Discussion:Illegal Practice of Law

If this person gives a bit of legal advice that turns out to be wrong, her E&O will deny coverage for anything that touches on corporate law. Or they will try to deny coverage. Same if she starts drafting wills and trusts. The client ends up in the lurch. Why isn't there a sign on the door that says that?

Can't hurt to report it I suppose.

She is an unlicensed preparer, which is perfectly legal, we don't have anything like CTEC. I have no problem with her suggesting what might be the best form of business taxwise. Perhaps that's all she's doing, but I doubt it.

My problem in general is that lawyers are taught to assume the worst in any endeavor, and to prepare ahead for it. This shows up now a lot with the LLC's and not getting the OA done, or any number of things. The preparer or whatever assumes "Hey, I got two 30 yo people here, in good health, no need to worry about the legal details if one of them dies or whatever." They likely don't think about this at all. And one of them gets hit by a bus the next week with a wife and two youngs kids, and now has the prospect of extra expense if certain things have to be litigated with the other partner. This is just an example of what I'm getting at.

I was very bluntly advised of this years ago by my sister who is an attorney. There is nothing illegal about going to a Department of State website, downloading the incorporation application papers, completing them for a client, and having the client sign, pay any required fee and mailing it. Then once the corporate, LLC or partnership name is approved, purchase from a Blumberg, Excelsior, or other commercial supplier a corporate, partnership, or LLC kit.

It's only if the person actually prepares a contract or other type agreement where advice and judgement is involved does it infer "practicing law without a license".

I see nothing wrong with this business so long as the principal is not engaging in services for which an attorney is required.

Simply because an H&RB opens an office locally doesn't mean they are doing anything illegal - if they are only preparing tax returns - even though unlicensed. At the present time it's not required to have a license to prepare tax returns (except for jurisdictions that specifically require it). If they were providing bookkeeping services, financial statement preparation or advising clients in areas only a licensed practitioner can provide - then that is a reportable offense. And that gets reported to the State Education Department - Licensing Bureau of the occupation that is being illegally practiced.

Uncle Sam, did you look at the link Crow provided. In the case of GA, it seems pretty clear how the law would be interpreted there with respect to filling out the corporate documents.

She'll either dig herself a hole, or she'll only fill in the forms.

To be safe, I don't do any incorporation work whatsoever.

That's exactly what I was trying to point out in my post - that you can't just automatically assume illegal activity unless you've got concrete evidence to substantiate it. About 8 years ago, I saw a lawn sign on the front lawn in the neighborhood where I once had an office that read "XXXXX XXXXX Certified Tax Practitioner". There is no such official title. It's a credential that at one time was granted by a membership organization once the requirements were met to obtain it. I wrote to a member of the State Board of Accountancy about it and was advised that so long as the word "Accountant" didn't appear anywhere on the sign - there wasn't anything that could be done to prevent it.

So if Crow is so upset over this sign and worried that someone is playing on his turf, he should go through the act of actually testing that lady to see just how far she goes.

I have no idea where this man was located, but knew from his lack of accent he was not in Bangalore or Manila. The point I make is that thru use of newsprint (in those days) or the Web today, what is to prevent these services from crossing state lines?

Personally, I don't have too much of a problem with these sorts of businesses. The way I figure it, if the client wants preparation of important legal documents with serious consequences (a Will or a Trust) or wants to form a business and is too penny-wise and pound-foolish to consult with me, then they're probably not the type of client I want to work with anyways. No offense intended to those of you who've used these types of services.

However, it's clear that the potential victims here are the customers and not us attorneys. So, if states really desire to protect the public, then these shops should be shut down.

I also don't like the idea that in some states, a real estate agent can represent the buyer/seller w/o an attorney present. I've seen some very messy closings. The real estate agent wants the sale to go through at the highest possible price because the commission depends upon it. In some areas they can represent both parties to the transaction. They are not a disinterested 3rd party. The atty gets a fee for the closing and can understand the leagalese in all the documents.

I sold two properties in Pennsylvania without a lawyer; I had one man review the papers both times but he did not need to come to the settlement.

On the forming of a corporation or preparation of any business agreement, I'd prefer to have an attorney do such. I am leery of preparing a PA-100 application for clients.