Online Service Providers

A recent television programme interviewed a business owner on her experience in using online service providers (“OSP”) to manage her legal documents. Typically, OSPs provide standard document templates for a monthly fee. Users can log in to a website to create their own documents based on standardised templates and an online questionnaire. For an additional fee, a live chat on specific issues can be arranged.

In the programme, a comparison was made between these OSPs and law firms in terms of pricing, convenience and time. The result is obvious. However, the comparison itself is flawed. The two entities cannot be compared as they do not belong in the same category. Yet, the fact that such a comparison is often made illustrates that the public has increasingly confused OSPs for law firms.

Law firms are managed by practising solicitors who are subject to strict professional rules of ethics and practice regulations under the law. To ensure a minimum standard of protection for the public, practising solicitors are required to maintain professional indemnity cover at no less than a specified statutory limit for the losses arising from claims in respect of civil liabilities incurred in the course of their practice.

On the other hand, the OSPs claim that they are not law firms and thus do not submit to the rules and regulations that apply to law firms, including the mandatory professional indemnity requirement. Operators of these OSPs, though legally qualified, claim that they are not practising as solicitors.

However, OSPs do provide services that are legally related, and some operators promote themselves as qualified legal practitioners, boasting years of private practice experience. This induces trust from the public that they can expect an OSP’s services to be up to the standard expected from a practising solicitor or a law firm, but omits any warning that such providers are not regulated as practising solicitors or as law firms. As such, the public is not protected in the same way in the event that they suffer losses resulting from an OSP’s advice.

The increasingly interactive nature of the services provided by the OSPs has raised concerns. Before the proliferation of online platforms, sharing of legal information used to be in print form. The publication of law books and document templates for sale to consumers is subject to consumer laws, as it is not a regulated legal activity. Online publications are no different.

However, OSPs go beyond the commoditisation of static legal information by giving interactive advice in response to specific instructions. These services present new issues. It involves the creation of a trust relationship between the service provider and the individual user. If the provider promotes its legal services by holding itself out as having legal professional qualifications, knowledge and practice skills, it is difficult to see how it differs from a law firm. An express disclaimer is self-serving. It is the substance not the form that matters.

Section 51 of the Legal Practitioners Ordinance (Cap. 159) is relevant. It provides that “if any act is done by a body corporate, or by any director, officer or servant thereof, of such a nature or in such a manner as to be calculated to imply that the body corporate is qualified or recognised by law as qualified to act as a solicitor, the body corporate shall be guilty of an offence.”

Further, under the Hong Kong Solicitors’ Guide to Professional Conduct Vol.1, Principle 2.07 provides that “a solicitor shall not by himself or with any other person set up or operate a separate business, other than a solicitor’s practice, which offers any service which may normally be offered by a solicitor as part of his practice….”.

Public protection is paramount. While the public is free to choose the service providers that suit their needs, they must not be allowed to be misled into thinking that the unregulated providers offering services normally offered by law firms are interchangeable with law firms. They are not. While the users may think that they are getting legal assistance, they may in fact be exposing themselves to more legal risks because if they suffer loss as a result of the services provided by the unregulated providers, they have no recourse.

We have been monitoring the situation closely and will keep liaising with the Department of Justice and the law enforcement agencies to ensure the public remains adequately informed and protected.

Jurisdictions: 

Secretary-General, Law Society of Hong Kong