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Court sets limits of practice

After more than six years of drafting, negotiating and re-drafting, attorneys in Wisconsin finally have a definition of the practice of law.

On June 1, the state Supreme Court unanimously adopted an amended version of the State Bar of Wisconsin’s petition which details the rights of a licensed attorney to practice law, as well as more than 20 exemptions for other professionals, such as real estate and insurance agents.

While bar leaders called the crafting of the definition a “step in the right direction” to protect consumers from people who illegally provide legal services, they questioned whether the new rule will be adequately enforced.

Rather than designate an entity to specifically handle complaints arising from the unauthorized practice of law, the Supreme Court opted to rely on existing law for enforcement.

The justices unanimously adopted language which simply states that the rule “may be enforced in any action authorized by law.”

Unauthorized Practice of Law Committee chair Thomas D. Zilavy expressed concern about the effectiveness of current law, primarily Wis. Stat. 757.30 and Wis. Stat. 100.18, on curbing offenses.

“I think whether or not is has the teeth will be determined in the future by how it’s enforced and applied,” he said. “We still have some reservations about the enforcement mechanism.”

Wis. Stat. 100.18 allows for potential civil remedies for misrepresentation claims, including the unauthorized practice of law, while Wis. Stat. 757.30 permits criminal prosecution of individuals who engage in the unauthorized practice of law.

Criminal offenses are punishable by a fine of up to $500, one year in prison, or both.

Some of the most egregious examples cited as examples of the unauthorized practice of law include so-called “notarios,” who offer legal-related services to primarily Spanish-speaking immigrants, and title insurance companies that draft warranty deeds for home closings.

The court voted against citing the specific statutes as enforcement options in a comment, but Justice Ann Walsh Bradley said combined with a definition of the practice of law, the existing laws will be more useful in prosecuting unauthorized practice of law claims.

“In theory what we are doing now is defining the practice of law so it is a tool for those who are engaged in enforcement whether it be criminal law or civil law,” she said. “They now have something of substance upon which they can sue.”

At least in the short-term, Justice David T. Prosser supported the concept of having state and local prosecutors pursue unauthorized practice of law claims.

Once an effective date is set, the court plans to revisit the rule in five years.

“What more do we need?” Prosser said. “At least until we have some experience.”

Zilavy conceded the link between a perpetrator of the unauthorized practice of law and the concept of misrepresentation and said complaints could certainly be made under the statutes referenced by the court.

“It’s conceivable that the State Bar could make a complaint about some activities it observed,” he said.

But Zilavy also noted that of the 25 other states that have adopted similar rules or statutes, many also implemented systems of enforcement to specifically address the problem.

Initially, the bar proposed the Office of Lawyer Regulation provide a half-time staff member to investigate complaints and recommend sanctions.

A modest attorney assessment would have funded the position, but in May the bar amended its petition to request that the Supreme Court establish a “legal services office of consumer protection” to handle enforcement.

The justices were reluctant to have the enforcement agency be an arm of the court and the State Bar argued that housing it within its organization would be viewed as a conflict of interests.

Had a separate entity to police the unauthorized practice of law been established, several professional groups requested that any complaints be referred to the specific agency responsible for sanctioning those individuals.

Andrew Franken, President of the Wisconsin Insurance Alliance, said the court took an “intriguing” approach to enforcement, but added that the protections included in the rule would have provided safety for insurance companies and agents.

“We too support the State Bar’s effort to get at people who are trying to practice without a license,” he said. “But we didn’t want any inadvertent spillover into what we would consider day-to-day operations of the insurance industry.”

Real estate agents, certified public accountants and bankers were also among the professions which sought and received exemptions in the rule for longstanding business practices, such as document drafting, which could have been construed as practicing law.

Wisconsin Realtors Association attorney Cori M. Lamont supported the outcome, as did attorney John E. Knight, who serves as general counsel to the Wisconsin Banker’s Association.

“I never felt that the banking industry was being targeted by this rule,” Knight said.

The goal of the petition has always been to deter those who willfully engage in the unauthorized practice of law and prey on the public, noted Zilavy, and not to infringe on the current practices of those licensed professionals who follow the rules.

Zilavy said ultimately, the outcome was only partially satisfying and he did not rule out the possibility that the State Bar may approach the court in the future on the topic, depending on the effectiveness of the enforcement.

“We still have to determine whether or not the way the court thinks this rule can be enforced in the long run is in the best interests of the consumers,” he said. “If we feel additional contact needs to be made with the court about how the rule is being applied and how things are working, we will do that.”

Jack Zemlicka can be reached at jack.zemlicka@wislawjournal.com.

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