I recently wrote about the controversy over the company TIKD (here) which is fighting a complaint alleging it is engaged in the unauthorized practice of law in Florida, a case that could really question the authority of the legal profession to continue to operate as a monopoly that regulates itself.
Now comes news of another case that may have similar implications. As reported in Bloomberg Law, a lawsuit was filed earlier this month in California federal court accusing venture-backed legal matchmaker UpCounsel Inc. of violating ethics rules and unfair competition laws to gain an edge over traditional legal service providers. The lawsuit was filed by LegalForce RAPC Worldwide P.C., an intellectual property law firm that uses artificial intelligence software to streamline the trademark application process. Raj Abhyanker, an engineer-turned-attorney who founded the plaintiff entities, told Bloomberg Law that the UpCounsel lawsuit will shine a light on regulatory inequities that have allowed nontraditional legal service providers to gain a competitive edge in the marketplace.
Note how ironic this claim is. The legal marketplace is essentially a monopoly in which only state admitted lawyers can participate and which is regulated by people who are participants in the monopoly itself. Companies like UpCounsel and others have argued that this constitutes an inequity because it prevents them from entering and competing in the market. Yet, the plaintiffs in this lawsuit are now claiming that allowing the companies to enter the market would constitute unfair competition. In other words, those who have benefited from controlling the market as a monopoly are now arguing it is unfair to allow others to enter the market because they might gain a competitive edge.
According to Bloomberg, UpCounsel has stated that the suit “is a frivolous act” by “an entrepreneur who has failed to compete in the market and is lashing out in frustration.” “UpCounsel's goal is to create a platform that provides access for businesses to find, connect and work with independent attorneys across the nation,” the statement said. The company, it added, has “worked diligently for years, and at great expense, to ensure our business is compliant with all ethical rules.”
I suspect that the future of regulation and the opening of the market to "outsiders" will be the "next big thing" in Professional Responsibility, and will probably get a lot of attention at the upcoming ABA National Conference on Professional Responsibility at the end of the month.