When it comes to offering legal advice or representing clients in court, licensed attorneys have the monopoly on the practice of law. Litigants are free to draft their own legal documents, file their own pleadings, prosecute or defend their own cases in court. However, it is illegal to do any of these activities for anyone else unless otherwise permitted by law. A person who is engaged in the unauthorized practice of law is subject to injunctions, fines, incarceration. The affected legal matter might even be voided or dismissed.
MCL 600.916(1) provides the following prohibition as to individuals:
- "A person shall not practice law or engage in the law business, shall not in any manner whatsoever lead others to believe that he or she is authorized to practice law or to engage in the law business, and shall not in any manner whatsoever represent or designate himself or herself as an attorney and counselor, attorney at law, or lawyer, unless the person is regularly licensed and authorized to practice law in this state. A person who violates this section is guilty of contempt of the supreme court and of the circuit court of the county in which the violation occurred, and upon conviction is punishable as provided by law. This section does not apply to a person who is duly licensed and authorized to practice law in another state while temporarily in this state and engaged in a particular matter."
A violation of this statute is not a crime and does not result in a criminal conviction, but it can result in either the circuit court or the Michigan Supreme Court punishing the conduct through its powers of contempt. The penalties for contempt include a fine up to $7,500.00, paying the costs or expenses of the proceeding, or up to 93 days in jail until compliance with the law is achieved. MCL 600.1715. The court may also place the offender on probation in the same manner as if he or she was being punished for a misdemeanor conviction. If there was an actual loss or injury to other parties as a result of the unauthorized practice of law, the court can also order civil sanctions to compensate the petitioner for out-of-pocket expenses that include attorney's fees. MCL 600.1721.
MCL 450.681 provides the following prohibition as to corporations and associations:
- "It shall be unlawful for any corporation or voluntary association to practice or appear as an attorney-at-law for any person other than itself in any court in this state or before any judicial body, or to make it a business to practice as an attorney-at-law, for any person other than itself, in any of said courts or to hold itself out to the public as being entitled to practice law, or render or furnish legal services or advice, or to furnish attorneys or counsel or to render legal services of any kind in actions or proceedings of any nature or in any other way or manner, or in any other manner to assume to be entitled to practice law or to assume, use or advertise the title of lawyer or attorney, attorney-at-law, or equivalent terms in any language in such manner as to convey the impression that it is entitled to practice law, or to furnish legal advice, services or counsel, or to advertise that either alone or together with or by or through any person whether a duly and regularly admitted attorney-at-law, or not, it has, owns, conducts or maintains a law office or an office for the practice of law, or for furnishing legal advice, services or counsel. It shall be unlawful further for any corporation or voluntary association to solicit itself or by or through its officers, agents or employees any claim or demand for the purpose of bringing an action thereon or of representing as attorney-at-law, or for furnishing legal advice, services or counsel to a person sued or about to be sued in any action or proceeding or against whom an action or proceeding has been or is about to be brought, or who may be affected by any action or proceeding which has been or may be instituted in any court or before any judicial body, or for the purpose of so representing any person in the pursuit of any civil remedy."
The penalty for violating this statute by a corporation, including "every officer, trustee, director, agent or employee of such corporation or voluntary association who directly or indirectly engages in any of the acts herein prohibited or assists such corporation or voluntary association to do such prohibited acts", is a criminal misdemeanor conviction punishable by up to 6 months in jail or a fine up to $1,000.00, or both.
The statute does not define what "practice law" or engage in the law business" is, so the explanation is left up to common law. In Dressel v Ameribank, 468 Mich 557; 664 NW2d 151 (2003), the Michigan Supreme Court held "that a person engages in the practice of law when he counsels or assists another in matters that require the use of legal discretion and profound legal knowledge". This is a big grey area open to interpretation. For example, a police officer telling a citizen that it is against the law to trespass is not unauthorized practice of law because he or she is merely informing the citizen of what the law says. However, a tax preparer advising a client that he or she should file for bankruptcy may be unauthorized practice of law because he or she is actually counselling someone to take a course of action that requires substantial legal knowledge.
The following are situations that courts have determined to be practicing law or engaging in the law business:
- The appearance on behalf of another person in court, as well as the preparation and management of pleadings and papers incident to legal actions on behalf of clients before judges and courts." Detroit Bar Ass'n v Union Guardian Trust Co., 282 Mich 216, 222; 276 NW 365 (1937).
- The drafting of wills and trusts is the practice of will. The Michigan Supreme Court determined that there is no exception for wills, "[f]irst, because of the profound legal knowledge necessary for one who makes a practice of this work; second, because all of these instruments, before they become effective, must be filed in and administered by a court; and, third, because what we consider the weight of authority so holds." Detroit Bar Ass'n v Union Guardian Trust Co., 282 Mich 216, 223; 276 NW 365 (1937). Companies that sell will and trust kits in the State of Michigan are likely committing UPL and can be prosecuted under MCL 450.681. Attorneys who collaborate or associate with these companies, presumably to sign off on the transaction, may find themselves facing ethical violations for assisting someone else in UPL and representing clients without sufficient minimal contact with them. See State Bar of Michigan Ethical Opinion RI-128.
- There is no exception for legal advice or legal representation other than from licensed Michigan attorneys. Out-of-state attorneys not licensed in the State of Michigan would be committing UPL if they attempted to represent clients in a local court. A non-lawyer partner or shareholder cannot represent the partnership or corporation in court. Paralegals and notary publics are also not licensed to practice law and cannot give legal advice. There is no exception even if someone executes a power of attorney for a non-lawyer to represent their interests in a court of law.
The following are situations that courts have determined to NOT be practicing law or engaging in the law business:
- Drafting "the ordinary run of agreements [used] in the every day activities of the commercial and industrial world." Detroit Bar Ass'n v Union Guardian Trust Co., 282 Mich 216, 229; 276 NW 365 (1937). The practice of law is not intended to include the vast majority of sales contracts, promissory notes, credit agreements or exchanges.
- The preparation of ordinary leases, mortgages and deeds do not involve the practice of law. Ingham Co. Bar A'ssn v Walter Neller Co., 342 Mich 214; 69 NW2d 713 (1955). This is true even when a bank charges a fee for the completion of standard mortgage forms on behalf of their consumers. Dressel v Ameribank, 468 Mich 557; 664 NW2d 151 (2003). "[T]he completion of standard legal forms that are available to the public does not constitute law practice", but the bank would have crossed the line if it did "counsel plaintiffs with regard to the legal validity of the document or the prudence of entering into the transaction." Id.
- An attorney licensed in federal court in another state and provides legal advice regarding a bankruptcy in Michigan is not committing UPL. In re Ernest J. Desilets, 291 F.3d 925 (6th Cir. 2002). However, an attorney that becomes disbarred during bankruptcy proceedings is no longer permitted to appear in court on behalf of his client, although he or she may appear and make argument on issues that affect the former attorney personally such as attorney's fees and costs incurred prior to the disbarment. Ginger v. Cohn, 426 F.2d 1385 (1970).
A special note on notary publics: In many Latin American countries, a notario publico is an individual who has the equivalent of a law license and may represent individuals before the government. While this translates to notary public in English, the differences are vast. American notary publics can take acknowledgments, administer oaths, take depositions and perform other ministerial tasks, but they CANNOT give legal advice and CANNOT represent clients in court. This can create confuse among Hispanic residents in the United States and notary publics need to ensure that UPL is avoided.
Michigan law has empowered the State Bar of Michigan to be the enforcement agency for UPL. Anyone who suspects UPL can make a complaint to the State Bar. If a complaint is substantiated after an investigation, the State Bar will pursue a restraining order and contempt sanctions in court against the violator. Attorneys and judges also have an ethical duty to report UPL they observed to the State Bar.
Unauthorized practice of law is no laughing matter. If you are accused of UPL or you have questions about what does and does not constitute the practice of law, do not hesitate to contact the experienced lawyers at Kershaw, Vititoe & Jedinak PLC today.