Loading ...
Sorry, an error occurred while loading the content.

the Feds on legal advice from non-attorneys

Expand Messages
  • one
    UNITED STATES OF AMERICA Federal Trade Commission Washington, DC 20580 Department Of Justice Washington, DC 20530 December 16, 2004 Denise Squillante, Esquire,
    Message 1 of 1 , Sep 3, 2007
    • 0 Attachment
      UNITED STATES
      OF AMERICA

      Federal Trade
      Commission
      Washington, DC 20580

      Department Of Justice
      Washington, DC
      20530

      December 16, 2004

      Denise Squillante, Esquire, Co-Chair
      Lee J. Gartenberg, Esquire, Co-Chair
      Task Force To Define The Practice
      Of Law In Massachusetts
      Massachusetts Bar Association
      20 West Street
      Boston, Massachusetts 02111-1204

      Re: Comments on Draft Proposed Definition
      of the Practice of Law in Massachusetts

      Dear Ms. Squillante, Mr. Gartenberg, and Members of the Task Force:

      We are writing about your recent proposal to define the practice of law
      and enumerate some exceptions. The proposed definition has been
      formulated by the Massachusetts Bar Association's ("MBA") Task
      Force to Define the Practice of Law in Massachusetts. The Department
      of Justice and Federal Trade Commission ("FTC") are concerned that
      the proposal is not in the best interest of consumers, as it would prevent
      non-lawyers from providing services in competition with lawyers in
      situations where there is no clear demonstration that non-lawyer
      services would actually harm consumers. For example, the definition has
      the potential to discourage lay activities such as real estate agents explaining
      certain aspects of a home purchase to consumers, accountants providing
      advice regarding tax filings, and the use of interactive self-help legal
      software to produce simple legal documents. This would likely raise costs
      for consumers and limit their choices.

      2

      Because the proposed rule is likely to restrain competition without
      providing any benefits to consumers, we recommend against adopting
      such a definition of the practice of law. Antitrust laws and competition
      policy generally consider sweeping restrictions on competition harmful
      to consumers and justified only by a showing that the restriction is
      needed to prevent significant consumer injury.

      The Interest and Experience of the U.S. Department
      of Justice and the Federal Trade Commission

      The Justice Department and the FTC are entrusted with enforcing the
      federal antitrust laws. Both agencies work to promote free and
      unfettered competition in all sectors of the American economy. The
      United States Supreme Court has observed that "ultimately competition
      will produce not only lower prices, but also better goods and services.
      'The heart of our national economic policy long has been faith in the
      value of competition.'"(1) Competition benefits consumers of both
      traditional manufacturing industries and professional services.(2)
      Restraining competition, in turn, can force consumers to pay increased
      prices or to accept goods and services of poorer quality.

      The Justice Department and the FTC are concerned about increasing
      efforts to prevent non-lawyers from competing with attorneys in
      providing certain services through the adoption of excessively broad
      unauthorized practice of law rules and opinions by state courts and
      legislatures. As Professor Catherine Lanctot has noted, "Lawyers
      historically have used the unauthorized practice of law statutes to
      protect against perceived incursions by real estate agents, bankers,
      insurance adjusters, and other groups that seemed to be providing legal
      services."(3) In addressing these concerns, the Justice Department and
      the FTC encourage competition through advocacy letters such as this
      one and amicus curiae briefs filed with state supreme courts. Through
      these filings, the FTC and Justice Department have urged the American
      Bar Association and the Indiana State Bar Association, as well as the
      states of Virginia, Rhode Island, Kentucky, North Carolina, Georgia,
      West Virginia, and Ohio, to reject such restrictions on competition
      between lawyers and non-lawyers.(4) We recently submitted a letter in
      support of legislation permitting real estate closing services to be
      performed by non-lawyers in Massachusetts in response to a request by
      Representative Paul Kujawski of the Massachusetts House of
      Representatives.(5) Separately, the Department of Justice has obtained
      injunctions prohibiting bar associations from unreasonably restraining
      competition from non-lawyers, since this conduct violates the antitrust
      laws.(6) Our ongoing efforts in this area have led us to submit these
      comments.

      3

      The MBA Task Force's Proposed Rule Change

      The MBA's Task Force has drafted a proposed definition of the
      practice of law. Section (c) states that:

      A person is presumed to be practicing law when engaging in any of the
      following conduct on behalf of another:


      1. Giving advice or counsel to a person as to his or her legal rights
      or responsibilities or those of others;
      2. Selecting, drafting, reviewing, recording, or completing legal
      documents or agreements that affect the legal rights or
      responsibilities of a person;
      3. Creating, conveying, evaluating, or terminating a person's legal
      interest in real property;
      4. Representing a person before a tribunal, including, but not
      limited to, preparing or filing documents or conducting
      discovery, or appearing before such body; or
      5. Negotiating legal rights or responsibilities on behalf of a
      person.


      Section (d) of the draft lists certain exceptions to the presumption:

      Exceptions: The following are permitted as exceptions to the
      requirements of Paragraph (a):


      1. Serving in a neutral non-adjudicative capacity as a mediator,
      conciliator or facilitator, or in an adjudicative capacity under
      court supervision;
      2. Affording advocacy assistance by non-lawyers through a
      governmental entity, a qualified legal assistance organization,
      or a not-for-profit entity, where no fee is charged, or as
      permitted by G.L.c.209A;
      3. Participating in labor negotiations, arbitrations, or conciliations
      arising under collective bargaining rights or agreements; and
      4. Participating in a regulatory or administrative proceeding
      pursuant to the rules of the agency, where no fee is charged for
      such participation.


      We understand that the Task Force originally submitted its proposal to
      the MBA House of Delegates last Spring and that the House referred
      the proposal back to the Task Force for further review and
      consideration. The Task Force has proposed that (1) the House of
      Delegates adopt the definition, and (2) the House of Delegates
      authorize a petition to the Supreme Judicial Court's Standing Advisory
      Committee on the Rules of Professional Conduct to incorporate the

      4

      proposed definition into the Massachusetts Rules of Professional
      Conduct.

      The MBA is a private organization of lawyers and is not a state agency.
      This letter is addressed to the MBA's proposal to the Supreme Judicial
      Court to change the rules. The letter should not be construed as
      offering any opinion about whether the Justice Department and the
      FTC consider it legal under the Sherman Act, 15 U.S.C. § 1, or the
      Federal Trade Commission Act, 15 U.S.C. § 45, for the Task Force or
      the MBA to define certain activities as the practice of law for any other
      purpose. Nor does the letter address whether the MBA has adopted
      adequate safeguards to ensure that its discussions on this issue do not
      violate the antitrust laws.

      Restrictions on Lawyer/Non-lawyer Competition Should Be
      Examined to Determine Whether They Are in the Public Interest

      The Justice Department and the FTC recognize that there are
      circumstances requiring the knowledge and skill of a person trained in
      the law. Nonetheless, the Justice Department and the FTC believe that
      consumers generally benefit from lawyer-non-lawyer competition in
      the provision of many services.

      Prohibitions on the unauthorized practice of law should serve the
      public interest, as the Massachusetts Supreme Judicial Court
      recognized in Lowell Bar Ass'n v. Loeb.(7) An inquiry into the public
      interest, however, involves not only assessing harm that consumers
      may suffer from allowing non-lawyers to perform certain tasks, but
      also consideration of the benefits that accrue to consumers when
      lawyers and non-lawyers compete.(8) More recently, the Supreme Court
      of New Jersey has explained,

      The question of what constitutes the unauthorized
      practice of law involves more than an academic analysis
      of the function of lawyers, more than a determination of
      what they are uniquely qualified to do. It also involves a
      determination of whether non-lawyers should be
      allowed, in the public interest, to engage in activities
      that may constitute the practice of law.
      . . .

      We determine the ultimate touchstone -- the public
      interest -- through the balancing of the factors involved
      in the case, namely, the risks and benefits to the public

      5

      of allowing or disallowing such activities.(9)

      The MBA Task Force has proposed to define broadly what constitutes
      the practice of law in Massachusetts. This proposed definition is not in
      the public interest because, by unnecessarily limiting competition
      between attorneys and non-attorneys, it will likely cause more harm to
      consumers than it may prevent. Indeed, one senior member of the
      MBA Task Force who helped introduce the proposal to the MBA's
      House of Delegates said, "Business and government is [sic] seeking to
      level the playing field on the theory that consumers will have more
      choice and this will drive prices down for legal services," adding that
      "we are going to be marginalized out of practice."(10) This statement
      suggests that the purpose of the definition is to protect lawyers from
      competition, not to serve the interests of the public.(11)

      The Proposed Rule Would Likely Hurt Massachusetts
      Consumers by Restraining Competition Between Lawyers and Nonlawyers

      The Justice Department and the FTC believe that adopting the
      proposed definition would harm consumers and fail to serve the public
      interest. The broad restrictions on lay practice found in the draft
      definition - and the narrow exceptions found in subsection (d) -
      could restrict and eliminate many forms of lawyer/non-lawyer
      competition. While developing an exhaustive list of all possibly
      affected lay activities may be difficult, some examples include:

      · real estate agents explaining to consumers such things as (i) the
      ramifications of failing to have the home inspection done on
      time, (ii) the meaning of the mortgage contingency clause, (iii)
      the meaning of an easement, (iv) the possible need to lower the
      price of a home because of an unusually restrictive easement, or
      (v) the requirements for lead, smoke detector, and other
      inspections imposed by state law;
      · tenants' associations informing renters of landlords' and tenants'
      legal rights and responsibilities, often in the context of
      resolving a particular landlord-tenant problem;(12)
      · income tax preparers and accountants interpreting federal and
      state tax codes, family law code, and general partnership laws,
      and providing advice to their clients that incorporates this legal
      information;
      · investment bankers and other business planners providing
      advice to their clients that includes information about various
      laws;
      · lay organizations, advocates, and consumer associations that
      provide citizens with information about legal rights and issues

      6

      in competition with attorneys and help them negotiate solutions
      to problems;(13)
      · employees and independent contractors who advise a client or
      employer about what must be done to comply with local zoning
      laws, state labor laws, or safety regulations, and who may
      negotiate contracts on behalf of their employers; and
      · inexpensive electronic software to complete wills, trusts, tax
      forms, and other legal documents, because the applications can
      be interactive and select certain clauses for the documents
      based on answers that consumers give, as well as providing
      some legal information and/or advice about those clauses.(14)

      By Prohibiting Non-lawyer Competition for Many Services,
      the Proposed Rule Would Likely Hurt the Massachusetts
      Public by Raising Prices and Reducing Consumer Choice

      When non-lawyers compete with lawyers to provide services that do
      not require formal legal training, Massachusetts consumers may
      consider all relevant factors in selecting a service provider, such as
      cost, convenience, and the degree of assurance that the necessary
      documents and commitments are sufficient. The use of lay services
      also can reduce costs to consumers.

      By limiting the ability of lay persons to provide such services in
      competition with lawyers, the proposed rule would eliminate or reduce
      many of these benefits, potentially harming Massachusetts consumers
      in several ways. First, the proposal would force consumers who would
      not otherwise hire a lawyer to do so. Businesses and individuals that
      rely on accountants, bankers, advocacy organizations, or other lay
      people for advice and information related to the services that these
      professionals provide arguably would be required to hire attorneys
      instead. Hence, the proposal could increase costs for all consumers who
      might prefer the combination of price, quality, and service that a nonlawyer
      provider offers. For example, although accountants and tax
      preparers do not typically itemize the legal-related functions included
      in their services, it is probable that the cost of retaining an attorney for
      those same services would often be higher. Advice and information
      about the laws from tenants' associations and other individual and
      organizational advocates are often provided at substantially lower cost
      than an attorney would charge. Evidence suggests that the use of lay
      real estate closers in various states provides a lower cost alternative for
      consumers.(15) Will-writing and other legal form-fill software packages
      can be significantly less expensive than hiring an attorney to draft the
      will or other legal document.(16) Further, the proposal may hurt
      Massachusetts consumers by denying them the right to choose a lay
      service provider that offers a combination of services or form of

      7

      service that better meets individual consumer needs. For example,
      consumers may choose to use legal software packages, like the will and
      trust-writing software, because they are relatively easy and convenient
      to use.

      Second, by eliminating competition from non-lawyers, the proposed
      rule would likely increase the price of lawyers' services because the
      availability of alternative, lower-cost lay service providers typically
      restrains the fees that lawyers can charge. Consequently, even
      Massachusetts consumers who would otherwise choose an attorney
      over a lay service provider would likely pay higher prices if the
      proposed rule were adopted. The New Jersey Supreme Court reached
      this same conclusion before ultimately rejecting an opinion that would
      have had the effect of eliminating lay real estate closings. Evidence
      gathered in that proceeding indicated that, in parts of New Jersey where
      lay closings are prevalent, buyers represented by counsel paid on
      average $350 less for closings and sellers represented by counsel paid
      $400 less than in parts where lay closings were not prevalent.(17)
      Likewise, in August 2003, the Kentucky Supreme Court concluded that
      prices for real estate closings for attorneys dropped substantially as a
      result of competition from lay title companies, explaining that the lay
      competitors' presence "encourages attorneys to work more cost-effectively."
      (18)

      Finally, because the unauthorized practice of law is a crime in
      Massachusetts, punishable by a fine or imprisonment,(19) the Task
      Force should act with particular care in seeking to have the Supreme
      Judicial Court define activities as the practice of law. The broad
      definition the MBA has proposed, coupled with such stringent
      punishment, is likely to chill conduct even beyond that which the MBA
      intends to prohibit. For example, some accountants or real estate agents
      may be hesitant to provide clients with non-legal advice for fear of
      being engaged in the unauthorized practice of law. By further limiting
      the areas where non-attorneys are willing to practice, this over-deterrence
      is likely to exacerbate cost increases borne by consumers.

      There Is No Indication that the Proposed Definition
      Is Needed to Prevent Significant Consumer Harm

      Restrictions on competition generally are considered harmful to
      consumers. Accordingly, such restrictions are justified only by a
      showing that they are necessary to prevent significant consumer harm
      and are narrowly drawn to minimize its anticompetitive impact.(20) A
      showing of likely harm is particularly important when, as here, the
      proposed restraint could prevent consumers from using entire classes of
      providers. Without a showing that current practice harms consumers, a

      8

      restraint on competition is likely to hurt Massachusetts consumers by
      raising prices and eliminating their ability to choose among competing
      providers, without providing any countervailing benefits. The Justice
      Department and FTC are unaware of any evidence that allowing nonlawyers
      to provide certain services has harmed consumers so as to
      justify a broad definition of the practice of law that effectively
      precludes non-lawyers from providing many services that benefit
      consumers and serve the public interest.

      First, the agencies have not seen any factual evidence from the Task
      Force Report demonstrating that consumers are actually hurt by the
      availability of lay services. The Task Force Report asserts that

      the chief reason for defining the practice of law is to
      protect the public welfare and ensure that members of
      the public not suffer harm from the activities of persons
      who are not trained to apply the general body and
      philosophy of the law to fact specific matters, who may
      be influenced by factors other than their client's
      interests, or who are not subject to the direct oversight
      and supervision of the Court.(21)

      Yet the Task Force offers no evidence that consumers have "suffer[ed]
      harm" under the current regime.(22) Absent such evidence, it does not
      appear that the proposed definition is needed to "protect the public
      welfare."

      Further, the Task Force's proposal seeks, among other things, to declare
      all real estate conveyancing and closing activity to be the practice of
      law. But, as the Justice Department and FTC observed in our recent
      letter to Massachusetts Representative Paul Kujawski, those that have
      examined the issue have failed to find evidence that allowing nonattorneys
      to perform real estate settlement functions results in
      consumer harm. For example, opponents of allowing lay settlements
      have expressed a concern that buyers and sellers will have questions
      about the transaction and the documents that a lay settlement provider
      cannot or should not answer.(23) However, with regard to the Kentucky
      Bar's assertion that attorneys need to be present at closing to answer
      legal questions, the Kentucky Supreme Court found that "few, if any,
      significant legal questions arise at most residential closings."(24)
      Further, with regard to a list of questions the Kentucky Bar alleged
      were likely to arise at closing, the court noted that "most of the
      witnesses conceded that questions of the nature of those [questions]
      listed . . . are asked, if ever, before the closing, when there is time to
      resolve any problems."(25) Likewise, the New Jersey Supreme Court
      found that the South Jersey practice of using non-attorneys to settle real

      9

      estate transactions "has been conducted without any demonstrable
      harm to sellers or buyers."(26)

      Scholarship also supports the conclusion that consumers face no
      additional risk of harm from turning to lay providers to perform real
      estate settlement services. One study, for example, compared five states
      where lay providers examined title evidence, drafted instruments, and
      facilitated the closing of real estate transactions with five states that
      prohibit lay provision of these settlement services. The author found
      "[t]he only clear conclusion" to be "that the evidence does not
      substantiate the claim that the public bears a sufficient risk from lay
      provision of real estate settlement services to warrant blanket
      prohibition of those services under the auspices of preventing the
      unauthorized practice of law."(27)

      Similarly, scholarship indicates that consumers in other areas likely to
      be affected by the proposed definition face little risk of harm from nonlawyer
      competition. According to Professor Deborah Rhode, studies of
      lay specialists who provide bankruptcy and administrative agency
      hearing representation find that they perform as well as or better than
      lawyers.(28) Likewise, a systematic survey found that complaints about
      unauthorized practice of law in most states did not come from
      consumers (who would be the victims of such conduct) but from
      lawyers, who did not allege any claims of specific injury.(29) As the
      Restatement (Third) of Law Governing Lawyers has explained:

      Several jurisdictions recognize that many such [lawrelated]
      services can be provided by nonlawyers without
      significant risk of incompetent service, that actual
      experience in several states with extensive nonlawyer
      provision of traditional legal services indicates no
      significant risk of harm to consumers of such services,
      that persons in need of legal services may be
      significantly aided in obtaining assistance at a much
      lower price than would be entailed by segregating out a
      portion of a transaction to be handled by a lawyer for a
      fee, and that many persons can ill afford, and most
      persons are at least inconvenienced by, the typically
      higher cost of lawyer services. In addition, traditional
      common-law and statutory consumer-protection
      measures offer significant protection to consumers of
      such nonlawyer services.(30)

      It is also important to note that the proposed definition does not
      guarantee that Massachusetts consumers will have the benefit of
      independent or experienced counsel; it only assures that an attorney,

      10

      rather than a lay person, will be involved in certain transactions. The
      selection, preparation, and completion of legal documents that the rule
      would require an attorney to do could be done by an attorney
      representing the other party. Real estate loan work could be done by
      the lender's lawyer, and the attorney who settles a real estate
      transaction typically will represent the lender as well. In these cases,
      the lawyers involved do not represent the consumer. While they might
      provide some legal explanations to consumers, they could not provide
      true legal advice to a consumer or protect him or her.(31) Nor would
      their presence likely give a consumer the leverage to halt a transaction
      that is against his or her best interest. The same is true of a lawyer who
      represents both lender and buyer. Under Massachusetts law, moreover,
      absent such an attorney-client relationship, a party cannot assert a
      malpractice claim against an attorney.(32) In addition, the only
      requirement in the Task Force definition is that it be a lawyer who
      performs the service; the lawyer need not have any particular expertise
      or experience with the type of law or service.

      Although the intent of the Task Force's proposal may be to ensure that
      consumers receive advice only from highly-trained individuals,
      consumers who receive assistance from individual advocates and
      advocacy organizations may be unable to hire a lawyer and may simply
      go without assistance altogether. A 1996 ABA task force survey, for
      example, concluded that low income (less than $25,000 per year) and
      middle-income (between $25,000 and $60,000 per year) households are
      severely underserved by the legal system.(33) Specifically, the ABA
      found that of the low- and middle-income households in the sample
      that had legal problems, only one-third of low-income and only 40
      percent of middle-income households handled them through the legal
      system. Though cost was a lesser concern for middle-income
      households, both low- and middle-income households listed cost as a
      major reason for avoiding the legal system.(34) Given its very narrow
      exemption for advocacy programs, the proposed definition is likely to
      thwart attempts to provide cost-effective legal services to this
      underserved population.(35)

      For consumers, the services of a licensed lawyer may well be desirable
      in certain situations. A Massachusetts consumer might choose to hire
      an attorney to answer legal questions, provide legal advice, research the
      case law, negotiate settlements, or offer various protections.
      Consumers who hire attorneys may get better service and
      representation than those who do not. This is, however, no reason to
      restrict the ability of non-lawyers to compete, as the proposed Task
      Force definition would.

      Until demonstrated otherwise, accountants, bankers, individual

      11

      advocates and advocacy organizations, real estate brokers, and other
      skilled professionals should remain able to provide advice and legal
      information related to their particular practices without harming the
      public. This already occurs every day in multiple jurisdictions, with
      little or no evidence that consumers would benefit if the same advice
      were provided solely by an attorney.

      Less Restrictive Measures May Protect Consumers

      Absent a clear demonstration not only that lay services have injured
      Massachusetts consumers, but also that less drastic measures cannot
      remedy any perceived problem, the proposed definition should not be
      adopted. Indeed, as a threshold matter, less restrictive alternatives to
      protect consumers are already in place. First, through reputation, the
      marketplace is likely to limit the ability of non-attorneys to provide
      shoddy service or otherwise take advantage of consumers. As the
      Kentucky Supreme Court has recognized, lay providers earn their
      livelihoods from providing these services; they risk those livelihoods if
      they commit acts that hurt consumers.(36) Consequently, they have great
      incentives to act ethically and professionally. Further, just as attorneys
      are subject to statutory, malpractice, and contract claims, lay providers
      are subject to similar claims if their negligence causes consumer
      harm.(37) For example, G.L.c. 93A provides a cause of action to
      consumers and businesses harmed by "unfair or deceptive acts or
      practices in the conduct of any trade or commerce."(38)

      Although we urge the Task Force to refrain from proposing this
      amendment to the current Massachusetts Rules of Professional
      Conduct, if the Task Force considers a change in the rules necessary,
      any change should be narrowly tailored to address demonstrated harms
      and not to prohibit non-lawyer competition that is beneficial to
      consumers and in the public interest. Less restrictive alternatives are
      available to protect consumers. In real estate closings, for example, the
      New Jersey Supreme Court has required written notice to consumers of
      the risks involved in proceeding with a real estate transaction without
      an attorney.(39) This measure permits consumers to make an informed
      choice about whether to use lay closing services.

      Conclusion

      The Task Force's proposed definition of the practice of law will likely
      unnecessarily and unreasonably reduce competition between attorneys
      and non-attorneys. Massachusetts consumers will likely pay higher
      prices and face a smaller range of service options with little or no
      offsetting benefit. The Task Force makes no showing of harm to
      consumers from lay service providers that would justify these

      12

      reductions in competition. As the New Jersey Supreme Court has
      concluded:

      Not every such intrusion by laypersons into legal
      matters disserves the public: this Court does not wear
      public interest blinders when passing on unauthorized
      practice of law questions. We have often found, despite
      the clear involvement of the practice of law, that nonlawyers
      may participate in these activities, basing our
      decisions on the public interest.(40)

      The Justice Department and FTC thank you for this opportunity to
      present our views. We would be pleased to address any questions or
      comments regarding this letter.

      Sincerely yours,

      /s/

      R. Hewitt Pate
      Assistant Attorney General

      /s/

      Jessica N. Butler-Arkow
      Trial Attorney
      United States Department of
      Justice
      Antitrust Division

      By direction of the
      Federal Trade Commission,

      /s/

      Deborah Platt Majoras
      Chairman

      /s/

      Maureen K. Ohlhausen
      Acting Director
      Office of Policy Planning

      13

      FOOTNOTES

      1. Nat'l Soc'y of Prof'l Eng'rs v. United States, 435 U.S. 679, 695
      (1978) (quoting Standard Oil Co. v. FTC, 340 U.S. 231, 248 (1951));accord FTC v. Superior Court Trial Lawyers Ass'n, 493 U.S. 411, 423 (1990).

      2. See, e.g., Nat'l Soc'y of Prof'l Eng'rs, 435 U.S. at 689; Goldfarb v.
      Virginia State Bar, 421 U.S. 773, 787 (1975); see also United States v.
      American Bar Ass'n, 934 F. Supp. 435 (D.D.C. 1996).

      3. Professor Catherine J. Lanctot, Villanova University Law School,
      "Regulating the Provision of Legal Services in Cyberspace," remarks at
      the Federal Trade Commission Public Workshop on Possible
      Anticompetitive Efforts to Restrict Competition on the Internet: Internet
      Legal Services (Oct. 9, 2002), available at
      HYPERLINK "http://www.ftc.gov/opp/ecommerce/anticompetitive/panel/lanctot.pdf"http://www.ftc.gov/opp/ecommerce/anticompetitive/panel/lanctot.pdf.

      4. Letter from the Justice Department and the FTC to Unauthorized
      Practice of Law Committee, Indiana State Bar Ass'n (October 1, 2003);
      letter from the Justice Department and the FTC to Standing Committee
      on the Unlicensed Practice of Law, State Bar of Georgia (Mar. 20,
      2003); letters from the Justice Department to Speaker of the Rhode
      Island House of Representatives and to the President of the Rhode
      Island Senate, et al. (June 30, 2003 and Mar. 28, 2003); letter from the
      Justice Department and the FTC to Task Force on the Model Definition
      of the Practice of Law, American Bar Association (Dec. 20, 2002);
      letter from the Justice Department and the FTC to Speaker of the
      Rhode Island House of Representatives, et al. (Mar. 29, 2002); letter
      from the Justice Department and the FTC to President of the North
      Carolina State Bar (July 11, 2002); letter from the Justice Department
      and the FTC to Ethics Committee of the North Carolina State Bar
      (Dec. 14, 2001); letter from the Justice Department to Board of
      Governors of the Kentucky Bar Association (June 10, 1999 and Sept.
      10, 1997), available at
      http://www.usdoj.gov/atr/public/comments/comments.htm; letter from
      the Justice Department and the FTC to Supreme Court of Virginia
      (Jan. 3, 1997); letter from the Justice Department and the FTC to
      Virginia State Bar (Sept. 20, 1996); Brief Amicus Curiae of the FTC inCleveland Bar Association v. CompManagement, Inc., No. 04-0817
      (filed Aug. 3, 2004), available at
      http://www.ftc.gov/os/2004/08/040803amicusbriefclevbar.pdf; BriefAmicus Curiae of the United States of America and the FTC in Lorrie McMahon v. Advanced Title Services Company of West Virginia, No. 31706 (filed May 25, 2004), available at

      14

      http://www.usdoj.gov/atr/cases/f203700/203790.htm and
      http://www.ftc.gov/be/V040017.pdf; Brief Amicus Curiae of the
      United States of America and the FTC in On Review of ULP Advisory
      Opinion 2003-2 (filed July 28, 2003), available at
      http://www.ftc.gov/os/2003/07/georgiabrief.pdf and
      http://www.usdoj.gov/atr/cases/f201100/201197.htm; Brief Amicus
      Curiae of the United States of America in Support of Movants
      Kentucky Land Title Ass'n et al. in Kentucky Land Title Ass'n v.
      Kentucky Bar Ass'n, No. 2000-SC-000207-KB (Ky., filed Feb. 29,
      2000), available at http://www.usdoj.gov/atr/cases/f4400/4491.htm.
      The letters to the American Bar Association, Indiana, Rhode Island,
      North Carolina, Georgia, and Virginia may be found on the FTC's web
      site, http://www.ftc.gov, and the Department of Justice's website,
      HYPERLINK "http://www.usdoj.gov/atr/public/comments/comments.htm"http://www.usdoj.gov/atr/public/comments/comments.htm.

      5. Letter from the Justice Department and the FTC to Representative
      Paul Kujawski of the Massachusetts House of Representatives (Oct. 6,
      2004).

      6. In United States v. Allen County Bar Association, the Justice
      Department obtained a judgment against a bar association that had
      restrained title insurance companies from competing in the business of
      certifying title. The bar association had adopted a resolution requiring
      lawyers' examinations of title abstracts and had induced banks and
      others to require the lawyers' examinations of their real estate
      transactions. Civ. No. F-79-0042 (N.D. Ind. 1980). In United States v.
      New York County Lawyers Association, the Justice Department
      obtained a court order prohibiting a county bar association from
      restricting the trust and estate services that corporate fiduciaries could
      provide in competition with attorneys. No. 80 Civ. 6129 (S.D.N.Y.
      1981). See also United States v. Coffee County Bar Ass'n, No. 80-112-
      S (M.D. Ala. 1980). In addition, the Justice Department has obtained
      injunctions against other anticompetitive restrictions in professional
      associations' ethical codes and against other anticompetitive activities
      by associations of lawyers. E.g., United States v. American Bar Ass'n,
      934 F. Supp. 435 (D.D.C. 1996), modified, 135 F. Supp. 2d 28 (D.D.C.
      2001); National Soc'y of Prof'l Eng'rs v. United States, 435 U.S 679
      (1978); United States v. American Institute of Architects, 1990-2 Trade
      Cas. (CCH) ¶ 69,256 (D.D.C. 1990); United States v. Soc'y of Authors'
      Representatives, 1982-83 Trade Cas. (CCH) ¶ 65,210 (S.D.N.Y. 1982).

      7. Lowell Bar Ass'n v. Loeb, 52 N.E.2d 27, 31 (Mass. 1943).

      8. See Nat'l Soc'y of Prof'l Eng'rs, 435 U.S. at 689; Goldfarb, 421 U.S.
      at 787.

      15

      9. In re Opinion No. 26 of the Comm. on Unauthorized Practice of
      Law, 654 A.2d 1344, 1345-46 (N.J. 1995).

      10. Massachusetts Bar Association, Delegates Debate Law Practice
      Definition, Other Issues At May Meeting (June 9, 2004), available at
      HYPERLINK "http://www.massbar.org/article.php?c_id=6650"http://www.massbar.org/article.php?c_id=6650.

      11. See Lowell, 52 N.E.2d at 31 (excluding non-attorneys from
      performing certain tasks cannot be justified on the grounds of
      "protection of the bar from competition").

      12. This activity would be exempted under Section (d)(2) of the
      proposed definition only if (1) the tenant receiving advice is deemed to
      be "a person who has obstacles to access to justice;" and (2) the tenants'
      association does not charge a fee and is a government entity, a not-forprofit
      entity, or a "qualified legal assistance organization," defined as:

      a legal aid, public defender, or military assistance office;
      or a bona fide organization that recommends, furnishes
      or pays for legal services to its members or
      beneficiaries, provided the office, service, or
      organization receives no profit from the rendition of
      legal services, is not designed to procure financial
      benefit or legal work for a lawyer as a private
      practitioner, does not infringe on the individual
      member's freedom as a client to challenge the approved
      counsel or to select outside counsel at the client's
      expense, and is not in violation of any applicable law.

      See Comment 4 to Proposed Definition of the Practice of Law in Ex. A
      to Report of the Task Force to Define the Practice of Law and
      Proposed Rule 9.1(i) in Ex. B to Report of the Task Force to Define the
      Practice of Law.

      13. Section d(2) of the proposed definition would exempt lay
      organizations, advocates, and consumer associations only if these
      entities provided advice to institutionalized persons, or to "a person
      who has obstacles to access to justice." See Comment 4 to Proposed
      Definition of the Practice of Law in Ex. A to Report of the Task Force
      to Define the Practice of Law. Further, to qualify for the exception
      under Section d(2), these entities cannot charge a fee and must be
      either a government entity, a not-for-profit entity, or a "qualified legal
      assistance organization."

      14. See Section c(2) of the proposed definition, which would define
      "selecting, drafting . . . or completing legal documents" as the practice

      16

      of law.

      15. See, e.g., Countrywide Home Loans, Inc. v. Kentucky Bar Ass'n,
      113 S.W.3d 105, 120 (Ky. 2003) ("before title companies emerged on
      the scene, [the Kentucky Bar Association's] members' rates for such
      services were significantly higher"). In 1997, Virginia passed a law
      upholding the right of consumers to continue using lay closing
      services. Proponents of lay competition pointed to survey evidence
      suggesting that lay closings in Virginia cost on average more than $150
      less than attorney closings. See letters to the Virginia Supreme Court
      and Virginia State Bar, supra n. 4.

      16. While the bill for an attorney to draft a will and trust can easily run
      into the hundreds of dollars or higher, retail software that permits the
      consumer to draft a simple will is available for less than $100.

      17. See In re Opinion No. 26, 654 A.2d at 1348-49. In 1997, Virginia
      passed a law upholding the right of consumers to continue using lay
      closing services. Proponents of lay competition pointed to survey
      evidence suggesting that lay closings in Virginia cost on average more
      than $150 less than attorney closings. See letters to the Virginia
      Supreme Court and Virginia State Bar, supra n.4.

      18. Countrywide Home Loans, Inc., 113 S.W.3d at 120.

      19. G.L.c. 221 § 41.

      20. Cf. FTC v. Indiana Federation of Dentists, 476 U.S. 447, 459
      (1986) ("Absent some countervailing procompetitive virtue," an
      impediment to "the ordinary give and take of the market place . . .
      cannot be sustained under the Rule of Reason.") (internal quotations
      and citations omitted).

      21. Report at ex. A, p.1.

      22. As noted by the Justice Department and the FTC in a 1997 letter to
      the Virginia Supreme Court, attorneys have been responsible for fraud
      involving Virginia real estate settlements in the 1990s. See Justice
      Department and FTC letter to Virginia Supreme Court (Jan. 3, 1997),supra n.4.

      23. See, e.g., Mass. Conveyancers Ass'n, Inc. v. Colonial Title &
      Escrow Inc, 2001 Mass. Super. LEXIS 431, at *20-21 (Suffolk, June 5,
      2001).

      17

      24. Countrywide Home Loans, Inc., 113 S.W.3d at 119.

      25. Id.

      26. In re Op. No. 26, 654 A.2d at 1359.

      27. Joyce Palomar, The War Between Attorneys and Lay Conveyancers
      - Empirical Evidence Says "Cease Fire!", 31 Conn. L. Rev. 423, 520
      (1999).

      28. Deborah Rhode, Access to Justice: Connecting Principles to
      Practice, 17 Geo. J. Legal Ethics 369, 407-08 (2004). See also Herbert
      M. Kritzer, Legal Advocacy: Lawyers and Non Lawyers at Work 50-51
      (1998) (finding that in unemployment compensation appeals before the
      Wisconsin Labor and Industry Review Commission, "[t]he overall
      pattern does not show any clear differences between the success of
      lawyers and agents").

      29. Id.

      30. Restatement (Third) of Law Governing Lawyers § 4 cmt. c (2000).

      31. See Countrywide Home Loans, Inc., 113 S.W.3d at 122.

      32. See, e.g., McCormack v. Galego, 1996 WL 131209, at *3 (Mass.
      Super. Mar. 4, 1996).

      33. Am. Bar Ass'n Fund for Justice & Ed., Legal Needs & Civil
      Justice: a Survey of Americans (1996). The most common legal needs
      reported by respondents were related to personal finances, consumer
      issues, and housing. For low- and middle-income households, the most
      common response to a legal problem was "handling the situation on
      their own." For low-income households, the second most common
      response was to take no action at all. The second most common
      response for middle-income households was to use the legal system,
      including contacts with lawyers, mediators, arbitrators, or official
      hearing bodies.

      34. Id.

      35. See notes 12-13, supra.

      36. Countrywide Home Loans, Inc., 113 S.W.3d at 121.

      37. Id.

      18

      38. G.L.c. 93A § 2. G.L.c. 93A § 9 provides a cause of action for
      consumers, and G.L.c. 93A § 11 provides a cause of action for
      businesses. A consumer may have additional leverage over an attorney
      who provides shoddy or dishonest service because the consumer can
      refer the attorney to the bar association for misconduct, and an attorney
      also may be less likely to be "judgment proof" to the extent that he or
      she is more likely than a non-attorney to carry malpractice insurance
      against negligence claims. Further, in a negligence case, an attorney
      likely is subject to a higher standard of care than is a lay provider. See
      Fishman v. Brooks, 487 N.E.2d 1377, 1379 (Mass. 1986) (standard of
      care for non-specialist in a legal malpractice suit is "the degree of care
      and skill of the average qualified practitioner"). Nevertheless, there is
      no reason to believe that the standard of care the law requires of a lay
      person is below what is necessary to perform correctly a legal task
      entrusted to him or her, especially in view of the generally simple legal
      tasks most often performed by non-attorneys. Further, it is likely to be
      more costly for a consumer to bring a legal malpractice case against an
      attorney than to bring a negligence case against a lay person. Under
      Massachusetts law, a lawyer's breach of the duty of care must be
      proven by expert testimony, unless "the alleged malpractice is so gross
      or obvious that laymen can rely on their common knowledge to
      recognize or infer negligence." Colucci v. Rosen, Goldberg, Slavet,
      Levenson & Wekstein, P.C., 515 N.E.2d 891, 894 (Mass. App. Ct.
      1987) (internal quotations omitted).

      39. In re Opinion No. 26, 654 A.2d at 1363.

      40. Id. at 1352.

      _____
    Your message has been successfully submitted and would be delivered to recipients shortly.