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Even if you are a lawyer, it might be scary to be charged with a Unauthorized Practice of Law (UPL) complaint, by a district attorney, a State Attorney General, or the US Attorney General (or their deputies). If you are not an attorney, this would definitely be scary. In California, UPL is a crime, not a civil tort.
Practicing law without a license is a crime, and if noticed, it is often vigorously punished.
An obvious example of UPL would be to represent yourself as a lawyer when you are not. Some less obvious examples of UPL would be (if you are not a lawyer):
1) Representing someone else in court or on a legal matter, except when working as a court-approved interpreter. 2) Working in any legal capacity for someone else.
3) Offering legal advice to anyone.
4) Being a "loan modification specialist" that "represents" people.
5) Enforcing a judgment for someone. If one is not a lawyer or a collection agency, they must own a judgment before they can legally recover it. The test of ownership is a notarized and court-endorsed assignment of judgment.
The work that judgment enforcers do, is somewhat similar to people who buy houses, fix them up, and then sell them. They are not real estate agents or brokers (unless they are licensed as such). Although they can sell their own houses (and must be knowledgeable about the real estate laws), they cannot sell homes for others.
There are a few UPL gray areas, for example in some situations, non-lawyer advocates can represent children and parents.
In most locations in the US, UPL charges come mostly from extreme or outrageous behavior. Here are some situations that are usually not considered UPL:
1) When, by mistake, a process server, sheriff, or court, names you as the attorney of record.
2) If a judge or someone else mistakes you for being an attorney, E.G., they call you "counselor".
3) You send proposed orders or letters to the court.
4) Representing yourself in court.
Anyone can sue anyone for any reason, including no valid reason. Judgment debtors have threatened or tried to sue judgment enforcers for enforcing a judgment they own.
When the enforcer owns the judgment and has complied with all laws, they or their attorney can file a simple demurrer (a claim that there is no legal basis for the lawsuit), and the matter might get dismissed quickly.
Anyone enforcing judgments needs to keep UPL in mind. In some courts, local policies, organizations, or people, consider judgment enforcement to be UPL. When this happens, the right actions to take include looking up your state laws, asking to speak to the judge or a supervisor, and hiring a lawyer to get their advice.
The wrong thing to do when this happens, is to communicate "so and so enforces judgments, so why can't I"?
I know of one judgment enforcer, who the judge tossed out of court, because he was not the original judgment creditor. The enforcer responded by submitted to the court the names, addresses, web sites, and phone numbers for about 50 other enforcers working in their state, asking the court "they do it, so why can't I"?
That was the wrong thing to do on so many levels; and did not work any better than telling a police officer "everyone else was driving as fast as me".
Only a district attorney, State Attorney General, or a US Attorney General's office, can sue for UPL alone. In a civil litigation situation, UPL is nothing more than an "add-on" complaint.
If you really mess up and cause actual damages, someone could add UPL punitive damages under Civil Code 3294, or Business And Professions Code 17200, if there is a cause of action against you already, for negligence or breach of contract.
There can be a few situations where one may allege UPL in a civil cause of action to recover damages. Two examples could be the Unfair Practices Act as defined in Business And Professions Code 17000, or for malice, fraud and oppression, as the causes of action with exemplary or punitive damages, as defined in CCP 3294.
When there is no case law specifically addressing a particular issue, you do not want to be the cause for any new case law.
Most judgment recovery specialist will never have to worry about UPL, as long as they are careful in their businesses, not to cross any lines into the UPL area.
What if you are not a lawyer, and are accused of UPL in your normal judgment business, where you work only on judgments assigned to you? Usually this starts when you get a letter from a Unauthorized Practice of Law Committee, that asks you to provide the names and contact information of everyone to who you have "furnished legal advice" or "rendered legal services". This should be easy, you give them your list of no names and N/A, because you do not provide legal advice or render legal services.
You might want to hire a lawyer to write a letter to them, explaining that you buy judgments, and provide a copy of the assignment and agreement. Conclude by stating that if they have any additional questions, your lawyer and you would be happy to meet with them. That should end it.
Attorneys are not allowed to share fees any fees with non-attorneys. Attorneys can only pay referral fees to other lawyers. An attorney can work for a non-attorney only if the attorney's services are not being offered to the public. A non-attorney cannot own or operate a law firm.
In California, there are many laws and rules that define UPL:
1) Business and Professions (B and P) Code 6125: No person shall practice law in California unless the person is an active member of the State Bar.
2) "Paralegals" cannot give legal advice at all, and must work under the direct supervision of an attorney, and must comply with B and P 6450 And "Consultants" definitely cannot give any kind of legal advice or draft legal documents without being a Legal Document Assistant as per B and P 6400(C and D)(1).
3) California Rules of Professional Conduct, Rule 1-120: Rule 1-120 Assisting, Soliciting, or Inducing Violations A member shall not knowingly assist in, solicit, or induce any violation of these rules or the State Bar Act.
4) California Rules of Professional Conduct, Rule 1-300: Rule 1-300 Unauthorized Practice of Law (A) A member shall not aid any person or entity in the unauthorized practice of law.
5) California Rules of Professional Conduct, Rule 1-310: Rule 1-310 Forming a Partnership With a Non-Lawyer A member shall not form a partnership with a person who is not a lawyer if any of the activities of that partnership consist of the practice of law.
6) Some quotes: As the term is generally understood, the practice of the law is the doing and performing services in a court of justice in any matter depending therein through its various stages and in conformity with the adopted rules of procedure. But in a larger sense it includes legal advice and counsel and the preparation of legal instruments and contracts by which legal rights are secured although such matter may or may not be depending in a court of law. (People v. Merchants Protective Corp. (1922) 189 Cal. 531,535, quoting Eley v. Miller (1893) 7 Ind. App. 529.)
So, California defines law practice as providing "legal advice and legal instrument and contract preparation, whether or not these subjects were rendered in the course of litigation."
Birbower, Montalban, Condo and Frank, P.C . v Superior Court., supra, at 128. Providing legal advice or service is a violation of the State Bar Act if done by an unlicensed person, even if the advice or service does not relate to any matter pending before a court. (Mickel v. Murphy (1957) 147 Cal.App.2d 718, 721.)
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