Legal Innovation After Reform: Five Years of Data on Regulatory Change

In 2020, Arizona and Utah launched groundbreaking legal reforms to expand access to justice by allowing nonlawyers to deliver legal services. Arizona eliminated restrictions on law firm ownership and fee sharing, enabling alternative business structures (ABSs). Utah created a regulatory “sandbox,” relaxing unauthorized practice of law (UPL) rules to allow innovative service models. Both reforms responded to a growing access-to-justice crisis and outdated regulations that stifle innovation. In 2022, the Deborah L. Rhode Center at Stanford Law School published Legal Innovation After Reform, the first empirical study of these changes. It found diverse, consumer-focused innovations entering the market—especially benefiting individuals and underserved communities. This follow-up report, five years in, extends those findings: -Reforms continue to spur innovation across law firms, tech companies, and intermediaries. -Utah’s sandbox supports mixed teams of lawyers, nonlawyers, and software. -Lawyers remain central, countering concerns about diminished professional roles. -Technology and alternative pricing models help reach individuals and small businesses. -Consumer harm remains minimal. Since 2022, Utah has sharply limited sandbox participation (from 39 to 11 entities), while Arizona expanded its ABS program (from 19 to 136). New challenges are emerging, including rising private equity ownership, ABS concentration in personal injury law, and the regulatory implications of generative AI. This report offers updated data and insights for those tracking how legal regulatory innovation is reshaping service delivery nationwide.

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