Disrupting consumer bankruptcy law practice

Imagine a conversation with Siri (or other digital assistant), circa 2040, that begins as follows:

Mariana: Siri. I am wondering whether I should file bankruptcy. What do you think?

Siri: Have you considered meeting with a consumer bankruptcy lawyer to discuss that?

Mariana: I've already contacted a few, but all of them charge more than I can afford.

Siri: I understand. I've talked with many other people who say the same thing, and many people file bankruptcy without consulting a lawyer. So let me see if I can help you. Why are you thinking about bankruptcy?

Mariana: I can't pay my medical bills and I got a notice from a collection agency about garnishing my wages. My credit card debts keep growing because I can't even pay the monthly interest, and my student loan debt is still large.

Siri: I imagine that this is pretty stressful for you and I think it is a good idea to consider ways in which you might be able to deal with these problems.

Mariana: Thanks for understanding. And I am losing sleep over this and also having trouble concentrating at work. What do you suggest?

Siri: Let's start by creating some spreadsheets that show your income, your living expenses, your debts, and what you own. You will probably have to dig up some of this information and get back to me, but we can at least start now.

Mariana: O.K. I've got some time now. How do we do this?

Siri: Turn on your television monitor and I'll show you some spreadsheets that we can fill in.

Mariana: O.K. Done.

Siri: Good. I see you now. You do look quite upset.

Mariana: [Shakes her head agreeing with Siri].

Siri: Do you want to talk a little bit more about how this is affecting you before getting started?

Mariana: No. Let's get started now.

Siri proceeds over the next couple of days to interview and counsel Mariana as would today's consumer bankruptcy lawyer (and staff). Siri gathers the necessary data and completes the spreadsheets. She helps Mariana understand and compare Chapter 7 and Chapter 13 as well as possible non-bankruptcy options (e.g. resisting wage garnishment and stopping unwanted contact from debt collectors). She provides Mariana with the required credit counseling.

After a few days reflection, Mariana instructs Siri to prepare the relevant documents for a Chapter 7 bankruptcy. Siri does so, obtains digital copies of Mariana's pay stubs, obtains Mariana's digital signatures, draws filing fees from Mariana's PayPal account, and files the necessary documents with the bankruptcy court.

Soon thereafter, Siri alerts Mariana to the first meeting of creditors. Mariana attends via FaceTime after practicing with Siri on answering questions that Siri anticipates from the United States Trustee. A few weeks later, Siri notifies Mariana of her discharge, evidence of which Siri will store for Mariana together with the spreadsheets, copies of the documents filed with the bankruptcy court, and a recording of all conversations between Siri and Mariana relating to resolution of her financial difficulties.

Science fiction? I'm beginning to think not for too long.

In The Future of Professions: How Technology Will Transform the Work of Human Experts (Oxford 2015), Richard and Daniel Susskind tell us:

The shift [from professionals to increasingly capable machines] . . . can be characterized in many ways: as the industrialization and digitization of the professions; as the routinization and commoditization of professional work; as the disintermediation and demystification of professionals. Whatever terminology is preferred, we foresee that, in the end, the traditional professions will be dismantled, leaving most (but not all) professionals to be replaced by less expert people and high performing systems.

Consider a small sample of the many seeds of this transformation already sprouting. IBM claims that Watson can analyze and interpret data, including audio and video as well as text, can learn to grow subject matter expertise, can personalize recommendations by understanding a user's personality, tone, and emotion, and can create chat bots that engage in dialogue. As one of many applications, IBM already licenses a Virtual Agent to act as a customer service representative that offers "a cognitive, conversational self-service experience that can provide answers and take action." Ross claims several major law firms as users of its artificial intelligence legal search system. Lex Machina offers "legal analytics," based on its mining of litigation data about judges, lawyers, parties, and cases, which help users predict litigation outcomes and create litigation strategy.

Upsolve, briefly described by Dalié Jimenéz in an earlier Credit Slips post, offers an interactive online questionnaire to assist New York debtors considering a pro se bankruptcy filing. The project is more fully described here. Work is in progress to enhance the questionnaire to guide users in choosing among surrender, redemption, reaffirmation, and ride-through if they enter Chapter 7 with a vehicle secured by a non-avoidable security interest – a complicated decision tree, especially if further adapted to reach purchase money security interests in other types of personal property such as jewelry, appliances, furniture, or electronics.

Several law schools have caught the wave. The Legal Design Lab based at the Stanford Law School and d.school, for example, is "working at the intersection of human-centered design, technology & law to build a new generation of products & services" to "promote a fair and just society, and to empower people." Neota Logic is collaborating with select universities to help students learn to develop applications that will provide legal assistance to people unable to afford legal representation, using Neota Logic's expert system platform. You can see three applications in action here, including a Debt & Eviction Navigator and a Mortgage Foreclosure Advisor. Under the leadership of Tanina Rostain, Georgetown law students work on these types of projects, described here, and Georetown holds an "Iron Tech Law Competition," described here. Also using the Neota Logic platform, and as part of an Apps for Justice Project, Lois Lupica at the University of Maine School of Law has worked with students to develop an application for use by tenants in a dispute with a landlord and another to assist legal services lawyers to gather information from family law clients. She discusses the applications in the ABI podcast "How Artificial Intelligence and Technology is Changing the Practice of Law" (Episode 191).

If the application I have imagined becomes technically feasible and if it can be perfected to provide competent, even excellent, legal advice, it would respond to a vast unmet legal need. Gillian Hadfield has convincingly argued that no reasonably foreseeable amount of increased legal aid funding or pro bono representation will satisfy the public's unmet needs for legal assistance. Recent data from an unpublished U.S. Courts Table F-28, cited in the May 2016 issue of the American Bankruptcy Institute Journal, indicates 49,344 Chapter 7 pro se filings and 25,639 pro se Chapter 13 filings in 2015. The Chapter 7 pro se filings represented 9.2% of all Chapter 7 filings for the year and the Chapter 13 pro se filings represented 8.5% of all Chapter 13 filings for the year. These figures don't account for an unknown number of additional individuals who might benefit from either bankruptcy or non-bankruptcy options but whose lack of knowledge, confidence, or support prevents action.

The application I have imagined could surely incorporate lessons learned from current or future studies of how self-help materials might more effectively overcome a debtor's barriers to understanding legal rules, concepts, and procedures and overcome a debtor's barriers to action, such as "overtaxed bandwidth," anxiety, and difficulty in making and implementing plans. See Greiner, Jiménez, and Lupica's "Self-Help Re-Imagined," generated as part of a more encompassing project of the Harvard Law School's Access to Justice Lab.

Such an application likely would also divert at least some, perhaps many, paying clients from consumer bankruptcy lawyers. Our younger generations have grown up with the mantra that "there's an app for that;" comfortable interaction with digital devices for all manner of functions will soon be ubiquitous and second nature. We should consider, then, whether the application I have imagined, if feasible and competent, would provide service inferior or superior to that of a consumer bankruptcy lawyer.

A digital assistant might better respond to a debtor's emotional and psychological state than some lawyers. Even now, Microsoft advertises its Emotion API that "analyzes faces to detect a range of feelings and personalize your app's responses." And here is a list of application program interfaces that allow the building of software and applications offering sentiment analysis. Some debtors may actually feel more comfortable, less ashamed, and less nervous sharing their financial and other concerns with a digital assistant than with a human being, in the privacy of their own homes, at their convenience, and without the meter running. (Cf. Shelly Turkle, "Alone Together," and Reclaiming Conversation: The Power of Talk in a Digital Age, reviewed here.)

If a debtor is eligible for either Chapter 7 or Chapter 13, most consumer bankruptcy lawyers will offer that choice. If a debtor then asks for the lawyer's recommendation, the client-centered counseling literature recommends that the lawyer encourage the client to choose based on the client's own values and perspective, informed by the lawyer's description of the alternatives and of the advantages and disadvantages of each. A digital assistant could do the same, augmented by information (garnered from previous users nationwide) about the choices that others have made in the same or similar circumstances.

Apart from critical threshold questions about feasibility and competence, several important and difficult questions about my imagined application remain, among them: What business model would enable the development of such an application and who would build it, monitor its accuracy and effectiveness, or assume responsibility for its "malpractice" (if any)? Would regulatory barriers to its use recede or adjust? In what cloud would a client's data – such as the record of the conversation between the client and the digital assistant – be stored? Would the data be protected by a duty of confidentiality (owed by whom?) and protected by an evidentiary privilege?