This material was originally prepared for and presented at the Connor-Zaritsky 40thAnnual Advanced Estate Planning and Administration Seminar sponsored by Virginia CLE.
|As attorneys, we do not have to worry about engaging in the unauthorized practice of law (UPL) because we are licensed to practice law in our given jurisdictions. However, we have office staff and we are responsible to ensure that they do not engage in the unauthorized practice of law. We also have clients that may come to us asking in what activities they may engage and not run afoul of the UPL rules. The purpose of UPL rules and enforcement is to protect the public against legal services being provided by unqualified individuals. However, there is a justice gap in the US and states are looking for ways to provide quality legal services to more of their residents at an affordable cost. Many jurisdictions are now licensing individuals who are not lawyers but serve clients in a quasi-lawyer position. We are also seeing a rise in the do-it-yourself legal industry and state bars must determine whether the providing of legal forms constitutes the practice of law in their jurisdictions.|
The unauthorized practice of law
Every state has its own set of UPL rules and regulations. In Virginia, UPL rules are found in the Rules of the Supreme Court of Virginia, Part 6, §1. The unauthorized practice of law is a Class 1 misdemeanor (§54.1-3904 of the Code of Virginia) which is punishable by up to 12 months in jail and/or a fine of not more than $2,500 (§18.2-11 of the Code of Virginia). UPL cases can be prosecuted by the Attorney General or by the local Commonwealth’s Attorney.
In February, 2019, the Virginia Supreme Court approved changes to the UPL rules that included a new format. The rules set out the general definition of the practice of law and then contain sections describing exceptions and exclusions. Following that, there is a lengthy section of comments and annotations explaining and providing examples of the exceptions and exclusions. The exceptions describe activities that are the practice of law but in which non-lawyers and foreign lawyers are specifically allowed to engage. The exclusions describe activities that are not considered the practice of law.
Definition of the practice of law
Pursuant to the Virginia UPL rules, an individual is deemed to be practicing law if:
- He undertakes for compensation, direct or indirect, to give advice or counsel to an entity or person in any matter involving the application of legal principles to facts.
- He selects, drafts or completes legal documents or agreements which affect the legal rights of an entity or person.
- He represents another entity or person before any tribunal.
- He negotiates the legal rights or responsibilities on behalf of another entity or person.
Activities in which non-lawyers may engage
There are certain activities in which non-lawyers may engage without violating the UPL rules.
- Paralegals or other office staff may draft documents for the review of an attorney. Exception 3.N. of the Virginia UPL rules states that a non-lawyer may work “as a paralegal or other administrative support under the direct supervision of a licensed attorney.” A non-lawyer may prepare forms of wills or trusts of general application and may submit proposed language to an attorney for review subject to the lawyer’s acceptance, modification or rejection. A non-lawyer may also furnish a client with routine forms or contracts of generally accepted application such as beneficiary designation forms or UTMA forms.
- Comment 5.F.3.d. of the Virginia UPL rules explains that accountants, financial advisors and others, who make it clear that they are not providing legal advice based on their knowledge of the law, are not engaged in the practice of law when they provide information about the application of the law to their product or service. The rationale behind this is that the customer or client does not have a reasonable expectation that professional legal advice is being given. The customer or client knows that the advisor with whom the client is dealing is not a lawyer. What a non-lawyer cannot do is to hold himself out as authorized to furnish advice which implies that the advisor has legal knowledge or skill in the application of the law to a specific set of facts for a particular person. A non-lawyer may not draft documents carrying out the non-lawyer’s recommendations.
- “A non-lawyer employee of a corporation may permissibly draft legal documents, negotiate complex transactions, and perform other tasks for the employing organization, even if the task is typically performed by lawyers for the organization.” Annotation 6.E. of the Virginia UPL rules.
- Exceptions 3.E and 3.G state that non-lawyer employees or officers of certain business entities can file certain pleadings on behalf of their employer as authorized by Virginia Code §16.1-88.03 and §16.1-81.1. Those code sections state that the persons authorized by the statute may file a variety of papers in general district court including warrants in debt, unlawful detainers, garnishments, and writs of possession. Only the activities specifically listed in the statutes are permitted so, for example, an employee could not draft and file a bill of particulars or a grounds of defense in a suit.
- Small businesses may appear pro se in general district court in Virginia through one of its owners or officers if the claim does not exceed $2,500. Virginia Code §16.1-81.1.
- A non-lawyer officer of a corporation may represent the corporation’s interests in dispute resolution processes such as mediation or arbitration. Virginia UPL Op. 206 (2004).
- A bank employee may prepare deeds of trust with the bank as the sole beneficiary. Virginia UPL Op. 49 (1980); Virginia UPL Op. 109 (1988).
- In small claims court, an owner, a general partner, an officer, or an employee of a corporate or partnership plaintiff or defendant may represent such corporation or partnership and shall have all of the rights and privileges given an individual to represent, plead and try a case without an attorney. Virginia Code §16.1-122.4.
- Non-lawyers are permitted to serve as lay advocates and represent parents in Individuals with Disabilities Education Act (IDEA) cases, provided the lay advocate is a person having special knowledge or training concerning the problems of children with disabilities. Annotation 6.F. of the Virginia UPL rules. Under the Virginia IDEA statues, specifically Virginia Code §22.1-214(C), a party may be “represented by legal counsel or other representative before such hearing officer without being in violation of the provisions of §54.1-3904 [prohibition against unauthorized practice of law].”
- A non-lawyer in Virginia can provide ministerial assistance to another individual in completing an advance medical directive (AMD). Annotation 6.B. of the Virginia UPL rules. According to Virginia Code §54.1-2988.1, ministerial assistance includes reading the form to the individual, discussing the individual’s preferences with regard to items in the form, recording the individual’s answers on the form and helping the individual sign the form and obtain other necessary signatures. Ministerial assistance does not include giving an opinion regarding the legal effects of any of the terms of the AMD or offering any legal advice.
- Legal assistance may be provided to military personnel by military legal assistance attorneys who are non-lawyers. Virginia Code §54.1-3900 and Exception 3.A. of the Virginia UPL rules.
Quasi-lawyers or paraprofessionals
There has been much discussion lately about the justice gap that exists in the United States. In response to this justice gap and to make legal services more readily available and less expensive, some states have developed some “quasi-lawyer” designations. For example, Arizona has created a class of practitioners who may prepare legal documents but may not provide legal advice. They are known as certified legal document preparers. Effective July 1, 2003, all individuals and businesses in Arizona who are preparing legal documents without the supervision of an attorney must be certified under the Legal Document Preparer Program. This program certifies non-attorney legal document preparers who may provide document preparation assistance and services to individuals and entities not represented by an attorney.
In order to be a certified legal document preparer, applicants must pass an exam which tests on legal terminology, client communication, data gathering, document preparation, ethical issues, and professional and administrative responsibilities pertaining to legal document preparation. There are also educational and experience requirements. Legal document preparers cannot give legal advice, recommend case strategies or legal remedies, engage in settlement negotiations or represent clients in court. As of May 1, 2018, there were about 600 certified legal document preparers in Arizona. Pursuant to the Arizona statute, legal document preparers may provide general legal information but may not provide any kind of specific advice, opinion, or recommendation about possible legal rights. Arizona Supreme Court Rule 31 and Arizona Code of Judicial Administration §7-208 and §7-201. These legal document preparers offer services in many areas of the law such as business, civil litigation, criminal defense, estate planning, family law and real estate.
Washington State has developed a Limited License Legal Technician program (LLLT). Washington Supreme Court Admission and Practice Rules 28. These individuals are permitted to operate on their own, without a supervising attorney. Currently, LLLTs can only assist clients on family law matters. They cannot represent clients in court or negotiate on behalf of a client. All communications still have to go through the client. The LLLT program requires 3,000 hours of practical experience under a lawyer’s supervision plus professional responsibility and practice area exams. Because of these rigorous requirements, as of March 1, 2019, there were only 35 licensed LLLTs in Washington.
Utah recently authorized a class of practitioners called Licensed Paralegal Practitioners (LPPs). Rule 14-802 of the Rules Governing the Utah State Bar creates an exception to the authorization to practice law for an LPP. The exception permits an LPP to assist a client only in the practice areas for which the LPP is licensed. Currently, the rule limits an LPP’s possible practice areas to specific family law matters such as temporary separation, divorce, parentage, cohabitant abuse, civil stalking, custody and support; name change; forcible entry and detainer; and debt collection matters in which the dollar amount at issue does not exceed the statutory limit for small claims cases.
In Virginia, there is a class of individuals known as “qualified advance directive facilitators”. Effective July 1, 2017, Virginia Code §54.1-2993.1 authorized a program for the training of qualified advance directive facilitators. Qualified advance directive facilitators do not engage in UPL by providing technical advice, consultation and assistance in completing and executing advance medical directives. This is specifically listed as Exception 3.J under the Virginia UPL rules. The Virginia Department of Health is charged with establishing training programs for qualified advance directive facilitators. There are currently several approved advance directive facilitator training programs in Virginia, run mostly by hospitals and hospice care providers.
While some view these paraprofessionals as endangering the legal profession, others say that they are serving a much-needed role in filling the justice gap that we have in the United States. As technology advances and the justice gap widens, we will be seeing many more of these paraprofessionals filling roles that were once filled by attorneys. State bars will have to respond accordingly by reevaluating their definitions of the unauthorized practice of law.
Legal form providers
Also seen by some as helping fill the justice gap are companies that provide legal forms, such as LegalZoom and Willing. At least eight state bar associations have questioned whether LegalZoom is committing the unauthorized practice of law in their respective states. The plaintiff’s argument in these cases is that LegalZoom’s decision tree is actually legal analysis and Legal Zoom provides legal advice, both of which are considered the practice of law.
In North Carolina, a consent decree was entered that ended the dispute between the North Carolina State Bar and LegalZoom. LegalZoom.com, Inc. v. N.C. State Bar, N.C. Super. Ct., Wake Cnty, No. 11 CVS 1511, settled 10/22/15. In the settlement, the parties agreed that the use of software to generate legal documents is not UPL if certain consumer protections are in place. These consumer protections include such things as: consumers get to see the blank template and the final document before they finalize their purchase, a North Carolina lawyer has to review all of the templates that are offered on the website, the provider has to inform the consumer that the forms are not a substitute for an attorney, the provider cannot limit the consumer’s recovery of damages, and the provider cannot require consumers to agree to jurisdiction or venue in any other state. In the settlement, the North Carolina Bar and LegalZoom agreed to support state legislation which would amend the definition of “practice of law” to exclude “the operation of a web site by a provider that offers consumers access to interactive software that generates legal documents based on the consumer’s answers to questions presented by the software.” So, North Carolina has carved out an exception specifically for on-line companies that provide forms. The law, which was passed in 2016 lists the consumer protections to which the software company must adhere. See, North Carolina G.S. §84-2.2.
In Texas, the court found that a similar company was committing the unauthorized practice of law by providing legal templates. Unauthorized Practice of Law v. Parsons Tech Inc., 179 F.3d. 956 (5thCir. 1999). In reaction to that ruling, the legislature then promptly changed the law to specifically exclude the providing of legal templates as the practice of law. See, Section 81.101 of the Texas Government Code. The Texas legislature felt that the UPL rules were designed to protect the public interest and not to protect lawyers from competition so they changed the definition of “practice of law” to exclude internet sales of books, forms, software or similar products as long as the product clearly and conspicuously states that the product is not a substitute for the advice of an attorney.
This issue was resolved in Virginia with the new UPL rules. Now there is a specific exclusion (Exclusion 4.B.) that states that the selling of legal forms is not the practice of law. Comment 5.E. states that this exclusion permits the sale of legal forms provided no legal advice is given about the completion of the forms.
Corporate officers and employees representing the company
In Virginia, Exceptions 3.E and 3.G of the UPL rules state that an employee or officer of certain business entities can file certain pleadings on behalf of his or her employer as authorized by Virginia Code §16.1-88.03 and §16.1-81.1. Those code sections state that a corporate officer may file a variety of papers in general district court including warrants in debt, unlawful detainers, garnishments, and writs of possession. Only the specific activities listed in the statute are permitted.
Pro se representation
As it has always been in Virginia, pro se representation is permitted in Virginia and is now listed as a specific exclusion to the practice of law. Exclusion 4.C. of the Virginia UPL rules. But what is considered pro se? Is an agent acting on behalf of a principal considered pro se? What about an executor acting on behalf of an estate?
Virginia UPL Opinion 194 specifically addressed this situation in the case of an agent under a power of attorney (POA). In that opinion, the inquirer asked 1) whether a POA authorizes a non-lawyer agent to prepare, sign and file a motion for judgment in Virginia and 2) whether a POA is sufficient to authorize a non-lawyer to prepare, sign and file pleadings on behalf of the principal if the language in the POA appears to confer that right.
The UPL Committee concluded that a non-lawyer may not represent the interests of another (i.e., the principal) before any tribunal even if it appears that the POA gives that authority. The Committee reasoned that the ability to practice law is a privilege granted and regulated by the state and this privilege cannot be granted by one private citizen to another by virtue of a contract or power of attorney. The language in the POA authorizing the attorney-in-fact to sue, permits the agent to engage the services of an attorney and to direct or instruct the attorney regarding the principal’s objectives. It does not confer upon the agent the privilege to practice law. If a power of attorney was sufficient to authorize the agent to practice law, there would be a number of individuals practicing law that would not be subject to the regulation of the State Bar, they would be beyond the disciplinary reach of the Bar, and they could engage in misconduct with impunity and not fear consequences.
The UPL Committee went on to point out that the unauthorized practice of law in Virginia is a class one misdemeanor. A private legal instrument (in this case, the POA) cannot authorize the performance of an activity which is illegal. The courts in Virginia will not assist a person who participates in an illegal activity. A non-lawyer may not rely upon the provisions in a POA to engage in prohibited activity so a POA is not sufficient to confer upon a non-lawyer the legal authority to practice law on the principal’s behalf.
The Wisconsin case of Ditech Financial LLC v. Estate of Stacey, 909 N.W.2d 180 (Wis. App. 2018) addressed a similar issue but this case involved the personal representative of an estate. In this case, a personal representative of an estate filed an appeal in a foreclosure action. The appellate court had to determine whether it had jurisdiction, and to have jurisdiction, the notice of appeal had to be correctly prepared. The court cited case law precedent that a non-lawyer cannot represent the interest of a legal entity in court. The court stated that “A person not admitted to practice law has no authority to sign a pleading on behalf of another to invoke this court’s jurisdiction.” The personal representative was signing the pleading on behalf of the estate, therefore, the appeal was dismissed. However, the opinion noted that this case was not in a probate action, but rather a foreclosure action. The court seemed to reserve judgment as to whether a personal representative might properly represent an estate in a probate matter. This opinion leaves open the question of whether, in Wisconsin, a non-lawyer personal representative can represent an estate in litigation within the probate court, such as a dispute with creditors or a will contest. Virginia does not have separate probate courts. Since Virginia’s definition of the practice of law includes representing another entity or person before a tribunal, and an estate is a separate legal entity from the personal representative, the personal representative would not be allowed to represent the estate in court in Virginia.
In the Virginia case of Kone v. Wilson,630 S.E.2d 744, 272 Virginia 59 (2006), an administrator of an estate hired a lawyer to file a wrongful death suit against a hospital and two doctors but the case was nonsuited in July, 2004. In December, 2004 (within the 6 month nonsuit period) the administrator filed a wrongful death action but he filed it pro se. The defendants moved to strike the motion for judgment arguing that the administrator was engaged in the unauthorized practice of law. The circuit court held that the administrator could not proceed without an attorney but gave the administrator a chance to hire counsel. In April, 2005, an attorney filed a notice of appearance. The defendants again moved to strike the motion for judgment, this time arguing that the administrator’s motion for judgment filed in December, 2004, was a nullity and that the 6 month statute of limitations following the July, 2004, nonsuit had expired. The circuit court agreed and granted the motion to strike the pleadings and dismissed the case with prejudice. The administrator appealed. On appeal, the administrator argued that a personal representative steps into the shoes of the decedent and can initiate an action pro se. The Court of Appeals pointed out that while the rightof action to bring the suit vests in the decedent’s personal representative, the causeof action belongs to the decedent’s beneficiaries. The court held that the administrator’s rightof action existed only to permit him to prosecute the causeof action belonging to the decedent’s beneficiaries and not to maintain any cause of action personal to himself. Therefore, he was acting in a representative capacity and could not file the wrongful death action pro se.
In 2018, there was a federal case out of the Third Circuit that addressed a similar question. In Murray v. City of Philadelphia, 901 F.3d 169 (3dCir. 2018), the mother of a decedent was appointed the personal representative of her son’s estate. The decedent was survived by a minor child. The mother of the decedent brought a case against two police officers and the city for use of excessive force. The city was dismissed from the case and the two officers claimed self-defense and obtained a jury verdict in their favor. The mother was represented by counsel in the suit. However, she appealed the decision pro se. The Court of Appeals advised her on two occasions that she should hire an attorney but she refused to do so. The Court of Appeals ultimately dismissed the appeal because it found that the mother was not the beneficiary of the estate and was representing the interest of her grandchild. The Court stated that legal counsel is required when someone is representing the interest of another.
The definition of unauthorized practice of law that attorneys have been working under for many years is changing. The various state bars will have to deal with how technology can be used to the public benefit without jeopardizing quality legal service. The public will have access to more and more do-it-yourself legal products. With the large justice gap that needs to be filled, paraprofessionals will most likely play an ever-increasing role in serving the legal needs of the public. Attorneys will have to adapt their practices and find ways to ensure their clients that they are the best choice when it comes to providing legal representation.