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Unauthorized practice of law update - 2010

Unauthorized practice of law update - 2010. Michelle A. Hall, Secretary Board on the Unauthorized Practice of Law The Supreme Court of Ohio. UPL = UNAUTHORIZED PRACTICE OF LAW. Topics . UPL Rules and Regulations Definitions of UPL UPL Considerations for Paralegals UPL Board Procedure

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Unauthorized practice of law update - 2010

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  1. Unauthorized practice of law update - 2010 Michelle A. Hall, Secretary Board on the Unauthorized Practice of Law The Supreme Court of Ohio

  2. UPL = UNAUTHORIZED PRACTICE OF LAW

  3. Topics UPL Rules and Regulations Definitions of UPL UPL Considerations for Paralegals UPL Board Procedure Case Law Update UPL Board Developments

  4. UPL: Who Regulates?

  5. Supreme Court of Ohio

  6. Ohio Constitution Art. IV Sec. 2(B)(1)(g) “The supreme court shall have original jurisdiction in the following…Admission to the practice of law, the discipline of persons so admitted, and all other matters relating to the practice of law.”

  7. UPL: Why Regulate?

  8. Purpose of Gov.Bar R. VII • Section 17: This rule… shall be liberally construed for the protection of the public, the courts, and the legal profession…

  9. Supreme Court View • “Gov.Bar R. VII is built on the premise that limiting the practice of law to licensed attorneys is generally necessary to protect the public against incompetence, divided loyalties, and other attendant evils that are often associated with unskilled representation.” Cleveland Bar Assn. v. CompManagement, Inc. (2004)

  10. UPL: What is it?

  11. Gov.Bar R. VII (Supreme Court Rules for the Government of the Bar) • The unauthorized practice of law is the rendering of legal services for another by any person not admitted to practice in Ohio under Rule I, and not granted active status under Rule VI, or certified under Rule II (legal interns), Rule IX (temporary certification), or Rule XI (foreign legal consultants) of the Supreme Court Rules for the Government of the Bar of Ohio.

  12. Rendering of legal services for another by any person Not admitted to practice in Ohio

  13. Definition of Practice of Law • “The practice of law is… the doing or performing services in a court… But in a larger sense it includes legal advice and counsel, and the preparation of legal instruments and contracts by which legal rights are secured, although such matter may or may not be depending in a court.” Land Title Abstract & Trust Co. v. Dworken (1934)

  14. Definition of Practice of Law • “The practice of law is not limited to the conduct of cases in court. It embraces the preparation of pleadings and other papers incident to actions and special proceedings and the management of such actions and proceedings on behalf of clients before judges and courts, and in addition conveyancing, the preparation of legal instruments of all kinds, and in general all advice to clients and all action taken for them in matters connected with the law.” Judd v. City Trust & Sav. Bank (1937)

  15. UPL: Defined through Case Law • General: • Legal Advice and Counsel • Preparation of Legal Instruments / Contracts • Management of Legal Action • All Advice and Action Taken for Clients in Matters Connected to the Law

  16. UPL: Defined through Case Law • Specific: • Estate planning services (“trust mills”) • Advising debtors of legal rights to avoid foreclosure or other collection proceedings • Negotiating settlements • Drafting deeds • Imposters / “holding out” / “power of attorney” • Selection / completion of forms • Attorneys without proper license

  17. UPL Exceptions • Third party administrators / BWC • IDEA / Parent pro se representation • Board of Revision complaints by corporate officers • Jailhouse lawyers • Company officer in small claims court • Hearings before Unemployment Compensation Board of Review / Bureau of Unemployment Services • Union elections / Collective bargaining

  18. UPL: What about Paralegals?

  19. ABA Model Guidelines for the Utilization of Paralegal Services • Lawyers delegate tasks to paralegals • Not all legal tasks may be delegated • Lawyer has ultimate responsibility for delegated tasks • Direct supervision and instruction • Improper delegation = assisting in UPL • Paralegal must act within delegated authority

  20. Ohio Rules of Professional Conduct • Replaced former Ohio Code of Professional Responsibility on February 1, 2007 • Prof. Cond. R. 5.3: Responsibilities regarding nonlawyer assistants • The lawyer must give appropriate instruction and supervision • The lawyer can be responsible for the nonlawyer’s violation of the Rules

  21. Ohio Rules of Professional Conduct • Prof. Cond. R. 5.4: Professional independence of a lawyer • With limited exception, the following is prohibited: • Sharing of legal fees with nonlawyers • Partnerships with nonlawyers • Nonlawyers’ direction of lawyers’ professional judgment

  22. Ohio Rules of Professional Conduct • Prof. Cond. R. 5.5: UPL; Multijurisdictional Practice of Law • No lawyer shall engage in UPL or assist another in UPL • Temporary Practice • Holding out • Corporate Status • Federal Practice Only

  23. Paralegal Canons and Ethical Considerations • Canon 6: A paralegal title shall be fully disclosed • Canon 7: A paralegal shall not engage in UPL

  24. Potential Paralegal Issues • Preparing forms or other documents for persons to file later pro se • Inadequate supervision by the attorney • Forgery of attorney signature on correspondence or court pleading • Not indicating to clients “not an attorney,” or misleading by omission • Appearances in courts • Settlement negotiations

  25. Recent “Paralegals” Cases • Columbus Bar Assn. v. Thomas (2006) • Exceeded delegated authority, acted independently • Prepared and filed pleadings • Prepared estate documents • Signed attorney’s name • Gave legal advice • $5,000 civil penalty

  26. Recent “Paralegals” Cases • Ohio State Bar Assn. v. Cohen (2005) • Dba DocuPrep USA (national chain of “independently operated paralegal offices”) • Drafted wills, pleadings, bankruptcy petitions, gave legal advice, charged a fee • Cleveland Bar Assn. v. Para-Legals (2005) • Sham authority of a power of attorney / no attorney supervision • Prepared dissolution documents that were filed in court • Represented a Florida corp. in small claims court

  27. Recent “Paralegals” Cases • Cleveland Bar Assn. v. McKissic (2005) • Dba Vel’s Professional Services • Selected and completed legal forms • Gave legal advice • Cleveland Bar Assn. v. Coats (2003) • Dba Paramount Paralegal Services • Drafted divorce complaints and judgment entries for filing on behalf of pro se litigants • No attorney supervision • Representation before admin. agency

  28. Recent “Paralegals” Cases • Columbus Bar Assn. v. Purnell (2002) • Filings in probate court in personal injury claim of a minor • Cincinnati Bar Assn. v. Cromwell (1998) • Business called “Paralegal Service Group” which operated without the supervision of an attorney • Negotiated settlements, prepared settlement agreement • Akron Bar Assn. v. Greene (1997) • Drafted and filed a complaint for divorce, appeared in court

  29. BCGD Opinions • Opinion 2009-6 • Outsourcing of legal or support services domestically or abroad, to lawyers or nonlawyers, is permissible but rules of supervision apply • Opinion 2002-4 • A lawyer may not delegate the taking of a deposition to a paralegal • Does not matter if supervised or predetermined questions • Constitutes assisting with UPL

  30. Other Sources • 109 A.L.R.5th 275: “What Constitutes Unauthorized Practice of Law by Paralegal” • American Bar Association Center for Professional Responsibility / Client Protection http://www.abanet.org/cpr/clientpro/client.html

  31. UPL Board Procedure

  32. Board on the UPL • Created 1976 • 11 Attorneys, 1 Nonattorney • Referrals for Investigation • Adjudicates formal complaints of UPL • Three-member panels • Hearings • Settlement Agreements and Consent Decrees • Recommendations to the Supreme Court • Advisory Opinions

  33. Supreme Court Review • Board Final Report • Court Order to Show Cause • Parties may file objections (except in consent decree cases) • Oral argument • Upon finding of UPL – Order issued: • Prohibits respondent from future conduct • Reimbursement of costs incurred by relator and Board • May impose civil penalty and tax costs

  34. Civil Penalties • Began in 2003 • $10,000 per “offense” • 5 factor analysis • Degree of cooperation • Number of occasions UPL was committed • Flagrancy • Harm to third parties • Any other relevant factors • See UPL regulations • Aggravation and Mitigation

  35. Civil Penalties 2009 $6,651,490 in 8 cases

  36. What happens to collected penalties? • Deposited in the Attorney Services Fund • Attorney disciplinary system • Clients’ Security Fund • UPL operations • Commission on Professionalism • Attorney Services (registration and CLE) • Ohio Legal Assistance Foundation • Ohio Lawyers Assistance Program • Fund report available on Court’s website

  37. Other UPL Remedies • R.C. 4705.01; 4705.07 • Must be admitted with the Supreme Court to practice law • No false representation as an attorney • Can pursue civil damages if UPL finding by Board / Court • Criminal penalty for UPL = 1st Degree Misdemeanor

  38. UPL Case Law Update

  39. Notable UPL Cases 2009 • Columbus Bar Assn. v. Am. Family Prepaid Legal • Cincinnati Bar Assn. v. Foreclosure Solutions • Cleveland Bar Assn. v. Boyd II • Disciplinary Counsel v. Brown • Cincinnati Bar Assn. v. Mid-South Estate Planning

  40. UPL Decisions 2009 • Columbus Bar Assn. v. Am. Family Prepaid Legal • Trust mill case • Court found at least 3,826 breaches of a 2003 consent agreement • $6.4 million civil penalty imposed against 4 respondents • $60,000 in civil penalties against 19 individual respondents • $10,000 in civil penalties through 4 consent decrees • $25,000 per day fine for not timely disclosing customer list

  41. UPL Decisions 2009 • Cincinnati Bar Assn. v. Foreclosure Solutions • Foreclosure mill • Serviced 12,000-14,000 Ohioans • $50,000 civil penalty

  42. UPL Decisions 2009 • Cleveland Bar Assn. v. Boyd II • Preparation and filing of pleadings in domestic relations cases for a fee • $20,000 civil penalty • Respondent also found to have engaged in UPL in 2006 • Found in contempt of 2006 Court order • Arrest warrant 10/21/09 • 7 days mandatory incarceration

  43. UPL Decisions 2009 • Disciplinary Counsel v. Brown • Disbarred attorney from NY • Legal advice and representation • Use of “Esq.” and “J.D.” • Also found to have engaged in UPL in 2003 • $50,000 civil penalty • Respondent currently incarcerated

  44. UPL Decisions 2009 • Cincinnati Bar Assn. v. Mid-South Estate Planning • Trust mill • 2 cases: • Consent decree, injunction, $17,500 civil penalty • Injunction, $50,000 civil penalty

  45. UPL Board: Recent Developments

  46. Advisory Opinions • UPL 2008-01: Lawyer and Nonlawyer Representation of Labor Organizations in Collective Bargaining and Labor Grievance Arbitration • UPL 2008-02: Nonattorney Completion of Mortgage Instruments • UPL 2008-03: Legal Document Preparation by Online Services

  47. Pro Hac Vice • Pro hac vice = a privilege granted to out-of-state attorneys not admitted in Ohio to appear before a tribunal on a limited basis • New Gov.Bar R. XII • Centralizes pro hac vice admission • Out-of-state attorneys must file application with Supreme Court and pay $100 annual registration • Three pro hac vice admissions per calendar year • Attorney must also file motion with the tribunal • Effective January 1, 2011

  48. Proposed Amendments to Gov.Bar R. VII • Will be presented to Court for initial consideration in February 2010 • Concepts • Definition of UPL clarified • Ohio AG may act as relator • Expansion of Board membership • Board election of chair and vice-chair • Settlement procedure refined

  49. Handouts Gov.Bar R. VII UPL Regs UPL Flowchart Gov.Bar R. XII Advisory Opinions 2008-01, 02, 03 R.C. 4705.01, 4705.07, 4705.99 Prof. Cond. R. 5.3, 5.4, 5.5 BCGD Opinions 2002-4, 2009-6

  50. Annual UPL Seminar Friday, November 5, 2010 Ohio Judicial Center Columbus, Ohio

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