Indiana is moving toward allowing alternative approaches to delivering legal services, following the lead of other U.S. states. On Thursday, the Indiana Supreme Court directed its innovation committee to develop parameters for a “legal regulatory sandbox,” with the goal of creating more flexible legal service models. The committee must submit its proposals by March 1.
This initiative follows a July report from a court-appointed commission, which highlighted Indiana’s shortage of lawyers. The commission’s report cited American Bar Association data showing that Indiana ranks among the bottom ten U.S. states, with just 2.3 attorneys per 1,000 residents. To address this shortage, the commission recommended that Indiana seek funding to create a regulatory sandbox program, which would encourage innovative approaches to legal services. The Indiana Supreme Court has now ordered the development of this framework and funding for the initiative.
The commission also proposed providing grants to law firms operating under non-profit business models, with the goal of increasing access to legal services for individuals with modest financial means.
Indiana’s move mirrors similar efforts in Utah, where a program launched in 2020 allows businesses to experiment with nontraditional business models for delivering legal services. Utah’s program relaxes rules restricting non-lawyer investment and ownership in law firms, allowing greater flexibility in who can provide legal services.
Other states, including Arizona, have implemented or considered similar reforms. Arizona became the first state in 2020 to remove rules prohibiting non-lawyers from having an economic stake in law firms. The program has now approved over 100 businesses, including national companies like Rocket Lawyer, LegalZoom, Elevate, and Axiom. Utah’s pilot program, which has authorized 43 entities as of June 2023, is scheduled to continue until 2027.
Proponents of these regulatory changes argue that loosening restrictions on who can provide legal services will make legal advice more affordable and accessible while driving innovation. Critics, however, caution that the changes could lead to ethical concerns if non-lawyer service providers are not held to the same standards as licensed attorneys.
Similar proposals in states like California and Florida have stalled after facing resistance from lawyers and other stakeholders. Washington State is currently considering a proposal to relax its legal practice rules, although reactions to the initiative have been mixed. The Washington Supreme Court is now reviewing the proposal, submitted in late September.
