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The Unauthorized Practice of Law: Hawai’i

All Hawai’i attorneys should be aware that they should not engage in the unauthorized practice of law in other jurisdictions or assist others in engaging in the unauthorized practice of law in Hawai’i.  But what constitutes the practice of law?  How do you know if you are violating the statutes or rules of another jurisdiction?

Hawai’i Revised Statutes § 605-14 states as follows:

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.

A violation of this statute is a misdemeanor[1] and only the attorney general and any bar association in Hawai’i have standing to maintain an action for violation of the statute.[2]

Hawai’i Rules of Professional Conduct, Rule 5.5 further provides as follows:

A lawyer shall not:

(a) practice law in a jurisdiction where doing so violates the regulation of the legal profession in that jurisdiction; or

(b) assist a person who is not a member of the bar in the performance of activity that constitutes the unauthorized practice of law; or

(c) allow any person who has been suspended or disbarred and who maintains a presence in an office where the practice of law is conducted by the lawyer to have any contact with the clients of the lawyer either in person, by telephone, or in writing or to have any contact with persons who have legal dealings with the office either in person, by telephone, or in writing.

Both the statute and the rule prohibit the unauthorized practice of law in Hawai’i.  But what constitutes the practice of law in Hawai’i?  The legislative history to HRS § 605-14 supports the uncontroversial position that the practice of law is not limited to appearing before courts and consists of, among other things, the giving of advice, preparing documents and providing other services affecting the legal rights of a party where such advice, drafting or service requires the use of any degree of legal knowledge, skill or advocacy.[3]  The legislature, however, declined to define the “practice of law” by way of specific examples because “attempts to define the practice of law in enumerating the specific types of services that come within the phrase are fruitless because new developments in society, whether legislative, social, or scientific in nature, continually create new concepts and new legal problems.”[4]  In addition, the commentary to HRPC, Rule 5.5 merely provides, in part, that “the definition of the practice of law is established by law and varies from one jurisdiction to another.”[5]

Neither the legislative history to the statute nor the commentary to the rule provide comprehensive guidance on what constitutes the practice of law in Hawai’i.  Most of the relevant Hawai’i case law also concerns situations where the issue of whether there may have been unauthorized practice of law activity should be rather apparent – for example, situations where individuals who are not licensed attorneys, such as debt collectors or trustees, engage in activities such as appearing in court, or where suspended lawyers nonetheless continue to engage in their practice.  Often, however, the more perplexing situation involves attorneys who are licensed in other jurisdictions and who provide legal services either in or affecting matters in Hawai’i.

In 1998, the Hawai’i Supreme Court looked at the issue of whether an Oregon company’s general counsel, who was licensed and located in Oregon, engaged in the unauthorized practice of law by engaging in such activities as consulting with the client and the client’s Hawai’i counsel regarding an appeal, preparing a statement in anticipation of mediation, assisting Hawai’i counsel with legal research, analyzing briefs and papers submitted by other parties, planning strategy for the appeal, resolving supersedeas bond issues, and reviewing and critiquing briefs and papers prepared by Hawai’i counsel.  Fought & Company, Inc. v. Steel Engineering and Erection, Inc., 87 Haw. 37, 951 P.2d 487 (1998).[6]   On the other hand, the Oregon company’s general performed all of its services in Oregon, did not draft or sign any of the papers filed in the appeal, did not appear in court, did not communicate with opposing counsel, and Hawai’i counsel was at all times in charge of the representation.

In concluding that general counsel located in Oregon did not engage in the unauthorized practice of law in Hawai’i, under the circumstances described above, the Court declared that a commercial entity that serves interstate markets is likely to receive more effective and efficient representation when its general counsel based close to its home office and who is familiar with its operations supervises the work of local counsel.[7]  The Court also referred favorably to factors set forth in a California Supreme Court decision rendered earlier that year, Birbrower, Montalbano, Condon & Frank, P.C. v. Superior Court of Santa Clara County, 949 P.2d 1, 70 Cal. Rptr. 2d 304 (Cal. 1998).  In particular, the Court made its decision in light of the factors suggested by Birbrower where it was reasoned that:

the practice of law “in California” entails sufficient contact with the California client to render the nature of the legal service a clear legal representation.  In addition to a quantitative analysis, we must consider the nature of the unlicensed lawyer’s activities in the state.  Mere fortuitous or attenuated contacts will not sustain a finding that the unlicensed lawyer practiced law “in California.”  The primary inquiry is whether the unlicensed lawyer engaged in sufficient activities in the state, or created a continuing relationship with the California client that included legal duties and obligations.[8]

The Fought decision therefore suggests that Hawai’i Courts may engage in a type of sufficient contacts analysis and look at the level of legal activity deemed to have been performed in Hawai’i by an attorney licensed in another jurisdiction when evaluating whether that attorney is engaging in the unauthorized practice of law.  The activity necessary rise to the level of practicing law in Hawai’i, however, remains largely unresolved in this jurisdiction.

Interestingly, the Birbrower decision referred to favorably in Fought to support the conclusion that there was no unauthorized practice of law in Hawai’i by mainland counsel, is a decision primarily referred to in the legal literature for raising an alarm over restrictions on multi-jurisdictional practice and triggering significant changes to ABA Model Rules of Professional Conduct, Rule 5.5.  This alarm was raised because the Birbrower court held that New York lawyers, who engaged in corporate counseling and filed an arbitration demand in California for a California client, could not collect fees under their engagement agreement with the client for work deemed to have been performed in California because they violated the California unauthorized practice of law statute in effect at the time.  There was also language in Birbrower suggesting that a lawyer could still practice law in the state and violate the California statute even if the lawyer was not physically present in the state by advising a California client by phone, fax, computer or other means.[9]  Indeed, following Birbrower, California enacted a new statute regarding an out of state lawyers’ ability to engage in arbitration in California and a number courts, including the Hawai’i Supreme Court in Fought, have interpreted or distinguished Birbrower in ways to avoid its harsh result.[10]

Moreover, as indicated above, following Birbrower, the ABA substantially changed Model Rule 5.5 to clarify rather liberally a lawyer’s ability to engage in multi-jurisdictional practice.  For example, Model Rule 5.5(c) provides as follows:

(c) A lawyer admitted in another United States jurisdiction, and not disbarred or suspended from practice in any jurisdiction, may provide legal services on a temporary basis in this jurisdiction that:

(1) are undertaken in association with a lawyer who is admitted to practice in this jurisdiction and who actively participates in the matter;

(2) are in or reasonably related to a pending or potential proceeding before a tribunal in this or another jurisdiction, if the lawyer, or a person the lawyer is assisting, is authorized by law or order to appear in such proceeding or reasonably expects to be so authorized;

(3) are in or reasonably related to a pending or potential arbitration, mediation, or other alternative dispute resolution proceeding in this or another jurisdiction, if the services arise out of or are reasonably related to the lawyer’s practice in a jurisdiction in which the lawyer is admitted to practice and are not services for which the forum requires pro hac vice admission; or

(4) are not within paragraphs (c)(2) or (c)(3) and arise out of or are reasonably related to the lawyer’s practice in a jurisdiction in which the lawyer is admitted to practice.

Hawai’i has not yet, however, adopted this version of Model Rule 5.5 and the extent to which Model Rule 5.5 may be persuasive has, to this author’s knowledge, not yet been significantly addressed in reported Hawai’i appellate decisions.

Finally, besides avoiding participating in or assisting others to participate in the unauthorized practice of law in Hawai’i, Hawai’i lawyers should also be concerned about avoiding their own unauthorized practice of law in other jurisdictions.  Most jurisdictions have adopted rules like Model Rule 5.5 referenced above.  The ABA maintains a detailed chart containing information on the status of multi-jurisdictional practice rules in each jurisdiction which can be accessed on line.  More practically, however, if you are working with mainland counsel and need to appear in another jurisdiction or perform work for a use by a mainland client in another jurisdiction, you should not hesitate to obtain the advice of mainland counsel on their relevant local statutes and rules.

This article is not intended to be a comprehensive overview of all unauthorized practice of law authorities or issues relevant to Hawai’i attorneys.  As always, you should seek appropriate legal advice as needed.

This article was published in the September 2016 and March 2022 issue of the Hawai’i Bar Journal.  #UnauthorizedPracticeofLaw #Hawai’iRevisedStatutes #Hawai’iRulesofProfessionalConduct #HRS605-14 #HRPCRule5.5

[1] Haw. Rev. Stat. § 605-17

[2] Haw. Rev. Stat. § 605-15.1

[3] Sen. Stand. Comm. Rep. No. 700, in 1955 Senate Journal, at 661; Hse. Stand Comm. Rep. No. 612, in 1955 House Journal at 783.

[4] Id.

[5] The comment to Rule 5.5. does make it clear that the rule does not prohibit a lawyer from employing the services of paraprofessionals and delegating functions to them so long as the lawyer is supervising and retains responsibility for the work.  Likewise, the rule does not prohibit lawyers from providing advice or instruction to non-lawyers whose employment requires knowledge of the law: for example, claims adjusters, employees of financial or commercial institutions, social workers, accountants and persons employed by governmental agencies.  Lawyers may also counsel nonlawyers who wish to proceed prose.

[6] The Hawai’i Supreme Court considered this issue in the context of whether the client could recover attorneys’ fees incurred for work performed by its mainland counsel.

[7] Fought, 87 Haw. at  47.

[8] Id. citing Birbrower, 17 Cal. 4th at 128.

[9] Birbrower, 17 Cal. 4th at 128-129 (Conversely, the Court also rejected the notion that a person automatically practices law in California whenever the person practices California law anywhere or “virtually” enters the state by telephone, fax, e‑mail, or satellite.)

[10] See also, Restatement Third, The Law Governing Lawyers (2000) which rejects the  Birbrower result as being “unduly restrictive” at Reporter’s Note to Section 3, Commente.

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