Disruptive Innovation In Medicine And Law

There’s been a lot of chatter on a couple law blogs about Rachel Rodgers, a 2009 law graduate with a knack for marketing herself. She’s licensed in New York and New Jersey but practices out of a home office in Arizona, where she’s not licensed; I’m not sure if it’s a “virtual law office,” because I don’t know what that marketing term really means, but I consider it to be one.

Let’s reflect for a moment on how novel that sort of law practice is. Not for Rachel in particular — she certainly didn’t invent telecommuting — but historically: until about the 1980s or so, it simply wasn’t feasible to practice law in a state on the other side of the country from where you live. These days, with e-filing and the ubiquity of email and electronic documents, running your law practice in a paperless manner like a “virtual law office” can often make it more efficient.

As Carolyn Elefant summarizes, Rodgers’ setup raises, but doesn’t necessarily decide, a few ethical issues. If, for example, Rodgers counsels Arizona clients, that’s a problem, because she’s not licensed there. If she represents or markets for New York or New Jersey clients, she has to be careful to follow their strict “bona fide office” and advertising rules. Like with the John Wait situation, another discussion over marketing for new lawyers, a number of law bloggers criticized Rodgers and her practice and its marketing; Elefant rounds them all up.

But let’s put that aside for the moment and jump over to medicine. Via Larry Ribstein (via Marginal Revolution), who wonders about the parallels to law, there’s the story of Jay Parkinson, MD, MPH:

Upon finishing my second residency at Hopkins in Baltimore in September of 2007, I moved back to Williamsburg to start a new kind of practice:

  1. Patients would visit my website
  2. See my Google calendar
  3. Choose a time and input their symptoms
  4. My iphone would alert me
  5. I would make a house call
  6. They’d pay me via paypal
  7. We’d follow up by email, IM, videochat, or in person

It was simple, elegant, and affordable for me to start. But most importantly, it just made sense given how we all communicate and do business today. …

Then, about six months later I got an official letter from the New York State Office of Professional Conduct. Obviously, that was unsettling. It essentially said that someone had made a complaint about my practice and my use of the internet. They wanted all of my records about the eight patients I prescribed narcotics for in my practice— I prescribed one time prescriptions for Tylenol #3 for eight patients treating their acute pain for various conditions.

Parkinson titles his post, “What happens to doctors who think outside the box?

So, what happened to Parkinson?

Nothing:

After about three months, the state got back to me asking me to come in and talk to them along with my lawyer. They had reviewed my records.

I arrived. They asked me questions for about half an hour. My lawyer answered some. I answered some. They saw that all of my records were complete, I was acting according to standard guidelines, and that all of my patients were people I’ve established a real life relationship with. It was obvious to them that I’d done nothing wrong.

Then the board members lightened up and asked me about my practice. Both of them were in their late 60’s. They whipped out their iPhones and told me how their grandkids were teaching them to text and how the internet has a real potential to change healthcare. Then they started complaining about the current state of medicine and the death of the doctor-patient relationship. They loved my practice and congratulated me on being innovative.

And the same has been true of Rachel Rodgers. As she described at length, the Arizona bar received a tip about her practice — like with Parkinson, the tip on Rodgers likely followed favorable press coverage — then confirmed that she didn’t represent clients in Arizona and went on their way.

Both Rodgers and Parkinson entered difficult job markets and used technology to build their solo practices in a way that was more efficient, better suited them, and met their clients’ needs. Because both used technology in a way outside of the norm, both were briefly investigated — and cleared — by licensing boards.

In short, nothing to see here: the system is functioning as it should, keeping an eye on novel business methods but doing so to ensure the purposes of the ethical rules are fulfilled, rather than using those rules to promote a particular type of practitioner.

When those same licensing boards fail to properly discipline errant professionals, we are outraged, like with the collapse of the California medical board. As I’ve discussed here before, data from the National Practitioner Data Bank report and state medical malpractice funds shows that a small number of incompetent doctors cause a disproportionate amount of damage. Just five percent of physicians are responsible for almost a third of all malpractice payments; if licensing boards were better at finding these bad doctors and either compelling them to shape up or suspending them from practice entirely, we would all be better off.

I imagine the same is true of lawyers. I’m unaware of any instance in which a disciplinary board sanctioned a lawyer or doctor for a mere technological innovation; in most instances, the lawyer or doctor didn’t just bend arbitrary rules meant to protect the trade guild, but in fact endangered their clients or patients. In contrast, there are a handful of lawyers who routinely violate ethical norms without penalty. If anything, the licensing boards are too permissive, not too restrictive.

Just like how I’ve criticized other bloggers in the past for drawing ethical concerns in terms of “old versus young,” I disagree with Rodgers that the current ethics rules need “redefining” — consider the ease with which the Arizona bar closed her case after she explained her practice. Experience can help form and refine a lawyer’s ethical judgment, but ethics isn’t a generational matter: Rodgers apparently closely studied the Arizona, New York, and New Jersey rules to ensure compliance with each. (It would be better, but not necessary, to obtain an outside opinion.) That’s all the law requires.

In short, if a professional utilizes a ‘disruptive technology’ or ‘disruptive innovation’ to build their practice — whether a virtual law office across the country or house calls scheduled online — they should expect some scrutiny both from the licensing board and from the community. That’s appropriate.

On the whole, though, it seems our current professional governance models are more than capable of accepting and understanding these novel business methods. Young lawyers need to exercise caution when choosing a non-traditional business model, but they need not give up the idea entirely.

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