Updated: Dec. 7, 2024

Entity Regulation Order

On Dec. 5, 2024, the Washington Supreme Court entered an order authorizing a timebound, data-driven test of entity regulation. The pilot will allow successful applicants to practice law under timebound, limited exemptions from otherwise applicable Court rules and statutes governing the practice of law in Washington. Under Order 25700-B-721, the Washington State Bar Association and the Practice of Law Board will collaborate to implement and run the pilot under the supervision of the Court. Check this webpage for updates about the logistics, timing, and application process.

What is the Pilot Project on Entity Regulation?


 


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  • 00:35 – What does “entity regulation” mean: How are people currently allowed to offer legal services and what would change with the pilot test?
  • 02:39 – Why are you proposing this pilot test now?
  • 04:25 – Do you have personal experiences that have informed your own viewpoint about piloting entity regulation?
  • 08:02 – How would the pilot test work?
  • 10:13 – How will the proposed pilot test ensure there are safeguards for Washingtonians who seek legal help?
  • 12:45 – Will this pilot test negatively impact lawyers and their traditional/historic ways of offering legal services?
  • 15:23 – How long has this pilot test concept been in development?
  • 17:30 – As you imagine what could come from this pilot test, what hopes do you have for what changes might come from this process in five or 10 years?

Historically, only individuals licensed by the Washington Supreme Court have been allowed to own law firms, share legal fees, and practice law in the state of Washington. Technology, however, is rapidly transforming our world, and the legal landscape is no exception. In Washington State, it would be difficult not to notice the impact of new technologies on the world around us, and in particular the potential for technology and innovative business models to impact the delivery of legal services and the practice of law in ways that may be positive, negative, or both. Online companies and innovative business models are already delivering legal services to the public and will undoubtedly expand in prevalence and sophistication in the coming years.

Recognizing the profound implications of these changes and to better understand the opportunities and threats presented by these emerging technologies — in terms of safety, quality, and access to legal help for Washingtonians — the Washington Supreme Court, the WSBA, and Practice of Law Board (POLB) will operate a pilot test of entity regulation. What does that mean? For the first time, entities with innovative business models (including those operated by individuals not licensed to practice law) can apply to offer legal services under timebound, limited exemptions from the otherwise applicable rules governing the practice of law. At the end of the pilot, the Court will consider the accumulated data to determine whether to move forward with more permanent regulatory reforms.

The pilot test is the beginning of a process, not the end; the goal is to learn more and make transparent, data-driven decisions before any permanent regulatory reform is put in place.

Background

With an eye toward consumer protection and safeguarding against the unauthorized practice of law, the POLB for years has been monitoring the ways technology is changing the legal landscape. More specifically, the POLB has been studying how online and innovative legal service providers are delivering legal services to the public and how the delivery of these services has the potential to increase access to justice. The POLB has studied the issue closely and engaged with legal technology experts to better understand current and potential ways entities might provide legal services; this work is already being done by national and international companies, unregulated by the WSBA, and is sure to expand in coming years.

The overriding question is: What role can and should the Court take with its plenary authority over the regulation of the practice of law, given the threats and opportunities presented by emerging legal technologies? The potential to close access-to-justice gaps is great, but so is the possibility of bad and harmful legal advice. To get to an answer, the POLB, with guidance from the Court, began exploring a process for a pilot test of entity regulation—that is, allowing innovative business models to offer legal services under carefully monitored conditions.

Also recognizing the profound implications of these changes in the delivery of legal services, the WSBA Board of Governors made it a strategic priority for fiscal year 2024 to “Assess technology‐related opportunities and threats and determine WSBA’s role vis‐a‐vis regulation, consumer protection, and support to legal professionals.” In furtherance of its strategic priority, the WSBA Board of Governors voted in Nov. 2023 to support the pilot test and become partners, as the WSBA acts under delegated authority from the Court to assist in regulating the practice of law and would have the expertise and responsibility of running the pilot in collaboration with the POLB. Following a public comment period on the proposal, on Sept. 27, 2024, the WSBA and POLB submitted to the Court a proposed order to implement a pilot of entity regulation. On Dec. 5, 2024, the Court adopted the proposed order with amendments extending the length of the pilot and clarifying entity reporting requirements.

Among U.S. jurisdictions, Washington now joins Utah and Arizona in executing a plan to determine how the delivery of legal services by entities can be regulated in a manner that protects consumers and promotes broader access to legal services. Participating entities will be required to abide by a Supreme Court authorizing order detailing conditions on their participation, including adherence to rules of ethics and regular reporting of data and information relating to their delivery of services to the public.

Resources

Feedback? Send it to entityregulationpilot@wsba.org

Questions? Contact POLB liaison Thea Jennings