Eight Legal Issues to Consider When Building Legal Products and Legal Applications

What's the difference between legal information and legal advice?  What is the unauthorized practice of law?  This article provides an overview of some of the legal issues to consider when building legal products and legal applications to improve work flow and create new sources of revenue.  In future articles, we’ll cover each of these topics in greater depth.  For now, we simply spot the issues and provide some basic considerations.  

Before diving in, it’s important to note an emerging trend: States are increasingly exploring ways to adapt the rules governing traditional legal practice to account for new technologies and the entrepreneurial rise of legal products and applications.

1.  Do legal products and software constitute the practice of law?

The rapid growth and variety of legal products and software in recent years have outpaced the development of clear, consistent legal standards. As a result, there is no definitive answer—but the overall trend is moving toward greater acceptance and encouragement of these innovations.

For example, the U.K. began loosening its definition of the practice of law as early as 2007 to accommodate the rise of automated legal services and products. In the U.S., regulations vary by state, but signs of progress are emerging. North Carolina, for instance, has enacted legislation stating that software generating legal documents based on users' answers to legal questionnaires does not constitute the unauthorized practice of law.

This trend reflects a growing recognition that technology can improve access to legal services—especially when designed thoughtfully and responsibly.

2.  What’s the difference between providing legal information vs. legal advice?

Generally, legal information refers to resources such as court handouts explaining legal procedures or standardized forms provided by the court for general use. These materials are not tailored to any individual’s specific situation and do not determine legal outcomes—they simply explain the law or process in a general way.

Legal advice, on the other hand, is case-specific. It involves interpreting the law and applying it to a person’s or organization’s unique circumstances. This could include offering guidance, preparing customized documents, or taking actions that directly affect someone’s legal rights.

So where do legal products and applications fall on this spectrum?

As noted earlier, jurisdictions like North Carolina have clarified that software generating documents based on user input does not constitute the practice of law. This suggests that most legal products and applications—especially those that follow a standardized, rules-based format—are more akin to legal information than legal advice.

However, it’s important to be mindful of how the product is designed and marketed. The more personalized and outcome-driven a tool becomes, the closer it may edge toward legal advice and trigger concerns about the unauthorized practice of law.

3.  At What Point Is An Attorney-Client Relationship Formed, And Can You Avoid This?

Traditionally, an attorney-client relationship is formed when a person reasonably believes they have retained a lawyer and that a professional relationship exists. In the context of legal products and applications, this belief is less likely to arise, since the interaction typically involves standardized, self-guided tools rather than personalized legal counsel.

While there is no guaranteed method to prevent the formation of an attorney-client relationship, certain steps can reduce the likelihood of such a belief forming. Clear disclaimers, user agreements, and consistent messaging that the product does not offer legal advice or create a professional relationship can help demonstrate that no attorney-client relationship has been established.

4.  Does Malpractice Insurance Cover Your Legal Software?

         Coverage for legal software under malpractice insurance varies by provider. For example, some malpractice insurers reportedly offer discounts to attorneys who use automated legal products. The reason? Automation can reduce the risk of human error or omissions, leading to more consistent outcomes and potentially fewer claims.

5.  Conflicts of Interest

To reduce the risk of conflicts of interest when offering legal products or applications, it's important to build in procedures for identifying and managing potential conflicts. While traditional conflict checks may not apply in the same way, legal tech tools should still include mechanisms that help attorneys remain compliant with ethical obligations.

6.  Client Confidentiality

When building legal applications and products, protecting client confidentiality is essential. A key practical consideration is implementing a process that automatically deletes all personal information once the workflow is complete or the document has been generated. This helps minimize the risk of data exposure and supports compliance with ethical and privacy standards.

7.  Unbundling

Unbundling, or offering legal services on a limited-scope basis, is permitted in most states and is becoming an increasingly accepted method for delivering legal work through automated products and applications. This approach enables attorneys to provide specific, targeted assistance—often through document automation or self-guided tools—without taking on full representation. Unbundling has been shown to save huge amounts of time and resources, both for clients and attorneys. It also allows lawyers to practice at the top of their license, focusing on higher-level legal analysis while leveraging technology to handle routine or repetitive tasks.

8.  Are There Any Pending Regulations That Provide Guidance On These Topics?

Yes and no.  As mentioned earlier, the overall trend is toward integrating legal products and applications into the existing regulatory framework for legal services. This shift reflects a growing recognition of the role technology and innovation can play in improving access to justice and streamlining legal workflows.

We’ve already seen forward-thinking changes in places like the U.K. and North Carolina, where regulations have evolved to support legal entrepreneurs and the use of automation. While no specific new regulations are pending at this time, we anticipate continued developments in this space.

Stay tuned—future articles will provide updates as new guidance emerges.

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