A recent decision by a North Carolina court has provided a unique opportunity to start important and necessary discussions about the legal profession and the role of technology. In North Carolina State Bar v. Lienguard, Inc., 2014 NCBC 11, the court determined that Lienguard, Inc., has been engaged in the unauthorized practice of law by performing its commercial lien filing services. The North Carolina court’s decision will likely be appealed, but in the meantime, it has provided a platform from which interesting legal and technological discussions can be launched.

Unauthorized Practice of Law, Generally

Lawyers and bar associations across the country are protective of the right to practice law for a number of important reasons. Becoming a lawyer authorized to practice law involves extensive schooling, passing an intensive multi-day test, being determined fit ethically fit to practice, taking an oath to uphold certain standards, and more. Requiring a license to act as an attorney is comparable to requiring a license to be a doctor, a veterinarian, a public accountant, or other professional occupations – and provides protections both to the public and to the profession. The license requirement ensures that the person performing the specific job is adequately trained, experienced, and knowledgable to do so, and it enables people engaging the services of a professional to differentiate between those who are qualified and those who aren’t.

[a party] who writes or types something dictated or provided by another is not engaged in the practice of law, even if the drafted document is legal in nature.

Most people tend to believe that this type of regulation is both necessary and good, and I agree. The law is complex, and misapplication of the law or unauthorized representation can be devastating. I also believe, however, that individuals and companies meant to benefit from certain laws should have some control over the process, that technology can help in this area, and that a lawyer’s time is best spent doing “lawyer things”, not mindless automate-able tasks.

Generally speaking, this position is well represented in the law. A universally accepted “exception” to unauthorized practice of law restrictions is something known as the “scrivener’s exception”. This exception notes that a scrivener who writes or types something dictated or provided by another is not engaged in the practice of law, even if the drafted document is legal in nature. Further, individuals are allowed to represent themselves – whether or not they are licensed to practice law. It is also to note the important distinction between giving legal advice (which would fall under the UPL restrictions), and providing general legal information (which would not, and is protected as free speech). Legal information, like the facts of what the law states may be provided – after all this is factual information available to the public. Legal information can become legal advice, however, when the information is applied to specific facts

Given this framework, I’ll briefly discuss the North Carolina court’s decision, and the discussion surrounding it.

The Decision in North Carolina State Bar v. Lienguard, Inc., 2014 NCBC 11

In the case against Lienguard, the court determined that Lienguard had engaged in the unauthorized practice of law by preparing legal documents, and by providing unauthorized legal advice through the general lien law information published on its website.

As a disclaimer, while I disagree with some of the statements in the court’s decision, I don’t have enough information to determine whether or not Lienguard engaged in the unauthorized practice of law.

The court determined that a mechanics lien is a legal document, and Lienguard’s role in the preparation of mechanics liens in North Carolina amounted to more than a clerical, or scrivener’s task. The court also felt that the general lien information provided on Lienguard’s website amounted to impermissible legal advice because it was combined with the preparation of legal documents, and was provided “with the specific purpose of drawing a client to the commercial lime preparation service and in specific connection with drafting such claims of lien”.

To be advice, there must be an application of the general information to specific facts.

While Lienguard may have been engaged in unauthorized conduct, it seems a stretch to claim that general information provided via a website can constitute legal advice. As noted above, legal information is factual information already available to the public. While the court attempts to describe the information provided on Lienguard’s website as somehow nefarious, and disallowed because it was related to a service Lienguard provides, it does little to convince me that those facts substantially change the nature of the information from “information” to “advice”. To be advice, there must be an application of the general information to specific facts. Generally this application of information to specific facts must result in either a prediction of how a particular legal issue will be resolved, or counsels, recommends, or suggests a particular course of action based on a specific situation.

So, in the case at issue, whether or not Lienguard’s process of preparing mechanics liens was the unauthorized practice of law, and whether or not Lienguard may have been providing legal advice in some other manner, really should have no bearing on whether the general information provided on the website was classified as “information” or “advice”. In drawing the conclusion that the information provided was impermissible legal advice, the court noted a Tennessee bankruptcy case in which  that court held that providing “explanations or definitions of . . . legal terms of art . . . is, by itself, giving legal advice”. It’s worth noting that in that case, as well, this “information as advice” determination was predicated on the fact that the party giving the “advice” was also engaged in some unauthorized legal practice. I fail to find this compelling. Information does not become advice without the application of that information to particular facts – whether or not the information is in some manner related to an action of the party providing the information.

Finally, despite the fact that the court noted that Lienguard is an online commercial lien filing service, no real information is provided regarding the “online” portion of that statement. It seems that this particular situation is more related to a “service” rather than a true online software platform. When this result is viewed from the position of a true software platform, I think a different outcome is reached. A true technological solution provides a nearly unassailable position against claims of UPL.

The Current Discussion

This case provides a nice starting point for a discussion not just about what constitutes the unauthorized practice of law, but also how technology interplays with traditionally held ideas of what lawyers do, the increasing place for technology in legal-related fields in the future, and whether this constitutes an attack on the relevancy of the profession.

In my opinion, filling out forms (and for some clients, thousands and thousands of forms) is not a good use of attorney time. It’s definitely not a good use of attorney time when the consideration of the client’s wallet comes into play. And, if lawyer’s are being honest, I think there’s a good chance that this type of work would be directed to their secretaries, in any event. And, it also makes little sense as a practical matter for both the lawyer and the business. With regard to a big company client, the lawyer may not even have enough time to fill out all the necessary forms. And forcing a large nationwide company to hire 50 different lawyers, with lawyer-scale bills, to fill out hundreds of thousands of forms in each state, seems near-sighted, and unduly burdensome.  While it’s true that there can be tricky issues involved in making determinations related to mechanics liens, such as the determination of what actually constitutes a date of last furnishing labor and/or material to a project, those are determinations that can be made prior to any utilization of a software platform to fill out a form document.

the more a “legal”-type function can be automated by software, the less it constitutes the practice of law.

There is a huge difference between 1) the lien claimant going to a lawyer for advice (or seeking advice from a non-lawyer) as to what information should be used, and; 2) the claimant deciding the date itself, or deciding on a date after speaking with counsel, and then inputting that date into a software platform. Using a software platform for help in this manner is clearly allowed, and does’t constitute UPL even in North Carolina, for a variety of reasons – not the least of which is that North Carolina itself mandates the use of a software platform that creates a type of form and streamlines and automates a process related to mechanics liens. The relatively recent changes to North Carolina lien law specifically contemplated the creation and use of a software platform, (not run by lawyers) called LienNC, through which the newly created “Notice to Lien Agent” can be sent. Other examples of this type of automated process can be seen all over: TurboTax for tax documents and filing, AIA for certain contract documents, CT Liens for UCC Lien documents and filing . . . the list goes on. Many many documents with legal implications are filled out by non-lawyers, and many documents with legal implications are filled out by software.

The key question here, I think, is the role of technology. Technologically advanced companies, companies that provide a legitimate software platform for the automation of certain processes should avoid the UPL problem. Software doesn’t care how the information to be used is determined – it could be determined with assistance of counsel, or without – the software platform merely takes that self-determined date and places it onto paper. Complicated determinations to be made, whether regarding tax information or construction project information, do not make the documents themselves complicated. The forms required, despite potentially seeming complicated, are really nothing more than simple forms with blanks to be filled in.

So, what does this mean? Lawyers practice law. There are any number of function suited for lawyers that non-lawyers cannot and should not do. As a sub-set, there are many function performed by lawyers that software cannot do. Software cannot prosecute or defend case in front of a judge and jury; software cannot adapt to witness questioning or take a deposition; and software is unable to give specific legal advice – taking information and merging it onto a form, though, that’s something software can and should do.

If software products could actually practice law, that doesn’t say a lot for lawyers. And, as a lawyer, I would like to think I’m more valuable than a computational device or form-filler. Of course, software cannot take a lawyer’s place and perform lawyer functions. It follows, then, that functions a software program can competently do are not lawyer functions, are not the practice of law, and therefore are not a cause for concern to the bar associations of America. I would suggest that the more a “legal”-type function can be automated by software, the less it constitutes the practice of law.