Software = Unauthorized Practice of Law

The Ninth Circuit recently held that a software company selling bankruptcy software was engaged in the unauthorized practice of law. Reynoso v. Frankfort Digital, __ F.3d __ (9th Cir. Feb. 27, 2007). Coverage here. The web-based software permitted users to prepare bankruptcy petitions and schedules, "as well as informational guides promising advice on various aspects of relevant bankruptcy law." Among the software's promises is that it would find "loopholes" and "stealth techniques" for the user. The software contained the following lengthy disclaimer:

Realizing that this document is signed under penalty of perjury, I declare that I prepared my own bankruptcy by myself using a computer and that I was not assisted by an attorney, paralegal or bankruptcy preparer. I downloaded the software into my computer’s browser as a web page, typed in my bankruptcy information and printed my bankruptcy documents on my printer in the privacy of my home without any human intervention other than mine. ... The contents of my documents are based entirely on my own research and no one gave me legal advice or told me to include or omit any information from my documents.

The Bankruptcy Court held that the company "had committed fraudulent, unfair, or deceptive conduct, and had engaged in the unauthorized practice of law." Both the Bankruptcy Appellate Panel and the Ninth Circuit affirmed that decision.  The Ninth Circuit noted that the software was more than a mere scrivener:

The software did, indeed, go far beyond providing clerical services. It determined where (particularly, in which schedule) to place information provided by the debtor, selected exemptions for the debtor and supplied relevant legal citations. Providing such personalized guidance has been held to constitute the practice of law.

It is particularly heartening that those of us who practice law cannot be easily replaced by lifeless, heartless machines (though some may argue that lawyers equally qualify as both "lifeless" and "heartless"). That said, it raises the specter of how far legal-aid and public-interest organizations can go to help those who do not have the financial means to retain legal services.  Software such as the Nolo Willmaker gives peace of mind to those who could not afford to hire an estates and trusts attorney.

Similarly, would an organization such as the Computer & Technology law section be dispensing legal advice by including a contract-provision database, where one enters scenarios, with the software spitting out a draft contract.  Even if it included a disclaimer, such as in Reynoso, would that be enough to shield it from dispensing legal advice?  What implications does this have for informational articles on firm sites? 

While I agree with the decision, I wonder what it portends for access to justice, as well as for the legal profession.

Comments

[John Spence]

Great post. This is a very interesting development in an area of law that is quickly growing and evolving in new directions. I think there is, on the part of many, a genuine and honorable interest in increasing access to basic legal information to people who otherwise couldn't afford it or wouldn't know how to get it. However there is also a very real risk that such websites will overreach their intended task and at least flirt with the unauthorized practice of law. The difference between the two is, at best, a shady line and one that will be tested and retested as the internet becomes the first stop for a growing number of people looking for legal advice. This is a topic that I think has been underconsidered and has a real potential for danger despite the good intentions of some participants. Considering the competition for clients, it is not difficult to imagine rival websites inching closer and closer to the line.