Legal Ethics, Technology

Legal Technology Landscape Rocked By Contract Attorney Overtime Decision

At what point does software become so complex that it really is dispensing legal advice?

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Remember when the Second Circuit ruled that document review wasn’t legal work and opened the door for contract attorneys everywhere to earn overtime? Me neither. But I do remember when the Second Circuit kicked the David Lola case back to the district court on the grounds that, under North Carolina law, the question of whether or not document review is legal work should survive a motion to dismiss. This description is substantially less sexy, but it has the benefit of being precise.

Well, if you think back to that decision that rightfully sent Biglaw and a slew of document management companies into a tizzy, you may remember the standard that the Second Circuit laid out for what constitutes “legal work”:

A fair reading of the complaint in the light most favorable to Lola is that he provided services that a machine could have provided. The parties themselves agreed at oral argument that an individual who, in the course of reviewing discovery documents, undertakes tasks that could otherwise be performed entirely by a machine cannot be said to engage in the practice of law.

Off-hand, this seems like a fair standard. If the job consists of a bundle of rote tasks, there’s not really legal judgment at play. “Check any document that says, ‘X'” requires optical recognition, not a law license. But in a world of increasingly complex machines, is it still fair to say “performed entirely by a machine” is synonymous with performing rote tasks? High-end software systems employ complex algorithms to replicate legal judgment. As the folks at Kira Systems, which builds solutions for transactional lawyers, note:

On the one hand, work without any legal judgment is an extremely low bar; many secretaries and law clerks perform work under the supervision of lawyers that easily exceeds this standard. On the other hand, lots of currently available legal software is capable of replicating quite sophisticated legal judgment. Our software at Kira, for example, helps lawyers find, extract, and analyze complicated contractual provisions like change of control or assignment with greater accuracy than similar lawyers not using it.

So what could this standard mean? Well, for one thing, how can a machine ever be liable for the unauthorized practice of law if its functions do not constitute the practice of law? Even software modeled on the judgment of attorneys may be fair game under this standard. In fact, even in North Carolina — the state law involved in the Lola suit — there’s an effort to declare machines unauthorized legal practitioners:

The “machines cannot practice law” standard is a welcome contradiction to some existing case law. As an illustration, consider LegalZoom, a legal technology company that offers software to assist with the preparation of legal documents. LegalZoom is currently the focus of a lawsuit for unauthorized practice of law in North Carolina. The North Carolina Bar Association, which initiated the proceedings against LegalZoom, contends that the branching process used by LegalZoom to identify relevant customer information is akin to the manner in which a lawyer interviews a client and requires professional judgment.

The fact that LegalZoom’s templates were completed by a machine using a consistent and predictable process was insufficient to dismiss the case: the Superior Court of North Carolina postponed judgment until a more complete factual record is developed. Although LegalZoom has been more successful in other states in which it has been pursued for unauthorized practice of law, the North Carolina decision is evidence that there is not, as yet, a national consensus.

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So nobody really knows what North Carolina law thinks about machines practicing law. And that’s a big deal generally, because a survey of definitions of the “practice of law” across the states reveals there’s a lot of similarity and a lot of vagueness on this question. At what point does software become so complex that it really is dispensing legal advice?

Certainly something to think about while SkyNet puts out its shingle.

I Think Therefore I am a Lawyer? Implications of Lola v Skadden for Document Reviewers and their Computer Replacements [Kira Systems]

Earlier: Federal Appeals Court Says Doc Review Is NOT Real Legal Work
Second Circuit Sympathetic To Contract Attorneys?
Contract Attorney OT Suit Moves To Second Circuit
The Overtime Fight For Document Review Continues
The Cautionary Tale Of A Contract Attorney’s Biglaw Lawsuit
Contract Attorney Sues Staffing Agency For Overtime; What Happens Next Will Make You Chuckle

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