March 9, 2010 – The Wisconsin Supreme Court has voted unanimously to adopt in principle its draft version of the State Bar of Wisconsin’s 2007 petition regarding the unauthorized practice of law. The vote represents an important step toward adopting a workable definition of the practice of law and a mechanism to enforce that definition.
The March 8 vote followed the court’s second public hearing on the petition. Despite the vote, the justices still have several important and unresolved issues to work through. However, the 7-0 vote in favor of adopting the court’s working draft regarding UPL marks a significant step forward for the proposed rule since the court’s last vote in October 2008, when only four justices voted to continue work on the rule.
Testifying in favor of the petition, State Bar President Doug Kammer responded to Justice David Prosser’s question about a billboard in Wautoma advertising the services of an independent paralegal.
“I want to tell you the harm that is being done and how this violates the public interest,” Kammer said about the services characterized by the billboard.
“This paralegal is free to solicit business any way she wants to without restraint,” explained Kammer. “She’s allowed to comingle her money with her clients’ money. She’s allowed to advise clients to prosecute a course of action in which she has a personal interest. She’s free to have conflicts between her clients without revealing them to her clients without sanction. She’s allowed to take communications that are given to her and repeat them in the grocery story. She’s allowed to take on a job and prosecute it with a lack of diligence.”
“And the problem is that there is not a thing you can do about it,” Kammer concluded. “That’s the problem with our paralegal practicing law. She’s not held to the standards the rest of us are held to.”
Kammer also gave the justices three UPL examples he personally had been asked to help unwind for clients, two cases involving problems with title to a farm – one caused by advice from a banker about avoiding probate and another caused by a warranty deed drafted by a title company – as well as a third case caused by a CPA who gave advice regarding a complicated business formation matter.
“Doing nothing is not an option,” Kammer concluded. “Something has got to be done.”
More work yet to be done
The court will continue to consider several unresolved issues at an as-yet unscheduled meeting, including:
- Whether or not CPAs will be given a blanket exemption from application of the rule, a measure sought by the Wisconsin Institute of CPAs. The State Bar opposes any blanket exemption.
- Another measure sought by CPAs, real estate agents, professional engineers and other professions regulated by the Department of Regulation and Licensing (DRL) that would require UPL complaints against members of their professions to be referred to the applicable DRL licensing board rather than to the entity charged with enforcing the UPL rule. (The State Bar opposes such a measure, and instead favors giving the proposed administrator of the UPL rule the discretion to refer such complaints to DRL when appropriate, preserving the court’s ultimate authority to regulate the practice of law.)
- Various exceptions sought by the insurance and banking industries. The State Bar has agreed to some exceptions sought by these industries but opposes others as unnecessary or too far-reaching.
- Whether to sunset the rule after a period of three to five years, requiring the State Bar to bring another petition before that time to justify the rule and its continued enforcement.
- Who will enforce the rule. The State Bar proposes that a half-time attorney in the Office of Lawyer Regulation enforce the rule, funded by an assessment of approximately $5 per year. Justices appeared concerned about vesting enforcement in OLR but were willing to continue exploring it pending further information.
Other professions seek exemptions but already enjoy similar protections
Testifying in favor of the Wisconsin Institute of CPAs, Madison attorney Michael Vaughan attacked the State Bar’s motives in bringing the UPL petition to the court and attempted to make the case for giving CPAs a blanket exemption from the proposed rule’s application.
“There’s an elephant in the room, and that elephant is the economic self-interest of the people who have proposed this petition,” Vaughan charged. “This does not serve the public interest, it serves the private interest of those who propose it.”
However, after quizzing from the justices, Vaughan conceded that the State Bar was merely seeking what has long been enjoyed by CPAs and other professions regulated by DRL – the ability to protect the public by keeping unqualified individuals from practicing a licensed profession.
Justices appeared skeptical of the exemption proposed by Vaughan and the CPAs.
“The first sentence [of the CPAs’ proposed exemption] to me just says anything that a CPA does is OK,” remarked Justice Pat Roggensack. “To me frankly that seems a little bit broad if we are trying to delineate what are usual and customary for CPA practices.”
Vaughan asserted there were many existing avenues for addressing CPA malpractice.
“I don’t think this proposal by the Bar is aimed at CPA malpractice,” Justice Roggensack responded. “I think it is aimed at trying to have the CPAs not do everything that lawyers do.”
Justice Annette Ziegler also questioned the proposed CPA exemption.
“Do you have rules that define a CPA?” Justice Ziegler asked Vaughan. “What if someone is practicing accounting as a CPA and they don’t have the right to be doing that? Does your group go after those people?”
“What do you do with the people who are interfering with your area of practice or are saying they can do what you do but they can’t?” questioned Justice Ziegler. “Are we embarking on new ground by saying, ‘This is lawyering’ and nobody else can do it?”
Vaughan conceded that the Accounting Examining Board and the DRL currently have the power to enjoin those holding themselves out as CPAs or practicing as CPAs without a license.
“Isn’t that what this is all about?” asked Justice Prosser.
“I think this is exactly what this is all about,” Vaughan admitted.
In addition to the CPAs, the Wisconsin Realtors Association and professional engineers asked the court to require the UPL rule’s proposed administrator to refer any UPL complaints against members of their professions to the respective licensing board at DRL.
“We are unalterably opposed to that,” Tom Zilavy, chair of the State Bar’s UPL Policy Committee, told the justices. “We see no basis for the court ceding any authority to deal with the practice of law to any of the bodies that regulate professions and businesses through the Department of Regulation and Licensing.”
In contrast, Zilavy told the court the State Bar favors giving the administrator of the UPL rule the discretion to refer complaints when appropriate and to consult with the licensing boards on scope-of-practice issues, preserving the court’s exclusive authority to regulate the practice of law.
Attorney Jack Zwieg, a member of the UPL Policy Committee and a staff attorney at DRL, explained that DRL has had the authority for almost 20 years to enjoin unauthorized practice falling under the jurisdiction of the various licensing boards in the department, such as the Wisconsin Real Estate Board.
Representing the Wisconsin Realtors Association, Madison attorney Hannah Renfro expressed concern the State Bar’s petition would disturb the Supreme Court’s holding in State ex rel. Reynolds v. Dinger, 14 Wis.2d 193 (1961). Dinger recognized the ability of licensed real estate agents to use state-approved forms in real estate transactions.
Zilavy laid such concerns to rest in his concluding remarks.
“The Realtors seem to be concerned that what the State Bar is proposing would somehow have a negative impact on the holding in the ruling in the Dinger case,” Zilavy said. “The State Bar has no interest in disturbing Dinger. There is no intention to reverse or go backward on that ruling. I hope these comments give the Realtors some feeling of solace that we are not trying to cause trouble for them in that area.”
State Bar members advocate for public protection
The court’s public hearing on the UPL petition took place after dozens of individual attorneys around Wisconsin wrote directly to the court over the last several months, voicing their concerns about the adverse impact of UPL on consumers. Those attorneys were joined by the boards of six State Bar sections and the members of two State Bar committees in expressing support for the UPL petition.
Over the last two months, a series of weekly articles published on Wisbar.org have detailed recent examples of possible unauthorized practice of law in Wisconsin and urged members of the State Bar of Wisconsin to contact the Wisconsin Supreme Court directly and voice their concerns.
The examples detailed in the articles touched on areas of law as diverse as child support, divorce and family law, employment litigation, real estate law, estate planning, immigrant rights, consumer debt, and even local government law.
The State Bar’s activities regarding Supreme Court rule-making petitions are coordinated by the State Bar’s government relations team. If you have questions regarding the State Bar’s UPL petition, please contact Adam Korbitz, government relations coordinator.
Related articles:
Only the Supreme Court can stop UPL in Wisconsin - March 1, 2010
Internet proves to be fertile ground for UPL in Wisconsin - February 22, 2010
Consumer debt a rich opportunity for possible UPL operations in Wisconsin - February 19, 2010
Local governments around Wisconsin targeted by possible UPL operations - Feb. 10, 2010
Despite notario law, UPL operations targeting immigrants persist in Wisconsin - February 1, 2010
Divorce makes easy target for UPL operators, Wisconsin-based website proves - January 25, 2010
Business guilty of UPL in Ohio now soliciting clients in Wisconsin with impunity - Jan. 20, 2010
Case of independent paralegal raises UPL questions - Jan. 13, 2010
Supreme Court must approve UPL petition to protect public, State Bar members say - Jan. 6, 2010
Board of Governors calls on Supreme Court to approve UPL petition - December 4, 2009
Retired Justice Wilcox on the unauthorized practice of law: 'Let the court know your concerns' – Inside Track, Dec. 2, 2009
Only Lawyers Need a License to Practice Law in Wisconsin – Wisconsin Lawyer, October 2009
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