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UPL Advisory Opinions
UPL Advisory Opinion No. 2005-1
UPL Advisory Opinion No. 2004-1
UPL Advisory Opinion No. 2003-2
UPL Advisory Opinion No. 2003-1
UPL Advisory Opinion No. 2002-1
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UPL Advisory Opinion No. 2005-1
Issued by the Standing Committee on the Unlicensed Practice of Law on June 10, 2005. Note: This opinion is only an interpretation of the law, and does not constitute final action by the Supreme Court of Georgia. Unless the Court grants review under Bar Rule 14-9.1(g), this opinion shall be binding only on the Standing Committee on the Unlicensed Practice of Law, the State Bar of Georgia, and the petitioner, and not on the Supreme Court of Georgia, which shall treat the opinion as persuasive authority only.
QUESTION PRESENTED
Does a nonlawyer engage in the unlicensed practice of law when he prepares, for another and for remuneration, articles of incorporation, bylaws or other documents relating to the establishment of a corporation?
SUMMARY ANSWER
Yes. The existence of a corporation depends entirely upon the law, and the documents that bring it into being secure legal rights. Consequently, the preparation of those documents involves the practice of law. A nonlawyer who prepares such documents for another in exchange for a fee engages in the unlicensed practice of law.
OPINION
A corporation is a legal person, having "the same powers as an individual to do all things necessary or convenient to carry out its business and affairs...." O.C.G.A. §14-2-302. When properly formed and maintained, its existence is legally independent from those who created and own it. This independent status relative to the law is the raison d'être of the corporation, as the entity can insulate its shareholders, directors and officers from certain forms of liability. See, e.g., O.C.G.A. §§14-2-622(b), 14-2-830(d), and 14-2-842(d). The corporation owes its existence entirely to the operation of the law, as "[a] corporation, considered in itself... is, in fact, a myth, a fiction, and has no existence but in the imagination of the law." Loudon v. Coleman, 59 Ga. 653, 655 (1877). Since a corporation's existence is utterly tied to and dependent upon the law, the documents that bring it into being and define its parameters are documents that serve to secure legal rights.
The practice of law in Georgia is defined, in part, as "[t]he preparation of legal instruments of all kinds whereby a legal right is secured" and "[a]ny action taken for others in any matter connected with the law." O.C.G.A. §§15-19-50(3) and 15-19-50(6). See also Huber v. State, 234 Ga. 357, 358 (1975). The documents referenced in the question above are designed to bring a corporation into existence. Once they are filed with the Georgia Secretary of State, they confer rights and impose obligations under applicable state and federal law. In view of the foregoing, the preparation of the documents involves the practice of law. The Committee notes that its determination in this regard is consistent with the superior court orders entered into the record of the hearing conducted in this matter.
The preceding analysis does not exhaust the issue. Individuals have the general right to pro se representation. Ga. Const. (1983), Art. 1, Sec. 1, Para. 12. This right to handle one's personal legal affairs extends beyond the narrow confines of court proceedings. See, e.g., In re UPL Advisory Opinion 2003-2, 277 Ga. 472, 473 n.2 (2003). Under Georgia law, those who act on their own behalf are free to prepare those documents they deem necessary to effectuate a pro se incorporation.
O.C.G.A. §15-19-52 states, in part, that no person shall "be prohibited from drawing any legal instrument for another person, firm, or corporation, provided it is done without fee and solely at the solicitation and the request and under the direction of the person, firm, or corporation desiring to execute the instrument." Accordingly, a nonlawyer who assists another within the scope of O.C.G.A. §15-19-52 does not engage in the unlicensed practice of law. Moreover, an employee of an attorney acting within the ambit of O.C.G.A. §15-19-54 does not engage in the unlicensed practice of law.
During the hearing, the Committee heard testimony indicating that there are nonlawyers who, for third parties and in exchange for a fee, prepare documents relating to the establishment of Georgia corporations. The Committee finds that this activity does constitute the unlicensed practice of law. As noted above, O.C.G.A. §15-19-52 allows a nonlawyer to assist another with regard to the drawing of legal instruments. The permissible degree of assistance, however, is not unlimited, and is partially predicated upon the assistance being rendered on a noncommercial basis. The proponents of such activity have failed to direct the Committee to any provision of Georgia law authorizing nonlawyers to deliver commercial legal services to Georgia residents. They have also failed to explain why such activity is not prohibited by O.C.G.A. §§15-19-51(a)(3), 15-19-51(a)(4) or 15-19-51(a)(8). In contradistinction to this fact, the Supreme Court of Georgia has, when discussing the delivery of legal services in another context, explicitly distinguished between delivering those services as part of "a professional service," as opposed to their delivery though "a purely commercial enterprise." In re UPL Advisory Opinion 2003-2, 277 Ga. at 473-474 (2003). The Court has indicated that legal services are to be provided by duly licensed and regulated Georgia attorneys.
"The Secretary of State has the power reasonably necessary to perform the duties required of him" regarding the administration of the laws relating to corporations. O.C.G.A. §14-2-130. This opinion does not, of course, in any way impinge upon the Secretary of State's prerogative to disseminate information under O.C.G.A. §14-2-121, or otherwise act in a way consistent with his legal duties as set out by statute, rule or applicable law.
UPL Advisory Opinion No. 2004-1
Issued by the Standing Committee on the Unlicensed Practice of Law on August 6, 2004.
Note: This opinion is only an interpretation of the law, and does not constitute final action by the Supreme Court of Georgia. Unless the Court grants review under Bar Rule 14-9.1(g), this opinion shall be binding only on the Standing Committee on the Unlicensed Practice of Law, the State Bar of Georgia, and the petitioner, and not on the Supreme Court of Georgia, which shall treat the opinion as persuasive authority only.
QUESTION PRESENTED
Is the preparation or filing of a lien considered the unlicensed practice of law if it is done by someone other than the lienholder or a licensed Georgia attorney?
SUMMARY ANSWER
A nonlawyer's preparation of a lien for another in exchange for a fee is the unlicensed practice of law. The ministerial act of physically filing a lien with a court is not the practice of law.
OPINION
There are two components to the question presented above, viz., the preparation of a lien and the filing of a lien. With regard to the latter, the Committee is of the opinion that the mere ministerial act of physically filing a lien with a court does not in itself constitute the practice of law.
As far as the preparation of a lien, the Committee looks in part to O.C.G.A. §15-19-50(3), which states that the practice of law includes "[t]he preparation of legal instruments of all kinds whereby a legal right is secured." The Supreme Court of Georgia has recently indicated that O.C.G.A. §15-19-50(3) continues to aid the judiciary in the performance of its functions with regard to defining the practice of law in this state. In re UPL Advisory Opinion 2003-2, 277 Ga. 472, 474 (2003). See also In re UPL Advisory Opinion 2002-1, 277 Ga. 521, 522 (2004).
A lien is "'a hold or claim which one person has on the property of another as a security for some debt or charge.'" Waldroup v. State, 198 Ga. 144, 149 (1944). See also Miller v. New Amsterdam Cas. Co., 105 Ga. App. 174, 176 (1961). With regard to real estate, a lien encumbers title. Lincoln Log Homes Mktg., Inc., v. Holbrook, 163 Ga. App. 592, 594 (1982). There are a variety of liens available under Georgia law. See, e.g., O.C.G.A. §44-14-320. They may vary as to the particulars of their operation, but all assert the perceived rights of the lienholder. A lien affects the status of title as to the relevant property, and is an instrument designed to secure a legal right. It follows that under O.C.G.A. §15-19-50(3) the preparation of a lien constitutes the practice of law.
During the public hearing regarding this matter, the Committee heard a presentation made by a nonlawyer business entity that prepares mechanics' and materialmen's liens for others. The customer provides the company with relevant background information, and the company performs a title search, prepares a legal description of the property, and inserts the description into the lien document. The company then prints the lien, files it with the appropriate court, and provides notice to the property owner. According to the company, its employees do not provide legal advice to the customer. The company claims that this activity is not the practice of law, notwithstanding the existence of O.C.G.A. §15-19-50(3).
The company first asserts that its activity is essentially tantamount to performing a title search and preparing an abstract of title, an activity allowed by O.C.G.A. §15-19-53. An abstract of title "should be a complete showing in more or less abbreviated form of all instruments appearing of record in any way affecting the title, either adversely or beneficially...." 3 Hinkel, Pindar's Georgia Real Estate Law and Procedure, §26-7, p. 44 (6th ed. 2004). In the Committee's view, it is not proper to equate a title search or abstract of title with a lien. As noted above, an abstract identifies a lien; it is not itself a lien. Moreover, an abstract, being a history of the title to land, is at its core a neutral, informational document. A lien, on the other hand, asserts a legal claim. Given the foregoing, it would be unreasonable to read O.C.G.A. §15-19-53 as extending to the preparation of liens.
In the alternative, the company states that its activity is allowed under O.C.G.A. §15-19-52, which does not prohibit drafting a legal instrument for another "provided it is done without fee and solely at solicitation and the request and under the direction of the person, firm, or corporation desiring to execute the instrument." The company claims that it collects a fee from its customer solely for preparing an abstract of title or providing a legal description of the property, and that it then prepares the lien free of charge.
The Committee views the latter contention as being disingenuous. Accepting such a deconstruction of the transaction would effectively eviscerate O.C.G.A. §15-19-50(3), because the nonlawyer preparer of a legal document could always claim to be charging the fee for something other than the preparation of the instrument. An interpretation of O.C.G.A. §15-19-50(3) that leads to such a result cannot be a correct one. Rather, it seems more sensible to examine the reason the customer contacted the nonlawyer document preparer, the expectations of the customer, and the ultimate product of the transaction. In the situation described above, the goal of the customer is to procure a lien, not a mere abstract of title or legal description of property. The customer in fact obtains the lien, and pays the company for its services in this regard. Under the circumstances, the transaction involves the practice of law as set out in O.C.G.A. §15-19-50(3), and the consequent furnishing of legal services within the meaning of O.C.G.A. §15-19-51(a)(4).
UPL Advisory Opinion No. 2003-2
Issued by the Standing Committee on the Unlicensed Practice of Law on April 22, 2003. Approved by the Supreme Court of Georgia on November 10, 2003. In re UPL Advisory Opinion 2003-2, 277 Ga. 472 (2003).
QUESTION PRESENTED
Is the preparation and execution of a deed of conveyance (including, but not limited to, a warranty deed, limited warranty deed, quitclaim deed, security deed, and deed to secure debt) considered the unlicensed practice of law if someone other than a duly licensed Georgia attorney prepares or facilitates the execution of said deed(s) for the benefit of the seller, borrower and lender?
SUMMARY ANSWER
Yes. Under Georgia law, the preparation of a document that serves to secure a legal right is considered the practice of law. The execution of a deed of conveyance, because it is an integral part of the real estate closing process, is also the practice of law. As a general rule it would, therefore, be the unlicensed practice of law for a nonlawyer to prepare or facilitate the execution of such deeds.
OPINION
In answering the above question, the Committee looks to the law as set out "by statute, court rule, and case law of the State of Georgia." Bar Rule 14-2.1(a). "Conveyancing," "[t]he preparation of legal instruments of all kinds whereby a legal right is secured," "[t]he rendering of opinions as to the validity or invalidity of titles to real or personal property," "[t]he giving of any legal advice" and "[a]ny action taken for others in any matter connected with the law" is considered the practice of law in Georgia. O.C.G.A. §15-19-50. Moreover, it is illegal for a nonlawyer "[t]o render or furnish legal services or advice." O.C.G.A. §15-19-51.
There are certain exceptions to these statutory provisions. For example, "no bank shall be prohibited from giving any advice to its customers in matters incidental to banks or banking...." O.C.G.A. §15-19-52. A title insurance company "may prepare such papers as it thinks proper or necessary in connection with a title which it proposes to insure, in order, in its opinion, for it to be willing to insure the title, where no charge is made by it for the papers." Id. Nonlawyers may examine records of title to real property, prepare abstracts of title, and issue related insurance. O.C.G.A. §15-19-53. O.C.G.A. §15-19-54 allows nonlawyers to provide attorneys with paralegal and clerical services, so long as "at all times the attorney receiving the information or services shall maintain full professional and direct responsibility to his clients for the information and services received."
In addition to the acts of the Georgia legislature, the Supreme Court of Georgia has made it clear that the preparation of deeds constitutes the practice of law, and is to be undertaken on behalf of another only by a duly qualified and licensed Georgia attorney. For example, the Court has issued the Rules Governing Admission to the Practice of Law in Georgia. Under Part E of those rules, an individual can be licensed as a "foreign law consultant," and thereby be authorized to "render legal services and give professional legal advice on, and only on, the law of the foreign country in which the foreign law consultant is admitted to practice...." Since such an individual has not been regularly admitted to the State Bar of Georgia, the Court prohibits foreign law consultants from providing any other legal services to the public. For purposes of this discussion, it is noteworthy that Part E, §2(b) states that a foreign law consultant may not "prepare any deed, mortgage, assignment, discharge, lease, trust instrument, or any other instrument affecting title to real estate located in the United States of America."
The Committee concludes that, with the limited exception of those activities expressly permitted by the Georgia legislature or courts, the preparation of deeds of conveyance on behalf of another within the state of Georgia by anyone other than a duly licensed attorney constitutes the unlicensed practice of law.
The Committee turns its attention to the execution of deeds of conveyance. Pro se handling of one's own legal affairs is, of course, entirely permissible, and there is nothing in Georgia law to "prevent any corporation, voluntary association, or individual from doing any act or acts set out in Code Section 15-19-50 to which the persons are a party...." O.C.G.A. §15-19-52. The Committee instead focuses on "notary closers," "signing agents," and others who are not a party to the real estate closing, but nonetheless inject themselves into the closing process and conduct, for example, a "witness only closing." A "witness only closing" is one in which an individual presides over the execution of deeds of conveyance and other closing documents, but purports to do so merely as a witness and notary, not as someone who is practicing law.
The Supreme Court of Georgia periodically issues advisory opinions relating to attorney conduct. Under Court rule, such opinions have "the same precedential authority given to the regularly published judicial opinions of the Court." Bar Rule 4-403(e). It would be proper, then, for the Committee to turn to any relevant advisory opinions for guidance.
In Formal Advisory Opinion 86-5, the Supreme Court of Georgia interpreted the word "conveyancing" as set out in O.C.G.A. §15-19-50, and considered what the term meant in relation to the closing of a real estate transaction. The Court viewed a real estate closing "as the entire series of events through which title to the land is conveyed from one party to another party...." That being the case, the Court concluded "it would be ethically improper for a lawyer to aid nonlawyers to 'close' real estate transactions," or for a lawyer to "delegate to a nonlawyer the responsibility to 'close' the real estate transaction without the participation of an attorney."
In Formal Advisory Opinion 00-3, the Court restated its view that the real estate closing is a continuous, interconnected series of events. The Court made it clear that, in order for an attorney to avoid possible disciplinary sanctions for aiding a nonlawyer in the unauthorized practice of law, "[t]he lawyer must be in control of the closing process from beginning to end. The supervision of the paralegal must be direct and constant." The Court held that "[e]ven though the paralegal may state that they are not a lawyer and is not there for the purpose of giving legal advice, circumstances may arise where one involved in this process as a purchaser, seller or lender would look to the paralegal for advice and/or explanations normally provided by a lawyer. This is not permissible." A lawyer who aids a nonlawyer in the unauthorized practice of law can be disbarred. Georgia Rule of Professional Conduct 5.5.
The Committee finds that those who conduct witness only closings or otherwise facilitate the execution of deeds of conveyance on behalf of others are engaged in the practice of law. As noted above, "conveyancing" is deemed to be the practice of law, and the very purpose of a deed is to effectuate a conveyance of real property. In reviewing the foregoing opinions of the Supreme Court of Georgia, the Committee concludes that the execution of a deed of conveyance is so intimately interwoven with the other elements of the closing process so as to be inseparable from the closing as a whole. It is one of "the entire series of events through which title to the land is conveyed from one party to another party." To view the execution of a deed of conveyance as something separate and distinct from the other phases of the closing process--and thus as something other than the practice of law--would not only be forced and artificial, it would run counter to the opinions of the Court. Such an interpretation would mean that a nonlawyer could lawfully preside over the execution of deeds of conveyance, yet an attorney who allowed an unsupervised paralegal to engage in precisely the same activity could be disbarred. An interpretation of Court opinions that leads to such an incongruous result cannot be proper. Rather, the view consistent with those opinions is that one who facilitates the execution of deeds of conveyance is practicing law.
Accordingly, the Committee concludes that, subject to any relevant exceptions set out by the Georgia legislature or courts, one who facilitates the execution of a deed of conveyance on behalf of another within the state of Georgia is engaged in the practice of law. One does not become licensed to practice law simply by procuring a notary seal. A Georgia lawyer who conducts a witness only closing does not, of course, engage in the unlicensed practice of law. There may well exist, however, professional liability or disciplinary concerns that fall outside the scope of this opinion.
Refinance closings, second mortgages, home equity loans, construction loans and other secured real estate loan transactions may differ in certain particulars from purchase transactions. Nevertheless, the centerpiece of these transactions is the conveyance of real property. Such transactions are, therefore, subject to the same analysis as set out above.
UPL Advisory Opinion No. 2003-1
Issued by the Standing Committee on the Unlicensed Practice of Law on March 21, 2003. Approved by the Supreme Court of Georgia on November 21, 2005. In re UPL Advisory Opinion 2003-1, 280 Ga. 121 (2005).
QUESTION PRESENTED
Attorney representing the creditor on an account files a lawsuit against the debtor. The attorney receives a letter and agency power of attorney from a company stating that it has been authorized to act as the agent for the debtor in settlement negotiations. Is the company engaged in the unlicensed practice of law? Is the individual directing the company engaged in the unlicensed practice of law?
SUMMARY ANSWER
Yes. Under the circumstances set out above, the company is representing one of the parties to a lawsuit in settlement negotiations. Since such representation can only be lawfully undertaken by an individual who is duly licensed to practice law, and cannot legitimately arise out of an agency power of attorney, the company and its personnel are engaged in the unlicensed practice of law.
OPINION
The Committee conducted a public hearing concerning the question set out above. It heard testimony from the owner of one such company, who described his business operations. The company routinely obtains from Georgia court dockets the names and addresses of debtors against whom suit has been filed. The amount of the alleged indebtedness typically ranges from $500-$8,000. The company contacts the debtors by means of a direct mail solicitation, which contains the following introductory language: "Dear ____: I may have some good news concerning your civil case. You will soon be served with a Court Summons [emphasis in original] and time is very important. Please contact me as soon as possible...." When the debtor responds to the solicitation, he is informed that the company, if retained, will contact the plaintiff and attempt to negotiate a settlement of the outstanding indebtedness. If the debtor agrees to the representation, he executes a power of attorney in favor of the company, appointing it as the debtor's "attorney-in-fact," with the stated authority "[t]o mediate creditor's claim(s) and to effect a reasonable settlement with" the plaintiff. Once the company obtains the power of attorney, its employee contacts the plaintiff or, if represented by counsel, the plaintiff's attorney. The company's employee provides a copy of the power of attorney to the plaintiff, then attempts to settle the lawsuit through negotiation. The company sometimes charges the debtor a fee for its negotiation services, while at other times provides its services free of charge. The decision as to whether to charge a fee is a matter of discretion, to be determined by the financial plight of the debtor. The company makes it clear to all involved that it is not a law firm, and that none of its employees are licensed Georgia attorneys. Because the company's employees are nonlawyers, they are not bound by the Georgia Rules of Professional Conduct or otherwise subject to disciplinary regulation by the State Bar of Georgia.
A company operating in the manner described above is engaging in the unlicensed practice of law. The company's activity necessarily involves the delivery of legal services, because it is advocating the legal position of another relative to a pending lawsuit. O.C.G.A. §10-6-5 states that "[w]hatever one may do himself may be done by an agent, except such personal trusts in which special confidence is placed on the skill, discretion, or judgment of the person called in to act...." The Committee finds that negotiating a settlement to a lawsuit on behalf of another involves precisely the "special confidence" and "skill, discretion, or judgment" that can only be lawfully exercised by a duly licensed attorney. An individual cannot confer upon another the right to practice law simply by entering into a private agreement that purports to allow the representation. Such agreements, if they had force and effect, would allow literally anyone to represent another in a legal matter, thereby circumventing the rigorous attorney licensing procedures established by the Supreme Court of Georgia. The potential for public harm under such circumstances is clear, and those inclined to enter into such agreements should keep in mind that "[n]o rights shall arise to either party out of an agency created for an illegal purpose." O.C.G.A. §10-6-20.
In addition to any unlicensed practice of law issues, the Committee notes, without further comment, that O.C.G.A. §18-5-1 et seq. generally prohibits "the business of debt adjusting."
UPL Advisory Opinion No. 2002-1
Issued by the Standing Committee on the Unlicensed Practice of Law on July 1, 2002. Approved by the Supreme Court of Georgia on January 12, 2004. In re UPL Advisory Opinion 2002-1, 277 Ga. 521 (2004).
QUESTION PRESENTED
Debtor incurs a debt with Dr. A, a sole proprietor. Dr. A transfers the account to Collector C by written "assignment." However, the purported assignment states that the transfer is "for the purpose of collection only." Collector C pays nothing for the account, but has an arrangement with Dr. A to receive a set fee or contingency fee upon collection. Collector C is not an attorney, but files suit on the account against Debtor as "Dr. A by his transferee/assignee Collector C vs. Debtor." In the event the case is contested, Collector C also attempts to present the case in court. Is collector C engaged in the unauthorized practice of law?
SUMMARY ANSWER
Yes. Individuals normally have the right to represent themselves with regard to legal matters to which they are a party. In the scenario set out above, however, Collector C is not the true party in interest, but is instead taking legal action on behalf of another in exchange for a fee. The actions of Collector C violate O.C.G.A. §15-19-50 et seq., the Georgia statute pertaining to the unauthorized practice of law.
OPINION
Individuals have the right to self-representation. Georgia corporations have certain limited rights of self-representation. Eckles v. Atlanta Technology Group, 267 Ga. 801 (1997); Uniform Magistrate Court Rule 31. Under the circumstances set out above, Dr. A is always free to take action on his own behalf within the limits of the law.
The holder of a chose in action may assign his interest to another. O.C.G.A. §44-12-22. A creditor can, for example, sell an account receivable in exchange for a sum that is fixed and certain, such as a percentage of the indebtedness. If a claim were validly assigned in such a manner, the assignor would relinquish all right, title and interest to the claim, and such title and interest would vest solely in the assignee.
O.C.G.A. §15-19-50 defines the practice of law, in part, as "[r]epresenting litigants in court and preparing pleadings and other papers," "[t]he preparation of legal instruments of all kinds whereby a legal right is secured," and "[a]ny action taken for others in any matter connected with the law." O.C.G.A. §15-19-52 states that under certain circumstances nonlawyers may draw legal instruments for others, "provided it is done without fee and solely at the solicitation and the request and under the direction of the person, firm, or corporation desiring to execute the instrument."
In the situation set out above, there is not a true assignment of the debt, since there is no real transfer of title and interest to the claim. The putative assignment states that it exists "for the purpose of collection only." The "assignment" under these circumstances is in actuality nothing more than a means through which Collector C is attempting to represent Dr. A. Collector C is engaged in the unauthorized practice of law not only because he is representing a third party, but also because he is preparing pleadings and other papers (presumably the complaint and summons) on behalf of Dr. A in exchange for a fee. Private agreements between individuals--no matter what their phraseology--cannot serve to undo acts of the legislature and decisions of Georgia courts.