|Oregon State Bar Bulletin MAY 2012|
Protecting the Public from the Unlawful Practice of Law
By Amber Hollister
The unlawful practice of law has many faces. From “notarios” to independent paralegals to inadequately supervised legal staff, the unlawful practice of law can have a devastating impact on vulnerable communities. Although every lawyer knows that, with limited exception, you must be a member of the bar to practice law, staking out the boundaries of what is and what is not the “practice of law” can be confounding.
Oregon courts broadly define what constitutes the practice of law to include “any exercise of an intelligent choice, or any informed discretion in advising another of his legal rights and duties.” Oregon State Bar v. Security Escrows, Inc., 233 Or 80, 89 (1962). Various cases have refined this definition of the practice of law to include, among other things: appearing on behalf of others in Oregon courts and administrative proceedings; drafting or selecting legal documents for another when informed or trained discretion must be exercised to meet the person’s individual needs; advising someone of his or her legal rights in a particular situation; having a law office in Oregon regardless of where clients are located; acting as an immigration consultant unless authorized by federal law to do so; and holding oneself out as a lawyer.
The following scenarios provide a snapshot of the many contours of the unlawful practice of law.
Notarios and Immigration Consultants
A Spanish-speaking client arrives at a sparsely furnished strip mall office, needing immigration advice. After talking to a notario1who claims he has lots of immigration experience, the client pays the notario $2,000 in the hopes that he will be able to gain legal status in the United States. The notario files immigration forms on the client’s behalf. The forms are baseless and full of errors and result in a deportation order being entered against the client. Now, short $2,000, the client seeks the assistance of an attorney, who calls the bar to report that a notario caused his client financial and legal harm.
In addition to the broad prohibition against nonattorneys practicing law, ORS 9.160(1), it is illegal for nonattorneys to operate as immigration consultants unless they are explicitly authorized to do so by federal law. ORS 9.280. This means that nonattorneys are barred from giving advice on an immigration matter, including but not limited to, drafting an application, brief, document, petition or other paper or completing a form provided by a federal or state agency in an immigration matter. ORS 9.280(2)(a).
The bar is charged with investigating and, if appropriate, seeking an injunction against persons engaged in the unlawful practice of law. ORS 9.164; ORS 9.166.The bar has met with some success in obtaining injunctions against notarios. For instance, in Oregon State Bar v. Ortiz, 77 Or App 532 (1986), the court upheld an injunction obtained by the bar against a nonlawyer who was advising clients about what immigration benefits were available, how to obtain those benefits, what forms to use and assisting people in preparing applications for citizenship and immigration visas.
The bar’s partnership with law enforcement agencies and the immigration legal community is essential to efforts to stop the unlawful practice of law. As an example, the Oregon Department of Justice obtained a stipulated general judgment of contempt in an Unlawful Trade Practices Act case against Nibaldo Iriarte, an individual accused of illegally providing immigration services across the state. The bar had received multiple complaints about Iriarte working as a notario, but had not been able to put a stop to his practice. Assistant Attorney General Diane Schwartz Sykes explains, “DOJ recognizes that immigrants are particularly vulnerable to predatory consumer practices by notarios and is committed to enforcing Oregon’s consumer protection laws to protect our immigrant citizens from harm that arises from the unauthorized practice of law.”
After successfully completing his own divorce pro se, a nonattorney sets up a document preparation business, and advertises on Craigslist that he can prepare divorces, child custody modifications, step-parent adoptions and wills much more cheaply than an attorney. A woman pays him to complete a step-parent adoption, but later files a complaint with the bar when the Department of Human Services informs her that her forms are full of errors, and she will need to start over.
Choosing forms for another person and explaining how to fill them out is the practice of law. As the Oregon Supreme Court explained, the practice of law “includes the drafting or selection of documents and the giving of advice in regard thereto any time an informed or trained discretion must be exercised in the selection or drafting of a document to meet the needs of the persons being served.” Security Escrows, Inc., 233 Or at 89. Choosing and drafting forms requires both knowledge of the law and knowledge of the customer’s needs.
Independent paralegals can do serious harm to their clients. Over the past years, the bar has obtained a number of injunctions against prolific paralegals who pedal legal services they cannot deliver. Where necessary, the bar has the ability to bring a contempt action when an individual flouts an injunction. ORS 9.166.
Inadequate Staff Supervision
An Oregon lawyer with an estate planning practice decides to advertise his services by holding free estate planning workshops for seniors. Seniors attend the workshops and decide they want to hire the attorney to craft their estate plans. The workshops are more successful than the attorney ever imagined possible, and he is swamped with work. Luckily, he has several experienced paralegals who know how to set up a basic estate plan. Because the paralegals are so terrific, the lawyer lets them meet with clients to collect information and draft documents. Lawyer tries to review the documents before they are signed by clients, but the volume of work makes reviewing every document impossible.
Although support staff can perform many of the same tasks that lawyers do, their work must be supervised and reviewed by a lawyer in order to avoid the unlawful practice of law. Further, the unlawful practice of law by a staff member can result in the discipline of the supervising attorney. For example, the supervising attorney may engage in professional misconduct by failing to make reasonable efforts to ensure the staff members’ conduct is compatible with the professional obligations of the lawyer. RPC 5.3(a). In addition, the attorney may run afoul of RPC 5.5(a) if the lawyer assists the staff member in the unlawful practice of law.
As the Legal Ethics Committee noted in OSB Ethics Op. No. 2005-166, it is professional misconduct to delegate to a paralegal or other staff member tasks which must be performed by a lawyer. Lawyers with a high volume practice should be careful to instruct staff members not to provide legal advice to clients, or submit pleadings or forms that have not been reviewed by a lawyer. To do otherwise risks discipline. In In re White, 19 DB Rptr 343 (2005), a lawyer was disciplined for delegating a substantial portion of his immigration practice to a legal assistant, and failing to adequately supervise the legal assistant’s activities. The panel held that the lawyer’s lack of supervision was made more egregious because he knew that his legal assistant was already under unlawful practice restrictions imposed by the bar and the Department of Justice.
Lawyers should take special care to review all legal documents and pleadings prepared by legal assistants before they are provided to a client or filed. In In re Nishioka, 23 DB Rptr 44 (2009), an attorney was disciplined for utilizing the services of a legal assistant in a probate matter without adequate supervision. The attorney allowed the assistant to use the attorney’s letter head and pleading forms but did not review or approve the assistant’s work before it was filed in court.
An out-of-state attorney decides to wind down her practice and partially retire in Oregon. She works out of a home and limits her practice to appellate work in the jurisdiction where she is licensed. She communicates with her out-of-state clients by phone and email. Opposing counsel files a complaint when he realizes the address on her pleadings is in Oregon, even though she is not licensed here.
Out-of-state lawyers may not establish “an office or other systematic and continuous presence in this jurisdiction” unless they are otherwise authorized to do so by the Oregon Rules of Professional Conduct or other law. RPC 5.5(b)(1).2 This is true even if an out-of-state lawyer is only giving legal advice to clients who are located out of state, or is only giving legal advice based on the laws of the jurisdiction in which the lawyer is licensed.
This result is not without controversy. As noted by executive director Sylvia Stevens in a prior bar counsel column, some question whether such a rigid approach to out-of-state lawyer practice is justified by public policy. After all, what interest does the state of Oregon have in prohibiting a lawyer duly licensed elsewhere from practicing law in Oregon without being admitted here, under circumstances that do not involve representation of any Oregon client or the interpretation or application of Oregon law? Despite these competing viewpoints, the bar interprets the plain language of RPC 5.5(b)(1) to prohibit out-of-state lawyers establishing an office in Oregon.
An Oregon lawyer decides to take a break from the practice of law, and changes her status from active to inactive to reduce costs. A year later, a friend is in a nasty car accident and needs help. The inactive lawyer agrees to help negotiate a settlement with the insurance company, but explains that she cannot go to court because she is not an active member of the bar. Counsel for the insurance company calls the bar to complain, after looking lawyer up in the OSB online directory and learning she is not active.
Inactive members of the bar cannot provide legal services to others. OSB Bylaw 6.100(b). Because negotiating settlements is the practice of law, inactive lawyers may not engage in settlement negotiations on behalf of others. See Oregon State Bar v. Lenske, 243 Or 477 (1966) (holding an inquiry to opposing lawyer as to whether case may be settled is the practice of law). There is no exception in Oregon for inactive attorneys who wish to provide legal advice to family or close friends.
Oftentimes, trouble can arise for attorneys who transfer to inactive practice and then try to complete just one last task for a former client. For instance, in In re Bryant, 17 DB Rptr 174 (2003), an attorney who had transferred to inactive status improperly continued to represent his prior client by filing a motion to dismiss a pre-existing Chapter 11 bankruptcy so that a business could be sold. The accused attorney explained that he only filed the motion because he believed it was an emergency — without dismissing the bankruptcy his former client would lose the payment in full to creditors. Despite this explanation, the attorney was disciplined.
Given the strict prohibition against representing a client while inactive, attorneys would be wise to create a transition plan for any possible client emergencies prior to changing status.
Reporting the Unlawful
Practice of Law
Although lawyers are not required to report the unlawful practice of law by nonattorneys,3 the bar relies on the vigilance of attorneys and the public to learn about the unlawful practice of law. In 2011, the bar received 54 complaints of unlawful practice of law. If you or a client would like to report the unlawful practice of law, you can do so by submitting a complaint in writing to the Unlawful Practice of Law Committee. Complaint forms are available at www.osbar.org/_docs/resources/UPLComplaintForm.pdf . All complaints become public record.
To help educate the legal community and public about the unlawful practice of law, the Unlawful Practice of Law Committee has been given authority to issue informal advisory opinions on what constitutes the unlawful practice of law. Stay posted for the committee’s first set of informal advisory opinions in the coming year.
1. The term notario is often used as a shorthand term for a person holding him or herself out as a “notario publico.” In Mexico, notario publicos have extensive training and are authorized to provide some legal services. Of course, in the United States, a notary need not be a lawyer, and becoming a notary does not give an individual the right to practice law. Some opportunistic individuals have taken advantage of this linguistic confusion to falsely represent that they are able to do legal work in the United States because they are a notario.
2 One often used exception is the federal practice exception, RPC 5.5(d), which allows out-of-state lawyers to practice in Oregon if they only “provide legal services in this jurisdiction that are services that the lawyer is authorized to provide by federal law”.
3. Lawyers are, however, required to report ethical misconduct by lawyers involving the unlawful practice of law if the conduct triggers the reporting requirement of RPC 8.3.
ABOUT THE AUTHOR
Amber Hollister is deputy general counsel for the Oregon State Bar. She can be reached at (503) 620-0222, or toll-free in Oregon at (800) 452-8260, ext. 312, or by email at firstname.lastname@example.org
© 2012 Amber Hollister