Rocket Lawyer is among the first applicants approved to join Utah's regulatory sandbox program
Rocket Lawyer announced Tuesday that it is one of the first entities approved to participate in Utah’s new regulatory sandbox program permitting nontraditional legal services providers, including those with nonlawyer investors, to operate in the state without fear of being accused of the unauthorized practice of law.
The sandbox pilot program is the centerpiece of a regulatory reform package that the Utah Supreme Court endorsed last month in hopes that allowing the testing of innovative approaches to serving legal consumers will ultimately strengthen access to justice.
Overall, the Utah Supreme Court last week approved five entities for participation in the sandbox program, including other legal technology platforms, according to the court.
Rocket Lawyer, which is an online platform that helps consumers create legal documents and connects them with a network of independent attorneys, already serves consumers in Utah.
But Charley Moore, the San Francisco-based CEO and founder of Rocket Lawyer, says by participating in the sandbox program, his company will also have the ability to connect its users with Utah lawyers it hires as staff.
“By being able to employ lawyers directly, we are now going to be able to provide a great customer experience at a fraction of the cost,” Moore says.
Moore says the hybrid model of connecting consumers with staff and independent attorneys is an approach that Rocket Lawyer has already successfully implemented in the United Kingdom for several years.
In Utah, the platform has hired Matthew Tenney to be its director of attorney services and associate general counsel. The company plans to hire additional lawyers as needed to meet demand, according to Moore.
He also highlights that Rocket Lawyer has had operations in Ogden, Utah, for several years.
“What we saw early on is that the Utah Supreme Court really shared our values around making legal services more affordable and making access to justice a reality for more people,” Moore says.
The four other sandbox program applicants granted approval by the Utah Supreme Court are:
- • LawHQ: The Salt Lake City law firm plans to offer equity ownership to certain software developers in the firm. LawHQ also plans to offer a software application, called CallerHQ, designed to allow consumers to report spam telephone calls, text messages and voicemails. Consumers signed up through the application may then be joined into a mass tort litigation brought by LawHQ against the spammers.
- • 1Law: This entity 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: This entity 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 the firm plans to give his paralegal employee a 10% ownership interest in the firm as an incentive to remain with the firm.
Gillian Hadfield, a law professor at the University of Toronto in Canada who worked on two Utah regulatory reform panels in recent years, says she was pleased to hear that the Utah Supreme Court had begun approving sandbox program applicants.
“It takes more than just having an environment that allows people to innovate,” Hadfield says. “We really need to also now support, encourage and fund innovators in Utah.”
The Utah Supreme Court recently established an office focusing on legal services innovation that is responsible for recommending sandbox program applicants to the court and overseeing the applicants approved for entry.
Sandbox program participants that are able to demonstrate their legal services and “do not cause levels of consumer harm above threshold levels established by” the innovation office may receive approval to exit the sandbox program and continue practicing law, according to an Aug. 14 Utah Supreme Court standing order.
At the conclusion of a two-year pilot program period that began Aug. 14, the Utah Supreme Court plans to evaluate whether the major regulatory reforms that it has approved should continue “based on a review of data collected from those entities and individuals participating in the program,” according to an Aug. 13 press release.
Additionally, the court recently approved changes to ethics rules that now permit attorney fee sharing with nonlawyers, as long as there is written notice to the client.
Meanwhile, the Arizona Supreme Court also recently voted to allow alternative business structures in the legal industry through approving changes to ethics rules that take effect Jan. 1. Unlike Utah, there will be no sandbox program, but it has been described as a “rigorous application process.”
Moore says Rocket Lawyer expects “to fully participate in the Arizona rule changes, as well.”
“We are really thrilled to see Arizona also innovate in this area of access to justice,” he says.
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