Dropservicing business in the US - is this legal for industries like law, accounting/bookkeeping and other regulated industries?
<p>I am looking to get into the business of dropservicing - finding a white label provider of certain services and then re-selling those services to retail customers. For myself, I'm sticking to traditional IT services and digital marketing. However, I was talking to a friend and he's not at all into technology (that's why I'm asking this question for him here, aside from my own curiosity). After I told him what I was doing, he was thinking of doing a similar business with bookkeeping and general legal services. We found some white label providers of these services (US-based), but he was concerned about legal issues since those are regulated industries.</p>
<p>My question is: is this sort of arbitrage legal for those kinds of industries?</p>
<p>Thank you.</p>

<p>Both law and accounting are subject to state regulation, so, at a minimum, work done remotely by non-licensed persons must be reviewed substantively and blessed by a local admitted professional before being shared with a client, and there are limits on what contacts with the client the back office can have.</p>
<p>In a legal context, the back office is limited to what a paralegal can do, and that varies considerably from one U.S. state to another, especially with respect to real property matters.</p>
<p>Mere &quot;book keeping&quot; as opposed to accounting is rarely a regulated profession under state law, but as in the case of legal services, the distinction between accounting that requires a license and activities that do not require a license varies from state to state (although less dramatically).</p>
<p>The notion of selling &quot;forms&quot; is well recognized, but what crosses over the line from selling a &quot;form&quot; to selling legal or accounting advice varies and can be treacherous.</p>
<p>I don't know off hand if this is true for accountants in most states, but in most U.S. states non-lawyers are prohibited from having an equity or profits based interest in a law firm, and referral fee compensation is also subject to significant professional ethics regulation. Non-competition clauses involving lawyers are also subject to heavy professional ethics regulations not common to non-legal professional activities.</p>
<p>Without a more concrete example of what the dropservicing business model would entail, it is impossible to do a very definitive analysis. Your model seems to be based upon obtaining services from a third-party and re-selling those services. For the most part, that isn't a workable business model from a regulatory perspective in the U.S. Instead, you need licensed &quot;white label&quot; providers as the face of the business and you may potentially provide services behind them in the back office.</p>
<p>There are some services along this line currently in existence with varied business models involving somewhat similar concepts:</p>
<ul>
<li><p>Legal forms companies like the recently succeeded <a href="https://cle.cobar.org/BradfordPublishingRelease" rel="noreferrer">Bradford Publishing</a>.</p>
</li>
<li><p><a href="https://www.bbb.org/us/oh/cleveland/profile/legal-services/hyatt-legal-plans-0312-16002631/complaints" rel="noreferrer">Hyatt Legal Services Plans</a></p>
</li>
<li><p>Private legal services insurance such as <a href="https://www.legalshield.com/business-plan/get-legal-help-now?utm_source=google&amp;utm_medium=cpc&amp;utm_campaign=G_LS_US_SMB_Search_Non-Brand&amp;utm_term=contract%20attorney&amp;gclid=Cj0KCQjw6575BRCQARIsAMp-ksONPbKuZwehsd-XOD4b_pgPSB1Vk3gW05it6IgWJLAT4fki6Xbybx8aAqQYEALw_wcB" rel="noreferrer">Legal Shield</a>.</p>
</li>
<li><p><a href="https://www.hrblock.com/" rel="noreferrer">H&amp;R Block</a> and also tax services.</p>
</li>
<li><p>The legal services provided by the <a href="https://www.goarmy.com/jag.html" rel="noreferrer">JAG Corps</a> to military service members.</p>
</li>
<li><p><a href="https://www.nolo.com/" rel="noreferrer">Nolo.com</a></p>
</li>
<li><p>Union sponsored legal services plans such as <a href="https://www.unionplus.org/benefits/home/legal-help" rel="noreferrer">Union Plus</a>.</p>
</li>
<li><p>Title insurance companies such as <a href="https://www.firstam.com/" rel="noreferrer">First American Title</a> and related transaction execution companies.</p>
</li>
<li><p>The legal defense provided incident to a liability insurance policy by companies such as <a href="https://www.allstate.com/landingpages/lsp/auto-brand-general-desktop.html?CMP=KNC-T1-NA-DSK-GG-AU-MISC-B-070805-200515:allstate&amp;TFN=&amp;CAMPAIGN=444490000070805&amp;affcode=p10430065301&amp;ds_rl=1261774&amp;s_kwcid=AL!9024!3!101473088408!e!!g!!allstate&amp;gclid=Cj0KCQjw6575BRCQARIsAMp-ksMop9TAgLl19b9qP07uHnq4zVzjs2uDavRsOVi4d_khHyVl6qdq90kaAsZUEALw_wcB&amp;gclsrc=aw.ds" rel="noreferrer">Allstate</a>.</p>
</li>
<li><p>Governmental shared risk pools such as <a href="https://www.cirsa.org/" rel="noreferrer">CIRSA</a>.</p>
</li>
<li><p>Donation driven non-profits such as <a href="https://action.aclu.org/give/fund-every-fight-ahead?cid=7014A000001Zs9uQAC&amp;initms_aff=nat&amp;initms_chan=sem&amp;utm_medium=sem&amp;initms=200114_evergreenun_sem-402136072447-85034109043-aclu%20national-b_segmenta_ggl&amp;utm_source=ggl&amp;utm_campaign=evergreenun&amp;utm_content=200114_sem-402136072447-85034109043-aclu%20national-b_segmenta&amp;ms_aff=nat&amp;ms_chan=sem&amp;ms=200114_evergreenun_sem-402136072447-85034109043-aclu%20national-b_segmenta_ggl&amp;gclid=Cj0KCQjw6575BRCQARIsAMp-ksOAvU4sb4pLf_ZYFsLxpkOUKCIEWJ-5DlUwiy2ThfgtWJfDdtbDDccaAqsEEALw_wcB&amp;gclid=Cj0KCQjw6575BRCQARIsAMp-ksOAvU4sb4pLf_ZYFsLxpkOUKCIEWJ-5DlUwiy2ThfgtWJfDdtbDDccaAqsEEALw_wcB" rel="noreferrer">the ACLU</a>.</p>
</li>
<li><p>The <a href="https://www.facebook.com/a2tenantsunion/" rel="noreferrer">Ann Arbor Tenants Union</a>.</p>
</li>
<li><p>Temp agencies providing paralegals to companies such as <a href="https://national.hireanesquire.com/freelance-paralegals/?kw=%2Btemp%20%2Bparalegal&amp;cpn=1938616217&amp;utm_term=%2Btemp%20%2Bparalegal&amp;utm_campaign=Freelance%20paralegal&amp;utm_source=adwords&amp;utm_medium=ppc&amp;hsa_tgt=kwd-535810181190&amp;hsa_grp=70181947909&amp;hsa_src=g&amp;hsa_net=adwords&amp;hsa_mt=b&amp;hsa_ver=3&amp;hsa_ad=414275841311&amp;hsa_acc=7490703806&amp;hsa_kw=%2Btemp%20%2Bparalegal&amp;hsa_cam=1938616217&amp;gclid=Cj0KCQjw6575BRCQARIsAMp-ksM1RFiSA3ilecmAa1MAEh0XbtVtKlX59HcNuPNjE7VA2LduHk7l5JYaAp-gEALw_wcB" rel="noreferrer">this one</a>. A few also make contract attorneys' available for a firm's one time big project.</p>
</li>
<li><p>Tax software companies like TurboTax (a division of <a href="https://turbotax.intuit.com/" rel="noreferrer">Inuit</a>).</p>
</li>
<li><p><a href="https://signon.thomsonreuters.com/?productid=CBT&amp;lr=0&amp;culture=en-US&amp;returnto=https%3A%2F%2F1.next.westlaw.com%2FCosi%2FSignOn&amp;tracetoken=0803201406450QIEk3nszyKirhiMMWkdV-rloYMuCRv06igJFaBSZc29YIbdZPjKDLzK9SRb6Wd5igdVqUmJ_dnMkUegeI0cINHIpimGP_Qu9w75vs1tjBSlHYHVYXHgFigUnUcAQ8WenfhjgT_G1wqtm1VDPmkMakrPskHLdkxvUUNHTQRA4_ppLI6G_uEVkpe_w3SPxzMry2lORvf7SoitkPq-YniImpU-RQ3QfBwsC75wYeCQn3Vh832lolL6Vc3IfcJFJC0BcdBdhWCgdD0FAQ0pCUJoJ9DTg011lIQaUolerEU7O6OMVDKXN9oyemr2TMLdk6SAsxVj2Hlg2Bb9uFWH3VF_2bzGstjXpmwySTTDrAMyq2KptkAPz6NyA17VPg7pRXOd3&amp;bhcp=1" rel="noreferrer">Westlaw</a></p>
</li>
<li><p><a href="https://www.lexisnexis.com/en-us/gateway.page" rel="noreferrer">LexisNexis</a></p>
</li>
<li><p><a href="https://www.cch.com/" rel="noreferrer">Wolters Kluwer</a> (f.k.a. CCH).</p>
</li>
</ul>

united-states business regulations