AI legal tools are advancing quickly, but unclear rules about what constitutes unauthorized practice of law in this arena leaves courts, state bars, and solution providers without a workable framework — but there are pathways to proper regulation
Key insights:
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Courts and the legal profession need to show leadership — Given their specialized knowledge of the needs of litigants and of courts, courts need to take the lead in determining definitions of the unauthorized practice of law.
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3 paths forward to workable regulatory solutions — Recent discussions and research around this subject offered three paths toward modernizing UPL definitions.
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Uncertainty harms users and innovation — Fear of UPL can drive self-censorship and market exits, even as litigants continue to use publicly available GenAI tools.
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Today, many Americans experience legal issues but lack proper access to legal representation. At the same time, AI tools capable of providing legal information are rapidly evolving and already in widespread use. Between these two facts lies a critical definitional problem that courts and state bars must urgently address: How to define the unauthorized practice of law (UPL) in way that doesn’t further curtail access to justice.
This discussion is not theoretical. It directly determines whether AI-based legal services can operate, how they should be regulated, and ultimately whether AI can help unrepresented or self-represented litigants gain meaningful access to justice. This issue was explored in more depth during a recent webinar from the AI Policy Consortium, a joint effort by the National Center for State Courts (NCSC) and the Thomson Reuters Institute (TRI).
The need for clear definitions
During the webinar, Alaska Supreme Court Administrative Director Stacey Marz noted that “there is no uniform definition of the practice of law” and that UPL regulations represent “a real varied continuum of scope and clarity.” This variation makes compliance challenging for technology providers, especially as they navigate 50 different state standards.
UPL generally occurs when someone “not licensed as an attorney attempts to represent or perform legal work on behalf of another person,” explained Cathy Cunningham, Senior Specialist Legal Editor at Thomson Reuters Practical Law.
Marz added that such legal advice typically involves “applying the law, rules, principles, and processes to specific facts and circumstances of that individual client — and then recommending a course of action.”
The challenge, however, is that AI can appear to do exactly this, yet the regulatory framework remains unclear about whether and how this should be permitted and how consumers can be protected.
3 paths forward
During the recent webinar, panelists discussed several different approaches to UPL regulations, noting that a recent webinar discussion and accompanying paper outlined three approaches that state courts could take, including:
Path 1: Explicitly enabling tools with regulatory framework — UPL statutes can be revisited to explicitly allow purpose-built AI legal tools to operate without threat of UPL enforcement, provided they meet certain requirements. Prof. Dyane O’Leary, Director of Legal Innovation & Technology at Suffolk University, emphasized that consumer-facing AI legal tools are already being used for tailored legal advice, arguing that some oversight is better than “just letting these tools continue to operate and hoping consumers aren’t harmed by them.”
Path 2: Creating regulatory sandboxes — Courts could establish temporary experimental zones in which AI legal service providers can operate under controlled conditions while regulators gather data about efficacy and safety through feedback and research, with an eye toward informing future regulation reform.
Path 3: Narrowing UPL to human conduct — Clarifying that existing UPL rules apply only to humans who may hold themselves out as attorneys in tribunals or courtrooms or creating legal documents under the guise of being a human attorney, effectively would leave AI-powered legal tools clearly outside UPL restrictions and open up a “new pocket of the free market” for consumers.
Utah Courts Self-Help Center Director Nathanael Player referenced Utah Supreme Court Standing Order Number 15, which established their regulatory sandbox using a fundamentally different standard: Not whether services match what lawyers provide, but rather “is this better than the absolute nothing that people currently have available to them?”
Prof. O’Leary reframed the comparison itself, suggesting that instead of comparing consumers who use AI tools to consumers with an attorney, the framework should be “consumers that use legal AI tools, and maybe consumers that otherwise have no support whatsoever.”
The personhood puzzle
“AI, at this time, does not have legal personhood status,” said Practical Law’s Cunningham. “So, AI can’t commit unauthorized practice of law because AI is not a person.”
However, Player pushed back on this reasoning, clarifying that “AI does have a corporate personhood. There is a corporation that made the AI, [and] the corporation providing that does have corporate personhood.” He added, however, that “it’s not clear, I don’t think we know whether or not there is… some sort of consequence for the provision of ChatGPT providing legal services.”
You can view the TRI/NCSC AI Policy Consortium Webinar: Modernizing unauthorized practice of law regulations to embrace AI-driven solutions here
This ambiguity creates what might be called the personhood gap, a zone of legal uncertainty with serious consequences for both innovation and access to justice.
Colin Rule, CEO at online dispute resolution platform ODR.com, explained that “one of the major impacts of UPL is, actually self-censorship.” After receiving a UPL letter from a state bar years ago, he immediately exited that market. This pattern repeats across the legal tech landscape, leaving companies hesitant to innovate.
Rule’s bottom line resonates with anyone trying to build solutions in this space. “As a solution provider, what I want is guidance,” Rules explained. “Clarity is what I need most… that’s my number one priority.”
Moving forward: Clarity over perfection
The legal profession needs to lead on this issue, and that means state bars and state supreme courts must take action now. The tools are already in use, and the question is not whether AI will play a role in legal services, but rather whether that role will be defined by thoughtful regulation or by default.
The solution is for the judiciary to provide clear guidance on what services can be offered, by whom, and under what conditions. To do that, courts much first acknowledge that for most people, the choice is not between an AI tool and a lawyer but between an AI tool and nothing. Given that, states must walk a path that will both encourage innovation and protect consumers.
To this end, legal professionals and courts should experiment with these tools, understand their trajectory as well as their current limitations, and work collaboratively with developers to create frameworks that prioritize consumer protection without stifling innovation that could genuinely expand access to justice.
You can find out more about how courts and legal professionals are dealing with the unauthorized practice of law here
