Issued June 23, 2003
¶ 1 Issue: Is it ethical for a lawyer to advertise to provide legal services in Social Security Administration hearings to claimants who have been denied benefits, where nonlawyers are used by the lawyer in providing these services?
¶ 2 Opinion: With due consideration for the rules governing advertising and supervision of nonlawyers assistants, it is not unethical for a lawyer to use nonlawyer paraprofessionals to provide representation of clients in hearings before a government agency that authorizes nonlawyer representation. In particular, the lawyer does not assist the nonlawyer paraprofessional in the unauthorized practice of law under these circumstances.1
¶ 3 Background: The United States Social Security Administration permits nonlawyers to appear at hearings as representatives of claimants challenging the denial of Social Security benefits. The hearings are evidentiary and require representatives of claimants to offer direct testimony and to cross-examine adverse witnesses. Lawyers who represent claimants for Social Security Administration benefits often use nonlawyer paraprofessionals to represent the clients in the agency hearings. These lawyers advertise their services in Social Security Administration matters, but commonly do not disclose in the advertisements that the client’s representative at the hearing is normally a nonlawyer paraprofessional.
¶ 4 Analysis: We have been asked whether an advertisement placed by a lawyer to provide legal services in Social Security Administration hearings to claimants who have been denied Social Security benefits must disclose that the lawyer normally uses nonlawyer paraprofessionals in making appearances for claimants in such hearings.
¶ 5 Advertising Rules. The first step in the analysis is to review the rules governing advertising. First, “[s]ubject to the requirements of Rules 7.1 and 7.3, a lawyer may advertise services through public media, such as a telephone directory, legal directory, newspaper or other periodical, outdoor advertising, radio or television, or through written or recorded communication.”2 But, any advertisement for the lawyer’s legal services must comport with Rule 7.1(a):
A lawyer shall not make a false or misleading communication about the lawyer or the lawyer’s services. A communication is false or misleading if it: (a) Contains a material misrepresentation of fact or law, or omits a fact necessary to make the statement considered as a whole not materially misleading.3
As the comment to the Rule emphasizes, “This Rule applies to all communications concerning the lawyer’s services, including advertising materials.”4
¶ 6 Thus, a disclosure concerning the use of paraprofessionals would only be required if it were necessary to make the advertisement “considered as a whole, not materially misleading.” But, lawyers routinely provide legal services through the use of nonlawyer paraprofessionals and, indeed, are encouraged to do so to make legal services affordable to the broadest spectrum of the population. Thus, we conclude that the advertisement in question is not materially misleading if it does not disclose that the services are often provided through nonlawyer paraprofessionals.
¶ 7 Delegation to Nonlawyers. Social Security Administration rules and regulations permit the appearance of nonlawyer representatives for claimants in Social Security Administration hearings challenging the denial of benefits.5 Without such authority, paraprofessionals would ordinarily not be allowed to provide unassisted representation of a client in an evidentiary hearing. Given the Social Security Administration’s authorization of nonlawyer professionals to appear as representatives of claimants at its hearings, a lawyer does not act unethically in delegating to paralegals the representation of clients at these hearings. However, the lawyer must comply with his supervisory responsibilities under Rule 5.3,6 which permits nonlawyer paraprofessionals to “act for the lawyer in rendition of the lawyer’s professional services.”7 Rule 5.3 requires, however, that the lawyer provide nonlawyer paraprofessionals appropriate supervision and retain responsibility for their work.8 (more…)
(Approved April 30, 1999)
Issue: Does a lawyer who negotiates or communicates with an opposing party’s legal assistant, secretary or other non-lawyer representative about substantive matters assist in the unauthorized practice of law under Utah Rule of Professional Conduct 5.5(b)?
Opinion: In general, a lawyer who negotiates or otherwise communicates with a non-lawyer representative on substantive matters affecting the rights of parties to a particular matter is not assisting in the unauthorized practice of law if that representative is supervised by a lawyer as required under Rule 5.3. When the non-lawyer representative is employed in a lawyer’s office, the lawyer communicating with such a representative may presume that the representative is supervised within the requirements of Rule 5.3, unless the lawyer is aware of facts and circumstances that impart knowledge that adequate supervision is lacking.
Analysis: Under Utah Rules of Professional Conduct 5.5(b), “A lawyer shall not . . . [a]ssist any person in the performance of activity that constitutes the unauthorized practice of law.” The Utah Supreme Court has stated that “the practice of law, although difficult to define precisely, is generally acknowledged to involve the rendering of services that require the knowledge and application of legal principles to serve the interests of another with his consent.”1The Court continued, “What constitutes the practice of law in any given situation requires a case-by-case decision, and therefore, each case must be evaluated to determine whether the particular acts involved constitute the practice of law.”2
Lawyers often employ non-lawyer assistants, including secretaries, legal assistants, paralegals and student interns. Such assistants may perform a wide array of services, including interviewing clients, scheduling depositions, drafting documents or pleadings, and conducting legal research. Some of these activities might constitute the practice of law in a given situation if the persons performing them were to act independently of any supervision.3However, the Rules of Professional Conduct except such activities from the prohibitions relating to the unauthorized practice of law if the assistants are employed by a lawyer “so long as the lawyer supervises the delegated work and retains responsibility for their work.”4The fact that the practice of law is a licensed profession creates safeguards for the protection of the public. Those safeguards are in place where a paralegal or other non-lawyer acts under a lawyer’s supervision, and they are absent when such supervision is inadequate or non-existent.5
Exceptions to the general rule exist for certain non-lawyer professionals who are licensed and, by the nature of their profession, engage in actions representing clients and negotiating on their behalf. Examples of these are first-party insurance adjusters6and real estate agents.7A lawyer may negotiate or communicate with these representatives without fear of assisting in the unauthorized practice of law. If, however, the lawyer knows that the opposing party is also represented in the matter by a lawyer, communication with the non-lawyer representative is improper without the lawyer’s consent.8
Just as defining what constitutes the practice of law is fact-specific and requires a case-by-case analysis, so does defining what constitutes adequate supervision of a non-lawyer assistant. The issue before the Committee does not directly involve the conduct of a supervising lawyer, but rather an opposing party’s lawyer’s communication with a non-lawyer representative. Where a non-lawyer assistant is employed by a lawyer, an opposing lawyer communicating with that assistant may presume that the assistant is supervised within the requirements of Rule 5.3. The presumption may be overcome where the communicating lawyer is aware of facts and circumstances indicating that adequate supervision is lacking. In that case, counsel may indeed be assisting in the unauthorized practice of law in violation of Rule 5.5(b). The appropriate level of supervision necessary to insure that the representative is not engaging in the unauthorized practice of law is fact-specific and will vary from case to case. (more…)
(Approved December 6, 1996)
Issue: May an attorney employ a paralegal who owns a proprietary interest in a collection agency the attorney represents as a client?
Opinion: If there is no violation of a statute, including Utah Code Ann. § 78-51-27, and if there is no sham arrangement in which the paralegal would nominally own an interest in a collection agency that is in reality owned by the attorney, the Rules of Professional Conduct do not prohibit an attorney from employing a paralegal who owns an interest in a collection agency the attorney represents as a client. The attorney’s conduct within such an employment relationship would at all times be governed by the requirements of the Rules of Professional Conduct, including Rule 5.3, “Responsibilities Regarding Nonlawyer Assistants.”
Facts: An individual who is not an attorney holds an ownership interest in a collection agency that is duly registered and bonded with the State of Utah. This individual has experience in collection matters based in part on having formerly been employed by an attorney. The same attorney desires to re-employ the individual as a paralegal, represent the collection agency as its attorney, and assign the owner-paralegal to assist the attorney in providing legal services to the collection agency.
Analysis: The issue presented is related to an issue previously considered by the Utah State Bar: whether an attorney simultaneously may own an interest in a collection agency and represent the collection agency as a client. Utah Ethics Advisory Opinion No. 45, issued in 1978, held that an attorney could not represent a collection agency in lawsuits to collect on assigned accounts if the attorney owned stock in or had an interest in the collection agency.
On July 29, 1993, Utah Ethics Advisory Opinion No. 111 reconsidered Opinion No. 45 in light of cases and rule changes that loosened the restrictions on lawyer solicitation and advertising. Opinion No. 111 determined, in view of these changes, that “the ethical propriety of a collection agency owner-attorney cannot revolve around the issue of what kind of solicitation and advertising is allowed under the Rules of Professional Conduct. Rather, the issue must now be examined from the perspective of whether there is an improper conflict of interest.” After determining that the facts presented involved no inherent conflict interest, Opinion No. 111 reasoned that “Opinion No. 45’s interest-ownership restriction on an attorney who represents a collection agency was based on a legal premise that has been overruled since that opinion was issued. Because the Committee can identify no other ethical offense in the relationship, the Committee finds that it is not per se unethical for an attorney who has a financial interest in a collection agency to represent the agency in lawsuits to collect on assigned accounts.”
Opinion No. 111 noted, however, that there might be legal constraints on the owner-attorney imposed by statute, in particular Utah Code Ann. § 78-51-27(1):
An attorney or counsel shall not: (1) directly or indirectly buy, or be in any manner interested in buying or having assigned to him, for the purpose of collection, a bond, promissory note, bill of exchange, book debt, or other thing in action, with the intent and for the purpose of bringing an action thereon. (more…)