Updated: Jun 13, 2021
Harnessing technology for the benefit of litigants - seekers of justice - is of utmost importance.
Regulation of the legal profession serves to protect the public interest and ensure clients receive the highest quality of legal service delivery. However, there is growing pressure for the industry to adapt to the innovations and expansions that are rapidly transforming the legal industry. The use of legal advice and document creation software, cloud computing programs, and artificial intelligence (‘AI’) in law firms is becoming the ‘new normal’ but with a serious cost, causing several ethical, professional, and regulatory issues.
Focussing on Queensland, this article will explore how current state regulations are inhibiting innovation in legal service delivery, particularly in relation to access to justice. This article defines access to justice as ensuring the provision of legal services is cost effective, highly accessible, and compliant with professional duties. These duties include the duty to provide good quality legal advice, maintain the privacy and integrity of client’s information, and ensure public confidence in the profession. It will analyse how the general legislative silence in Queensland’s regulations regarding the use of technology inhibits innovation and restricts access to justice by limiting the engagement of legal practice to lawyers, creating competency and confidentiality issues, and negatively impacting consumers’ confidence in the legal industry. The article will explore regulation in international jurisdictions and conclude that Queensland’s legal profession requires an element of deregulation and amendments to current regulations to adapt to the innovative disruptions to the industry, and provide several recommendations on how this can be achieved. These conclusions are pivotal to the rapidly developing legal profession in Queensland to regulate this evolving area of the law into the future where the use of technology is inevitable and innovation will become conventional.
The impacts of technology and innovation on the legal profession have been discussed by a substantial body of international and local literature in academic articles, research reports, and news publications. Much of this literature uses the term ‘disruptive’ to describe the way innovation is transforming the legal profession, building on Clayton Christensen’s theory of disruptive innovation first published in 1995. The literature considers innovation to include automated documentation, cloud computing and artificial intelligence systems. Many authors agree that the use of these innovations within the legal profession have a positive impact on access to justice due to the increased availability of information, flexibility and efficiency of lawyers, and affordability of legal services. However, some academics raise concerns regarding artificial intelligence and its impacts on a lawyer’s ethical duties.
The literature identifies that one of the most significant barriers to implementing innovative change in firms is regulation governing the legal profession and conclude that changes need to be implemented to develop the industry into the 21st century. Authors agree that regulation of automated systems is especially vital where lawyers use AI to supplement or even replace elements of their work to protect vulnerable consumers of legal services and increase access to justice. However, whilst there is an abundance of research about how innovation is disrupting the legal profession, there is little Australian research regarding how current regulations inhibit or support innovation or recommendations to change these regulations. This article addresses the significant gap in Australian literature by applying international research to Queensland’s legal profession to identify the current regulations and how they are inhibiting innovation in the industry. This research is vital to the legal industry as it highlights a need for change in regulations and transformation of the current profession to adapt to these disruptive innovations.
Queensland lawyers are required to abide by a wide range of professional and ethical standards, regulated primarily by the Legal Profession Act 2007 (Qld) (‘LPA’), Legal Profession Regulation 2017 (Qld) (‘LPR’) and the Australian Solicitors Conduct Rules 2012 (‘ASCR’).The conduct of solicitors is supervised by the Queensland Law Society (QLS) and the Legal Services Commission (LSC), which is governed by the LPA. Ultimately, these regulations and supervisory bodies ensure that lawyers uphold their paramount duty to the court to facilitate the administration of justice which includes defending the underlying principles of the rule of law and access to justice. However, the regulations provide no guidance regarding the use of rapidly developing innovations such as artificial intelligence (‘AI’) and other online systems providing legal services. In fact, the LPA contains provisions restricting the engagement of legal practice in Queensland to Australian legal practitioners. This particular regulatory restriction and general silence regarding the use of technology inhibits innovation and restricts access to justice by causing breaches of ethical considerations when technological innovation is applied in practice.
EFFECTS OF REGULATION OF INNOVATIONS ON ACCESS TO JUSTICE
Online Legal Drafting
Online legal drafting software including Drafting Assistant and Softdocs are allowing lawyers to create new or scan existing legal documents and be alerted to any errors, inconsistencies, and missing information. These programs use AI to assess potential drafting issues, such as defined terms, cross-reference discrepancies, omissions, and numeration errors. Estimations suggest that 22 per cent of a lawyer’s job and 35 per cent of a law clerk’s job can be automated. By implementing this software in firms, lawyers and clerks spend less time on menial, routine tasks and more time on areas requiring skills and expertise – increasing the quality of legal services provided. The use of AI and automation of legal drafting in practice is driving down the cost of services due to reduced overheads which in turn, increases access to affordable justice. However, these innovations are causing a trade-off between abiding by the regulations and significant cost savings and quality increases for the client – both of which benefit access to justice.
Restricted Legal Practice
Queensland regulations restrict legal practice to only be engaged in by Australian legal practitioners. Legal practice is not defined in the regulations, however, has been interpreted in common law to mean the giving of legal advice and counsel to others as to their rights and obligations under the law and the preparation of legal instruments. Therefore, the artificially generated documents created by online drafting programs seemingly breach this regulation, ultimately affecting access to justice as the documents may not be accepted by the Court. However, the common law distinguishes between generic legal documentation and customised documentation requiring drafting by a lawyer with personal legal advice provided. Generally, generic legal documentation provided by online systems does not fall within the definition of legal practice and is permitted by the Court. Unfortunately, the common law demonstrates that the distinction is not clear in separating permissible legal work from impermissible legal practice and is regarded as a matter of fact depending on each individual case. Ultimately, this restricts access to quality justice as existing precedent does not indicate when a breach may be found which can result in inconsistencies regarding the application of law to individual circumstances. The legislative silence regarding the definition of legal practice causes a conflict in the separation of powers and inhibits the innovation of online drafting services in law firms, ultimately undermining Queensland’s legal system and in turn negatively affecting access to justice.
Artificial Intelligence Systems
Artificial intelligence systems such as Ailira and Lex Machina use natural language processing and machine learning to provide research assistance and legal advice. The innovations are being used by clients and lawyers to obtain insights into judicial behaviour, venues, opposing parties and opposing counsel to assist them in making better decisions about claim construction and case strategy. These programs seemingly increase access to justice despite disrupting the legal system by providing legal services to consumers without the need for a lawyer. They have even led to the opening of ‘Law Firms Without Lawyers’ in low socio-economic areas, increasing access to justice to individuals who are disproportionally affected by their demographics.
Ensuring Competency and Public Confidence
Pursuant to the ASCR, lawyers have a fundamental ethical duty to deliver legal services competently, diligently, and as promptly as reasonably possible. Artificial intelligence emulates human thought processes and rational human behaviour through machine learning and storage of experiences.  As a result, it can act differently in the same situations, depending on the actions previously performed. There is also a risk that AI systems are unable to distinguish between causation and correlation, thus creating a further risk of drawing conclusions based on wrong inferences. An example of this is the purchase of a hang-gliding magazine being correlated with a risky lifestyle by the AI system when the consumer's actual intention for purchase is an interest in photography. These issues raise concerns regarding the innovation’s capacity to compute reliable advice free from bias or error which impacts access to good justice. America’s COMPAS model is a notable example of bias entering an AI system resulting in discriminating predictions. The model was implemented by the US Court system to predict the likelihood of defendants reoffending and based on the data used and how the algorithm was created, the model predicted twice as many black reoffenders than white. This example suggests that the risks with AI pose a threat of lawyers breaching Queensland’s regulations if they are not trained in comprehending the integrity of the outcome and reduces competency in lawyers through over-reliance on AI. Both these situations could lead to injustice for a client as a result of the provision of biased or inaccurate legal advice, consequently diminishing the public confidence in the system and ultimately hindering access to justice.
Cloud computing is a type of software that is not installed locally on the computer or phone being used by the lawyer operating the service, but can be accessed over the internet using a browser or mobile phone application.  Cloud-based email services and document management systems such as Gmail and Salesforce deliver services in which users can access their uploads from any computer with a browser and internet connection, regardless of the hardware on the computer. The use of this innovation is dominating the legal industry according to a recent survey by the International Legal Technology Association which identified that 78% of the top 100 law firms currently store client data in the cloud. The innovation has allowed law practices to operate virtually or out of minimal physical office space lowering overhead costs and increasing flexibility and efficiency as the web-based systems can be accessed anywhere, at any time. These benefits translate into significant cost savings for clients and ultimately increases access to justice – an element of which is cost-effective legal services.
Duty of Confidentiality
The ASCR rule 9.1 mandates that lawyers must manage and maintain their client’s information. This duty of client confidentiality inhibits the implementation of cloud computing in firms as there is a significant security risk associated with uploading data to the cloud. This is because the data is processed and stored on remote servers rather than on local computers or hard drives which creates a danger of breaching a lawyer’s fiduciary duty of confidentiality. Under most standard terms of service, a cloud service provider has the right to move, store, and process a customer’s data without giving them the right to receive reports on the location of its data, the number of copies made of such data, or the locations where such copies may be stored. Cloud computing service providers often hold data and operate servers in off shore jurisdictions where confidentiality of information cannot be guaranteed as the third-party providers do not owe any duties of confidence to the law practice implementing the software. In a commercial relationship, confidentiality only attaches through an explicit agreement between the parties and in the absence of such an agreement, client data can be accessed by persons unauthorised by the ASCRs. The third party provider is not a party caught by the exception in ASCR 9.2 unless the client expressly or impliedly authorises disclosure. Therefore, Queensland’s current regulations inhibit this type of innovation which impacts consumer’s access to justice that conforms to ethical regulations.
No Conflict Rule
The issues relating to confidentiality also give rise to a breach of the no conflict rule in ASCR 10.1. This regulation operates to ensure solicitors and law practices avoid conflicts between the duties owed to current and former clients. Clients have the right to legal advice that follows regulations and does not breach any ethical duties, particularly as the client is vulnerable in the fiduciary relationship that exists between themselves and the legal practitioner. Queensland’s regulations under the ASCR, particularly rule 10.1, inhibits cloud computing as there is no way of knowing if other firms have previously represented that client when outsourcing work to those firms over the cloud. Some cloud computing software includes conflict checking mechanisms that can automatically compare parties’ details to identify conflicts, however this is an additional cost which defeats the purpose of implementing the innovation which is to reduce costs to the client by reducing overheads. There are no measures in Queensland’s regulations pertaining to how legal practitioners can fulfil their ethical obligation to avoid conflicts when using cloud computing software which inhibits this type of innovation and ultimately affects access to justice.
Queensland’s current regulations are inadvertently inhibiting innovation and are not reflective of a constantly developing industry. The use of online legal drafting software, AI systems, and cloud computing threaten to render the regulations obsolete because of the professional and ethical challenges they create that are not addressed by the regulations. Regulatory change is essential to ensure lawyers can adopt appropriate practices regarding innovation that improves access to justice by mitigating the risks to competency and confidentiality to maintain public confidence in the law. Using international jurisdictions as a basis of reform, the rest of this paper will focus on recommendations to the state’s current regulations and propose a regulatory framework to be implemented in Queensland.
Restricted Legal Practice
The United Kingdom has one of the most deregulated legal industries in the world as a result of enacting the Legal Services Act 2007 (UK). The main distinction between the UK Act and Queensland’s equivalent act (the LPA) is in regard to who can engage in legal practice and what legal activity is. The UK act defines ‘legal activity’ as the provision of legal advice, assistance, or representation in connection with the application of the law or with any form of resolution of legal disputes. Legal activity can be engaged in by professionals authorised by an approved regulator including solicitors and barristers but also non-lawyers including licensed conveyancers, notaries, and chartered accountants. This deregulation has removed the significant barrier to entry of the legal industry (becoming a registered solicitor or barrister) that still exists in Queensland and allows for a wider range of legal service providers by permitting non-lawyers to engage in legal practice. UK’s regulations also support the implementation of innovation in firms which is evident as 89% of the country’s law firms are already utilising artificial intelligence or have imminent plans to do so.
However, the deregulation of the industry causes a serious trade-off between the elements of access to justice. A legal industry with non-lawyers increases competition driving down the cost of services and allows for higher standards of quality from the use of innovation, however, jeopardises consumer confidentiality and confidence as explored in this article, thereby undermining the legal system. Therefore, when considering changes in Queensland’s current regulations, those factors need to be considered. Queensland’s LPA allows for an element of collaboration with non-lawyers in the delivery of legal services through allowing the creation of multidisciplinary partnerships, despite restricting engaging in legal practice to Australian legal practitioners. The main issue in the state’s regulation is the lack of definition of legal practice which inhibits the use of innovation due to the risks of breaching the restricted legal practice rule. In order to allow the use of innovation in law firms, Queensland’s LPA should insert a legislative definition of legal practice as these innovations replace routine work and increase efficiencies at reduced costs to the client. Routine legal work is also the most amenable to being performed by technology and its innovations. This definition should specifically limit the use of innovation to such tasks that do not require an application of the law to individual circumstances in order to mitigate the risks of incorrect legal advice and public confidence issues. This definition will prevent conflicts between the separation of powers and decrease the amount of cases needing Court resolution due to innovation engaging in legal practice against the current regulations.
Ensuring Competency and Public Confidence
The article identified that the main risk to competency and public confidence from artificial intelligence systems is bias entering the machine learning system at any stage of its operation. To prevent this bias, it is vital that the algorithm produces transparent results with reasons in order to identify and neutralise bias that may arise in the advice provided. AI systems should not be implemented on a stand-alone basis and lawyers should regularly stay up to date with technology to ensure competent advice giving. These provisions should be reflected in the ASCRs and LPA.
Similarly, in order to safeguard artificially produced advice from error and bias, regular auditing should be integrated into the systems as well as appropriate mechanisms for human review put in place. System failure cannot be an excuse for compromising client service and periodical assessments of the systems would ensure that regularly updated laws are reflected in the system, data is inputted accurately, and overall that the machine is maintained to a certain standard. This could take form as a provision in the LPA with appropriate penalty units for a breach. This is a similar approach as the one taken to ensure trust accounts are dealt with by practitioners with the highest of care in order to ensure consumer confidence in the legal services market. Much like the current provisions in the LPA which require a law practice to have trust records reviewed annually by an external examiner, the same principle can be applied to reviewing AI systems. This will ensure the systems stay up-to-date with the complexities of the law and maintain trust in the legal profession by providing the highest standard of care when dealing with artificial intelligence.
Duty of Confidentiality
This article identified that Queensland’s regulations inhibit the innovation of cloud computing in legal practice due to the risk to client confidentiality when information is stored by third-parties. There are several ways this issue can be mitigated to ensure access to justice.
The equivalent ASCR in the U.S.’s legal system establishes an express and explicit duty to supervise subordinates, including third-party providers, in connection with the delivery of legal services by the lawyer or law firm. A similar provision exists in the ASCR which mandates that a solicitor with designated responsibility for a matter must exercise reasonable supervision over solicitors and all other employees engaged in the provision of the legal services for that matter. However, this provision does not encapsulate third-party providers supplying cloud computing software. Client communications and files with firms implementing innovative systems should receive equivalent protections as afforded by a lawyer’s duty of confidentiality. There should also exist steps to ensure the business has an appropriate record keeping system and supporting procedures that will ensure the firm has access to information and transactions in the event the business ever goes offline.If rule 37.1 was amended to include third parties then Queensland lawyers would be assumed competent to select and oversee the proper use of cloud computing. This could also be affirmed in the form of a due diligence duty in the ASCR which will place an ethical duty on solicitors to exercise due diligence when choosing to implement innovation. Under this regulatory reform, legal practitioners will be subject to disciplinary proceedings for any breaches of a due diligence duty and supervision of others duty which can amount to findings of unsatisfactory professional conduct or professional misconduct. This can lead to further consequences for the practitioner including removal from the roll, having their practising certificate suspended, and paying a penalty or compensation, among other penalties. These penalties will deter practitioners from non-compliance with the regulations which will in turn increase the quality of services provided and access to justice.
Another way to mitigate the risk of storing information in off-shore jurisdictions is to amend the ASCR 9.1 and impose an additional duty on the solicitor to explain what is meant when a client’s information is stored on the cloud and require the client to authorise disclosure expressly or impliedly before engaging in legal services. This will ensure that the exception in ASCR 9.2 regarding client confidentiality is complied with.
Although a QLS reference guide exists about choosing and using cloud services, this guide is not binding and is to be considered by practitioners in light of the legislation, ASCRs and common law. Therefore, there should be an amendment to the LPR to include a provision regarding cloud-computing and the requirements for choosing a reliable third-party provider. This is recommended as the risks with cloud-computing on confidentiality can be likened to the risks of the use of computers in trust accounting. The LPR provides several requirements regarding computer accounting systems to ensure adequate security of money held on trust by practitioners. These regulations were in response to the transition from paper cheques to online banking in a computerised society. Applying this logic, the LPR should also reflect the rapid expansions of technology in data-storing and include provisions for cloud-computing. The provisions could include a duty to maintain backups of all client communication and files on a company computer or hardware not accessible by third-parties – similar to section 32 of the LPR which requires backup copies of all records to be kept. A provision in the LPR will ensure the regulation accurately reflects a developing legal industry positively impacted by innovations and hold practitioners accountable for any breaches.
No Conflict Rule
The article identified the risks of cloud-computing on the no conflict rule to be that the software cannot check for conflicts between past and present clients. The most appropriate recommendation is to include in the provision for cloud-computing a section outlining that software without conflict checking mechanisms should not be used in law practice. This will ensure that the firm uses products that include a conflict of interest check built into the application to search for the names of any party associated with cases selected by the legal practitioner running the check and prevent breaches of the no conflict duty in the ASCR.
It is undeniable that innovations in the legal industry are steadily transforming legal practice. This article has highlighted that the restrictions imposed on legal services and general silence regarding the use of technology in Queensland’s regulations undermine innovation. Technology’s infiltration in the legal industry causes a combination of ethical, professional, and regulatory issues and ultimately impacts access to good, affordable justice. In particular, the article explored the ethical duties of ensuring competency, public confidence, confidentiality, and conflicts, and concluded that there will always be a trade-off between cost, quality of services and conforming to regulation when using innovation to provide legal services. The article recommends that in order to mitigate these elements of access to justice, there should be some consideration for technology and innovation in the LPA and ASCRs that regulate the state’s profession. This will ensure that Queensland’s legal profession is reflective of a society constantly technologically developing and allow for the implementation of innovations in law practice to increase access to justice for all consumers.
Author: Vanessa Mihov, LLB (Hons), BBus (Econ)
You can visit Vanessa's Linkedin here.
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