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Sometimes it's black. Other times, it's white. But most of the time, it's a murky, muddy gray. The unauthorized practice of law (UPL), say lawyers, legal educators and paralegals alike, is
often hard to identify and still harder to define.
Some cases of UPL are easily recognizable: The person without a license to practice law who advises his or her so-called clients
on how to avoid bankruptcy proceedings, or the one who - absent statutory or rule authority - appears at a court proceeding as an advocate for a client. But it's much less clear when the
practitioner is what has come to be known as a traditional legal assistant - someone trained and educated in the paralegal profession, often with years of experience, who works under the
supervision of licensed attorneys. Can traditional paralegals tell a client in a litigation matter what to expect procedurally without crossing the line into giving legal advice? Can you
observe a deposition without a supervising attorney being present? Can you handle real estate closings outside the presence of an attorney? Can your name be included on firm letterhead
and, if so, are there restrictions?
These are the types of questions paralegals at all experience levels face on a regular basis. The answers, however, are not always obvious and
may vary from jurisdiction or jurisdiction. The American Bar Association (ABA), the National Association of Legal Assistants (NALA), National Federation of Paralegal Associations (NFPA),
state and local legal assistant organizations and most states have developed guidelines, ethical canons or statutes to help define the practice of law. But even those who deal daily with
the issue of UPL admit that it can be tough to pin down what does and doesn't constitute the practice of law.
"It's nearly impossible to draw a line between what is and isn't
UPL when a paralegal is working under the supervision of an attorney," said Thomas E. Spahn, a partner at McGuireWoods in McLean, Va., who spends the bulk of his time advising his
550-attorney firm on issues of ethics and conflicts and lecturing on those subjects to others. "It's a very quirky area."
The Law, the Rules and the Guidelines
Limitations on the practice of law in the United States date back more than 200 years. A proliferation of untrained practitioners during colonial times "caused local courts to adopt
rules requiring attorneys who appear before them to have a license granted by the court," according to "The Concise Guide to Paralegal Ethics," published by Aspen Law &
Business, 2001 and written by lawyer and educator Theresa A. Cannon. These rules were adopted in part to "stop incompetence that harmed not only the clients but the administration of
justice and dignity of the courts."
According to Cannon's book, UPL is a misdemeanor in more than 30 states and subjects a person to civil contempt proceedings in more than 25
states. But criminal prosecution is reserved for the most egregious cases. "[Criminal] prosecutions generally arise only if someone, like a disgruntled customer or a lawyer,
complains," explained Cannon, consultant to and former member of the ABA's Standing Committee on Legal Assistants. "There have been some [prosecuted] in Florida, California,
Tennessee and Illinois but not in many other places."
Crossing the Line
One such Florida case involved Jesse Toca, who operated an independent paralegal business
and was convicted in 1998 on six first-degree misdemeanor counts for promoting a "pay for delay" scheme in which people facing mortgage foreclosures hired him to file motions
and provide advice resulting in delays in the litigation. While UPL actions in Florida are usually handled through civil proceedings, prosecutors determined Toca's activities were
particularly harmful to the public. A trial, Toca didn't deny his actions, maintaining he didn't know what he was doing was
unlawful. The jury was not convinced. After the verdict,
one juror called him "the epitome of what paralegals do not want in their field. . . . He was definitely practicing law. He was telling his clients what to do and how to do it."
The Toca case is a UPL example in the extreme. In the day-to-day practice of a legal assistant, the question always looms: Where is the line drawn between what is and isn't the
practice of law?
State Variations
Today, there is wide variation of UPL regulations. "Control over the practice of law is vested in the states, not the federal
government, so naturally there are different views on areas like UPL," Cannon said. "The regulations are usually in the form of state statutes that prohibit the unauthorized
practice of law. They are fairly uniform."
The California Business and Professions Code, for example, states, "No person shall practice law in California unless the
person is an active member of the state bar." Further, "[A]ny person advertising or holding himself or herself out as practicing or entitled to practice law or otherwise
practicing law who is not an active member of the state bar, is guilty of a misdemeanor" (Calif. Business and Professions Code, ¤6125-6140.05). Similarly, the law in the Commonwealth
of Virginia states that those who hold a license or certificate to practice law under the laws of the commonwealth and have paid the license tax prescribed by law may practice law there,
but violators could face a misdemeanor penalty (Va. Code ¤¤ 54.1-3900 and 54.1-3904). A handful of states, including Arizona and Iowa, are without any UPL statutes. But according to Fran
Johansen, UPL counsel for the State Bar of Arizona, some of those states deal with UPL through a state Supreme Court rule.
"The variation [in state statutes] comes in when
these laws are applied to actual instances of UPL that are the subject of criminal prosecution or civil lawsuits," Cannon explained. "Since the courts can only decide what comes
before them, there will always be some variation."
The ABA's View
Like the states, the ABA is loath to adopt a narrow definition of the practice of law. Its Model
Code of Professional Responsibility EC 3-5 states, "[I]t is neither necessary nor desirable to attempt the formulation of a single, specific definition of what constitutes the
practice of law."
Spahn noted the ABA rules also acknowledge lawyers, in their practice of law, may rely on paralegals, but must avoid assisting others - including paralegals
- in the unauthorized practice of law. "ABA Model Rule 5.5(b) states that, 'A lawyer shall not assist a person who is not a member of the bar in the performance of activity that
constitutes the unauthorized practice of law,'" he said.
The Black and White Prohibitions
Most bar or state definitions of the practice of law generally prohibit the following activities by nonlawyers:
Establishing an attorney-client relationship. Lawyers' relationships
with clients are governed by statutes and ethics rules that hold them to a high standard of care in serving those clients. Communications between attorney and client are protected by the
attorney-client privilege. Many courts have ruled that privilege extends to nonlawyers only when they are acting under the direct supervision of a lawyer (see discussion of HPD Laboratories, Inc., v. Clorox Co., below)
Setting fees. Fee setting is considered part of establishing the attorney-client relationship. Consequently, only an attorney can contract with the client for legal services and
determine the fees charged for those services.
Representing a client in court or acting as an advocate in a representative capacity. Court appearances, taking or defending
depositions or engaging in substantiative negotiations with adversaries typically require the skills and knowledge that only a trained, educated and experienced lawyer can provide.
However, paralegals can provide valuable assistance at trials, hearings and depositions by reviewing relevant documents, identifying areas of questioning, helping to prepare witnesses and
assisting with the introduction of evidence.
Providing legal advice.
Like appearing in court on behalf of a client, providing legal advice can be undertaken only by someone who has the necessary knowledge of law gained through education, training and experience. While Cannon noted that the concept of giving legal advice is complex and has a lot of gray areas, generally, it consists of directing or recommending a course of action that might have legal consequences; explaining to a client his or her legal rights and responsibilities; evaluating the probable outcome of a matter; and interpreting the law.
The Struggle Over Legal Advice
Cannon said the biggest potential UPL problem for paralegals working under attorney supervising may be drawing the line when it comes to
giving legal advice when they communicate with clients. "They have to evaluate whether explaining something to a client constitutes legal advice or not," she said.
Take the case of Karen Peeff, a paralegal in the legal department of Clorox Co. In HPD Laboratories, Inc., v. Clorox Co., WL909258, D.N.J. (2001), a patent infringement and unfair
competition action, HPD Laboratories sought production of a number of Clorox documents it claimed were not protected by attorney-client privilege because they were communications between
Peeff and certain nonlegal department Clorox employees who came to Peeff for legal advice. The documents, primarily memoranda and e-mails, summarized advice provided by Peeff to the
employees or conveyed her views about specific claims made by HPD Laboratories.
Peeff admitted she didn't consult with her supervising attorney or other in-house counsel prior to
dispensing the advice documented in the materials. Further, she was the only legal employee involved in the communications with the nonlegal department Clorox employees on this matter.
In its ruling, the court addressed the attorney-client privilege issue but didn't address the underlying issue of UPL. "It's shocking that there was no UPL analysis in the
decision," Spahn said. "Instead the judge determined certain information was no longer protected by the attorney-client privilege. As a result, Clorox was compelled to cough up
documents regarding this paralegal's relationship with a client that otherwise would have been protected."
The issue was one of supervision. Had Peeff's activities in this
particular matter been conducted under the direct supervision of an attorney, it's likely the court would have held that the documents were, in fact, protected. "While there is
nothing wrong with Clorox employees using Ms. Peeff as a legal resource, there is also nothing privileged about their communications to her in this instance," the court wrote.
"Clorox has not demonstrated that its employees conferred with Ms. peeff to obtain legal advice from counsel. Instead they endeavored to obtain her own views and opinions.
Accordingly, their statements are not privileged." In supporting this position, the court cited previous cases that concluded privilege doesn't cover communications between a
nonattorney and a client that involved the conveyance of legal advice offered by the nonattorney (United States v. Kovel, 296 F.2d 918 (2d Cir. 1961); Byrnes v. Empire Blue Cross Blue Shield,
No. 98 Civ. 8520, 1999 WL 1006312 (S.D.N.Y. Nov. 4, 1999); United States Postal Service v. Phelps Dodge Refining Corp., 852 F.Supp. (E.D.N.Y.) 1994)).
Drawing the Line
In some instances, legal advice has even been construed as giving legal presentations. In Doe v. Condon, 532 S.E.2d 879 (4th Cir., 2000), WL 718448, the question of UPL arose
in the context of a paralegal teaching a seminar without an attorney being present.
The court held that a paralegal can't make unsupervised public presentations (in this case, the
topic was estate planning) or conduct initial client interviews in which the paralegal answers legal questions. But the court made no distinction between general and specific legal
questions, ruling that paralegal may not give legal advice, period.
Pamela Jo Packard, chair of NFPA's Ethics Board, advised paralegals struggling with whether they were engaging
in UPL to think about the questions they were being asked and the answers they were giving.
"They need to ask themselves whether their answers sound like advice only an
attorney could give," she said. In her own practice, her rule of thumb is this: "If the information is strictly procedural, I feel comfortable providing it to a client. But
sometimes clients will ask me something that can only be answered by a lawyer, because it requires a legal judgment. In those cases, I tell the client that I'll convey the question to the
lawyer and one of us will get back to him or her."
Full Disclosure
Closely tied to the issue of dispensing legal advice is the issue of what Spahn calls
"holding out" - in his opinion, a critical issue for paralegals. "Because legal assistants work so closely with lawyers, they must be careful to avoid Ôholding themselves
out' as lawyers, either intentionally or unintentionally. When speaking or meeting with clients or the public, legal assistants must correctly describe their role," he explained.
That extends to making sure they properly represent themselves in correspondence and on business cards.
"I worry about people being misled into thinking a paralegal is an
attorney. If malpractice is committed, there could be an additional legal complaint that the client thought the paralegal was a lawyer," Spahn said.
He said he believes such
violations are unlikely to occur in large firms such as McGuireWoods, because the paralegals in that type of environment work very closely with lawyers. However, similar violations may be
more common in small firms or in solo practices where legal assistants are depended upon to move a matter forward from start to finish, Spahn explained.
Packard, however, said she
believes traditional paralegals are unlikely to commit UPL. "I can't image that any paralegals working in law firms would be likely to commit UPL because of the fact that they're
required to work under the supervision of attorneys," she said. "[When looking for UPL violations], the bar is looking for people out on the street who aren't supervised."
In her role as NFPA Ethics Board chair, Packard fields many requests for guidelines on what paralegals can and can't do. "There are people out there who don't think they are
practicing law because they're just filing out forms for people for wills or divorces or simple entity organizations. But they have to decide which forms to use and that requires a legal
judgment."
Spahn said that, although defining permitted activities is as difficult as defining those that are not permitted, several national ethics guidelines list
activities in which a legal assistant may freely participate. For example, the NALA Model Standards, Guideline 5, states that, as long as legal assistants act with full disclosure
(defined in NALA's Code of Ethics and Professional Responsibility as disclosing his or her status as a legal assistant at the outset of any professional relationship with a client,
attorney, court or administrative agency, or member of the general public), they may:
- Maintain client contacts after creation of the attorney-client relationship
- Send and receive correspondence from clients and third parties
- Conduct factual investigations
- Conduct legal research under the supervision of an attorney
- Draft, for a lawyer's review, legal documents, pleadings, correspondence and other materials
- Summarize pleadings and depositions
- Accompany lawyers to and assist them with meetings and court proceedings.
Stephanie Mark, CLAS, NALA ethics chair and a 24-year paralegal veteran who has been with the firm of Hall, Still, Hardwick, Gable, Golden & Nelson in Tulsa, Okla. since 1984, said
NALA doesn't deal with UPL per se. Instead, its approach is to educate its members on all aspects of ethics, including UPL, through its publications, meetings, seminars and Web
site. "We don't see gray areas when it comes to UPL," she said. "We emphasize disclosure and also focus on what legal assistants cannot do, like give legal advice,
establish the attorney-client relationship, set fees or appear in court or in an administrative proceeding unless expressly authorized by rule or statute. But it all goes back to
educating on ethics." She cites the Condon case as an example of the types of decisions NALA monitors and updates its members about.
However, like Packard, she
differentiates between how UPL relates to traditional paralegals and how it relates to people who "fill out forms and call themselves legal assistants," such as legal document
assistants in California. The latter, she said, "we could talk about forever."
NFPA's Model Code of Ethics and Professional Responsibility and Guidelines for Enforcement
expressly prohibits UPL stating, "[A] paralegal shall comply with the applicable legal authority governing the unauthorized practice of law in the jurisdiction in which the paralegal
practices" (EC-1.8(a)). It also specifies these guidelines for full disclosure:
- A paralegal shall clearly indicate his or her status and disclose it in all business and professional communications to avoid misunderstandings and misconceptions about the
paralegal's role and responsibilities.
- A paralegal's title shall be included if the paralegal's name appears on business cards, letterhead, brochures, directories and advertisements.
- A paralegal shall not use letterhead, business cards or other promotional materials to create a fraudulent impression of his or her status or ability to practice in the jurisdiction
in which the paralegal practices.
- A paralegal shall not practice under color of any record, diploma or certificate that has been illegally or fraudulently obtained or issued or which is misrepresentative in any way.
- A paralegal shall not participate in the creation, issuance or dissemination of fraudulent records, diplomas or certificates (EC-1.7(a)-(e)).
Packard said she believes all of the rules, codes and laws lead practitioners to one final truth: What is in the best interest of the client?
A paralegal for 30 years, the last 24
of which have been at Stoel Rives, in Boise, Idaho, Packard has come to trust her professional instincts about what she can and can't do.
"If it feels like giving legal advice and it sounds like giving legal advice, I don't do it," she explained.
Instead, she consults the attorney about the client's
questions and gets back to him or her. After speaking with the attorney, she conveys his informational response.
Mark's advice is this: Err on the side of caution. "As
educated individuals, we know what's ethical and what's not. In those situations when we are unsure, we should always, always go to an attorney."
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