About  »  Frequently Asked Questions

Frequently Asked Questions

1. What rules are lawyers subject to that don’t apply to entities?

Licensed lawyers are subject to the Utah Rules of Professional Conduct. These rules include the following:

  •  Rule 1.1. Competence: Requires a lawyer only to take on cases where they have the “legal knowledge, skill, thoroughness, and preparation reasonably necessary for the representation”
  • Rule 1.3. Diligence – Requires a lawyer to zealously represent the client’s interests while allowing the lawyer to determine how to do so. This rule also warns the lawyer against procrastination or taking on a workload that harms the client. It also requires they handle the matter to the end of their attorney/client relationship.
  • Rule 1.4. Communication – Requires a lawyer to communicate with the client about any offers, how to achieve the objectives, the status of the case, and generally keep the client informed on their case.
  • Rule 1.5. Fees – Requires a lawyer not to charge more than is reasonable for the representation and lays out what constitutes unreasonable fees.
  • Rule 1.6. Confidentiality of information – A lawyer must keep client information and consultations confidential except in very few circumstances where it is optional. While this rule does not apply to entities in the Sandbox, Rule 504 of the rules of evidence does apply and extends the attorney/client privilege to entities in the Sandbox. This means that the opposing party cannot force the legal provider to disclose the content of their consultations with the client.
  • Rule 1.9. Duties to Former Clients – Prohibits a lawyer from representing anyone whose case is related to a case of a prior client which may adversely affect either client.
  • Rule 1.13. Organization as a client – Requires a lawyer to act in the best interest of their total client’s interest rather than any individual employee of the entity, and sets out what to do in potential conflict situations.
  • Rule 1.14. Client with Diminished Capacity – Requires a lawyer to do his/her best to represent a client with diminished capacity in the same way he/she would any other client and gives the lawyer authority to act in the client’s best interest when at risk.
  • Rule 1.18. Duties to Prospective Client – Requires a lawyer to keep information confidential and not use it in other matters, even when the client doesn’t hire them to represent them in the case.

2. What are Sandbox entities allowed to do that would otherwise be prohibited by rule?

The Sandbox primarily tests whether two rules thought to protect consumers are unnecessarily stifling the kind of innovation that could narrow the access to justice gap—RPC Rule 5.4 and UCJA Rule 14-802.

Rule 5.4 is considered to protect lawyer independence by prohibiting fee sharing with non-lawyers who are not subject to the Rules of Professional Conduct. Under this rule, if you’re a lawyer with innovative ideas for new ways to deliver legal services, you can’t partner with a non-lawyer who has the know-how or capital you need to invest in new technologies and services. Through the Sandbox, the Court hopes to learn whether Rule 5.4 is necessary to prevent consumer harm or whether it merely prevents consumer-friendly innovation. Sandbox entities that seek a waiver of this rule are known as Alternative Business Structures (“ABS”).

Rule 14-802 prohibits the unauthorized practice of law. Under this rule, the “practice of law” is defined broadly to include any application of legal principles to a person’s specific facts and circumstances. Recognizing that most people with civil legal problems do not get help from a lawyer, the Court hopes to assess whether the benefit of delivering legal services to those consumers through the use of technology or trained non-lawyers outweighs any potential risk. Sandbox entities that seek a waiver of this rule are known as Alternative Legal Providers (“ALP”). Many ALPs are also using an ABS in order to fund technological advancements or other innovations. Both ABS and ALP entities can seek waivers of other rules on a case-by-case basis.

3. Is the Sandbox really about access to justice?

Yes. Generally, we rely on supply and demand to produce market-based solutions to meet consumers’ needs. But studies show that most American households are not receiving adequate help with the civil legal problems they face. This access-to-justice gap extends beyond the low-income populations that traditional legal aid services are designed to reach. It impacts middle-income families and small businesses as well. Despite the efforts to provide pro-bono and modest means services, volunteer at legal clinics, and donate to legal aid organizations, the access to justice gap remains. Here you can learn more about the unmet legal needs of Americans across socio-demographic groups.

The Sandbox pilot project is designed to test the hypothesis that this unmet need is caused, at least in part, by the way the Court regulates the practice of law. Under the Utah constitution, the Supreme Court has exclusive authority to govern the practice of law. If the practice of law is not fully serving the public, the Court believes it has a constitutional duty to examine whether its rules are part of the problem. The Sandbox is a closely monitored experiment to test whether the Court can relax certain regulatory rules to facilitate innovation without increasing the risk of consumer harm. The Court’s stated and continued purpose of this project is to “shrink the access-to-justice gap by fostering innovation and harnessing market forces, all while protecting consumers of legal services from harm.”

4. If the purpose of the Sandbox is to improve access to justice, why not limit Sandbox participation to entities that could show a direct impact on the access to justice gap?

The Court recognizes that the access to justice gap is broader than the needs of low-income communities traditionally reached by legal aid programs. If it limits participation in the Sandbox to entities seeking to address a narrowly defined access to justice problem, it misses the opportunity to test whether the market can produce other solutions to reach consumers at all income levels. As the Court gathers more information, it can better tailor the pilot project and any future policy decisions to ensure that it is advancing its access-to-justice goals.

5. Is the Sandbox harming consumers?

So far, the data shows no increased harm to consumers compared to traditional legal services. The Supreme Court heavily regulates the entities in the Sandbox through the Innovation Office, which employs a robust data collection system paired with the solicitation of consumer complaints and attorney-led audits of ALPs. (Because ABSs deliver legal services through licensed lawyers subject to the Utah Rules of Professional Conduct, those services are not audited.) The complaint rate is comparable to complaints lodged against licensed attorneys, and the audit results have been positive.

Some of the information collected by the Innovation Office is proprietary business information and is shared only with the Court and its advisory committee. But a great deal of data is published in a public report every month. Interested members of the Bar can review each of the Innovation Office’s monthly data reports going back to October 2020. 

6. How does the Innovation Office measure consumer harm?

The Sandbox is a well-regulated, data-driven experiment that relies on an ex-post evaluation of consumer harm. Consumer harm is measured in three ways.

First, Sandbox entities must regularly report detailed data to the Innovation Office. This data includes the type of services sought, the service dates, the scope of services provided, the amount paid for each distinct service, the legal and/or financial outcomes experienced by the client, and any client complaints. The data is compiled and analyzed each month for evidence of consumer harm, such as a mismatch between services sought and services provided, poor outcomes, or disproportionate cost.

Second, the IO solicits consumer complaints directly through a link that must be conspicuously posted on each entity’s website and at brick-and-mortar locations. The IO investigates each complaint and to date has determined that each was resolved by the relevant entity to the satisfaction of all parties.

Third, the IO assesses the quality of the services provided by entities using software or nonlawyer service providers by employing Utah-licensed lawyers with relevant expertise to audit case files. So far, the audit process, reports, and results have been both thorough and positive.

Each month, the Court reviews a detailed report on all entities authorized in the Sandbox, and the IO releases a public report that excludes proprietary information. The IO also has a robust public-facing website with a sortable database of all authorized entities and their authorization materials as well as the public facing monthly reports.

7. How does the Innovation Office measure the benefits of the Sandbox?

Benefits to consumers can take many forms, including increased access to legal advice or services, lower cost, increased information, greater knowledge, and improved control and choice.

The LSI Committee requires all applicants to demonstrate that their proposal meets an “innovation requirement,” meaning that Sandbox authorization will allow the entity to reach consumers currently underserved by the market. An applicant may make this showing in several ways, including but not limited to, reducing the cost of legal services, making legal services more accessible, or developing a new business or service model. Examples might include using non-lawyer providers to deliver free or low-cost services, creating a one-stop-shop for consumers to obtain related legal and non-legal services, or taking on outside investment to fund software development. Importantly, non-attorney investment or ownership arrangements which do nothing more than supply capital for advertising and/or marketing of existing legal services will not meet the innovation requirement.

Additionally, Sandbox entities are required to provide a consumer survey with a net promotor question to ascertain benefit and quality of services rendered.

8. Is the Sandbox improving access to justice in Utah?

The first two years of Sandbox operations were focused on ensuring that authorized non-traditional service methods do not increase the risk of consumer harm. Office data on the access to justice impact is more limited, but still promising. The vast majority of services provided in the Sandbox are to individual consumers and small businesses, two groups that have been identified as key components of the justice gap. Multiple entities are using capital to develop new tiers of service using either technology or nonlawyer providers to decrease cost and/or increase accessibility. Finally, the Court is pleased to have multiple nonprofits within the Sandbox, using nonlawyers to provide targeted free legal services to Utah communities in need.

Also, legal services have been delivered through Sandbox entities in twenty-seven of Utah’s twenty-nine counties, including fifteen of seventeen “legal deserts” where there is less than one lawyer per 1,000 residents.

9. Is the Sandbox harming lawyers?

The Innovation Office has no information or data to suggest that the Sandbox is harming the legal community. Licensed lawyers are involved in every Sandbox project. All ABS entities provide legal services through Licensed lawyers. All ALP entities have been developed by lawyers or have lawyers providing training, oversight, and assistance. The Sandbox is creating new jobs for Utah-licensed attorneys and opportunities for Utah lawyers to grow and expand their practices. If members of our legal community have information that the Sandbox is harming their practice, the Innovation Office would like to hear from you. Please feel free to submit your thoughts here.

10. What is the difference in regulatory structure from the Bar?

By design, the Sandbox’s regulatory model differs from the traditional regulation of the practice of law. The traditional model licenses individual lawyers and paralegals who meet specified qualifications to practice as they see fit so long as they adhere to the Rules of Professional Conduct. The Sandbox authorizes entities, not individuals, to function in a highly regulated environment and regulates based on an ex-post evaluation of consumer experience, rather than by rule.

11. Who is paying for this?

The Innovation Office has been funded almost exclusively by grants from the State Justice Institute, and the Hewlett Foundation, and has been allocated some funding from the recent American Rescue Plan Act. The Supreme Court also approved the Innovation Office to begin collecting fees from entities granted license status to defray the cost of regulation, just like attorneys do.

The Court recognizes that at least some of the initial cost of operating the Innovation Office within the Bar will come from lawyer licensing fees, but it views that as an appropriate use of those fees that is wholly consistent with the Bar’s mandate. The Sandbox offers opportunities for enterprising Utah lawyers to expand their practices to fulfill unmet market demand. Licensed lawyers have been involved in every authorized Sandbox entity. Regulating these new business models to ensure that they do not pose a risk to the public is fully within the Court’s delegation of regulatory authority to the Bar. The Court believes that it is fair to use a portion of its lawyer licensing fees to test this regulatory model, so long as Sandbox entities also contribute to the cost of regulation.

Unlike lawyer licensing fees, the revenue-based fee structure of Innovation Office licensing fees ties the amount of that contribution to the profits generated by virtue of participating in the Sandbox. This funding mechanism allows the Court to continue to carry out its constitutional regulatory responsibilities through the Bar in a way that is fair and equitable to all participants.

11. Where is this heading?

The purpose of this pilot project is to gather information to better inform future policy decisions. The Court is still in the evidence-gathering phase and has not yet made any final decisions regarding permanent regulatory changes. As it gathers data and input from stakeholders, the Court will continue to assess whether to modify the structure or scope of the Sandbox. We will seek additional input and public comment before adopting any permanent policy changes.

13. How can I learn more about legal regulatory reform?

There have been a lot of articles written about regulatory reform. Here is a recent report published by Stanford Law School about reforms in Utah and Arizona. Here is a forum exchange hosted by the Yale Law Journal that includes an article in favor of regulatory reforms and one in opposition. Finally, here is a recent article published in the ABA Journal about Utah’s reform efforts.