f/k/a . . . the archives

July 4, 2003

Unauthorized Practice of Law

Filed under: — David Giacalone @ 10:39 pm

Below are ethicalEsq-f/k/a postings and annotated web resources on this topic. Find our full list of annotated ethics links by clicking the Client Rights & Legal Ethics link on the Navigation Bar.

FTC and DOJ on Defining “Practice of Law” The Federal Trade Comm’n and Dept. of Justice presented joint comments (12/20/02) on the ABA’s draft Model Definition of the Practice of Law. The federal antitrust agencies concluded that the proposed definition was overly broad and would injure consumers and competition. The agencies urged the Task Force to permit lay competition that is in the public interest and craft an appropriate definition after careful review of the harms and benefits of lay participation in providing law-related services.

ABA Task Force on the Model Definition of the Practice of Law The Task Force made its Recommendation and Report in March ’03. The Recommendations are discussed in a Posting on 7/01/03. An appendix included State Definitions of the Practice of Law.

Lawyers Try to Reestablish Their Monopoly [scroll down to 2nd article; formerly at Nolo.com] This article, by attorneys Stephen R. Elias and Ralph Warner, describes and decries current efforts before the ABA to define “the practice of law,” and gives a brief history of the organized bar’s efforts to keep nonlawyers from performing law-related tasks.

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Lawyer vs. NonLawyer In an article appearing in Legal Times (02-03-2003), James C. Turner, Executive Director of the legal reform group HALT, argues against the ABA’s proposed model rule defining “practice of law” and its corollary of “unauthorized practice.” Turner says the proposed model rule “poses a major threat to the rights of millions of American consumers who choose to handle their routine legal tasks with the help of nonlawyer resources.” In 2002, HALT opposed attempts by Arizona attorneys to curb competition from non-lawyers by expanding the definition of the “unauthorized practice of law.” On its UPL Project Home Page, HALT set forth its approach and principles:

One of the most effective ways to increase consumer choice in legal services would be to

abolish unauthorized practice statutes. As the simple and routine legal needs of millions of

Americans continue to go unmet each year, it is critical that consumers be able to utilize

independent paralegals and other nonlawyer resources.


At the core of HALT’s efforts to reform restrictions on unauthorized practice are three

principles:

  1. The unauthorized practice of law means saying you are a lawyer when you are not;

  2. Innovative partnering between lawyers and nonlawyers is permissible with client consent after full disclosure of work and fee arrangements; and

  3. A client or customer complaint should be required before unauthorized practice of law proceedings can be initiated.

Scriveners in Cyberspace In this Hofstra law review article (44 pp., pdf), Prof. Catherine J. Lanctot takes a close look at the issues raised by online document preparation (especially interactive programs that present solutions to a consumer’s individual fact situation) and the regulation of the unauthorized practice of law. Included is a detailed history of the organized bar’s attempts to prohibit nonlawyers from providing consumers with law-related information and services.

  • Also, see Prof. Lanctot’s article in the Duke Law Journal, (Cited: 49 Duke L. J. 147) Attorney-Client Relationships in Cyberspace: The Peril & the Promise: Nolo v. Texas This article contains a brief summary of the battle between Nolo.com and the Texas bar — when Texas lawyers tried unsuccesfully a few years back to ban Nolo’s publications from being sold or distributed in the state, claiming they amounted to the unauthorized practice of law.

4 Comments

  1. Unfortunately, most state’s unauthorized practice of law statutes are befuddling at best and unconstitutionally vague at worst. Most states subject the offender to both civil and criminal penalties, although some states, Connecticut for example, provide an exemption from criminal penalties to lawyers who are both employees of an entity within the state and licensed to practice by the highest court in another jurisdiction. However, the age old question still remains unanswered; what constitutes the practice of law? A majority of states seem to employ the “facts to law” test, specifically, the dissemination of advice whereby the actor applies substantive law to the facts of an individual’s specific situation, and where such advice would substantially affect one’s legal rights generally constitutes the practice of law. However, there’s a lot of room for leeway in that definition, and concurrently, a lot of room for abuse of the rule itself. In sum, there is an inverse relationship between the clarity of a rule and its potential for abuse. It’s not uncommon for lawyers to wield unauthorized practice of law statutes during the course of civil litigation in order to gain an unfair advantage in such proceeding, sometimes conspiring with disciplinary counsel to accomplish their avaricious result. While I support restrictions on the right to practice law in the interest of public safety and concern, I would clarify its definition in the interest of procedural due process, as well as provide some “safe harbors” for in house counsel and multi-jurisdictional practioners. Possibly statutes could provide that no complaint can be issued against an alleged offender until and unless an actual victim exists. This would prevent opprobrious lawyers from bringing forth complaints for their own self interests. Additionally, statutes should provide a complete exemption for in house counsel employed by an entity within the state provided counsel is licensed by the highest court in another jurisdiction. One last clause could provide a “safe harbor” for out of state of counsel on the condition they have a “sponsoring counsel” who takes responsibilty for the out of state counsel’s work. As the old saying goes, ” we dance around the circle and suppose, but the secret sits in the middle and knows.”

    Comment by JOHN A. TATOIAN ESQ. — April 24, 2007 @ 8:08 pm

  2. The rash of predatory lending, that has led to the current subprime mortgage foreclosure crisis, has as one of its main underpinnings the use of non-attorneys for accomplishment of both title searching and loan closings. As a consequence of no involvement by anyone with an ethical obligation to explain the terms of the documents being signed, many borrowers signed up for outrageous loan terms. In these same transactions, fees were charged that exceeded in many instances the fees for similar services that would have been charged by licensed attorneys. Bad outcomes for consumers, no offsetting economic advantage for consumers. An object lesson in the “benefits” of nonlawyers taking over traditional legal services.

    Comment by David Puryear — October 25, 2007 @ 11:01 am

  3. Thanks for the Comment, David. You make some factual assumptions that I cannot possibly verify. Having choices never means that consumers will always make the best choices, but it opens up possibilities that can bring quality, innovation and pricing options otherwise not available — and create competition that improves attorney performance.

    Your remarks beg a couple important questions: For example, In how many of those transactions did the consumer have attorney representation? How many of those attorneys offered relevant, useful advice (and why was it ignored)? Would receiving the advice have changed the actions of unrepresented consumers? How often did the nonlawyers in fact give the kinds of explanations you are assuming were not given?

    By the way, in my experience, attorneys handling closings give very little advice (and have underlings perform most of the tasks).

    Comment by David Giacalone — October 25, 2007 @ 11:26 am

  4. The purported primary purpose of UPL statutes is to protect the public from the incompetence of individuals without proper legal training. Unfortunately, the practical application of these statutes is extremely “bouncey”, and the motives behind enacting them “dicey” at best( some say the real purpose behind the UPL statutes is the continued protection of the current legal monopoly). I query what would happen if states let the marketplace rule, allowing consumers freedom to choose among a myriad of legal service options. Wouldn’t the practical result be the marketplace weeding out the incompetent, while the strong and competent survive? If a consumer was harmed, wouldn’t they still have available to them the various other remedies currently available; civil action, administrative action from consumer protection etc. ? Seems the only difference would be an inability to criminally prosecute the alleged offender based on a statute which fails to clearly define the conduct which is prohibited. Thoughts…comments etc.??

    Comment by JOHN A. TATOIAN ESQ. — November 18, 2007 @ 3:06 pm

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