Banned in Austin
Why Did a Texas Judge Ban Self-Help Legal Software?
AUGUST 01, 1999 by GEORGE C. LEEF
People love competition. It is wonderful to have others trying to outdo rivals in finding new and better ways to serve you, giving you more alternatives at lower prices. But people also hate competition. How annoying it is to have others trying to take away “your” customers just so they can make money. What nerve!
In our statist era, people have frequently turned to government seeking to hinder or even eliminate the competition they don’t like. Those who are adept at manipulating the political system often succeed, getting statutes or regulations that take from others the freedom to compete. Not surprisingly, the legal profession is particularly good at working the system. Competition-suppressing measures have given licensed attorneys a corner on the legal-services market for decades. But one of the legal profession’s most recent attacks against competition is especially noteworthy because it involves nothing less than the First Amendment.
The high cost of hiring a lawyer has led to a growing industry in self-help legal books and software. Companies now market books and computer programs that enable anyone to get answers to legal questions and create legal documents at a price far lower than contracting for the services of a lawyer. Non-lawyers welcome self-help publications because such materials increase the range of options open to them when they need legal assistance. On the other hand, many lawyers fear that they will begin to lose “their” clients to those awful books and CD-ROMs. Time for action—but how do you keep books and software off the market in a nation ostensibly committed to a free press?
A Suit Is Pressed
People always look for the least costly way of accomplishing their objectives—and that includes nefarious objectives like stifling competition. For lawyers, the least costly way of stopping competition is to do what they do best. They file a lawsuit.
In 1998 the State Bar of Texas instituted suits against Nolo Press, a Berkeley, California, firm that publishes an array of self-help books and computer programs, and Parsons Technology, an Iowa-based firm that sells computer software including several legal self-help titles. The ground for the suits? The State Bar argued that the firms had violated the Texas statute prohibiting “unauthorized practice of law (UPL).” This law, some version of which is in effect in every state except Arizona, restricts “the practice of law” to licensed attorneys. It is the equivalent of a “No Trespassing” sign around the entire field of legal services.
Individuals have the right to do their own legal work, whether it’s drafting their will or defending against criminal charges in court. Publications that merely inform people about the law are legally unobjectionable—law libraries are, after all, open to the public—but they are also less beneficial to laymen than books or software that actually help them navigate through the shoals of the law. Because the Nolo and Parsons products stepped over the line by actually helping individuals, the unauthorized-practice watchdogs argued that they had broken the law.
To briefly recapitulate the argument against UPL prohibitions, they are neither necessary nor sufficient to protect consumers against incompetent or dishonest legal practitioners. A free market backed by the possibility of legal remedies for fraud, negligence, or breach of contract is the optimal system for deterring harm to consumers. It has no need for coercive legal action against any peaceful individual or First Amendment-weakening lawsuits such as the Texas Bar Association’s.
But those considerations don’t matter when the objective is something as vital as preserving billable hours. The UPL Committee’s case against Nolo was argued before the Texas Supreme Court in October 1998 and at the time of this writing no decision had been rendered. However, the suit against Parsons ended in victory when in January 1999, federal district Judge Barefoot Sanders granted the bar’s motion for summary judgment. That means he saw no need for a trial; on the facts as presented, Parsons must necessarily lose. Judge Sanders followed up that ruling with a ban against the sale of Parsons “Quicken Family Lawyer” software within the state.
What is frightening about this ruling (which may, of course, be reversed on appeal—or stand as a precedent for future attacks against the freedom to produce and sell informational products) is that it undermines one of the cornerstones of a free society. Let’s analyze the decision.
First, there was no showing of any specific flaw in the software that had or even might cause a user to make a legal error and suffer some detriment. Quicken Family Lawyer was written by attorneys who specialize in the areas of law covered, and checked for state-to-state variations. Parsons does not want either a bad reputation or a lawsuit from an individual who made some legal blunder because he followed its software. But care in preparation and lack of harm are no defense. Parsons Technology is not licensed to practice law in Texas (only individuals who graduate from law school and pass the bar exam can be), and that settles it.
Second, Judge Sanders brushed off the company’s First Amendment arguments. The First Amendment prohibits Congress from enacting any law that abridges freedom of the press, and decades ago the Supreme Court ruled that this restraint on government power also applies to the states and their instrumentalities. In First Amendment cases, the decision almost always turns on the “level of scrutiny” the court will apply. If the judge decides that the case merits “strict scrutiny,” then the government’s restriction will be struck down unless the state can show that its action is the least intrusive possible means of accomplishing some “compelling state interest.” (Never mind that the First Amendment does not read: “Congress shall make no law abridging freedom of the press unless. . . .”) Statutes and regulations that are given “strict scrutiny” almost never survive. On the other hand, if the court decides that the case does not warrant “strict scrutiny,” then all the government needs to do to prevail is to show that there is some rational basis for thinking that the law furthers some “important” (or similar adjective) state interest. (Again, never mind that the Constitution draws no such distinctions.)
Judge Sanders stated that strict scrutiny would not apply because the restriction sought by the Texas State Bar on freedom of the press was “content neutral.” That is, the state was not trying to suppress knowledge or ideas, but merely limiting who was allowed to convey particular knowledge and ideas. In First Amendment jurisprudence, “content neutrality” renders restrictions on freedom of speech or press constitutionally trivial, so the government needs only to meet the easy “rational basis” test in order to prevail. Judge Sanders concluded that the state’s “substantial interest” in “eradicating unauthorized practice of law” was justification enough.
The notion that “the state,” an abstract entity, can have any interests at all is worthy of debate, but that is a question for another time. Let us ask whether there is in fact some “substantial” public benefit to be achieved in eradicating UPL. Is it something heinous that belongs in the same league as, say, lynching or typhoid fever? Certainly not. What the bar calls “unauthorized” practice is simply a voluntary market transaction. Transactions between consumers and legal practitioners deemed unauthorized by the state turn out satisfactorily as frequently as do transactions between consumers and licensed attorneys. That is one lesson from the free market in legal services that exists in Arizona. The public interest is no more served by eradicating UPL (assuming that the law could do so) than it would be in eradicating, say, unauthorized lawn mowing.
If the state has an interest in the market for legal services at all, it is to maximize access to competent, affordable assistance. That is done not by placing arbitrary restraints on entry into the market, but by establishing the conditions that allow the market to function unhampered. Sadly, public policy is usually made by people who have little or no understanding of economics.
Note also that there are noncoercive means of accomplishing whatever legitimate concerns the State Bar might have, a point that Judge Sanders did not bother with because of his conclusion that the UPL statute was content neutral. (Is it? Texas lawyers evidently have no interest in publishing legal self-help materials, so in saying that only they are allowed to publish something they don’t want to publish, the state is in effect suppressing the transmission of knowledge and ideas.) Rather than seeking an authoritarian ban, why couldn’t the Texas Bar carefully analyze Quicken Family Lawyer for problems and then bring them to the attention of Parsons? Or lawyers could find QFL users with genuine reasons to complain about its quality and then sue. There is no justification for banning this (or any) product from the market and depriving many people of its benefits just because it might not be perfect for everyone.
Perhaps Parsons will win a reversal on appeal. We should hope so. As it stands, the decision to ban self-help legal software in Texas is a stab wound to the First Amendment, a blow to consumers (especially poorer ones for whom low-cost alternatives are a great boon), and an encouragement to bar associations and other special-interest groups to turn to government whenever they see competition they want to eradicate.