October 05, 2011

James P. Schaller Re: Report of ABA Commission on Multidisciplinary Practice - Center for Professional Responsibility

June 25, 1999

Art Garwin
Center for Professional Responsibility
American Bar Association
541 North Fairbanks Court
Chicago, IL 60611

Re: Report of ABA Commission on Multidisciplinary Practice

Dear Mr. Garwin:

I write to comment upon a single aspect of the MDP Commission’s Report which I have recently received and which I will confess to not having studied in detail.

Nevertheless, I must make the following observation respecting the proposed definition of "practice of law" as contained therein. Notwithstanding the Commission is at pains to acknowledge "[d]efining ‘the practice of law . . . to be exceedingly difficult," it has decided to include in Appendix A to the Report a model definition, "based in great part upon District of Columbia Rule 49, which the Reporter viewed as a useful model."

I served on the D.C. Court of Appeals Committee on Unauthorized Practice of Law for eight years, six as Chair of the Committee. I also chaired the ad hoc Committee of the D.C. Bar which proposed the revision of Rule 49 in its present form. I am flattered that the Commission would choose to adopt our language with respect to the definition of "practice of law", but as you may or may not be aware, the Rule is subject to extensive commentary. The bare text of the definition, without more, is really not going to be helpful to the regulating courts of other jurisdictions. Indeed, it would almost certainly work considerable mischief to create the impression that the ABA is breaking no new ground because D.C. already has in place a rule embodying this definition.

The fact of the matter is that there are numerous well-recognized areas of activity -- which partake of certain elements of law practice -- but which have long been recognized as not constituting unauthorized practice. Those kinds of activities have to be differentiated in a way that preserves the spirit of the rule but allows these venerable institutions to continue to perform their useful functions unthreatened by the rules forbidding unauthorized practice of law. The most persuasive way of illustrating the point, I think, is to set out the commentary appertaining to the "practice of law" definition in Rule 49, in its entirety. It reads as follows:

Although section (b) of the original rule included definitions, not all of the essential terms were defined. The new section (b) follows the conventional approach of rules and statutes in defining such terms.

As originally stated in sections (b)(2) and (3) of the prior Rule, the "practice of law" was broadly defined, embracing every activity in which a person provides services to another relating to legal rights. This approach has been refined, in recognition that there are some legitimate activities of non-Bar members that may fall within an unqualifiedly broad definition of "practice of law."

The definition set forth in section (b)(2) is designed to focus first on the two essential elements of the practice of law: The provision of legal advice or services, and a client relationship of trust or reliance. Where one provides such advice or services within such a relationship, there is an implicit representation that the provider is authorized or competent to provide them; just as one who provides any services requiring special skill gives an implied warranty that they are provided in a good and workmanlike manner. See, e.g., Ehrenhaft v. Malcolm Price, Inc., 483 A.2d 1192, 1200(D.C. 1984); Carey v. Crane Service Co., Inc., 457 A.2d 1102, 1007 (D.C. 1983).

Recognizing that the definition of "practice of law" may not anticipate every relevant circumstance, the Rule adopts four methods of definition: (1) the more refined definition focusing on the provision of legal advice or services and a client relationship of trust or reliance; (2) an enumerated list of the most common activities which are rebuttably presumed to be the practice of law; (3) this commentary; and (4) opinions of the Committee on Unauthorized Practice of Law where further questions of interpretation may arise. See section (d)(3)(G) below. (Emphasis added)

The definition of "practice of law," the list of activities, this commentary and opinions of the Committee on Unauthorized Practice of Law are to be considered and applied in light of the purposes of the Rule as set forth in the commentary to sections (a) and (b).

The presumption that one’s engagement in one of the enumerated activities is the "practice of law" may be rebutted by showing that there is no client relationship of trust or reliance, or that there is no explicit or implicit representation of authority or competence to practice law, or that both are absent. (Emphasis added)

While the Rule is meant to embrace every client relationship where legal advice or services are rendered, or one holds oneself out as authorized or competent to provide such services, the Rule is not intended to cover conduct which lacks the essential features of an attorney-client relationship.

For example, a law professor instructing a class in the application of law to a particular real situation is not engaged in the practice of law because she is not undertaking to provide advice or services for one or more clients as to their legal interests. An experienced industrial relations supervisor is not engaged in the practice of law when he advises his employer what he thinks the firm must do to comply with state or federal labor laws, because the employer does not reasonably expect it is receiving a professional legal opinion. See also the exception for Internal Counsel set forth in Section (c)(6). Law clerks, paralegals and summer associates are not practicing law where they do not engage in providing advice to clients or otherwise hold themselves out to the public as having authority or competence to practice law. Tax accountants, real estate agents, title company attorneys, securities advisors, pension consultants, and the like, who do not indicate they are providing legal advice or services based on competence and standing in the law are not engaged in the practice of law, because their relationship with the customer is not based on the reasonable expectation that learned and authorized professional legal advice is being given. Nor is it the practice of law under the Rule for a person to draft an agreement or resolve a controversy in a business context, where there is no reasonable expectation that she is acting as a qualified or authorized attorney.

The rule is not intended to cover the provision of mediation or alternative dispute resolution ("ADR") services. This intent is expressed in the first sentence of the definition of the "practice of law" which requires the presence of two essential factors: the provision of legal advice or services and a client relationship of trust or reliance. ADR services are not given in circumstances where there is a client relationship of trust or reliance; and it is common practice for providers of ADR services explicitly to advise participants that they are not providing the services of legal counsel.

While payment of a fee is often a strong indication of an attorney-client relationship, it is not essential.

Ordinarily, one who provides or offers to provide legal advice or services to clients in the District of Columbia implies to the consumer that he or she is authorized and competent to practice law in the District of Columbia. It is not sufficient for a person who is not an enrolled, active member of the District of Columbia Bar merely to give notice that he is not a lawyer while engaging in conduct that is likely to mislead consumers into believing that he is a licensed attorney at law. Where consumers continue to seek services after such notice, the provider must take special care to assure that they understand that the person they are consulting does not have the authority and competence to render professional legal services in the District of Columbia. See In Re Banks, 561 A.2d 168 (D.C. 1987).

The Rule also confines the practice of law to provision of legal services under engagement for another. One who represents himself or herself is not required to be admitted to the District of Columbia Bar.

The conduct described in Section (b)(2)(F) concerning the furnishing of attorneys is not intended to include legitimate or official referral services, such as those offered by the District of Columbia Bar, bar associations, labor organizations, non-fee pro bono organizations and other court-authorized organizations.

As you can see, the commentary to the definition of "practice of law" is orders of magnitude more detailed and exhaustive than the definition itself. Were the definition in the MDP Commission draft to be put out as bodying forth the District of Columbia Rule, without more, it would grossly misrepresent the actual situation. I do not for a moment suggest that the Commission not include the definition in Rule 49, because I believe it is as thoughtful and well-designed an effort as you are likely to find to use as a model. But it is essential that the commentary also be utilized in order to illustrate the subtlety of the issue.

Multi-disciplinary practice organizations are a radical departure from traditional forms and they give rise to a host of ethical and practical concerns, many of which go to the very core of our jurisprudence. They will also appear, for a time at least, very threatening to the more comfortable forms lawyers and judges are accustomed to dealing with. It is entirely appropriate that any such change be subject to fair criticism and close scrutiny. But my sense is that, lawyers being an inherently fair-minded, if conservative, group, they will not resist MDP’s if they can be accommodated without doing violence to the core values of our profession.

 Nevertheless, this is an area that is subtle and complex. Our Committee worked 2½ years, held innumerable meetings and debated these concepts over and over. There were numerous public hearings. We received comments from over 40 organizations and individuals and all of those comments were seriously considered. The Rule did not go into effect in the District of Columbia until February 1, 1998. Within its first year, it has generated five advisory opinions from the Committee on Unauthorized Practice running to 32 pages of text. And the Rule doesn’t even address multidisciplinary practices.

Consequently, in selecting a "model" definition of this most critical term it is important not only to choose an excellent definition, but to include with that definition the gloss and explanatory comment which refines and clarifies its meaning.

Since the Committee that was responsible for proposing the re-draft of Rule 49 is no longer extant, I write in my private capacity. I will, of course, furnish copies of this comment to all of the former members of the Rule 49 Committee as well as the members of the D.C. Court of Appeals Committee on Unauthorized Practice and the Board of Judges. I would ask, moreover, that you post this comment to the Commission’s website.

Surely, should you have any questions or comments with respect to this submission –- or if there is any way in which I can be of assistance in attempting to elucidate the drafting history of Rule 49 -- please do not hesitate to contact me and I will do whatever I can to be helpful to the Commission.

Respectfully submitted,

James P. Schaller