Oregon State Bar Bulletin — FEBRUARY/MARCH 2003

The American Bar Association’s current president, A.P. Carlton Jr., has appointed a task force to review whether the ABA should adopt a model definition of the practice of law. The challenge statement to this group is as follows:

To determine the best approach for the Association to address whether to create a model definition of the practice of law that would support the goal to provide the public with better access to legal services, be in concert with governmental concerns about anticompetitive restraints, and provide a basis for effective enforcement of unauthorized practice of law statutes.

Additional information about this task force can be found on the Internet at http://www.abanet.org/cpr/model_def_home.html. The basic idea behind the adoption of a model definition is to clarify for judges, lawyers and the public alike what is deemed to be within and outside of the practice of law. For those activities within the definition, states would have the option of continuing to impose licensing requirements, other regulatory schemes, or to permit the activity even without a license to practice law. For those activities outside the practice of law, service providers would not have to fear the accusation that they might be engaging in the unlawful practice of law.

The ABA’s task force has released the following draft definition of the practice of law:

(a) The practice of law shall be performed only by those authorized by the highest court of this jurisdiction.

(b) Definitions:

(1) The 'practice of law' is the application of legal principles and judgment with regard to the circumstances or objectives of a person that require the knowledge and skill of a person trained in the law.

(2) 'Person' includes the plural as well as the singular and denotes an individual or any legal or commercial entity.

(3) 'Adjudicative body' includes a court, a mediator, an arbitrator or a legislative body, administrative agency or other body acting in an adjudicative capacity. A legislative body, administrative agency or other body acts in an adjudicative capacity when a neutral official, after the presentation of evidence or legal argument by a party or parties, will render a binding legal judgment directly affecting a party’s interests in a particular matter.

(c) A person is presumed to be practicing law when engaging in any of the following conduct on behalf of another:

(1) Giving advice or counsel to persons as to their legal rights or responsibilities or to those of others;

(2) Selecting, drafting, or completing legal documents or agreements that affect the legal rights of a person;

(3) Representing a person before an adjudicative body, including, but not limited to, preparing or filing documents or conducting discovery; or

(4) Negotiating legal rights or responsibilities on behalf of a person.

(d) Exceptions and exclusions: Whether or not they constitute the practice of law, the following are permitted:

(1) Practicing law authorized by a limited license to practice;

(2) Pro se representation;

(3) Serving as a mediator, arbitrator, conciliator or facilitator; and

(4) Providing services under the supervision of a lawyer in compliance with the Rules of Professional Conduct.

(e) Any person engaged in the practice of law shall be held to the same standard of care and duty of loyalty to the client independent of whether the person is authorized to practice law in this jurisdiction. With regard to the exceptions and exclusions listed in paragraph (d), if the person providing the services is a nonlawyer, the person shall disclose that fact in writing. In the case of an entity engaged in the practice of law, the liability of the entity is unlimited and the liability of its constituent members is limited to those persons participating in such conduct and those persons who had knowledge of the conduct and failed to take remedial action immediately upon discovery of same.

(f) If a person who is not authorized to practice law is engaged in the practice of law, that person shall be subject to the civil and criminal penalties of this jurisdiction.

(1) The primary consideration in defining the practice of law is the protection of the public. Thus, for a person’s conduct to be considered the practice of law, there must be another person toward whom the benefit of that conduct is directed. That explains the exception for pro se representation. The conduct also must be targeted toward the circumstances or objectives of a specific person. Thus, courts have held that the publication of legal self-help books is not the practice of law.

(2) The exception for pro se representation in paragraph (d)(2) contemplates not only self-representation by an individual but also representation of an entity by an authorized nonlawyer agent of the entity in those jurisdictions that permit such representation.

The ABA Definition of the Practice of Law Task Force is in the process of seeking input from state bars and others on its proposed model definition. Washington State’s definition of the practice of law has been the essential model for the ABA’s draft. Additional information about Washington’s unlawful practice of law regulatory scheme can be found on the Internet at http://www.wsba.org/practiceoflawboard.

Oregon does not have a statutory definition of the practice of law. Under ORS 9.160 to 9.166, the bar has the authority to investigate and pursue injunctive relief against individuals and entities alleged to be engaging in the unlawful practice of law. The OSB Board of Governors has adopted policies under which the bar’s unlawful practice of law activities are conducted. These policies (Section 9.700) are available on the Internet at:
http://www.osbar.org/2practice/rulesregs/bogpolicies.htm.

Under BOG Policy 9.700(A)(2), the 'unlawful practice of law' is defined to mean:

The practice of law, as defined by the Oregon Supreme Court, by persons not members of the Oregon State Bar and not otherwise authorized by statute. It is unlawful for a person who is not an active member of the Oregon State Bar to engage in the practice of law within the State of Oregon, whether or not for compensation or in connection with any other activity, unless specifically authorized by law or rule. The practice of law includes, but is not limited to, any of the following: 1) holding oneself out, in any manner, as an attorney or lawyer authorized to practice law in the State of Oregon; 2) appearing, personally or otherwise, on behalf of another in any judicial or administrative proceeding; 3) providing advice or service to another on any matter involving the application of legal principles to rights, duties, obligations or liabilities.

There are innumerable business activities that could arguably be considered the practice of law. Consider, for example: contract administrators for corporations; trust officers for banks, staff of trade organizations and associations that help members stay abreast of changes in the law; accountants; real estate agents; court clerks who try to help pro se litigants; and employees of title and escrow companies.

Much of what could be considered the practice of law has been deemed, as a practical matter, not to be the practice of law. Not that it isn’t, legally and strictly speaking, the practice of law, but that strict application of such a definition of the practice of law would preclude a tremendous amount of otherwise lawful business activity unless it was performed by lawyers. Mandatory bar associations have for decades been perceived by various groups and individuals to be more concerned with maintaining their members’ monopoly over the practice of law than working to ensure that all who need legal services have access to them at a cost they can afford to pay. Legal needs studies show that even today many more people have legal needs than can be meet through available legal services programs and the free market.

As is the case with all problems, there is another side to the foregoing argument. Many lawyers are concerned that their bar associations have ceded the practice of law to many other groups without doing enough to enforce existing prohibitions against the unlawful practice of law. Some would argue that bar associations go after the easy targets (people who at least superficially appear to be trying to help other people with divorces, traffic tickets, personal bankruptcies and landlord-tenant disputes), while looking the other way when banks, major corporations and other institutional heavyweights engage in a wide variety of activities that could be considered the practice of law (harken back to the definition of the practice of law as 'providing advice or service to another on any matter involving the application of legal principles to rights, duties, obligations or liabilities').

Where does this leave us? What will an ABA model definition of the practice of law do to bring clarity to the issue of who can and who cannot engage in the practice of law?

First, what is and is not deemed to be the practice of law depends on your local jurisdiction. There are 57 states, territories and possessions in the United States. Research I have conducted in this area leads me to believe there are almost 57 different definitions in the United States as to what constitutes the practice of law. I applaud the ABA’s efforts to develop a model definition of the practice of law for consideration by these 57 jurisdictions. If a few jurisdictions could see the wisdom of adopting a uniform definition, their citizens would benefit from a clearer standard against which to judge the conduct of non-lawyer legal service providers.

Second, a model definition will help bar associations and other groups focus on the lack of adequate legal resources for many segments of society. The ABA’s draft definition recognizes this problem by delineating certain activities that are permitted to be engaged in by nonlawyers even if they are within the definition of the practice of law. Washington State has gone so far as to establish a Law Practice Board that has been given authority not only to deal with enforcement issues concerning the unlawful practice of law, but also to consider whether nonlawyers should be given greater license to provide law-related services for the benefit of the public without being considered to be engaging in the unlawful practice of law. Washington’s Law Practice Board seems to meld in an appropriate way public protection and access to justice concerns. This model should be studied for possible emulation in other U.S. jurisdictions.

Yet another model to study is Arizona’s new Legal Document Preparer Program. In conjunction with the adoption of a definition of the practice of law and a UPL enforcement procedure, the Arizona Supreme Court will begin licensing document preparers to provide specified services to the public, effective July 1, 2003. The text of these new rules is available on the Internet at www.azbar.org.

Where does all this leave the Oregon State Bar? I believe Oregon has a pretty decent UPL statute that could perhaps benefit from the incorporation of a definition of the practice of law. We are already working on a statutory amendment to clarify what activities title insurance and escrow agents can engage in without being considered to be practicing law. We are also considering a statutory amendment to allow the bar and the Oregon Supreme Court to adopt rules to permit out-of-state and foreign lawyers to engage in the temporary practice of law in Oregon without being members of the Oregon State Bar. The ABA’s model multijurisdictional practice of law rules will held us craft workable rules in this area as well. The OSB has a very active Unlawful Practice of Law Committee that has recently been expanded to help the bar investigate complaints of the unlawful practice of law in a timely and thorough fashion. All these developments are pointing us in the right direction. They will help bring clarity to the rules in this area and may serve as a platform for further improvements in how quality, cost-effective legal services are delivered to the public in the years to come.

My crystal ball tells me that the tension between occupational licensing requirements and the provision of services the public needs and can afford will only continue to heighten over time. Creative solutions must be developed to offer the public cost-effective and quality options for the resolution of their legal problems, while assuring that charlatans, frauds and cheats have as few opportunities to ply their wares as possible.

ABOUT THE AUTHOR
George A. Riemer is general counsel and deputy director of the Oregon State Bar. He can be reached at (503) 620-0222, ext. 405, or toll-free in Oregon at (800) 452-8260, ext. 405, and by e-mail at griemer@osbar.org.

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