UPL, MDP and MJP (Defining What Lawyers Do and McGuireWoods LLP Where They Can Do It): Part I T. Spahn (3/1/19) Hypotheticals and Analyses Master UPL, MDP AND MJP (DEFINING WHAT LAWYERS DO AND WHERE THEY CAN DO IT): PART I Hypotheticals and Analyses* Thomas E. Spahn McGuireWoods LLP * These analyses primarily rely on the ABA Model Rules, which represent a voluntary organization's suggested guidelines. Every state has adopted its own unique set of mandatory ethics rules, and you should check those when seeking ethics guidance. For ease of use, these analyses and citations use the generic term "legal ethics opinion" rather than the formal categories of the ABA's and state authorities' opinions -- including advisory, formal and informal. ______________________ © 2019 McGuireWoods LLP. McGuireWoods LLP grants you the right to download and/or reproduce this work for personal, educational use within your organization only, provided that you give proper attribution and do not alter the work. You are not permitted to re-publish or re-distribute the work to third parties without permission. Please email Thomas E. Spahn ([email protected]) with any questions or requests. 35950817_6 UPL, MDP and MJP (Defining What Lawyers Do and McGuireWoods LLP Where They Can Do It): Part I T. Spahn (3/1/19) Hypotheticals and Analyses Master TABLE OF CONTENTS Hypo No. Subject Page Unauthorized Practice of Law -- General Issues 1 Public Policy Debate .................................................................................. 1 2 Power to Define and Regulate the Practice of Law .................................. 6 3 Power to Enforce Unauthorized Practice of Law Restrictions ............... 9 Unauthorized Practice of Law -- Definitions and Consequences 4 Defining the Practice of Law ...................................................................... 18 5 Assisting UPL Violations ........................................................................... 29 6 Drawing the Line Between Permissible and Impermissible Actions by Nonlawyers ............................................................................................ 44 7 "Self-Help" Books and Online Services .................................................... 57 Unauthorized Practice of Law -- Exception for Some Nonlawyers 8 Exception for Pro Se Litigants .................................................................. 68 9 Statutory/Regulatory Exceptions .............................................................. 73 10 Exception for Corporate Employees ......................................................... 85 Paralegals 11 Paralegals: General Rules ........................................................................ 104 12 Assisting Paralegals' UPL Violations........................................................ 118 13 Paralegals: Attorney-Client Privilege Issues ........................................... 129 14 Paralegals: Work Product Issues ............................................................. 133 i 35950817_6 UPL, MDP and MJP (Defining What Lawyers Do and McGuireWoods LLP Where They Can Do It): Part I T. Spahn (3/1/19) Hypotheticals and Analyses Master Hypo No. Subject Page Unauthorized Practice of Law -- Unlicensed and Disbarred Lawyers 15 Lawyers Whose Licenses Have Lapsed ................................................... 135 16 Disbarred Lawyers: General Rule ............................................................ 145 Unauthorized Practice of Law -- In-House Lawyers 17 In-House Lawyers Whose Licenses Have Lapsed ................................... 162 18 Representing Corporate Affiliates............................................................. 177 19 Representing Company Employees.......................................................... 190 20 Representing Company Customers .......................................................... 194 21 Representing Pro Bono Clients ................................................................. 205 Multidisciplinary Practice ("MDP") / Alternative Law Practice Structures ("ALPS") 22 Prohibition on Sharing Fees with Law Firm Nonlawyer Employees ................................................................................................... 211 23 Law Firms Allowing Ownership Interest by Nonlawyers Who Assist the Law Firm in Providing Legal Services (The D.C. and the Abandoned ABA 20/20 Commission Model) ...................................... 228 24 Multidisciplinary Practice (MDP) ............................................................... 242 25 Law Firms Allowing Ownership Interest by Nonlawyers Other than Those Assisting the Law Firm in Providing Legal Services ........... 281 ii 35950817_6 UPL, MDP and MJP (Defining What Lawyers Do and McGuireWoods LLP Where They Can Do It): Part I T. Spahn (3/1/19) Hypotheticals and Analyses Master Public Policy Debate Hypothetical 1 You just participated as the "lawyer" representative on a diverse panel debating the wisdom of loosening unauthorized practice of law rules. Not surprisingly, the nonlawyer representatives have argued that society would benefit by allowing insurance agents to provide simple estate planning advice, permitting marital counselors to assist in simple divorces, etc. The audience at a recent public hearing seemed very sympathetic to these arguments, and you wonder what arguments you can or should muster in response. Would society benefit from loosening unauthorized practice of law rules to allow nonlawyers to provide such simple services? (A) YES (B) NO MAYBE Analysis For well over 100 years, America has debated this issue. The organized bar has emphasized the danger to society of allowing nonlawyers to engage in such activities. Others have argued that society would benefit by allowing nonlawyers to engage in such simple steps, which arguably would make services more widely available and lower costs. The Restatement extensively discusses this broad debate. Controversy has surrounded many out-of-court activities such as advising on estate planning by bank trust officers, advising on estate planning by insurance agents, stock brokers, or benefit-plan and similar consultants, filling out or providing guidance on forms for property transactions by real-estate agents, title companies, and closing-service companies, and selling books or individual forms containing instructions on self-help legal services or accompanied by 1 35950817_6 UPL, MDP and MJP (Defining What Lawyers Do and McGuireWoods LLP Where They Can Do It): Part I T. Spahn (3/1/19) Hypotheticals and Analyses Master personal, nonlawyer assistance on filling them out in connection with legal procedures such as obtaining a marriage dissolution. The position of bar associations has traditionally been that nonlawyer provision of such services denies the person served the benefit of such legal measures as the attorney-client privilege, the benefits of such extraordinary duties as that of confidentiality of client information and the protection against conflicts of interest, and the protection of such measures as those regulating lawyer trust accounts and requiring lawyers to supervise nonlawyer personnel. Several jurisdictions recognize that many such services can be provided by nonlawyers without significant risk of incompetent service, that actual experience in several states with extensive nonlawyer provision of traditional legal services indicates no significant risk of harm to consumers to such services, that persons in need of legal services may be significantly aided in obtaining assistance at a such lower price that would be entailed by segregating out a portion of a transaction to be handled by a lawyer for a fee, and that many persons can ill afford, and most persons are at least inconvenienced by, the typically higher cost of lawyer services. In addition, traditional common-law and statutory consumer-protection measures offer significant protection to consumers of such nonlawyer services. Restatement (Third) of Law Governing Lawyers § 4 cmt. c (2000). The Restatement described a recent trend toward permitting nonlawyers to provide such services. Courts, typically as the result of lawsuits brought by bar associations, began in the early part of the 20th century to adapt common-law rules to permit bar associations and lawyer-competitors to seek injunctions against some forms of unauthorized practice by nonlawyers. The courts also played a large role in attempting to define a delineate such practice. The primary justification given for unauthorized practice limitations was that of consumer protection -- to protect consumers of unauthorized practitioner services against the significant risk of harm believed to be threatened by the nonlawyer practitioner's incompetence or lack of ethical constraints. Delineating the respective areas of permissible and impermissible activities has often been controversial. Some consumer groups and governmental agencies have criticized some restrictions as over-protective, anti-competitive, and costly to consumers. 2 35950817_6 UPL, MDP and MJP (Defining What Lawyers Do and McGuireWoods LLP Where They Can Do It): Part I T. Spahn (3/1/19) Hypotheticals and Analyses Master In the latter part of the 20th century, unauthorized practice restrictions has lessened, to a greater or lesser extent, in most jurisdictions. In some few jurisdictions traditional restraints are apparently still enforced through active programs. In other jurisdictions, enforcement has effectively ceased, and large numbers of lay practitioners perform many traditional