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Delaware’s Bonafide Office Requirement Is Bonafide Hypocrisy & Bonafide Short-Sighted

by Carolyn Elefant on January 3, 2014 · 1 comment

in Future Fridays, Office Options

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You might say that recently sanctioned  Delaware attorney Fred Barakat didn’t set his sights high enough.  Suspended for two years for several disciplinary violations including representing clients from his Pennsylvania home without a bonafide office in Delaware, Barakat could have been a paragon rather than a pariah had he founded an #AltLaw operation instead of settling for the pedestrian goal of ”using advancements in technology”  and a virtual office space to serve individual clients remotely. Silly Barakat  for believing that technology could actually substitute for a “real law office” or provide a cost-effective wayto expand access to law.

Had Barakat been just a little hipper, he would have followed the lead of the cool law kids who reside in similar virtual store fronts just down the road, with names like
LegalZooms, Axiom, RocketLawyer, Clearspire, UpCounsel  and Priori Legal. If we’re being honest, these entities are essentially de facto law firms — but unlike Barakat who somewhat resembled a traditional lawyer, these #newlaw entities shed most of the trappings of #oldlaw and thus, evade regulatory scrutiny.

Thus, instead of setting up a satellite office to meet in person with real life clients, Barakat should have incorporated himself as a non-law firm. Instead of setting up a website with an address and phone number website inviting clients to contact him directly, Barakat should have sold forms online to Delaware residents (like Legal Zoom) or lured clients to a platform where he could then (as a non-law corporation) have contracted with himself or other lawyers with a physical office in Delaware to provide services (like a matchmaking or lead gen site) or, if he’d really wanted to get fancy, he could have provided managed and seconded legal services  to GCs at Delaware corporations (like Axiom). Barakat could have done all of this without the need for a bonafide office in the state. But what Barakat couldn’t do is what he and so many other solo and small firm lawyers (and our clients) really want: to serve individual clients directly, conveniently and in a cost-effective manner.

By the time the ethics regulators wake up and realize that imposing costly requirements on solos and smalls like bonafide offices serve little purpose but to increase the cost of legal service, it will be too late.  Ironically, in trying to preserve the past and the old way of how law was once practiced, the Delaware court sacrificed lawyers’ futures. Inflicting costly bonafide office requirements on solos and smalls doesn’t accomplish anything but ensure solos displacement by cheaper options like LegalZoom or Rocket Lawyers or non-lawyer practitioners, all of whom aren’t subject to the same bloated regulatory mandates.

Good work, Delaware, for proving that justice is blind – blind to to what’s coming down the pike. Congrats on saving the bonafide law office. Too bad, so sad that after rulings like this, there won’t be any real lawyers left to inhabit them.

 

  • AF

    Delaware is notorious for being overly protective of its bar. It is very hard to become licensed in Delaware, and, even though, you can maintain an active license after moving away, you cannot appear before state courts without having an office in-state. Given the amount of corporate and patent litigation happening in the state, it provides a very nice money-making opportunity for locals which they do not want to give up by letting people set up “virtual offices.” So you can actually say it is a very carefully calculated protectionist position.

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