Unauthorized Practice of Law

1. Unauthorized Practice of Law Maintaining Quality by Controlling Practice

2. The Florida Bar v. Brumbaugh • Florida Bar sought an injunction prohibiting Brumbaugh from engaging further in the unauthorized practice of law. • Brumbaugh is not an attorney. • She offers typing services for “Do-It-Yourself” divorces, wills, resumes, bankruptcies. • Bar says her advice in divorce cases – for which she charges $50 – constitutes the unauthorized practice of law. • Question: Is she prohibited from doing this? If so, why?

3. Prohibition of unauthorized practice • Why is unauthorized practice of law prohibited? • Protect the bar?? Stop competition? • Concurring opinion disagrees with this. • Protect the public? • Make sure “attorney” has appropriate training, expertise, competence • Make sure “attorney” is subject to appropriate controls • Why is the bar involved here?

4. Quality of Brumbaugh’s services • Did anyone complain about Brumbaugh’s services? • Why does the court not think this is determinative? • How do clients know if advice is bad? • Will example • If they know, will they complain? • Are “clients” in a position to complain? • “Green card” example

5. Unauthorized Practice of Law • Definitions somewhat nebulous • Tex. Gov’t Code 81.101 • Service in or out of court • Preparation of pleading • Management of action • Giving advice or rendering service “requiring the use of legal skill or knowledge” • Legal effect of which “must be carefully determined.” • Includes drafting will, contract, etc. • Definition not exclusive – Judicial branch has power and authority to determine

6. Brumbaugh Services • Is typing the practice of law? • Did Ms. Brumbaugh represent anyone in court? • This is the clearest example of unauthorized practice. • Need to protect integrity of process. • She represented herself in court. • Pro se representation not unauthorized practice. • Right to represent, access to court – outweighs process concerns • How did she do?

7. What happens now? • Must Brumbaugh quit typing wills and forms? • Can she still sell forms? • How will customers know what to do with them? • She can’t answer questions, give advice. • She can give printed instructions. • Is this okay? • Are printed instructions the practice of law?

8. Books and Software • Most states say that sale of books, forms, or instructions are not the practice of law. • Not tailored to specific facts or case • Note 7 RE Texas statute to same effect. • Disclaimer required – not substitute for legal advice. • 81.101(c) – refers to books, forms, computer software or similar products – must clearly state that “not a substitute for the advice of an attorney.” • Key in both cases: • giving information vs. giving advice.

9. Law related work • Often exceptions/concessions for certain professions, situations: • Real estate agents/brokers – Land men • Bankers, Accountants, Insurance agents • Title insurance companies • Preparation of medical powers of attorney, advance directives, guardianships • Representation in certain administrative proceedings. • Note: Assistance with insurance claims generally practice of law – not allowed. • Q: What does all this tell us?

10. Pro Se representation – further considerations: • Not against rules to assist someone with pro se representation • Not assisting unauthorized practice • May not be considered pro se if acting for other under power of attorney – Fravel, Note 12. • There was a dissent in Fravel. • Other examples: • Mom files writ of mandamus for son (UPL) • Mom purported to be “representing” son, though not attorney. • V.P. of corp. perfects appeal, posts cash bond (ok). • The issue was whether the filing was “proper.” • The court said this was a ministerial act.

11. Other considerations • Corporation cannot practice law (other than professional corporation – lawyers) • Does not matter whether being paid or not – • Can be UPL even if doing for free. • Jailhouse lawyers • Assistance of “writwriters” for habeas corpus allowed. • Interest in liberty • No other real options

12. Why is this an issue for attorneys? • By definition, attorneys are licensed to practice law. • Cannot assist in the unauthorized practice. • Careful with use of paralegals, assistants, unlicensed attorneys. • Can suspended or disbarred lawyers work as paralegal? Should they? • Careful with giving advice to Marilyn Brumbaughs. • Cannot practice where or when not licensed.

13. Birbrower, Montalbano v. Superior Court of Santa Clara County • California Statute: No person shall practice law in California unless member of the Bar. • Birbrower is New York firm. • Attorneys represented client ESQ in California – contract claims. • Q: Did client know not licensed in Cal.? • Traveled to California several times. Gave advice there. ESQ settled claim. • ESQ sued Birbrower for malpractice. Birbrower sued for fees. • Partial SJ that Birbrower engaged in UPL.

14. 2 Issues: • (1) Did firm “practice law”? • (2) Did it practice law “in California”? • Clearly licensed to practice law – just not licensed in California. • Majority: • Yes to both Qs (with focus on (2) – see dissent). • Dissent: • No to (1) (or, since SJ, at least fact issues), which necessarily means no to (2) also.

15. What is the practice of law? • Isn’t this obvious? • They represented/advised a client. • They did it in California. • (Actually, physical presence not required.) • Not everything an attorney does is the practice of law. • What if the arbitration had gone forward? • Isn’t arbitration different anyway? • Why didn’t court make exception? • Was this the practice of law?

16. Factors in Birbrower • Legal issues involved in advice – contract dispute. • Presence may be a factor. • May not know California law. • How big a problem is this? • Decide on facts of case. • Deference to legislature • Note legislative exception after case (for arbitration). • Case has been criticized.

17. Rule 5.5 • Shall not practice in violation of rules or assist another in doing so. • If not admitted in jurisdiction shall not • Establish continuous presence in jurisdiction; • Hold out that licensed. • If admitted in another jurisdiction may provide temporary services • In association with licensed lawyer • If authorized by law • Arbitration, mediation, ADR related to own practice (unless forum requires pro hac vice admission) • Related to lawyer’s practice – not addressed in previous rules. • Advice to employer (if pro hac vice not required)

18. Trend toward multi-state practice (MJP) • Adoptions of Rule 5.5 • 35 state high courts have adopted 5.5 or substantially similar rule • 11 states have pending recommendations at various levels for 5.5 or substantially similar rule. • 4 states (including Texas) are studying rule. • See Rest sec 3 – Note 1 – allowing practice in another state to extent related to lawyer’s practice in home state. • Prudential Equity Group LLC v. Ajamie (S.D.N.Y. 2008) • Weiss hired Texas attorney (Ajamie) to assist it in pursuing arbitration claims against Prudential in New York. • Weiss argued that Ajamie was not entitled to a fee because not licensed in New York. • Not unauthorized practice.

19. Texas Rule 5.05 • A lawyer shall not: • (a) practice law in a jurisdiction where doing so violates the regulation of the legal profession in that jurisdiction; or • (b) assist a person who is not a member of the bar in the performance of activity that constitutes the unauthorized practice of law.

20. Satterwhite v. State of Texas • What kind of case is Satterwhite? • What is Satterwhite’s crime? • Holding himself out as an attorney • Not currently licensed, in good standing • Intent to obtain economic benefit • Texas Penal Code 38.122 • Third degree felony & Serious Crime • Is he guilty? • Yes. 4½ years. $7500 fine. Affirmed.

21. Practice while technically suspended • Satterwhite’s argument: • Bar rules reinstate retroactively after payment of dues + penalty. • He still has same qualifications. • State’s argument: • Rule says reinstatement does not affect disciplinary proceedings. • Is that what this is? • Rule just means that he doesn’t have to be “readmitted.” • Was a crime at the time he practiced without a license. • Can’t change criminal statute through bar rule. • Who’s right? Is the statute clear? If it’s not, how should that affect the outcome?

22. Effect on representation • Satterwhite represented criminal D while not licensed. Any effect on that case? • Apparently none. • If D had been acquitted, he’s free. • If D had been convicted, he could not attack his conviction based on fact that attorney was not licensed. Not the same as ineffective counsel (Hill). • Is Hill a good case for Satterwhite? • Tends to show no harm – • But different issue. • Q: What is purpose of criminal statute?

23. UPL – 38.123 • Offense if, with intent for economic benefit: • K to represent person RE property damage or personal injury • Advise about rights RE same • Advise about settlement RE same • Enter contingent fee K with assignment of rights RE same • Enter K to select/retain legal counsel in legal proceeding. • Not if licensed attorney. • Class A misdemeanor • Third degree felony if previously convicted.

24. UPL Remedies • Fee not paid • K – public policy • Texas has treble damages for some reps • Criminal • Injunction • Contempt • For practicing without a license, or • For not obeying an injunction. • Fraud • Negligence • Discipline if assist

25. Discipline Maintaining Quality through Discipline

26. Discipline • Background info – own reading • Note: Federal courts generally use rules of jurisdiction in which they sit. • Texas as example – types of discipline • Private reprimand • Public reprimand • Probation • Suspension • Disbarment How is the decision made regarding which discipline?

27. Choice of Law – Rule 8.5 • Attorney is subject to laws in jurisdiction admitted, regardless of where conduct occurs. • Attorney providing legal services in jurisdiction is subject to laws in jurisdiction, even if not admitted. • Choice of Law: • In matters before tribunal – Use rules of jurisdiction of tribunal, or of tribunal. • Other conduct – Use rules where conduct occurred, or where predominant effect of conduct – consider reasonable belief of attorney.

28. Texas Rule 8.05 • (a) Subject to discipline in Texas if admitted, or admitted specially. Subject to discipline for conduct occurring in Texas, or in other jurisdiction or resulting in discipline in other jurisdiction if misconduct under 8.04. • (b) Subject to discipline for certain out-of-state advertising and solicitation designed to result in employment in Texas.

29. Procedure Grievance InquiryComplaint Restate / appeal / Just cause Dismiss Dismiss Closed panel review Attorney {hear, dismiss} {mediation, choice dispute res., Hearing {med, etc.} refer} {dismiss, refer, sanction} Public Trial Appeal – BODA Appeal – Ct. Appeals Appeal – Supreme Court

30. Discipline • Mandatory duty to cooperate • Taking 5th is not failure to cooperate • No discipline for taking 5th • But not available in discipline case • Can’t refuse to answer discipline Qs on basis of 5th • Texas – • Proof by preponderance of evidence • Confidential if no public sanction

31. Misconduct – Rule 8.4 • Often seen in discipline cases • Violate Rules – assist, induce other to do so • Commit criminal act – reflects adversely on honesty, trustworthiness, fitness • Conduct involving dishonesty, fraud, etc. • Conduct prejudicial to the administration of justice • State have ability to improperly influence gov’t agency or official by violating rules or law • Knowingly assist judge in violating rules or law • New cmt 3 – Manifestation of bias • Prejudicial to administration of justice • Texas rule 5.08