James Towery

Taking steps to crack down on UPL

For the past year, President Jim Towery has answered questions in this column from members of the bar. Next month, the Bar Journal will present Towery's year-end report. This column will resume in November with questions to the new bar president, Tom Stolpman. Address your questions to: Ask the President, California Bar Journal, 555 Franklin St., San Francisco 94102-4498.

This month's question and Towery's response:

QUESTION: Why doesn't the State Bar do more to prevent trust mills, typing services and unlicensed paralegals from practicing law without a license? These folks are doing legal work in family law, bankruptcy, immigration, estate planning and many other areas. Why doesn't the State Bar shut them down?

TOWERY: I know this is a source of major frustration to many California lawyers. As I traveled around the state on the plebiscite campaign trail, it was one of the most common questions I heard.

The State Bar does have some structural limitations as to what it can do to prevent the "unauthorized practice of law" (UPL) activities. Despite those limitations, the State Bar has in fact made a priority of enhancing its UPL activities.

There have been several recent developments, which will be described later in this article, that demonstrate the bar's commitment to stepping up its UPL activities.

First, a word about the structural limitations. The State Bar has statutory authority to discipline lawyers. By definition, UPL problems involve conduct by non-lawyers.

No authority

The State Bar has no authority to discipline non-lawyers involved in UPL. Historically, UPL is enforced primarily through the criminal statutes and is thus the province of district attorneys in each county.

The State Bar has no direct authority to enforce the criminal UPL statutes. The bar always has cooperated with district attorneys' offices, primarily by lending the aid of bar investigators who are often more familiar with UPL problems than district attorney investigators.

Of course, the primary focus of State Bar investigators has been, and should continue to be, the investigation of attorney disciplinary cases.

And that signifies one of the real problems of UPL enforcement: it can be exceedingly expensive.

The State Bar of Florida recently undertook a $1 million campaign to attack UPL problems. In California, the State Bar is at a juncture where it is attempting to reduce expenditures (and consequently dues), rather than adding expenditures.

Nonetheless, the current Board of Governors has resolved that UPL enforcement should be given a higher profile. This is in part simply a reflection of the values of the current board (and president).

It is also a response to the continual message we have heard from the membership, advocating more UPL enforcement. In response, the staff of the State Bar has initiated several dramatic new initiatives regarding UPL.

Civil lawsuit

The most significant of these new initiatives was the July 18 filing of a civil lawsuit in Los Angeles Superior Court of an action against an alleged trust mill, the Alliance for Mature Americans and numerous individual defendants.

In this action, the State Bar is co-counsel with the office of the state attorney general.

The action is primarily for unfair competition under Business & Professions Code §17200, as well as other alleged statutory violations.

The complaint also includes a civil count for UPL, and that is the reason for which the State Bar has joined as counsel.

I should mention that I recently had the opportunity to discuss the filing of this lawsuit with the executive committee of the State Bar section on estates and trusts.

This section has long been advocating that such an action be undertaken, and the section is quite gratified that the bar has heeded that advice.

Further action

Another example of State Bar action occurred in May in San Diego. In that instance, the bar joined forces with the San Diego District Attorney in shutting down an uncertified legal referral service being run by a non-lawyer. That individual is being criminally prosecuted.

The bar sought and received court authority under Business & Professions Code §6180 to assume jurisdiction of client files in this individual's possession.

It was a classic example of cooperation between prosecutors and the State Bar to assure public protection.

Beyond these specific examples, the State Bar has recognized that seeking enhanced statutory authority will aid in UPL enforcement. At the July board meeting, the legal and discipline committees jointly sent out for public comment, with a deadline date of Sept. 3, approximately a dozen proposed statutory changes.

Enhanced penalties

These proposals would provide for enhanced penalties in UPL enforcement actions, allow for recovery of costs and otherwise give the State Bar greater discretion and authority in UPL cases. Following the September meeting of the board, there will be an opportunity for additional comment from all interested parties before this goes to the board's committee on courts and legislation in the fall.

Of course, increased State Bar UPL activity is opposed by many so-called consumer advocates. These people argue that the bar is simply trying to maintain the monopoly of lawyers, protect the economic interests of lawyers and prevent access to courts by consumers who cannot afford lawyers.

Unjust criticism

If these truly were the motivations of the State Bar to enhance UPL enforcement, the criticisms would be just. However, there is a quite different and very valid motivation for the State Bar to increase its UPL enforcement: consumer protection, not lawyer protection.

Our concerns are the lack of any standards or ethical guidelines for nonlawyer practitioners and the absence of accountability or enforcement mechanisms when things go wrong due to lack of competence.

For example, trust mill salespersons give legal advice on estate planning, yet are not qualified to discuss the limitations, requirements and ramifications of the trust documents they peddle.

Therein lies the legitimate interest of the State Bar in UPL.