Report Title:

Unauthorized Practice of Law; Professional License

 

Description:

Allows licensed professionals to provide services within the scope of their license without violating the prohibition on the unauthorized practice of law.  (SD1)

 


THE SENATE

S.B. NO.

1044

TWENTY-FIFTH LEGISLATURE, 2009

S.D. 1

STATE OF HAWAII

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO ATTORNEYS.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


     SECTION 1.  Chapter 605, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part   .  UNAUTHORIZED PRACTICE OF LAW PROHIBITED

     §605‑    Purpose.  It is recognized that individuals have a right to represent themselves in legal matters. However, the privilege of representing others is granted and supervised by the Hawaii supreme court for the protection of the public from harm by persons engaged in the unauthorized practice of law in this State.  Such persons generally lack the legal education, training, and experience of a licensed lawyer in this State and are not subject to Hawaii's rules of professional conduct or disciplinary system established in this State for licensed lawyers.  Nevertheless, several groups of licensed professionals provide the public with necessary and important services in the fields of insurance, accounting, real estate, automobile dealers, and others.  It is not the intent of this part to draw such licensed professionals into the scope of this part inasmuch as they are subject to their own licensing laws and rules.

     §605‑    Prohibition.  No person shall practice law in this State or in any manner hold themselves out as a lawyer, or being authorized or competent to practice law in this state unless the person is an active member of the Hawaii State Bar Association in good standing, except as otherwise permitted by this part or any supreme court rule.

     §605‑    Definitions.  As used in this part:

     "In-house counsel" means a lawyer who is not licensed in this State, but who is currently a member in good standing of the bar of another state or the District of Columbia, or eligible to practice before the highest court in any state, territory, or insular possession of the United States, and who resides and is employed in this State by a qualifying institution, the business of which is lawful and is other than the practice of law or the provision of legal services.

     "Person" means individuals and entities.

     "Practice of law" means the giving of legal advice, counsel, assistance, or service where there is a client relationship of trust or reliance between the party giving such advice, counsel, assistance, or service and the party to whom it is given, including but not limited to:

     (1)  Giving advice or counsel to another person or entity about the person's or entity's legal rights and obligations or the legal rights and obligations of others where a relationship of trust or reliance exists between the party giving such advice or counsel and the party to whom it is given;

     (2)  Holding oneself out in any manner as a lawyer, attorney, legal counselor or advisor entitled and able to engage in the practice of law in this State;

     (3)  Selecting, drafting, or completing documents that affect the legal rights of another person or entity;

     (4)  Representing another person in a court, an administrative proceeding, an arbitration proceeding, a hearing, a deposition, or any other formal or informal dispute resolution process in which legal documents are submitted or a record is established;

     (5)  Negotiating legal rights or obligations with others on behalf of another person or entity; and

     (6)  Providing oral or written legal opinions.

     "Qualifying institution" means a corporation, a partnership, an association, or other legal entity that is authorized and registered to do business in this State as provided by law, including its subsidiaries and organizational affiliates.

     §605‑    Exceptions and exclusions.  The following activities by a non-lawyer, who is not otherwise claiming to be a lawyer, or a lawyer not licensed in this State is permitted:

     (1)  Appearing pro se;

     (2)  Acting as a representative when authorized by law or by a governmental agency, including the representation of a person in small claims court without compensation and upon express approval of the court or representing a legal entity as an employee representative in small claims court;

     (3)  Serving as a neutral mediator, arbitrator, conciliator or facilitator when such service does not include rendering advice or counsel as set forth under the definition of practice of law;

     (4)  Serving as in-house counsel for a single qualifying institution; provided that in-house counsel:

         (A)  Registers and maintains registration with the Hawaii State Bar Association in accordance with the requirements of the rules of the Hawaii State Bar Association under a classification that does not require the registrant to take the Hawaii bar examination;

         (B)  Provides no personal representation to individuals, including customers, shareholders, owners, partners, officers, employees, servants, or agents of the qualifying institution;  

         (C)  Makes no state court appearances on behalf of any person or entity other than pro se appearances; and

         (D)  Agrees to submit to the disciplinary jurisdiction of the supreme court of Hawaii and its disciplinary board;

     (5)  Acting as a legislative lobbyist;

     (6)  Making legal forms available to the general public, whether by sale or otherwise, or publishing legal self-help information by print or electronic media;

     (7)  Participating in labor negotiations, arbitrations or conciliations arising under collective bargaining rights or agreements, or as otherwise allowed by law;

     (8)  Performing services as a law clerk to a judge, justice, or member of the Hawaii State Bar Association;

     (9)  Performing services as a paralegal under the supervision of a judge, justice, or member of the Hawaii State Bar Association;

    (10)  Preparing tax returns and performing any other statutorily or legally authorized services as a certified public accountant, enrolled Internal Revenue Service agent, public accountant, public bookkeeper, or tax preparer, including, but not limited to financial planning or accompanying or representing a taxpayer client in a hearing before a state board of taxation review;

    (11)  Performing or providing services authorized by statute or rule in this State by an entity or organization in the business of insurance or a self-insured entity or organization licensed in this State, and their licensed agents, affiliated licensees, and employees of such entities, including claims representatives, adjustors or handlers;

    (12)  Recommending insurance coverage, informing customers with respect to their options with respect to insurance or annuity contract purchase and ownership, naming of beneficiaries, and adjustment or handling of insurance claims by insurance companies and their claims representatives or insurance agents;

    (13)  Performing or providing services authorized by statute or rule in this State by real estate licensees who are licensed real estate brokers or salespersons pursuant to chapter 467, including but not limited to:

         (A)  Preparation of real estate sales or purchase agreements and contracts of sale;

         (B)  Preparation of real estate sale or rental agreements;

         (C)  Providing or completing forms related to the sale, lease, rental, or purchase of real estate, improvements, and personal property for customers;

         (D)  Providing information or advice relating to the sale, lease, rental, or purchase of real estate and improvements; and

         (E)  Negotiating for or on behalf of clients or customers relative to the sale, lease, rental, or purchase of real estate and improvements;

    (14)  Providing information or education about law, regulations, legal procedures, and compliance issues by a person, entity or organization for the purpose of teaching, training or educating others;

    (15)  Performing activities that are preempted by federal law; and

    (16)  Performing other activities as the courts of Hawaii have determined do not constitute the unauthorized practice of law.

     §605‑    Governmental agencies.  Nothing in this part shall affect the ability of a governmental agency to carry out its responsibilities as provided by law.

     §605‑    General information.  Nothing in this part affects the ability of a person or entity to provide information of a general nature about the law and legal procedures to members of the public.

     §605‑    No private cause of action created.  Nothing in this part creates or may be the basis of a private cause of action or claim cognizable in any court, administrative agency or alternative dispute forum."

     SECTION 2.  Section 605-14, Hawaii Revised Statutes, is repealed.

     ["§605-14  Unauthorized practice of law prohibited.  It shall be unlawful for any person, firm, association, or corporation to engage in or attempt to engage in or to offer to engage in the practice of law, or to do or attempt to do or offer to do any act constituting the practice of law, except and to the extent that the person, firm, or association is licensed or authorized so to do by an appropriate court, agency, or office or by a statute of the State or of the United States.  Nothing in sections 605-14 to 605-17 contained shall be construed to prohibit the preparation or use by any party to a transaction of any legal or business form or document used in the transaction."]

     SECTION 3.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect July 1, 2009.