CHAPTER 13 UNAUTHORIZED PRACTICE OF LAW: POTENTIAL TRAPS FOR LAWYERS AND LANDMEN
| Jurisdiction | United States |
(Jan 1996)
UNAUTHORIZED PRACTICE OF LAW: POTENTIAL TRAPS FOR LAWYERS AND LANDMEN
University of Texas School of Law
Austin, Texas
Table of Contents
I. Introduction
II. Unauthorized Practice of Law
A. The Justification for Unauthorized Practice Statutes
B. Defining the Unauthorized Practice of LawThe Historical Background of the Practice AreaRepresentations before a TribunalWritten Products and Guides are Protected by the First AmendmentAre Lawyers Interested in Performing the ServiceThe Political Power of the Non-lawyer GroupThe Preemption by Some State or Federal Law or AuthorityThe Bar's Fear of Antitrust Implications
D. The Contours of Unauthorized PracticeNon-Lawyers Who Practice LawBusiness Entities Which Offer Legal Services as Part of a Larger Non-Legal ServiceLawyers Practicing in States in Which They are Not LicensedLawyers Who Assist Non-Lawyers in the Practice of LawLawyers Who Assist Non-Lawyers in the Practice of LawNon-Lawyer Ownership in Law FirmsProvision of Ancillary Services By Law Firms
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III. Potential Traps for Landmen and Lawyers
A. Types of WorkInvestigation and Determination of TitleCurative Work on TitleNegotiation with Mineral Owner to Execute a LeasePreparation of an Environmental Report
B. Working Closely with a Lawyer
C. Reasons Why Landmen Have not Been the Targets of Many Unauthorized Practice Claims
IV. Future Trends in Unauthorized Practice
V. Conclusion
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I. Introduction
The state law of unauthorized practice forms the cornerstone of the legal profession's monopoly on the provision of legal services.2 Most states have a statutory or constitutional provision limiting the practice of law to lawyers licensed to practice in the state. Although prosecutors rarely invoke the criminal charges against those who violate the statutes, those who violate the prohibition on unauthorized practice of law face several other consequences. First, in most jurisdictions, if a person practices law without a license, the person cannot collect a fee for performing the services. Second, non-lawyers who practice law and who commit an error are likely to be held to the standards of a lawyer under the circumstances in a negligence suit and thus subjecting the person to significant liability. Finally, state bar associations often seek injunctions against persons and organizations who violate the unauthorized practice of law statutes. The state bar injunction is often the most likely sanction.
Professional landmen inherently in their practice skirt the edge of the practice of law. Historically, landmen as a profession were protected by their position in history. The petroleum landman had occupied an integral role in the oil and gas industry — a role understood by lawyers, lessors, and participants in the industry.3 Although there was some risk that a landman could run afoul of the unauthorized practice of law rules, there was a clear line to follow. Today, as petroleum landmen have become professional
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landmen with a wider range of tasks in a variety of industries, the risks of running into unauthorized practice of law prohibitions appear greater.
This paper will examine the manner in which unauthorized practice of law rules may impact landmen and lawyers in the oil and gas industry. First, I will examine the law of authorized practice generally. Second, I will identify potential traps for landmen and lawyers in the industry. Finally, I will examine future trends in this area.
II. Unauthorized Practice of Law
A. The Justification for Unauthorized Practice Statutes
Unauthorized practice prohibitions are justified on four independent grounds.4 First, there is a fear that non-lawyers who provided legal services would have the potential to harm clients. The practice of law requires special training and the consequences of error are so significant that there is an important state interest in protecting the public from non-lawyers. A second reason involve the harm to the legal system that would result if non-lawyers began to practice law. Negligent performance of legal work would inevitably result in the additional judicial resources to correct the problems. Furthermore, if the involvement of non-lawyers prohibited clients from fully realizing their legal rights ultimately much harm would result from the effect on the judicial decision on the merits in these cases.5 A third reason involves the manner in which non-lawyers would be regulated if they offered services involving the practice of law. Lawyers are regulated extensively in the courtroom and by state and federal bodies depending upon the area of practice. Who would regulate the non-lawyers. In some areas such as tax practice, non-lawyers are regulated extensively by the Treasury and Internal Revenue Service.6 Presumably, unauthorized practice statutes avoid the question of whom would regulate
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non-lawyers who practiced law. The final justification provided for unauthorized practice prohibitions involve protecting the monopoly that lawyers have over the practice of law.7 This reason often drives many contours of unauthorized practice. It also explains how an area of practice can be perfectly well served by non-lawyers until lawyers move in an make it unauthorized practice of law and drive the lawyers out.8
B. Defining the Unauthorized Practice of Law
Despite the universal adoption of unauthorized practice rules in the states, no one has come up with an adequate definition of exactly what is the unauthorized practice of law.9 The current state of the law involves a series of compromises among a variety of different factors. The following paragraphs will address the different factors at play in the determination of whether a particular act should be classified unauthorized practice of law if performed by a lawyer.
The Historical Background of the Practice Area
The most important factor in defining the unauthorized practice of law is the history underlying how non-lawyers have been involved in a particular law related task. In different states, non-lawyer professionals have often performed services which involved the practice of law or border on legal practice. Sometimes the organized legal profession has opened invited such non-lawyer involvement and in other states they have simply tolerated. Customs and practices have evolved into an unwritten decision that particular
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acts may be performed by non-lawyers. In other states, the very same act performed by a non-lawyer may constitute the unauthorized practice of law. Certainly, in most states, conduct such as bill collecting has historically been exempted from the characterization of the practice of law. On the other hand, in most states, will drafting has been reserved exclusively to the legal profession because of the dangers that result when a non-lawyer makes a mistake in a will.
Representations before a Tribunal
Another very important factor involves whether the service involves representation before a tribunal. Historically, when a person represents a client before a court or other adjudicatory tribunal, this conduct is characterized as the practice of law. Of course, lobbying is generally not considered to be the practice of law so legislatures often have specific rules about qualification of lobbyists and limitations on their conduct. Further, Congress and various federal and state agencies have also in many contexts allowed non-lawyers to represent clients. The practice before the Internal Revenue Service is the obvious example however law individuals can also represent clients before the Veterans administration. The important point with most judicial tribunals is that courts expect parties to be represented by a person who is familiar with the rules and operation of the tribunal. Representation by laypersons would often impose substantial costs upon the tribunal.
Written Products and Guides are Protected by the First Amendment
Early in the unauthorized practice of law debate, courts recognized that non-lawyers could author "how to" books and other forms and guides on how to represent yourself and these activities were considered to be protected by the first amendment to the constitution. Thus, the only recourse that a client would have against the non-lawyer would involve a negligence or products liability lawsuit. The first amendment exception
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was so broad that creative non-lawyers began to offer clinics whereby counselors would help clients fill out the forms.10 In some cases, the clinics were know as typing services.
The practice of law involves the giving of specific and particularized legal advice about specific facts to a client. A client who receives such advice is likely to rely upon such information and not seek the advice of a lawyer when the lawyer may be able to protect the client's interests more effectively. Thus, while divorce kits are protected by the first amendment, they should contain a disclaimer that the seller is not an attorney and cannot render legal advice and that such kits may be of limited value because they do not adequately address custody or tax matters upon property division. Thus, if the user has a more complicated situation, the client should seek the advice of a lawyer. No personal advice may be given, and all information must be received through a written document to the client. A typing service may not be used to give legal advice to clients
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Are Lawyers Interested in Performing the Service
Another factor involves whether lawyers are interested in performing the specific service. If the legal profession does not occupy an area or chooses to let other professional perform a specific task, then it is difficult to call that area the practice of law. The major problem with this factor is that the law of unauthorized practice may change over time as...
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