The List of States Grappling with Unauthorized Practice of Law in Real Estate Closing Lengthens
September 15, 2003
Contact: Kristin Weber or Tom Gordon - 202/887 8255
Washington, D.C. - On September 22 the Supreme Court of Georgia will hear oral arguments on a state bar advisory opinion that limits the right to conduct real estate closing transactions to lawyers alone. The Georgia court's decision on whether nonlawyer closings constitute an unauthorized practice of law will follow a series of similar cases across the nation. Recent decisions to strike down these unauthorized practice opinions in several states represent a growing trend toward protecting consumers against a legal monopoly over services that do not demand a lawyer.
Last spring, the State Bar of Georgia issued an advisory opinion (UPL 2003-2) that declared nonlawyers - including employees of title companies, mortgage firms and banks - who prepare or facilitate real estate closings to be engaging in the unlicensed practice of law. At Monday's session, Georgia's high court will review the opinion.
"We hope that the Supreme Court of Georgia will follow the lead of several other states by abandoning the anachronistic practice of requiring a lawyer for what is strictly an administrative function," says Thomas Gordon, senior counsel of HALT, a legal reform organization.
HALT advocates a continuum of legal services to match the continuum of legal consumer needs. This not only connects consumers with the most qualified service provider, but it also promotes an atmosphere of competition and consumer choice. Urging the Supreme Court of Georgia to consider these aspects of the public interest at stake, Gordon states, "The costs associated with buying a home are already high enough without paying hundreds of dollars an hour for an attorney. Homebuyers have the right to a convenient, accessible, affordable closing agent, who may not necessarily be an attorney."
Next week's oral arguments come on the heels of a Supreme Court of Kentucky decision last month that struck down a claim that nonlawyer closings were the unauthorized practice of law. In an amicus curiae brief, the Department of Justice called for the Supreme Court of Georgia to follow this lead. The Department of Justice states, "In Georgia, as in other states, the prohibition on the unlicensed practice of law is designed to protect the public interest."
HALT has worked to abolish a number of other unauthorized practice opinions that unnecessarily thwart competition in order to protect lawyers. Holding up the simple definition that the unauthorized practice of law means saying you are a lawyer when you are not, HALT views the State Bar of Georgia's advisory opinion as an attempt to stifle competition and to drive qualified service providers out of the marketplace.
On the national level, the American Bar Association recently backed away from its controversial model definition of the practice of law. Facing opposition from HALT and other organizations, the ABA's Task Force on the Model Definition of Law was forced to reconsider its overly broad proposed definition, which stood to proscribe consumer access to diverse legal service providers.
Founded in 1978, HALT - An Organization of Americans for Legal Reform is a non-partisan, non-profit public interest organization. HALT pursues an ambitious education and advocacy program that challenges the legal establishment to improve access and reduce costs in the civil justice system.
|