Practice Makes Perfect

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The definition of what constitutes the unauthorized practice of law by professionals not licensed to do so will not be found in Webster’s Dictionary.

State Bar of Wisconsin leaders hope it will appear in a Wisconsin Supreme Court rule. Justices reviewed the State Bar’s petition to adopt SCR 23 on Dec. 10.

During a public hearing prior to that discussion, representatives of banking, accounting and insurance groups opposed changes they said protected lawyers’ practices rather than consumers.

Though the Court expressed interest in adopting a rule defining the practice of law and creating a system to administer the rule, endorsement could be contingent on several recommendations made by the justices.

Chief Justice Shirley S. Abrahamson outlined jurisdictional and structural concerns raised by the petition, as well as a need for more collaboration between the Bar and opponents of the rule.

“I get the sense that the Court is not willing to undertake adoption of the petition as it stands,” said Abrahamson during the open administrative conference which followed the presentation of the petition.

Open to Opposition

Representatives from more than a dozen organizations including the Wisconsin Bankers Association (WBA), Wisconsin Institute of Certified Public Accountants (WICPA) and The American Insurance Association (AIA) either appeared or submitted document opposing the rule.

While each organization cited field-specific objections, the general consensus was that the proposed rule would create unnecessary conflicts with respective regulatory boards and increase costs to accountants, engineers, architects, bankers and dozens of other non-legal professionals.

“The proposed petition intrudes on routine business practices,” said Michael R. Vaughan, counsel for the WICPA. “Is this proposal consumer protection, or lawyer protection? We think the latter.”

State Bar President, Thomas J. Basting, Sr. said the goal of the proposed rule is not to infringe on current practices of those licensed professionals who follow the rules, but to dissuade those people who represent themselves as legal professionals.

Basting specifically cited unqualified people, known as “notarios,” who prey on immigrants, as well as trust mills and other outfits offering civil legal guidance, as primary targets of the petition.

“Many of the complaints we received were from those areas and those are the people who we want to protect the public from,” said Basting.

But Justice Ann Walsh Bradley questioned whether the petition was too broad in its conception and pointed to a recently adopted rule in Nebraska, which details exemptions for specific organizations.

“It’s seems there is a gray area and what we have should be narrowly tailored to fit the people the public is intended to be protected from,” said Bradley. “If we are talking about those organizations not practicing law, then the train has already left the station. How do we refine what is important now?”

The State Bar recently inserted a revised exemption for real estate agents, CPA’s and other professionals to alleviate regulatory overlap between the Wisconsin Department of Regulation and Licensing and an agency designated by the Supreme Court to police the unauthorized practice of law.

Representatives still said the exemptions are too vague and that Chapters 440-480 of state regulatory statutes sufficiently patrol their professions, but a compromise could be possible if individual organizations were allowed to offer more specific exemptions.

Basting was receptive to the idea and the justices agreed that organizations in opposition of the petition should draft exemptions which would then be considered for inclusion.

Enforcement Issues

A second sticking point concerned which arm of the judiciary should be responsible for enforcing an unauthorized practice of law rule.

The petition recommended a half-time position be created inside the Office of Lawyer Regulation (OLR) at an estimated cost of $60,000 to $70,000 for the first year. Basting said funding would come from a $4 to $5 assessment on the nearly 22,000 attorneys licensed in the state.

But according to research of states with similar rules in place, OLR Director Keith Sellen estimated a need for one lawyer and one assistant position at an annual cost of more than $150,000. The annual lawyer assessment would increase by approximately $10.

Sellen took no position on whether a system should be created to regulate the unauthorized practice of law, but Ann U. Smith, chairman of the Board of Administrative Oversight, which governs the OLR, spoke in opposition to placing the burden of enforcement on OLR.

“You would have a situation of assigning additional duties to people, who already regulate lawyers, to include non-lawyers,” said Smith.

Basting said Smith’s statements “came out of the blue,” and he had no indication that the Board was opposed to the idea of placing the enforcement branch in OLR.

Comments from Smith left the Supreme Court to contemplate alternatives, which included whether the State Bar should be responsible for enforcement and associated costs, or if a commission should be established. Abrahamson suggested that either case would likely be more expensive than an addition to OLR.

“The rule in Nebraska said that you, as the state bar, should enforce this rule and bring the injunctions to stop actions, so I wonder if the same can be done here,” said Bradley.

Basting said potential ethical conflicts could arise should the State Bar act as the enforcer of the rule and that it simply was not “good policy.”

The Court did not indicate when it plans to revisit the petition once the additional information is included.