The two federal antitrust agencies filed a joint amicus brief today asking the Georgia Supreme Court to reject an advisory ethics opinion, which declares that non-lawyers who perform real estate closing are engaged in the Unauthorized Practice of Law. The Advisory Opinion was issued by the State Bar of Georgia UPL Standing Committee. Click here for the text of the brief. The case is captioned On Review of UPL Advisory Opinion No. 2003-2, Case No. S03U1451 (Ga. S. Ct.). Georgia State Bar UPL Advisory Opinion 2003-2 (April 22, 2003) concludes: [S]ubject to any relevant exceptions set out by the Georgia legislature or courts, one who facilitates the execution of a deed of conveyance on behalf of another within the state of Georgia is engaged in the practice of law. One does not become licensed to practice law simply by procuring a notary seal. A Georgia lawyer who conducts a witness only closing does not, of course, engage in the unlicensed practice of law. There may well exist, however, professional liability or disciplinary concerns that fall outside the scope of this opinion. Refinance closings, second mortgages, home equity loans, construction loans and other secured real estate loan transactions may differ in certain particulars from purchase transactions. Nevertheless, the centerpiece of these transactions is the conveyance of real property. Such transactions are, therefore, subject to the same analysis as set out above. The two agencies had submitted extensive comments to the State Bar’s ULP Committee on March 20, 2003, requesting that the Committee either declare such conduct not to be the practice of law or decline to issue an opinion. The Letter and the amicus Brief argue that preventing non-lawyers from conducting real estate closings would likely increase costs and decrease convenience for consumers, while restricting e-commerce, despite a lack of evidence of consumer injury from the practice. They caution against using unnecessary ULP restrictions to prevent competition from non-lawyers. The definition of the practice of law must take into account the public interest, the agencies assert, as determined by a balancing of potential consumer benefits and harms.
July 29, 2003
DOJ & FTC Support Non-lawyers Doing Real Estate Closings in Georgia
Professor Continues to Battle New Model Rule 1.5 and Standard Contingency Fees
Lester Brickman, ethics professor at Cardozo Law School, has taken his fight to improve New Model Rule 1.5 and its treatment of contingency fees to the Rule-making authority of each State. Over the past few months, Prof. Brickman has sent a Letter to each presiding justice urging “you and your fellow justices to decline to adopt the proposed changes to Model Rule 1.5.” (Letter posted at ethicalEsq? by permission of the author)
Brickman is a longtime foe of the use of “standard” contingency fees — because they are frequently unrelated to the risk taken and work performed by an attorney in a particular case, and therefore often overcompensate the lawyer at the expense of the injured client. In his Testimony to the ABA Ethics 2000, Brickman argued that current ethical standards and ethics opinions concerning the use of contingency fees were universally ignored, and that the new model rule on fees must explicitly require that contingency fees be linked to the lawyer’s risk and must inform clients of their right to be fully informed, so that they could make informed choices among fee options (such as hourly, flat or mixed fees), and negotiate the level of a contingency fee.
Brickman and other consumer advocates (such as your Editor) lost this fight before Ethics 2000. The Commission instead proposed a Rule 1.5, later adopted by the ABA in its New Model Rules, that — according to Brickman — “trashed fiducial rights in favor of simple self-interest.” (emphasis added)
To explain his argument in detail, Prof. Brickman enclosed with each Letter a copy of the page proofs of his soon-to-be published law review article, The Continuing Assault on the Citadel of Fiduciary Protection: Ethics 2000’s Revision of Model Rule 1.5, by Lester Brickman, 2003 Univ. Ill.L.Rev. No. 5 (forthcoming). Brickman notes in the Letter that:
[The Article spells] out in sad detail how the ABA has abused the bar’s self-regulatory status by urging upon courts the elimination of one of the few remaining fiducial fee protections in the codes of ethics. (underscore added)
The battle over the new model rule governing contingency fees is being fought right now across the country, on the state level. As reported in our Posting 6/30/03, Arizona recently adopted a version of Rule 1.5 that considerably improves upon the Ethics 2000 proposal, while North Carolina became the first state to adopt the new rule without changes. Your Editor gave his version of the problems with New Model Rule 1.5 in an Open Letter to the FTC (HALT Forum, “Protecting Fees Rather than Injured Clients: The ‘Standard’ Contingency Fee and the ABA,” April 11, 2002).
Another Lawyer Boycott? NYC Blames Property-Tax Counsel for Software Co. Pullout
According to the New York Post, City officials allege that “
The Post article continues:
Genesis Computer Consultants may have violated antitrust laws when it pulled out of talks with the city following threats by property, or certiorari, lawyers to boycott its products, city Corporation Counsel Michael Cardozo said in a June 24 letter to the company.
Apparently,
the software is used by so-called “cert” or “certiorari” lawyers to challenge property tax bills. If the City acquires the software, its assessors would have the same easy-to-access data on incomes and expenses of individual properties over the last 10 years . City Finance Commissioner told the Post that the software “would also allow Finance to perform quick audits of how we calculate property values, making it easier to catch errors and detect any hint of corruption.” Genesis denies the allegations and disputes the City’s legal analysis.I would have never predicted that this weblog would be drawing so often on my antitrust experience. (See yesterday’s postings, July 27th, on the refusal of Bar Advocates in Massachusetts to take cases). If the City is correct, it’s the “cert” lawyers who deserve the most scrutiny by antitrust enforcers. It gets my blood boiling, to think that lawyers might be pressuring a software firm to deprive other users of a valuable tool — an amazingly modern approach to protecting a guild’s source of income. Another blackeye for the profession, or another unjustified slur? We shall see.