In a decision that may be of considerable interest to New Hampshire practitioners, on June 8, 2001, a Massachusetts Superior Court judge, in Massachusetts Conveyancer Association, Inc. v. Colonial Title & Escrow Inc., permanently enjoined Colonial Title & Escrow, Inc. ("Colonial") from:

• Evaluating title to determine the legal interest created, transferred or terminated and communicating that evaluation to any interested party in a residential real estate transaction;
• Ensuring that parties to a real estate transaction have met their contractual obligations;
• Preparing, drafting or reviewing legal documents that affect title to real estate or affect the obligations of the parties to the real estate transaction;
• Explaining at the closing any documents relating to the interest in the real estate being created, transferred or terminated or relating to the agreement of the parties;
• Issuing title certification or policy of title insurance premised on Colonial's evaluation of title to real estate;
• Representing lenders as their closing agents; and
• Holding itself out to lenders, title insurance companies or members of the public as willing and able to provide the above services.

Suffolk County Superior Court Judge Jame Haggerty declared that the practices of Colonial constituted the unauthorized practice of law in violation of M.G.L. c. 221, §46, a statute that is almost identical to N.H. Rev. Stat. Annot. 311:11.¹  Both statutes prohibit a corporation from appearing in court on behalf of third persons, drafting agreements or giving legal advice in matters unrelated to its lawful business, or holding itself out as being entitled to practice law.

When the suit was filed in 1996 by a group of Massachusetts bar associations, Colonial, a Rhode Island corporation owned and operated by two non-lawyers, provided services to mortgage lenders in connection with the purchase or re-financing of residential real estate and acted as the issuing agent for various title insurance companies. David Carroll, a Massachusetts attorney, provided legal services to Colonial in exchange for the use of space and equipment at Colonial's offices in Foxboro, Mass.

Although most of Colonial's income was earned through the issuance of title insurance policies after determining there was clear title to the property, it also operated as the closing agent for mortgage lenders for which it charged a flat fee that was lower than the average fee charged by an attorney for the same services. Colonial contended at trial that it's simply provided information and secured the signatures of the parties to the closing documents, and therefore had not engaged in the unauthorized practice of law. Judge Haggerty found otherwise: "Colonial is the lender's legal representative at the closing when it acts as a closing agent and the borrower may incorrectly look to him for legal advice and explanation."

Judge Haggerty also found that M.G.L. c. 221, §46 prohibited Colonial from acting as an issuing agent for title insurance companies because Colonial engaged in the practice of law when it evaluated title and rendered title opinions to the title insurance companies; she rejected Colonial's argument that because the legislature had permitted the incorporation of title insurance companies, Colonial's issuance of title policies under the supervision of Carroll was permissible. As Judge Haggerty explained:

Carroll, an attorney, may be hired as a title insurance agent directly by a title insurance company. A title insurance company, however, may not hire Colonial (who then hires Carroll) to conduct evaluations of title.

At the heart of the decision in Colonial Title is the long-standing justification for excluding unlicensed persons from the practice of law: "....the protection of the public from being advised and represented in legal matters by incompetent and unreliable persons, over whom the judicial department could exercise little control." Id., citing Lowell Bar Association v. Loeb, 315 Mass. 176, 180 (1943). ² 

The unauthorized practice of law by individuals presents slightly different issues. Although RSA 311:1 provides that "[a] party in any cause or proceeding may appear, plead, prosecute or defend, in his proper person or by any person of good character," this provision is limited by RSA 311:7, which provides: "[n]o person shall be permitted commonly to practice as an attorney in court unless he has been admitted by the court and taken the oath." Bilodeau v. Antal, 123 N.H. 39, 42 (1983) (emphasis supplied). Since the 19th century, the New Hampshire Supreme Court has drawn a distinction between the "occasional representation of a party" and the "frequent appearance of a non-lawyer in a legal capacity." Ricker's Petition, 66 N.H. 207, 225 (1890); see also, Bryant's Case, 24 N.H. 149 (1951). The Court has construed the "citizen of good character" language to authorize a layperson to appear in an "individual" case, but not as creating "a blanket exception allowing lay counsel to file appearances as a matter of course." Campaign for Ratepayers' Rights, 137 N.H. 707, 714-15(1994), citing State v. Settle, 129 N.H. 171, 176 (1987); see also, Tocci's Case, 140 N.H. 68, 70 (1995).

Notwithstanding the strong public policy against the unauthorized practice of law recognized by the New Hampshire Legislature3  and the New Hampshire Supreme Court, see, Knox Leasing v. Turner, 132 N.H. 68, 72 (1989), the New Hampshire Attorney General's Office, which is charged with enforcement of both RSA 311 and RSA 358-A, the New Hampshire Consumer Protection Act, has, in recent years, ignored highly visible instances of the unauthorized practice of law by self-proclaimed "judicial reformers," and "independent paralegal" firms. One recent press release, for example, advertised the opening of the "Court System Resource & Referral Center" by a non-lawyer independent paralegal firm that planned to offer assistance with procedural requirements, assistance with pleadings and "case preparations" for pro se litigants. These services are in clear violation of the Supreme Court's construction of RSA 311:1 to require pro se litigants to "draft all pleadings, briefs and memoranda of law without the assistance of outside parties." Knox Leasing v. Turner, 132 N.H. 68, 72 (1989).

It is frequently argued by those who advocate or openly engage in the unauthorized practice of law that they provide affordable legal services to those who would otherwise be unrepresented, and that any effort to limit the practice of law is simply the anti-competitive activity of the organized bar. See, Turner, "Statement Before the ABA Commission On Evaluation of the Rules of Professional Conduct" at http://www.halt.org ("Broad prohibitions on the 'unauthorized practice of law' are vestiges of anti-competitive practices by the legal profession that have become increasingly antiquated as we enter the information age.") and "Democracy Corner" at http://www.nolo.com ("American democracy is mocked by the fact only a small professional elite has easy access to our government's judicial branch.").

This argument ignores the risks of lay representation that are frequently not disclosed to consumers of the services of unlicensed practitioners: (1) non-lawyers are not required to demonstrate that they have the minimum competency and moral character to represent others in a fiduciary capacity, see, Bilodeau at 42-43; (2) non-lawyers are not subject to comprehensive regulation by the New Hampshire Supreme Court and are thus not required to comply with the Rules of Professional Conduct, satisfy mandatory CLE requirements, or maintain client trust accounts, and their clients have no recourse to the Public Protection Fund., cf. Averill v. Cox, NH Supreme Court decision issued Oct. 31, 2000) ; (3) non-lawyers are not officers of the court bound by the oath required of licensed attorneys or members of the unified New Hampshire Bar, the "overwhelming majority" of whom "have continually served the needs and interests of their clients and communities with competence, adherence to ethical principles, and respect for the rule of law," In Re: Proposed Public Protection Fund Rule, 142 N.H. 588, 591 (1998); and (4) non-lawyers are generally not bound by the attorney-client privilege. See, e.g., Klonoski v. Mahlab, 953 F. Supp. 425 (D.N.H. 1996).

The significant distinctions between lawyers licensed to practice law in this state and those who provide services in violation of RSA 311 ensure that "[t]he practice of law is not simply an occupation; it is a profession." Daigle v. City of Portsmouth, 137 N.H. 572, 576 (1993).

A case can be made that increased and more affordable access to justice for all citizens of this state requires that non-lawyers be allowed to engage in limited areas of the practice of law under a system of licensing, regulation and discipline that would ensure that the consumers of those services receive competent representation from individuals or entities who have satisfied minimum standards of proficiency and who are subject to disciplinary action for unethical or incompetent conduct. Unless and until RSA 311 is amended by the Legislature to authorize the limited - and regulated - provision of legal services by non-lawyers, the Office of the Attorney General can and should carry out its statutory responsibilities to protect consumers and to investigate and prosecute violations of RSA 311.

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