Tuesday, June 21, 2022

Federal District Court judge rules that the First Amendment protects those who provide legal advice in certain cases, even if they are not lawyers

If you follow professional responsibility news, you probably know by now that last month the Federal District Court for the Southern District of New York issued a preliminary injunction to prevent the state's Attorney General from instituting actions against a nonprofit company called Upsolve, which was created to provide free legal advice to individuals facing debt collection actions.  Why would the state go after Upsolve?  Because the legal advice would be provided by people who are not lawyers, and this might be considered to be a violation of the state's law against the "unauthorized practice of law."

I have not read the opinion in detail so I will just provide the background and give you some links to full commentary by other authors.  You can read the full opinion here.  For excellent comments on the case go here and here.  For a podcast discussing the case, go here.

Upsolve plan is to train "Justice Advocates" (who are not lawyers) to provide limited legal advice to lower-income New Yorkers who face debt collection actions.  The advocates' assistance would be limited to helping individuals fill out forms provided by the state for the purpose of helping those individuals avoid default.  If a "client" were to need more legal services, the advocates are supposed to refer them to a lawyer.

Upsolve believed their services did not violate the UPL law, but just to make sure, it filed a petition for an injunction to prevent New York’s attorney general from trying to enforce the UPL law.  

In support of its position, Upsolve argued that New York UPL law interfered with the plaintiffs’ right to associate in order to fulfill their objectives and that it infringed on the plaintiff's freedom of expression.

In the opinion, issued about a month ago, the judge dismissed the argument based on freedom of association, but granted the injunction on the basis of the argument related to freedom of expression stating that

. . . a preliminary injunction is warranted. The UPL rules cannot be applied to Plaintiffs’ program because the First Amendment protects their legal advice as speech, and the UPL rules are not narrowly tailored to satisfy strict scrutiny in this context. Further, the balance of equities favors an injunction because Plaintiffs’ program would help alleviate an avalanche of unanswered debt collection cases, while mitigating the risk of consumer or ethical harm. And enjoining enforcement against Plaintiffs alone, whose activities are carefully limited to out-of-court advice, will not threaten the overall regulatory exclusivity of the legal profession. 

Before we go any further, note that the decision is not a decision on the merits.  It is only a decision on whether to grant a preliminary injunction.  It is possible that the plaintiffs will lose the action in the end and the injunction will be dissolved, but, obviously, the decision to grant the injunction is based on the fact that the judge believes the plaintiffs are likely to win on the merits.

Although I agree that there is a huge need to find ways to provide more access to legal representation, I am not sure that concluding that legal advice by people who are not lawyers is protected speech is a good way to do it.  Unless this conclusion is limited (which the court tried to do), this could mean that anyone ignorant of the law can claim to have a right to give legal advice.  This would not be a good result.  It may actually result in more harm to the public.  I think it is true that the notion of the regulation of the profession has an element of protectionism, but it also has an element of protecting the public.  And since both the goal of protecting the public, and the goal of providing better access to representation are equally important, those in charge of the regulation of the profession need to find a compromise.  

The good news is that, as one commentator has suggested, there are at least three other approaches that could be used to address the conflict between the regulation of the practice of law and the need to provide better access to representation.  For example, we can redefine the “practice of law” to exclude the type of service that Upsolve is providing.  Second, the state can develop a program to allow licensed nonlawyers to provide certain limited legal services, as has been done in other states.  And, third, New York could follow Utah’s lead and develop a “regulatory sandbox,” where those who wish to explore legal services models outside our current regulatory structure can do so under tight supervision.  

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