Frequently Asked Questions
What is the Sandbox?
The Sandbox is a mechanism by which the Utah Supreme Court permits entities to offer new and innovative ideas, methods, and models of legal practice. Although not a literal sandbox, the legal regulatory Sandbox creates a limited and controlled space outside of the traditional rules governing legal practice. The Office of Legal Services Innovation (“the Office”), created by the Court, oversees the Sandbox to assess, recommend, and monitor entities seeking to try new approaches to legal practice.
How long does the Sandbox last? What happens at the end?
The Court has given the Office initial authorization to work for seven years (starting September 1, 2020). At the end of the seven years, the Court will review the Sandbox experience and determine the next steps. This could include extending the Sandbox period, allowing the Sandbox to become permanent, or terminating the Sandbox.
What are the requirements or qualifications to apply to the Sandbox?
The Sandbox is open to legal business models and services that would not have been permitted under the traditional rules of professional conduct and unauthorized practice of law doctrine. Specifically, under revised Rule 5.4 and the Utah Supreme Court’s Standing Order No. 15, the following kinds of business models and services must apply for authorization in the Sandbox:
- Lawyers sharing fees with nonlawyers (if those nonlawyers or nonlawyer entities are not in the Sandbox themselves) [As of Dec. 10, 2020, the Court has halted authorization of bare referral fee arrangements pending review]
- Legal practice entities which are owned by lawyers and nonlawyers jointly, in whole or in part by nonlawyers, or in which nonlawyers have financial investments
- Lawyers or law firms or any other kind of entity using nonlawyer practitioners (whether human or software) to provide legal advice and other practice services
Some likely models and services are not identified in the above list. The rule of thumb you should come into the sandbox if you don’t think you can do it under the rules. We also require that your model/service be ready to implement. This means that you have a clear plan and path to launch that you can implement upon authorization and that you will be able to launch soon thereafter.
Are there any bars to offering services in the Sandbox?
There are two basic bars:
- A disbarred/suspended lawyer may not own more than 10% of any entity offering services in the Sandbox.
- Out-of-state lawyers cannot use the Sandbox to circumvent multijurisdictional practice rules.
As of the Court’s Dec. 10, 2020 statement, bare referral fee arrangements will not be processed.
What kind of information does the Sandbox application require?
To apply, you must submit an application through the Sandbox application portal when ready to apply.
The application is short and simple. The goal is to help us understand the details of what you are proposing to do, how it differs from traditional legal services, and how it might pose risks to consumers. We encourage you to be detailed and transparent in the application – it will help make the process more smooth and more efficient if we don’t have to follow up with questions.
We also ask for a series of disclosures to help us assess potential risks. They are:
- Identifying individuals with controlling financial or managerial interest in the entity, including those with managerial control over the direct provision of legal services to the public.
- Disclosing whether any of those individuals are either disbarred/suspended lawyers or have a felony criminal history.
- Disclosing whether the entity itself (or parent or affiliated companies) has a history of either state or federal misdemeanor or felony conviction, consent decree, or enforcement action resulting in sanctions.
- Disclosing whether the entity itself (or parent or affiliated companies) is, to your knowledge, under state or federal criminal investigation or enforcement action investigation.
- Disclosing whether the entity’s business model includes sharing or selling consumer data.
Are Sandbox applications confidential?
Applications are not available to the public until the Court has acted upon them.
While an application is being reviewed, it remains confidential, with only those involved review aware of its content. There has been some evolution in the Court’s view of this process, and the need for transparency has been emphasized. Thus, the current application offers applicants the opportunity to designate any part of their application that they consider to be confidential business information. If the Innovation Office sees a need to make public some information the applicant has designated as confidential, it will notify the applicant and work through that issue with them.
Since the Utah Supreme Court, a governmental entity, is conducting the Sandbox application process, the records are subject to GRAMA (Government Records Access and Management Act). When someone requests access to the Innovation Office’s records for a certain application, GRAMA law governs these requests. If there were a challenge to an applicant’s assertions of confidentiality, it would fall to the applicant to defend that position.
I submitted a Sandbox application. Now what?
The Office’s program coordinator will review your application to ensure it is complete and contact you if there are any issues. Once they have determined it is complete, your application will be added to the review queue. The process is as follows:
- Review by the Executive Director.
- The Executive Committee will review your application and draft a recommendation, including recommended risk category, which dictates the entity’s required disclosure, reporting, and other authorization requirements if authorized.
- Legal Services Committee Review.
- The Legal Services Innovation Committee (“LSI Committee”) meets twice a month to review applications and draft recommendations. They will vote to either recommend your application to the Supreme Court or it will vote to table or deny the application.
- A vote to table usually means additional questions or issues have been raised, and the Executive Director will likely reach out to you for follow-up.
- A vote to deny means that your application is inappropriate for the Sandbox at this time (e.g., not ready to implement, not compliant with Utah or federal requirements, out of state lawyer, or excessively high risk). You will have an opportunity to challenge that denial.
- Recommendation to the Supreme Court.
- The LSI Committee presents the recommended applications to the Supreme Court at the Court’s monthly conference.
- The Court has full discretion on the question of whether and with what scope to authorize the recommended entity.
- If the Court votes to authorize your entity, it will issue an authorization order, and you will receive an authorization packet from the Office detailing your authorization, disclosure requirements, and reporting requirements.
- The Court’s Order will set your risk category. The Innovation Office Manual details what that risk categorization entails for your authorization requirements.
- The Innovation Office will contact you to schedule an authorization call to review your authorization, disclosure, and reporting requirements.
My entity has been authorized to offer legal services in the Sandbox. That means I am immune from investigation, enforcement, or prosecution by any agency, right?
Absolutely not. The Sandbox authorizes you to practice law through a nontraditional service model without being subjected to discipline by the Utah State Bar for that particular form of legal practice.
- If your entity violates state or federal law (consumer protection, disclosure, securities, etc.), you can absolutely be investigated and prosecuted for those violations.
- Consumers can also sue you for any torts your entity commits.
- Lawyers working with your entity can be disciplined if they violate the Rules of Professional Conduct.
- Any other licensed professionals in your entity (accountants, medical providers, social workers, etc.) are subject to their professional discipline if they violate their rules.
I’m a Utah lawyer and have been approached by an entity authorized in the Sandbox. They want to hire me! Can I work for them?
Yes! Utah lawyers can practice law in these new entities, whether nonlawyer-owned firms, for-profit companies, or anything else. However, you need to know that your professional responsibility requirements and compliances with the Rules of Professional Conduct remain intact. Therefore, you need to ensure that you can comply with the new entity’s rules (confidentiality, conflicts, etc.). You need to be clear about this with your potential employer. If you have questions about your professional responsibility duties, you should contact the Utah State Bar’s Ethics Advisory Opinion Committee.
I’m a Utah lawyer and want to share fees with nonlawyers (e.g., pay referral fees). Do I need to come into the Sandbox?
Rule 5.4 currently states that lawyers may share fees with nonlawyers if:
(1) The fee to be shared is reasonable, and
(2) The Innovation Office authorized the arrangement for offer in the Sandbox (as per Standing Order No. 15).
This would indicate that any fee-sharing arrangements between lawyers and nonlawyers must be considered and authorized through the Innovation Office process for offer within the Sandbox.
However, on December 10, 2020, the Court issued a statement noting that it is halting consideration of “bare referral fee arrangements,” “those in which payment is made by the lawyer to the nonlawyer solely to compensate the nonlawyer for referring a potential client to the lawyer; there is no other business relationship between the lawyer and nonlawyer,” until the potential ethical issues can be given further consideration. Thus, the Innovation Office will not consider proposals for bare referral fee arrangements until further notice from the Court.
The Court stated, “The Court will, however, continue to consider and, as appropriate, authorize other innovative business arrangements and service models involving lawyers and nonlawyers that incorporate innovations beyond bare referral fee arrangements.” Thus, if your proposal includes fee sharing with nonlawyers as part of a more comprehensive business relationship, the Office can consider the proposal.
I’m a Utah lawyer and want to share fees with other lawyers. Do I have to come into the Sandbox?
No. Rule 5.4 only applies to lawyers sharing fees with nonlawyers.
I’m a lawyer from California (or any other state). I’m not licensed in Utah. Can I come into the Sandbox to practice in Utah?
No. The Sandbox is not a mechanism to circumvent multijurisdictional practice rules.
I’ve been admitted to the Sandbox. Now, what happens?
You will have an authorization meeting with the Executive Director and Director of Data to discuss the scope of your authorization, review disclosure, and data reporting requirements, and answer any questions you might have. You should be prepared to identify your launch date at that meeting.
Is it possible to exit the Sandbox? How does that work?
Yes! The Sandbox is a mechanism through which the Court permits new and innovative ideas and models for legal practice. The focus is on whether these new ideas and models harm consumers. The Innovation Office sets data reporting requirements for authorized entities that are focused on identifying whether consumer harm is occurring (e.g., legal outcomes, financial outcomes, amount the consumer paid for the service, what the consumer asked for, what the consumer received, consumer complaints). As consumers engage with these new services, the Innovation Office analyzes the data to watch for consumer harm. If an entity is serving consumers well and not causing significant harm, then the entity may apply to exit the Sandbox. The Supreme Court makes the approval for applications to exit.
I am a consumer and want to complain about the services I received from a provider in the Sandbox. Can you help me?
Our website has a fillable form for communicating complaints or concerns about legal services directly to the Innovation Office. Please include the following information:
- Which company provided the service;
- When and where you received the service; and
- A short description of your complaint.