Practice-Of-Law Definition Hits New Roadblock: Exemption Includes Paralegal Services

The practice of law remains difficult to define. This article appeared in today's issue of the Pacific Business News (Honolulu):

The issue of crafting a new definition for the practice of law in Hawaii is once again before the Hawaii Supreme Court, but state Attorney General Mark J. Bennett has spoken out against the revised rules, dealing a new blow to the efforts led by the Hawaii State Bar Association.

The bar association submitted its revised draft of a new definition for the practice of law last month after more than a year of occasionally contentious discussions in which professionals such as accountants, insurance agents and real estate brokers accused the lawyers of trying to steal their work.

The new four-page draft makes a point of saying that the rules are not intended to restrict anyone from doing their usual business. The public has until April 27 to comment.

After reviewing the rules in November, Bennett wrote to the bar association saying he could not support the revised rules because they were laden with exceptions and exclusions that were overly broad, ambiguous or do “not make sense.”

Bennett also quoted former state legislators who decided that defining the practice of law was “fruitless because new developments in society, whether legislative, social or scientific in nature, continually create new concepts and new legal problems.”

The new draft contains a dozen exemptions, including the preparation of real estate contracts, purchase and lease agreements and tax returns; selling or soliciting insurance and annuity products; performing paralegal services; and selling legal forms to the public. There are other exemptions for individuals who choose to represent themselves in court, who participate in labor negotiations and arbitrations or who lobby at the Legislature.

Groups including the Hawaii Association of Realtors, Hawaii Insurers Council and the Hawaii Society of Certified Public Accountants were heavily involved in retooling the new draft.
The bar association said it was surprised by Bennett’s position since several state deputy attorneys general from his office were intimately involved in the discussions and reviewed various drafts of the rules as they were being written.

In a letter to the court, Jeffrey Sia, immediate past president of the bar association, wrote that the exemptions strike a balance between the concerns of all the stakeholders involved in the discussions.

“It was not the [association’s] intent to take away the lawful livelihood of nonlawyers or hinder the public’s access to legal services,” Sia wrote. “These types of exceptions are not novel.”
Only licensed attorneys can practice law in Hawaii, but there is no definition that describes precisely what the practice of law is. So the Hawaii Supreme Court asked the bar association to write an acceptable definition of the law business.

Its goal was to protect Hawaii residents and businesses from untrained, unlicensed and unregulated individuals offering advice on legal matters.

At least 25 other states and the District of Columbia have adopted similar rules or statutes defining the practice of law or protecting consumers from amateur legal advice.

If the Hawaii Supreme Court approves the rule changes, the earliest they would take effect would be July 1. The proposed rules are available on the Hawaii State Judiciary’s Web site: http://www.courts.state.hi.us/.