What Constitutes the Unauthorized Practice of Law?
On the foregoing facts, the Florida Bar sought to enjoin the defendants from engaging in what it deemed was the unauthorized practice of law. According to the bar, the defendant company used its website and advertisements to represent itself to the public as qualified to provide legal services. A referee was appointed to consider the bar’s petition and concluded that, pursuant to Florida Bar Rules 4-1.8(f) and 4-5.4(d)—which govern third-party payment of attorney fees—the defendants were not engaged in the unauthorized practice of law. Therefore, the referee granted summary judgment in favor of the defendants.
The Florida Supreme Court reversed on appeal. Quoting the state constitution for its authority to “regulate . . . the practice of law . . . [,]” the court further cited its own precedent for the proposition that it may define “what constitutes the practice of law.” Next, in dicta, the court observed that conduct amounting to the practice of law changes as business and society changes. Citing its own precedent from State ex. rel Florida Bar v. Sperry, the court explained that if the “giving of advice and counsel and the performance of services in legal matters for compensation . . . affect[s] important rights of a person under law,” then such advice and such services constitute the practice of law.
Applying the four-factor test from Sperry, the court concluded that the defendants were engaged in the unauthorized practice of law. As to the first Sperry factor, the court noted that the defendants had the potential to “substantially affect” the quality and timeliness of representation that a driver receives. The court observed that the defendants were advertising to the public and soliciting drivers with legal problems, yet as nonlawyers could miss critical deadlines that could affect a driver’s rights.
Second, the court noted that although the defendants collected fees from clients to pay court costs and fines, they were not a law firm and thus were not required to hold such moneys in a trust for a driver/client to ensure the funds would be available to satisfy those obligations.
Third, the court observed, an inherent conflict exists when nonlawyers such as the defendants procure income from providing legal services, because financial interest may conflict with the legal obligation to act on behalf of the driver/client. Relying on Florida Bar v. Consololidated Business & Legal Forms, Inc., the court concluded that collecting income from the provision of legal services is a prime example of the unauthorized practice of law. The court also cited its recent opinion in Florida Bar re: Advisory Opinion – Medicaid Planning Activities by Nonlawyers for the argument that accepting payment for legal services provided is tantamount to the practice of law, particularly where the legal services provider controls the attorney-client relationship.
Fourth, and finally, the court stated that because the defendants were not licensed attorneys, they lacked the training to ensure the lawyers they contracted with were of high quality. Yet the defendants’ advertisements promised a “cost-effective alternative to hiring” legal representation, as if using the defendants’ services were a proxy for, or equal to, hiring one’s own attorney.
A Dissenting View
The dissent concluded that the defendants were not engaged in the unauthorized practice of law, but instead offered a business proposition to drivers who received traffic tickets. The dissent distinguished In re Advisory Opinion – Medicaid Planning Activities by Nonlawyers as inapposite, because unlike in that case, here the driver—not the defendant—controlled the attorney-client relationship. Further, the dissent stated, the harm identified in Consololidated Business & Legal Forms, Inc. was not present, given that the referee found that the defendants’ services were actually convenient and helpful to drivers.
A Growing Trend?
Litigation Section leaders are divided as to whether the defendants were engaged in the unauthorized practice of law in TIKD Services.
“[The defendant’s] business model seems well-suited for small dollar items such as routine traffic tickets,” reasons Michael S. LeBoff, Newport Beach, CA, cochair of the Section’s Professional Liability Litigation Committee. “The business model would not translate to other areas of law,” he surmises, “but in this instance, I believe more consumers are likely to forgo any legal assistance, rather than go through a traditional attorney-client relationship where the client must search for his or her own lawyers, then pay the lawyers hundreds of dollars per hour with no guarantee of the result.”
Offering a different perspective, another Section leader expressed understanding of how the court reached its conclusion. “The court is very protective of the public’s perception of lawyers,” opines John M. Barkett, Miami, FL, cochair of the Section’s Ethics & Professionalism Committee. “Its precedents allowed it to say, quite comfortably, that when a nonlawyer controls the delivery of legal services and handles the money associated with the representation, that nonlawyer is engaged in the unauthorized practice of law. Based on the court’s precedents and the facts that were presented, I can understand how the court reached its conclusion,” Barkett states.
Even so, Barkett is among those Section leaders who predict that allowing third-party providers to deliver legal services is part of a growing trend to make such services accessible to the public. “I know that Arizona has just begun an experiment with allowing third parties to have a financial interest in a law firm,” he offers. “I believe that Utah and Washington are also experimenting with different models to allow nonlawyers to provide certain legal services to clients.”
Echoing Barkett, J. Dalton Courson, cochair of the Section’s Access to Justice Committee, observes that “the traditional legal model is not working to meet the needs of certain clients in certain practice areas. The recent moves in Utah and Arizona to permit nonlawyers to appear in court under certain conditions seem part of the same trend.”