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Practicing Within the (state) Lines!

by Mark Scruggs, LaKeshia Banks |

What happens when you are contacted by a client for a matter that involves crossing state lines? For example, you are a licensed attorney in North Carolina. Suppose your neighbor is injured in an accident in Virginia with a Virginia resident and wants you to represent her in her claim with the other party’s insurance company. Suppose she received treatment in Virginia. Can you negotiate the  hospital’s lien? Can you settle with the insurance company and collect and distribute funds to Virginia medical providers in satisfaction of medical liens you have negotiated? Even if a lawsuit is never filed, at what point might your activity constitute the practice of law in Virginia and thus  violate Rule 5.5 of the Rules of Professional Conduct?

What is the unauthorized practice of law (UPL)?

Rule 5.5(a) of the Rules of Professional Conduct states, “A lawyer shall not practice in a jurisdiction in violation of the regulation of the legal profession in that jurisdiction, or assist another in doing so.”

What is the practice of law?

Each state has been tasked with creating its own definition and guidelines of the practice of law. In Virginia, the practice of law occurs if you provide legal advice, prepare legal documents, represent a client before any court, or if you hold yourself out as authorized to practice in the Commonwealth. [1]

Consequences of engaging in UPL

The UPL is a misdemeanor criminal offense in North Carolina, that is investigated by the State Bar’s Authorized Practice Committee. Depending on the laws in the state where you may have been practicing without a license, you may be in similar hot water. For example, in Virginia, UPL is punishable by criminal prosecution, civil remedies including quo warranto and any statutory discipline including disbarment and sanctions.[2] UPL matters can result in prosecution by the local district attorney, felony charges for accepted fees and civil liability including fraud, or unfair and deceptive trade practices.[3]

How can you avoid UPL?

  1. Realize that there is not a bright line between authorized practice and unauthorized practice. Many lawyers think anything short of filing a lawsuit in a state in which they are not licensed is OK. This is not necessarily the case.
  2. Refer the client to a lawyer licensed to practice in the relevant state. Yes, you will lose the business, but you will avoid having to answer to the State Bar on a charge of unauthorized practice of law.
  3. Associate a lawyer  in the relevant state to perform activities that may constitute the practice of law within that state.
  4. If a lawsuit has to be filed, seek pro hac vice admission in the relevant state.

Are You Practicing Within the (state) Lines?

It is not unusual for a lawyer to take on a client whose cause of action arose in another state. Many plaintiff’s personal injury lawyers represent clients who were involved in accidents in other states. In most cases, activities short of filing a lawsuit in that other state will not involve UPL because there will be some connection to North Carolina courts, parties or laws. However, one should be aware that there is no bright line – such as filing a lawsuit – dividing unauthorized practice from authorized practice of law. The best way to avoid UPL claims is to: analyze your exposure; be mindful of the jurisdictional guidelines for practice, admission, and pro hac vice admission; associate with local counsel; or refer the case to licensed counsel within that jurisdiction.

LaKeshia Banks is a rising second year law student at North Carolina Central University School of Law. LaKeshia interned with Lawyer’s Mutual in the summer of 2017 as part of the North Carolina Bar Association Minorities in the Profession 1L Summer Associate Program.

[1] Practice of Law in the Commonwealth of Virginia, The Virginia State Bar, http://www.vsb.org/pro-guidelines/index.php/unauthorized-practice-rules/practice-of-law-in-the-commonwealth-of-virginia/.

[2] Unauthorized Practice Rule 9 Administrative Agency Practice, The Virginia State Bar, http://www.vsb.org/pro-guidelines/index.php/unauthorized-practice-rules/rule-9/.

[3] Authorized Practice Committee, Guidelines for Attorneys Licensed in other Jurisdictions, The North Carolina State Bar, https://www.ncbar.gov/media/299146/Guidelines-for-Out-of-State-Attorneys.pdf.

About the Author

Mark Scruggs

Mark Scruggs is senior claims counsel with Lawyers Mutual specializing in litigation, workers compensation and family law matters. You can reach Mark at 800.662.8843 or at mscruggs@lawyersmutualnc.com.

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