March 2002

Regulating the Unauthorized Practice of Law

by Dale L. Carlisle, WSBA President

The Practice of Law Board (POLB) will begin its operations this year. The formation of this board is under General Rule (GR)25, and the definition of the practice of law under which the board will operate is GR24.

In discussing this board with WSBA members, one of the first questions I am asked is why it exists. Its formation was proposed by the WSBA to the Supreme Court, which adopted the above-named rules. The first objective was to define the practice of law, to help recognize those areas which constitute the unauthorized practice of law. To identify problems that place consumers at risk, the POLB will receive and investigate complaints. The rule also lists 10 existing practice areas (such as lobbying and distributing forms) that are exempt. In the future the board may be asked to determine whether certain actions fall within one of the exemptions.

If a matter is investigated and a conclusion reached by the board that a violation has occurred, it is likely a county prosecutor will proceed under the unauthorized practice statute. The statute also provides a definition for use, and a method for investigating complaints of a violation.

The second and perhaps more important function of the POLB is to identify areas where, under the definition, the service performed may constitute the unlicensed practice of law, but it is a benefit to the consumer. This function will be of particular benefit to low-income clients, in that a licensing or regulatory procedure will allow the activity to continue — keeping in place those procedures that provide ongoing protection to the consumers benefited by the service.

The Supreme Court licensing of Licensed Practice Officers (LPOs) provides an example of identifying and regulating a service that is beneficial to consumers. As some of you may recall, this action arose from a Supreme Court decision that held that the completion of forms by an escrow officer constituted the unauthorized practice of law. A court rule was adopted to create a regulatory and licensing procedure, and the Supreme Court assumed administration of the licensing of LPOs. Currently there are approximately 1,200 escrow officers licensed as LPOs in Washington. In adopting this new rule and establishing the POLB, we will look to the licensing of escrow officers as an example the board may emulate.

As part of GR25, the Supreme Court has designated the WSBA to administratively assist the POLB in its functions. The Court will also transfer the licensing of LPOs to the WSBA, effective July 1, 2002. The WSBA will assist the Limited Practice Officers Board, which currently oversees this escrow-officer licensing function. Currently, this function is revenue-neutral, as the fees cover the costs. The expectation is that the result achieved by the licensing of LPOs can be achieved by the POLB.

This effort will not be without substantial challenges. For example, CPA firms believe they perform work that falls within the definition of the unauthorized practice of law, but it is work they have done for many years. Generally, they believe they should be excluded from the rule in their traditional area of practice. Currently, the WSBA has no specific method of dealing with this issue.

It will take several years to achieve the objectives of these rules. Our expectations are high, and we expect to exceed our goals in the area of consumer protection. Also, the POLB will provide assistance to our access-to-justice objectives by considering the implementation of POLB regulatory procedures where some limited-practice functions may be achieved more efficiently and more economically by nonlawyers.

For additional information, including links to GR24 and GR25, see the WSBA Web site at www.wsba.org/info/lpo.htm.