsel.

It is not only individuals of lower to moderate means who are seeking limited scope services from law firms, but many more sophisticated client bases are keen on finding law firms that provide this. Accordingly, there is a great potential here for increased revenue for law firms as well as for the public to receive alternative forms of legal service delivery, increasing access to justice across the board. Naturally, the book covers the many ethics rules, best practices, and sometimes complex process of determining when unbundling is appropriate and when full-service is necessary.

I’ve included case studies, sample checklists and processes for unbundling. I’ve also tried to examine the concept of unbundling from the perspective of the business world and other industries, such as the music, airlines, newspapers, wireless providers, that have had to unbundle to adapt to changes in the marketplace. In addition to discussing ethics and best practices for unbundling, I’ve also examined marketing strategies and technologies used for unbundling and in delivering unbundled services.

Thank you to the individuals who were so kind to contribute a case study for the book:

David Bilinsky, Thoughtful Legal Management

Michael Mills, Neota Logic

Jim Ring, FairOutcomes

Darryl Mountain

Jared Correia, MassLOMAP

Lawyers Mutual of NC

Ronald Staudt, Chicago-Kent

Kenneth Adams, Koncision

Susan Cartier-Liebel, Solo Practice University

Richard Granat, DirectLaw

Jack Newton, Clio

Aaron Kelly, Kelly Law Firm

Charley Moore, Rocket Lawyer

Brian Whalley, Hubspot

Rimon Law

Kevin Chern, Total Attorneys

Robert Valdillez and Michael McMullan, Firebrand Legal

Lee Rosen, Rosen Law Firm

Law Offices of Gordon Firemark

Rania Combs, Texas Wills and Trusts Online

Susan Wakefield, Connecticut Legal Coaching, LLC

John Skiba, Skiba Law Group, PLC

At Techshow,  I held a Meet the Author session and enjoyed the challenging questions that came up from the attendees. I sincerely hope this book starts a dialogue that is productive and encourages lawyers in a variety of practices to consider implementing some of the concepts surrounding unbundling.

When I logged in for the first time, everything from my virtual law office was pulled in. I can view my tasks, agenda, documents, case files, contacts, leads, and billing. There is a central dashboard to show me recent activities and tasks that are marked due for today. There is also search functionality with filtering by type so that I can quickly find the files or client information that I need. There is also a timer at the top of the app that allows me to track my time. Even though I don’t use the billable hour, it’s still great to be able to record time spend on a web conference with a client or call that can be recorded into their digital file. This is really a clean, beautifully designed app that I will probably end up using more than the full browser version of the system.

Congratulations to the team at TA who were involved in making this happen (this especially includes my hardworking programmer husband who kept me informed of their progress along the way)!  There has been much discussion about how lawyers need to be careful about using mobile devices for elawyering. I believe a secure system like this that carries over the encryption and other security measures from the full version is the safer way to go if you are a lawyer who intends to work directly with clients and/or with their case files or other lawyers on a cloud-based system.

For awhile now I have been interested in learning about virtual practice models that go beyond the purely web-based model that I operate. Over the past year, I’ve been talking to Chad Burton, the founder of Burton Law, LLC, to understand his firm’s structure and how it uses technology to operate. Burton Law launched at the beginning of 2011 and is based in Ohio. They offer legal services in several practice areas, including business, data privacy, dispute resolution, estate planning and probate and intellectual property.

What impressed me the most about this virtual law firm was that it does not have the traditional law firm hierarchy. Many of us who are solo practitioners became so because we had less than stellar experiences with the traditional firm structure of partners and associates – not to mention the billable hour requirements and other firm policies that did not allow us the flexibility we needed to serve our clients.

Burton Law’s virtual firm structure is unique because the attorneys are all “members” of the firm. There is a manager, but no partners. The often
least-liked aspects of operating a practice are taken care of by the firm, and the lawyers can focus on delivering quality services to their clients.

Burton Law has also figured out how to create an online firm culture among the attorneys which is a nice balance of support and water cooler content, not unlike the ABA Solosez’s listserv. To do this, Burton Law uses a cloud-based application called Yammer to create a private “Facebook”-like environment – a fun way to be connected while practicing independently. The lawyers in Ohio also get together in-person from time to time and collaborate on cases when it makes sense to do so.

As of this week, I have agreed to be “of counsel” and the director of a branch of the Burton Law LLC virtual law firm. I will be building a North Carolina branch of the firm with lawyers here in the state. While doing this, I will continue to operate my virtual law office, Kimbro Legal Services, LLC, as a solo practitioner.

The synchronization and use of cloud-based technology in the Burton Law firm structure also appealed to me. Burton Law currently uses Clio as its practice management software. It also uses Box, Google Apps (professional version), a virtual assistant and other systems. In the near future, I will be introducing the firm to direct online delivery of legal services to their clients and the unbundling of services. We will be using the Total Attorneys platform for this aspect of the firm’s work.

I see a lot of potential in this form of virtual practice to provide attorneys with the same flexibility that I have as a solo virtual practitioner. Joining Burton Law and taking on the responsibility for building the NC Branch of the firm will give me a better understanding of the model and where it may develop from here. I expect it to provide me with new insight and ideas to share with readers of this blog.

The March issue of the South Carolina Lawyer features an article I co-wrote with Courtney Kennaday entitled “Ethics of Virtual Law Practice.” The full version of the issue is accessible online.

Factors to be considered in determining the reasonableness of the lawyer’s efforts include the sensitivity of the information, the
likelihood of disclosure if additional safeguards are not employed, the cost of employing additional safeguards, the difficulty of implementing the safeguards, and the extent to which the safeguards adversely  affect the lawyer’s ability to represent clients (e.g., by making a device or important piece of software excessively difficult to use).

These are all relatively broad factors and leave much up to the judgment of the lawyer. This Comment addresses the storage of electronic communications, while the almost identical comment [17] covers the transmission of data. I found this sentence, which appears after the list of factors, to be interesting:

A client may require the lawyer to implement special security measures not required by this Rule or may give informed consent to forego security measures that would otherwise be required by this Rule.

If I am reading this correctly, even if a lawyer weighs those factors and finds that there is a risk, he or she may discuss it with the client and include in an engagement or other agreement that the client is aware of that risk, but finds that in their case, the benefits exceed the risk or that the risk does not matter to them. This is interesting because I know some states have discussed making it a requirement that lawyers obtain client consent for the use of technology where there is a risk of any third-party access to confidentiality information. This comment does not require written consent, but it does hint to the lawyer – at least I’m thinking about my own limited scope agreement and CYA practices – that getting informed consent regarding the technology and security that is a part of that should be a best practice. Then, after you conduct reasonable efforts to ensure that you are safeguarding the client’s information, and something still happens (because only a fool will tell you a system or technology is 100% safe), then if there’s a breach you can hold up your agreement and say to the client “well, I did tell you there was that 1% risk.”  Wonder if the malpractice insurance carriers agree with me on this one.

As the report following the revised draft states, the Commission is aware that risks will exist even when the lawyer has made reasonable efforts to prevent inadvertent disclosure of confidential information. They state:

The Commission concluded…that technology is changing too rapidly to offer such guidance and that the particular measures lawyers should use will necessarily change as technology evolves and as new risks emerge and new security procedures become available.

Instead, they provided these broad factors and have suggested that the ABA create website with updated and more detailed information about technology and security. I think that the Legal Technology Resource Center might be a great place for such a site.

Included in Comment [16] is a reference to the “monitoring” responsibility that has been added to the revised proposed draft of Rule 5.3. That rule now has been expanded to include cloud computing providers and other “nonlawyer assistance.” Additionally, Rule 1.1 “Competency” has an added reference to cloud computing providers: “When using the services of nonfirm lawyers in providing legal services to a  client, a lawyer also should reasonably believe that such services meet the standard of competence under this Rule. “  In this context, if you are relying on a document automation or assembly program to generate a legal document that you then review and sell to the client, it’s still your responsibility to ensure 1) that this was best for the client based on their legal needs and 2) that the final product constituted competent representation under the circumstances.  Well, that’s a no-brainer, but maybe there are lawyers out there who use tech to produce legal work and rely on that system completely without reviewing the final work.

The report following the proposed draft of 5.3 states, “[t]he word “monitoring” was chosen intentionally to reflect the idea that, under these circumstances, a lawyer may have a duty to remain aware of how the nonlawyer service provider is performing its services, even if the lawyer has not chosen the provider and may not have any direct supervisory obligations.” I’m still not clear on how to monitor a cloud computing vendor. If my firm chooses to use the professional version of Google Apps, does this just mean I have to keep an eye on any changes in our user agreement or that I need more in-depth monitoring of server information, security risks, etc. that Google manages?

At first glance, these changes almost appear that they would have more affect on some of the nonlawyer legal service companies that are engaging with licensed lawyers to provide the “lawyer add-on” value to their online legal services. These additions to the rules send a strong message to those lawyers that they need to be aware of competency in the final product they deliver through those networks to clients as well as monitoring how those networks are perhaps engaging with clients not only from a security standpoint, but also from the perspective of initiating the attorney/client relationship, duty to prospective clients, etc.  I’m not as sure that these proposed rule changes are dictating that I have a call weekly with the CTO of my SaaS product to discuss his or her management of the technology I use.

It looks like they are accepting comments on these revised proposed drafts. Looking forward to reading those and hopefully they will shed some more insight.

Please take a minute to fill out this brief survey.  It will help out a team of law students who are researching how people use online services to fill their legal needs.

This law student team is part of the Law Without Walls program. I’m serving as an Entrepreneur Advisor this year and have been encouraged by the participants and their eagerness to think outside of the box to come up with their “project of worth.”

Law Without Walls is a great legal education initiative that pulls together academics, entrepreneurs, practitioners, and law students and takes an international and interdisciplinary approach to learning. I’ve met with the team online using Google Hangouts and the sessions for the entire project are held online through Adobe Connect. The program is a strong example of using technology to create new and exciting distance learning opportunities for law students.

Please help my team out by taking a minute to complete this survey. Thanks!

Established in 2002, Total Attorneys is a cloud-based technology and marketing company that is the country’s oldest and largest performance-based lead generation provider to small law firms. As some of you probably know, this is the company that acquired VLOTech, the software that I co-created and use for my virtual practice. For those not familiar with advertising terminology (after all, we don’t typically receive business education in law school), a “lead” for a law firm would be a “prospective” client.

The ethics complaint alleged advertising ethics violations pertaining to the company’s methods. Specifically, the complaint alleged 1) that the lawyer advertising model was actually a for-profit referral service and not advertising, 2) that its customers were fee-sharing, and 3) that the company’s paralegal services constituted the unauthorized practice of law. Of the 47 states that were presented with these allegations, only 24 states requested a response to the Complainant’s charges. The remaining states never took any action with regard to the complaint. While most of the disciplinary counsel who opened investigations did not pursue fee-sharing and UPL issues and many quickly closed investigations with no finding of wrongdoing, a few disciplinary counsel aggressively argued that the Total Attorneys business model violated Rule 7.2. The complainant alleged that when an attorney paid a fee on a per lead basis (instead of the traditional flat fee directory model), the payment violated Rule 7.2 of the Model Rules of Professional Conduct, as adopted by most state bar associations, which prohibits a lawyer for paying a non-attorney for the recommendation of his/her services.

To defend its business model, its customers and the ability of lawyers nationwide to take advantage of new technology to grow their legal practices, the company funded the legal defense of its attorney customers in each state. Total Attorneys, their customers and their counsel successfully argued that Total Attorneys was not a referral service and that the payments were payments for the reasonable cost of advertising and not a payment for a recommendation of the lawyers’ services. Over a period of almost 3 years, each of the 24 states’ regulatory bodies reviewed the complaint and closed their investigations with either “no finding” or a “finding of no wrongdoing. All of the complaints were eventually dismissed by November 2011. The states which conducted an inquiry and then closed or dismissed the matter are listed below:

• Illinois
• Connecticut (charges dismissed at close of prosecution in evidentiary hearing, see Zelotes v Rousseau)
• Hawai’i
• Alaska
• Alabama
• Arizona- A request for advisory opinion was jointly submitted by bar counsel and defense counsel – this was a term of the dismissal. The AZ Bar issued Opinion 11-02 in Oct. 2011.
• Idaho
• New Mexico
• Colorado
• Vermont
• Washington
• Texas
• North Carolina
• Missouri
• Wisconsin
• Maine
• North Dakota
• Michigan
• Tennessee
• Oregon
• Montana
• South Carolina
• Utah
• New Jersey

Resolution of the ethics matter was an important development in the states’ interpretation of online marketing. For the first time, clearer distinctions were made between referral sites, directory listings and other forms of lead generation marketing used by lawyers. (You can read many of the pleadings herewhich discuss in greater detail the difference between referral services, online directories and how pay-per-click advertising works.)

The fact that the company had to spend so much money defending its permissible advertising methods raises concerns. Any company or lawyer who comes up with an innovative method of marketing their services to the public must be aware of both the risk that comes with presenting a new method of marketing without obtaining the initial blessing of the states’ regulatory entities and the inertia that resists change within the legal profession. Unfortunately, the approval process is time-consuming and the default response to the use of new methodologies is often “no, you can’t”. Both attorneys and consumers pay the price for that inertia, as commercial speech is chilled and opportunities to expand access to legal services are lost. Further, the lack of standardization in the advertising rules from state to state, especially with regard to online advertising methods, puts even more of a chill on future innovation. After a long a tedious approval process, one state may permit the new advertising method/pricing structure only to have the state next door prohibit the same exact activity. The result is that the public is presented with fewer alternatives for locating and working with a lawyer.

What about the lawyer who wants to try a new form of online advertising or a multijurisdictional virtual law firm that must figure out how to comply with differing ethics rules in several states? Total Attorneys’ investment in advancing legal marketing opened up many options for attorneys, but in the time that it took to resolve the ethics matter, additional online advertising methods and technology for marketing have emerged. These may contain other nuances that have not been clearly addressed by state regulators and may not be clearly interpreted by a law firm reading its states’ advertising rules. Where the rules of a jurisdiction don’t clearly relate to a specific method, lawyers are left to interpret the rules without context and with little guidance.

Citing the ethics matter among others, the Standing Committee on the Delivery of Legal Services wrote a letter to the ABA Commission on Ethics 20/20 providing its recommendations regarding lawyer advertising rules, including the deletion of Model Rule 7.2(b), the rule that prohibits a lawyer from giving anything of value for recommendation for his or her services with four exceptions. The exceptions to the rule combined with the emergence of new online advertising methods have left lawyers with more questions than confidence when it comes to using Internet-based tools for client development.

The Committee’s recommendation for removal of the restrictions in 7.2 was rejected at the February meeting of the Commission. However, initial awareness of the issues was raised and a larger conversation started. A proposal to amend Model Rule 7.2 will go to the ABA House of Delegates for consideration at the Annual Meeting in August. The proposed amendment to Comment 5 would clarify the meaning of “recommending the lawyer’s services” and explicitly state that a lawyer may pay others for “generating client leads, such as Internet-based client leads, so long as the lead generator affirmatively states that it does not recommend the lawyer, any payment to the lead generator is consistent with Rules 1.5(e) (division of fees) and 5.4 (professional independence of the lawyer), and the lead generator’s communications are consistent with Rule 7.1 (communications concerning a lawyer’s services).” While it would have been preferable to eliminate Rule 7.2 outright, this proposal at least demonstrates recognition of the increased pressure for attorneys to compete in a crowded marketplace and the continued lack of access to lawyers among lower and middle-class Americans and raises hope for continued evolution of the Rules to alleviate those issues.