The Legal Ecosystem: The Regulators and the Do’ers (Part 2)

Topics: Alternative Legal Service Providers, Compliance, Government, Justice Ecosystem, Law Firms, Leadership, Regulation & Compliance, Risk Management


Editor’s Note: This is the second installment in a series of articles in which Lucy Endel Bassli will explore the key players in the legal industry ecosystem and the pressure they are exerting and enduring. She will focus on the commercial practice of law and players including regulatory and industry groups, law schools, the legal tech community, legal service providers, law firms, the Big 4 and corporate legal departments.

Bassli brings a depth of knowledge and a powerful perspective to this topic. Until recently, she was assistant general counsel at Microsoft, where she overhauled the global contracting operations by re-envisioning the mix of people, processes and technology. Earlier this year, she founded InnoLegal Services, a unique combination law firm and consultancy that advises on process optimization and on coaching lawyers in innovative practices. She also serves as Chief Legal Strategist for LawGeex, a start-up providing AI-based contract review automation.

Part 2

There are two members of the legal ecosystem that are fascinating to study together — industry associations and regulators — because they have such opposing and contradictory perspectives, yet both are critical to the evolution of legal services. Still, industry associations that focus on the more efficient delivery of legal services directly clash with the existing body of regulation about the practice of law.

At their core, the two appear to have contradictory goals. While industry groups like the Corporate Legal Operations Consortium (CLOC) and the Association of Corporate Counsel (ACC) Legal Operations are focusing on new ways to deliver legal services and engage in creative problem-solving, regulatory bodies across the US are focused on preserving the role of attorneys and the sanctity of what it means to practice law. Think of it as a battle between the practical and the philosophical.

Regulations regarding who can practice law in the US are grounded in the philosophy that there must be minimal standards and rules about who can provide legal advice, and who can participate in the judicial system. This philosophy is based on the desire to protect consumers and ensure that the layperson has adequate representation in a complex legal system.

The problem is that these rules do not distinguish between the practice of criminal law, family law and commercial law, for example. Thus, rules are to be applied similarly to a corporate in-house lawyer handling multi-million-dollar B2B commercial transactions and to a solo practitioner in rural America helping a couple with a divorce. Entire books have been written about the regulatory landscape of the practice of law, so let’s look at how this regulatory restriction impacts today’s practice of commercial law.

This disaggregation of certain aspects of the legal practice has been happening for decades as other players have entered the legal industry and taught lawyers creative ways of reconsidering their services.

In a commercial practice, whether at law firms or within corporate legal departments, there is mounting pressure to increase efficiencies and deliver faster, cheaper outputs. In order to accomplish these goals, attorneys are finding that parts of their practice or tasks can be delegated to others. This disaggregation of certain aspects of the legal practice has been happening for decades as other players have entered the legal industry and taught lawyers creative ways of reconsidering their services. (More to come on alternative service providers in a future installment.)

Attorneys are learning how to rely on others, beyond the traditional roles of legal secretaries or paralegals, and are increasingly comfortable handing off tasks and processes. As attorneys continue to do this, it forces this question: What part of lawyers’ work is the “practice of law” as defined by the regulating bodies in the 50 States?

We take comfort in the fact that those other people are not engaging in the practice of law as long as the attorney is overseeing the work. Why, though, do we need that aircover? Is the requirement that the attorneys have direction over that work just a way to preserve the long-standing goals of protecting the lawyer, rather than focusing on the work and the needs of the client? That is a bigger question than this article can answer.


Still, there has been notable movement in the regulatory landscape in recent years. In Washington state, for example, the Limited License Legal Technician (LLLT) is licensed by the Washington Supreme Court to advise and assist people going through divorce, child custody and other family law matters. This is a special licensing process for people who do not have JDs, but can practice law in limited areas (hence, the descriptive name).

This was a very encouraging step in opening the practice of law, but it took a long time to approve and is still extremely limited in its application. It also remains controversial years after deployment, with very few LLLTs operating in Washington, though there is now talk of expanding their scope.

If nothing else, this development has shed a light on this regulatory restriction that is keeping many people from accessing legal services in the US in areas outside of the commercial practice of law, which has been untouched from a regulatory perspective. Of course, that means we continue forward with governing laws that have not changed in decades, if not centuries.

Moreover, an argument can be made, and commonly is made, that the current regulatory restrictions are hindering access to justice on a macro level. Just consider the barriers for a layperson as they navigate basic legal actions simply because they are not licensed to practice law in the state in which they live. For example, is it really necessary to have completed three years of law school to file for a divorce, or dispute an eviction notice? Naturally, these disputes can become very complicated and require attorneys’ assistance, but often that is the result of attorneys over-complicating things to begin with.

…An argument can be made, and commonly is made, that the current regulatory restrictions are hindering access to justice on a macro level.

Surely, there must be lessons learned from Washington’s experience to open up the practice and allow others to help with the complicated legal system (which — not surprisingly — was designed by lawyers, for lawyers!)

On the other end of this spectrum is the growing number of legal industry groups that are pressing on precisely the topic of who can do what within the context of legal services — and asking about the difference between legal services and the practice of law and where those differences may intersect.

The sheer number of people identified as legal innovators, disruptors and futurists, coupled with the growing number of legal roles with the word innovation in the title demonstrates that these changes are a natural outgrowth of legal professionals seeking creative new solutions to age-old problems.

Without getting too philosophical, let’s look at how these industry groups are influencing the legal industry today. No other player in the ecosystem has had a more vocal impact recently than groups like CLOC and ACC Legal Ops. No doubt, if you are reading this article, you have heard of CLOC. That is due to the fast-paced rise of legal operations professionals across the industry. In firms or corporations, the role of legal ops professionals has evolved and transformed the definition of legal services in recent years.

These industry groups are bringing together operationally-minded lawyers with business and operations experts to gather, share ideas and demand change in the industry. As corporate legal operations specialists have shared and adopted successful tactics and processes, there has been a seismic shift across the ecosystem. Law firms are hearing requests for similar approaches and increased efficiencies from different corporate clients; while legal tech successes and failures are being openly discussed, and references from trusted colleagues remain critical for successful implementations.

In short, the tension between these industry associations and regulators alone is enough to cause a major disruption. Thousands of corporate legal ops professionals are challenging the traditionally regulated practice of law by demanding change from law firms and bringing in new players without licenses but who have the skills that supplement lawyers in ways we have not yet experienced before.

You can read the first installment of this series here.