Companies in Ohio and elsewhere have been contacted by a consulting firm that purports to engage in claims management and Alternative Dispute Resolution (ADR) for its customers. It contacts potential customers to describe its function as negotiations and strategies for ADR, and thereby settlement for its customers but expresses fees may be fixed or contingent.
This approach and representative function, while not novel, raises significant questions of the Unauthorized Practice of Law (UPL). Gov. Bar R. VII §2(A)(1) defines UPL as:
[t]he rendering of legal services for another by any person not admitted to practice in Ohio under Rule I of the Supreme Court Rules for the Government of the Bar unless [inapplicable exceptions]. . .”
The Ohio Legal Ethics Law Under Rules of Professional Conduct states in section §5.5:210 that the core concern is that the practice of law by non-lawyers will create the rendition of legal services by unqualified individuals or business entities. The treatise also states in the same section:
Consistent with this test, ‘one who purports to negotiate legal claims on behalf of another and advises persons of their legal rights and the terms and conditions of settlement engages in the practice of law.’ Cleveland Bar Ass’n v. Henley, 95 Ohio St.3d 91, 92, 766 N.E.2d 130, 131 (2002). Accord Cincinnati Bar Ass’n v. Foreclosure Solutions, L.L.C., 123 Ohio St.3d 107, 2009 Ohio 4174, 914 N.E.2d 386, at paras. 25-26.”
A well-known opinion by the Supreme Court of Ohio, Ohio State Bar Association v. Kolodner, 103 Ohio St.3d 504, 2004-Ohio-5581, states at paragraph 15:
The unauthorized practice of law consists of rendering legal services for another by any person not admitted to practice law in Ohio, see Gov.Bar R. VII(2)(A), and includes representation by a nonattorney who advises, counsels, or negotiates on behalf of an individual or business in the attempt to resolve a collection claim between debtors and creditors. Cincinnati Bar Assn. v. Telford (1999), 85 Ohio St.3d 111, 707 N.E.2d 462; Cincinnati Bar Assn. v. Cromwell (1998), 82 Ohio St.3d 255, 695 N.E.2d 243. Injunctive relief prohibiting such unauthorized representation is required for the public’s protection, and a civil penalty is appropriate. Toledo Bar Assn. v. Chelsea Title Agency of Dayton, Inc., 100 Ohio St.3d 356, 2003-Ohio-6453, 800 N.E.2d 29).” (Emphasis added)
The most recent opinion that would, in my view, make the proposal for representation in negotiations as well as those negotiations themselves is Cincinnati Bar Association v. Jansen, 138 Ohio St.3d 212, 2014-Ohio-512. The Court recited and held that the practice of law includes:
Making representations to creditors on behalf of third parties, and advising persons of their rights, and the terms and conditions of settlement. . . . It is no defense that respondents disclosed to their customers that they were not attorneys and could not give legal advice, or that they obtained powers of attorney executed by their customers.”
Considering the Ohio Supreme Court’s powers to issue broad injunctions and levy civil penalties (which have in at least one case exceeded $1 million), companies that are making these types of solicitations relating to negotiations and settlement are on thin ice through which they may fall into the unauthorized practice of law.