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July 1, 2003

Do Arizona’s New UPL Rules Protect Consumers or Lawyers?

Filed under: pre-06-2006 — David Giacalone @ 12:49 pm

A new, detailed definition of the “practice of law” goes into effect today (July 1, 2003) in Arizona, along with a complex Certified Code for Legal Document Preparers. .

  • It’s hard to tell if the Arizona State Bar has managed to define away the competition, regulate it into submission, co-opt parts of it with cartel protection, or truly protect consumers.
  • Orwell Alert: the State Bar recently changed the name of its Committee on the Unauthorized Practice of Law to “The Consumer Protection Committee,” and called the new UPL rule the Consumer Protection Rule.

Starting today, the “practice of law” in Arizona will include (among other activities), “providing legal advice or services to or for another by:

  1. preparing any document in any medium intended to affect or secure legal rights for a specific person or entity;
  2. “preparing any document through any medium for filing in any court, administrative proceeding, or other formal dispute resolution process such as arbitration or mediation;
  3. negotiating legal rights or responsibilities for a specific person or entity”

To avoid engaging in the unauthorized practice of law, any legal document preparer who is not a member of the bar or supervised by one must become a Certified Legal Document Preparer. A non-lawyer mediator cannot prepare any resulting documents without being a Certified Legal Document Preparer. In addition, you can only call yourself a “paralegal” if you are supervised by a member of the bar (thus, no independent paralegals allowed). Also, the State Bar, instead of the Attorney General, will prosecute cases for UPL in the superior court in the county in which the person allegedly engaged in UPL.
The Arizona Supreme Court has provided a Brief Overview and Fact Sheet of the new rules. It explains, with regard to document preparers, that:

“A new provision permits “certified legal document preparers” to prepare legal documents but does not permit them to provide legal advice or to otherwise engage in the practice of law.
“The Arizona Supreme Court will regulate certified legal document preparers, whose dues will fund the regulation system.
“The regulatory system for certified legal document preparers will:

a. limit preparation of documents for which the preparer is competent,
b. require a written disclaimer to the consumer stating that they are not a lawyer,
c. require educational and experience critera,
d. require an examination for admission,
e. mandate continuing education courses, and
f. establish a code of ethics.”

I’m skeptical that the problem of consumer injury caused by the unauthorized practice of law is significant at all, much less that it’s big enough to warrant deputizing the court/bar bureaucracy to oversee “legal document preparers” (basically, the same bureaucracy that currently “overlooks” much lawyer impropriety?). I’ve seen too much incompetence and lack of diligence by lawyers to think that the solution here is more credentialling and supervision of nonlawyer competitors — especially if it means that fewer alternative providers will be available to consumers and that fewer resources might go to policing lawyers. Of course, I do believe that the Bar will see that nonlawyers are monitoried far more strictly than are lawyers.
Consumers aren’t stupid and, when well-informed, can usually protect themselves. The Arizona Supreme Court might better serve consumers by (1) keeping nonlawyers from posing as lawyers; (2) giving consumers information to use in deciding what level of legal assistance they need and how to choose a provider of law-related services; and (3) helping truly injured consumers to assert their rights for redress through the State Attorney General’s office.
The legal reform group HALT submitted comments on the proposed rules last October. Both a press release (dated Oct. 1, 2002) and the full text are available online.
In the press release, which was titled Arizona Lawyers Try to Corner Market for Legal Services: State Bar Seeks to Curb Non-Lawyer Competition, HALT Senior Counsel Thomas M. Gordon is quoted saying: “One of the main reasons the average consumer cannot afford legal help is that archaic rules against the ‘unauthorized practice of law’ stifle competition and preserve a lawyers’ monopoly on providing legal services.”
Some thought-provoking points were made in HALT’s presentation, and I quote them here (emphases added) for your consideration, hoping you’ll want to read the full document:

“Consumers have a continuum of legal needs, and should therefore have access to a continuum of legal services, including traditional representation, a variety of nontraditional alternatives to lawyer representation, and various mixes of the two. “


Fifty percent [of the client population] can be served through very low-cost interventions such as self-help legal publications and software, self-help legal videos, cable-access television, and multi-lingual brochures. Thirty-five percent need low-cost intervention involving a trained nonlawyer (for example, a domestic violence shelter worker or a legal forms preparer). Ten percent require some help from an attorney, but the legal representation involved is low-cost and may be supplemented with paralegal or non-lawyer support. Only five-percent require full-range, high-cost lawyer representation to address their more complex legal needs. [cite omitted]

“The proposed rules are at best an overreaction to a minor problem, and at worst are blatant protectionism. . . . The State Bar of Arizona, in its Petition . . . refers (without documentation) to four hundred complaints that it received last year . . . According to a national study, only two percent of complaints against non-lawyer practice involved an allegation of injury by a consumer; the rest are brought by competing lawyers, unauthorized practice committees, state bar associations, and others [cite omitted].

“Whether the number of legitimate complaints against lay service providers for unauthorized practice is eight or four hundred, this number needs to be put in perspective. For example, in 2000, the State Bar of Arizona received 2,524 complaints against its members alleging various infractions. [cite omitted] As a consumer problem, unauthorized practice pales in comparison to the problems lawyers cause their clients. No matter what the extent of the harm caused by unauthorized practice, the proposed Rules reach too far in trying to prevent it.

“All of these proposed rules combine to make it nearly impossible for consumers to use the services of independent paralegals for simple tasks in the civil justice system.
“While the Bar claims to have the best interests of consumers in mind in proposing these rules, it is members of the Bar that stand to profit from their implementation. A cynic might view these proposed rule changes as an attempt by the Bar to further protect its monopoly over the provision of legal services.

“Arizona has been in the forefront of providing access to the civil justice system, both through its support of lay legal service providers and its assistance to pro se litigants in Maricopa County. The proposed rules would be a giant step backwards from the state’s position as one of the leaders in legal access.”

Two Cents from Jackie Cliente: HALT’s Tom Gordon has said that “HALT proposes a single sentence that would protect consumers against impostors posing as lawyers: ‘The unauthorized practice of law is saying you are a lawyer when you are not.'” Utah came very close to that minimalist approach in a new UPL rule (Utah Code Sec. 78-9-102) that will go into effect May, 3, 2004. See the March 2003 issue of Ethics and Lawyering Today.

In December ’02, the FTC & DOJ presented joint comments (12/20/02) to the ABA Task Force on the Model Definition of the Practice of Law . The federal antitrust agencies concluded that the proposed definition was overly broad and would injure consumers and competition. The agencies urged the Task Force to permit lay competition that is in the public interest and craft an appropriate definition after careful review of the harms and benefits of lay participation in providing law-related services.

In March ’03, the Task Force issued a Recommendation and Report stating that each state should adopt its own definition of the practice of law, rather than having the ABA adopt a Model Definition. The Recommendation further resolved:

  • “that each jurisdiction’s definition should include the basic premise that the practice of law is the application of legal principles and judgment to the circumstances or objectives of another person or entity.”
  • “that each jurisdiction should determine who may provide services that are included within the jurisdiction’s definition of the practice of law and under what circumstances, based upon potential harm and benefit to the public. The determination should include consideration of minimum qualifications, competence and accountability.”

The ABA Task Force compiled a pdf document with each State’s Definition of the Practice of Law.

update: See A Cogent Dissent to the ABA’s Approach to Defining the Practice of Law; and “carolyn and monica join the UPL posse.”

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