AI, MJP, And UPL: Alphabet Soup For Lawyers?

Bills. The bane of every in-house counsel who has to review bills from outside counsel and the bane of every outside counsel who needs to be on top of bills, not only hers, but those on her team and those junior lawyers who may well spend way too much time on tasks that shouldn’t be billed to the client, at least not with a straight face.

Younger lawyers won’t remember the olden days of block billing: the client received a monthly bill for all the services rendered, all lumped together with no breakout of time spent on any task and then a total, often cringeworthy. Whether the time spent was reasonable was impossible to determine as getting a breakdown of time spent on any one task was impossible to determine. Many firms assumed that the bill would be paid without question, and, indeed, it usually was.

Fast forward. Now it’s not block billing that raises hackles but figuring out how to bill for the AI time spent on a task. If a newbie associate took three hours to draft a document that should have only taken one hour, and AI can put an agreement together in the blink of an eye, how much is that eyeblink worth in lawyer billing time? Fee agreements need to explain if AI will be used, how it will be used, and how it will be billed.

Last fall, the State Bar of California issued what it terms a “Practical Guidance” to its licensees about using generative AI in practice. Saying that the guidance should be regarded as “guiding principles” rather than “best practices,” the guidance suggests how AI fits in with the duties both under the Rules of Professional Conduct and the State Bar Act, including, but not limited to, duties of confidentiality, competence and diligence, supervision of staff and junior lawyers, communicating AI use, and other topics.

The Florida Bar has also waded into the AI thicket, issuing guidance similar to California. The 18-page opinion discusses the various ethical issues that arise in using AI in legal practice.

What are malpractice carriers going to do about generative AI? Will it be an exclusion in policies? Coverage only up to a certain amount? Will there be limitations of the use of generative AI to obtain coverage?

Meanwhile, an op-ed in this past weekend’s Wall Street Journal discussed how difficult it is for physicians and other healthcare professionals to consult with patients who are in other states, for whatever reason, whether residing there or just visiting. The current law in most states is that doctors can only provide medical care (even telehealth) in states in which they are licensed and where patients are physically present. Even so much as a simple phone call can create liability for the physician and, in at least several states, criminal liability as well.

While it’s comforting to know that lawyers are not the only licensed professionals dealing with limitations on multijurisdictional practice (MJP), when and how will our profession finally acknowledge that we don’t live in a world confined by boundaries, whether artificial or real? ABA Model Rule 5.5 on the unauthorized practice of law (UPL) is a start, but only a start.

MJP is already here, if not openly. How many times have we spoken with a client on business out of state who needs an answer forthwith? What do we do? Do we say that we can’t answer the question and that the client needs to get local counsel to get an answer? Really? How fast can you lose a client? How many times have we given advice over the phone to an employee located out of state and who has a customer sitting at the desk? Or an employee resident in another state who has an issue that needs immediate attention? According to the Model Rule, you may be able to advise on a “temporary” basis, but what does that mean? If there’s a series of questions over time, is that still considered “temporary” for compliance with the UPL rule?

Clients don’t want or need to know about aspects of our profession that prohibit us from providing full service across state lines. When we try to explain, their eyes glaze over, and rightly so. UPL is not their problem, it is ours. Most lawyers are smart enough (or should be) to know what they don’t know, and they reach out to local counsel. However, delay is the monkey wrench that loses clients who have legitimate questions that need answers now.

In a perfect world, clients wouldn’t be in a hurry and bar regulators would understand that the practice of law does not stand still, not even for them. Is the multistate bar exam getting us even one iota closer to MJP? How do we move that needle? I would guess that every practicing lawyer who has a client out of state (whether for a nanosecond or longer) and who is not licensed in that state, has advised that client, without regard to UPL, rightly or wrongly. And please don’t tell me that even those who oppose MJP haven’t virtually skedaddled across state lines to help a client in need. If generative AI is here, why not MJP?

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Jill Switzer has been an active member of the State Bar of California for over 40 years. She remembers practicing law in a kinder, gentler time. She’s had a diverse legal career, including stints as a deputy district attorney, a solo practice, and several senior in-house gigs. She now mediates full-time, which gives her the opportunity to see dinosaurs, millennials, and those in-between interact — it’s not always civil. You can reach her by email at oldladylawyer@gmail.com.