William (Bill) Dolan, Esq.
Dolan Law LLC
484-508-8582 (office)
302-547-3903 (direct)
888-547-4414 (fax)
wdolan@dolanlawpa.com
Avoiding the Unauthorized Practice of Law
Avoiding the Unauthorized Practice of Law
1.
Introduction
2.
Defining the Practice of Law
3.
Public Policy Considerations with Respect to the Practice of Law
4.
UPL General Examples
5.
UPL Accountant/CPA Examples
William (Bill) Dolan, Esq.
Dolan Law LLC
484-508-8582 (office)
302-547-3903 (direct)
888-547-4414 (fax)
wdolan@dolanlawpa.com
Avoiding the Unauthorized Practice of Law
1.
Introduction
a)
b)
c)
Corporate and Real Estate Lawyer
Member of the Pennsylvania UPL Committee
Goals of this Presentation
William (Bill) Dolan, Esq.
Dolan Law LLC
484-508-8582 (office)
302-547-3903 (direct)
888-547-4414 (fax)
wdolan@dolanlawpa.com
Avoiding the Unauthorized Practice of Law
2.
William (Bill) Dolan, Esq.
Dolan Law LLC
484-508-8582 (office)
302-547-3903 (direct)
888-547-4414 (fax)
wdolan@dolanlawpa.com
Defining the Practice of Law
The Supreme Court of Pennsylvania:
“An attempt to formulate a precise definition of the unauthorized practice of law would be more
likely to invite criticism than to achieve clarity.”
Avoiding the Unauthorized Practice of Law
2.
William (Bill) Dolan, Esq.
Dolan Law LLC
484-508-8582 (office)
302-547-3903 (direct)
888-547-4414 (fax)
wdolan@dolanlawpa.com
Defining the Practice of Law
The Supreme Court of Pennsylvania:
“[t]hrough patient years of study, [a lawyer] has acquired an understanding of the law and
obtained a license to engage in its practice, [and] he applies his knowledge in three principal
domains of professional activity:
1.
He instructs and advises clients in regard to the law, so that they may properly pursue their
affairs and be informed as to their rights and obligations.
2.
He prepares for clients documents requiring familiarity with legal principals beyond the ken
of the ordinary layman – for example, wills and such contracts as are not of a routine nature.
3.
He appears for clients before public tribunals to whom is committed the function of
determining rights of life, liberty and property . . . .”
Avoiding the Unauthorized Practice of Law
3.
William (Bill) Dolan, Esq.
Dolan Law LLC
484-508-8582 (office)
302-547-3903 (direct)
888-547-4414 (fax)
wdolan@dolanlawpa.com
Public Policy Considerations with Respect to the Practice of Law
a)
Primary goal of restricting the practice of law:
The protection of the public from incompetent, unethical,
or irresponsible representation.
Manual Concerning the Unauthorized Practice of Law, Fifth Edition, PBA UPLC:
“Lawyers’ training is regulated, their intellectual and moral qualifications are
investigated, and their responsibility can be readily enforced by the court,
whose officer they are.”
Avoiding the Unauthorized Practice of Law
3.
Public Policy Considerations with Respect to the Practice of Law
b) How is the practice of law regulated.
i.
A.
B.
ii.
iii.
A.
B.
C.
D.
iv.
Section 2524 of Title 42 of the Pennsylvania code renders UPL a crime.
First offense, third degree misdemeanor.
Second or subsequent offense, first degree misdemeanor.
Violation of Unfair Trade Practices and Consumer Protection Law.
Pennsylvania Bar Association, Unauthorized Practice of Law Committee
UPL Committee Independent Actions
District Attorney
Attorney General
Professional Agencies
LWPR 8.3 Reporting Misconduct
William (Bill) Dolan, Esq.
Dolan Law LLC
484-508-8582 (office)
302-547-3903 (direct)
888-547-4414 (fax)
wdolan@dolanlawpa.com
Avoiding the Unauthorized Practice of Law
William (Bill) Dolan, Esq.
Dolan Law LLC
484-508-8582 (office)
302-547-3903 (direct)
888-547-4414 (fax)
wdolan@dolanlawpa.com
LWPR Rule 8.3 Reporting Misconduct
Maintaining The Integrity Of The Profession
Rule 8.3 Reporting Professional Misconduct
(a) A lawyer who knows that another lawyer has committed a violation of the Rules of
Professional Conduct that raises a substantial question as to that lawyer's honesty,
trustworthiness or fitness as a lawyer in other respects, shall inform the appropriate
professional authority.
(b) A lawyer who knows that a judge has committed a violation of applicable rules of judicial
conduct that raises a substantial question as to the judge's fitness for office shall inform the
appropriate authority.
(c) This Rule does not require disclosure of information otherwise protected by Rule 1.6 or
information gained by a lawyer or judge while participating in an approved lawyers assistance
program.
Avoiding the Unauthorized Practice of Law
3.
Public Policy Considerations with Respect to the Practice of Law
a)
b)
c)
d)
e)
f)
Rule 1.4: Communication
Rule 1.6: Confidentiality of Information
Rule 1.7: Conflict of Interest: Current Clients
Rule 5.4: Professional Independence of a Lawyer
Rule 7.4: Communication of Fields of Practice and Specialization
Rule 7.5: Firm Names and Letterheads
William (Bill) Dolan, Esq.
Dolan Law LLC
484-508-8582 (office)
302-547-3903 (direct)
888-547-4414 (fax)
wdolan@dolanlawpa.com
Avoiding the Unauthorized Practice of Law
4. UPL General Examples
a)
i.
Legal document preparation:
Some specific examples are:
A. Power of attorney forms.
B. Immigration paperwork (with a narrow exception).
C. Separation/marriage termination agreements.
D. Will and trusts.
E. Articles of incorporation, organization, and merger.
F. Operating agreement and bylaws.
William (Bill) Dolan, Esq.
Dolan Law LLC
484-508-8582 (office)
302-547-3903 (direct)
888-547-4414 (fax)
wdolan@dolanlawpa.com
Avoiding the Unauthorized Practice of Law
William (Bill) Dolan, Esq.
Dolan Law LLC
484-508-8582 (office)
302-547-3903 (direct)
888-547-4414 (fax)
wdolan@dolanlawpa.com
4. UPL General Examples
b) Public Representation of Clients:
i.
ii.
iii.
iv.
v.
Appearing before zoning boards and governing bodies of municipalities in connection with land
use applications.
Appearing with a debtor at his or her 341 meeting of creditors.
Representation of corporations by non-attorney officers in a court proceeding.
Representing a client at a real estate settlement.
Administrative and court appearances generally.
Avoiding the Unauthorized Practice of Law
William (Bill) Dolan, Esq.
Dolan Law LLC
484-508-8582 (office)
302-547-3903 (direct)
888-547-4414 (fax)
wdolan@dolanlawpa.com
5. UPL Accountant/CPA Examples
a) Tax Appeals
i.
Counseling, preparation and filing of real estate tax assessment appeal forms, and
appearance before a county board of assessment.
A. Power-of-attorney does not cloak a layperson with the power to act as an attorney-atlaw.
b) Probate
i. Preparation and filing of petitions for probate and other documents relating to a decedent’s
estate with the Register of Wills and the Clerk of the Orphans Court and otherwise assisting
personal representatives with the administration of decedent’s estates.
A. Preparing an inheritance tax return without the advice and direction of counsel for the
personal representative.
Avoiding the Unauthorized Practice of Law
William (Bill) Dolan, Esq.
Dolan Law LLC
484-508-8582 (office)
302-547-3903 (direct)
888-547-4414 (fax)
wdolan@dolanlawpa.com
5. UPL Accountant/CPA Examples
c)
Associations
i.
Forming associations (including but not limited to corporations, partnerships, limited liability
companies, business trusts, and limited liability partnerships.
ii.
Advertising such formations.
iii. Advising on the type of entity beyond tax and accounting issues.
 “Tax and accounting issues comprise only a small portion of the total overall analysis
required to determine the type of organization that is best suited for the particular client
under the particular set of circumstances.
iv. Issues surrounding association formations.
Avoiding the Unauthorized Practice of Law
iv.
Issues surrounding association formations.
A.
Piercing the Corporate Veil
William (Bill) Dolan, Esq.
Dolan Law LLC
484-508-8582 (office)
302-547-3903 (direct)
888-547-4414 (fax)
wdolan@dolanlawpa.com
Avoiding the Unauthorized Practice of Law
iv.
William (Bill) Dolan, Esq.
Dolan Law LLC
484-508-8582 (office)
302-547-3903 (direct)
888-547-4414 (fax)
wdolan@dolanlawpa.com
Issues surrounding association formations.
B.
Breach of Fiduciary Duties
1.
Who owes fiduciary duties and to whom, generally?
a.
A fiduciary duty exists in “a situation where one person reposes special trust in and reliance on the judgment of another or
where a special duty exists on the part of one person to protect the interests of another.”
1)
Officers to the company and to shareholders.
2)
Directors to the company and to shareholders
3)
Controlling shareholder to minority shareholders.
4)
Partners of a partnership to other partners.
5)
Members of an LLC to the company and other members.
6)
Manager of an LLC to the company and the members.
2.
What duties are owed?
a.
Duty of Care
1)
Duty of Good Faith
b.
Duty of Loyalty
Avoiding the Unauthorized Practice of Law
iv.
Issues surrounding association formations.
B.
Breach of Fiduciary Duties
William (Bill) Dolan, Esq.
Dolan Law LLC
484-508-8582 (office)
302-547-3903 (direct)
888-547-4414 (fax)
wdolan@dolanlawpa.com
Avoiding the Unauthorized Practice of Law
iv.
Issues surrounding association formations.
C.
Hypothetical Situation
Jon and Bev decide to make a movie.
William (Bill) Dolan, Esq.
Dolan Law LLC
484-508-8582 (office)
302-547-3903 (direct)
888-547-4414 (fax)
wdolan@dolanlawpa.com
Avoiding the Unauthorized Practice of Law
William (Bill) Dolan, Esq.
Dolan Law LLC
484-508-8582 (office)
302-547-3903 (direct)
888-547-4414 (fax)
wdolan@dolanlawpa.com
 A potential investor says he’s in if the business is taxed as a
partnership. They call their accountant for advice on setting
up the business. Their accountant gives them the
following advice:
1) LLCs have a flexible
a) taxation structure and can be taxed as a partnership or a
corporation; and
b) ownership structure;
2) LLCs afford the parties wide latitude in setting out the rights and
obligations of the parties; and
3) LLCs provide liability protection for the business owner like a shareholder in a corporation.

UPL
Avoiding the Unauthorized Practice of Law
William (Bill) Dolan, Esq.
Dolan Law LLC
484-508-8582 (office)
302-547-3903 (direct)
888-547-4414 (fax)
wdolan@dolanlawpa.com
 Jon and Bev love the LLC idea, so the accountant forms the entity (Picture LLC) and has
the corporate kit sent directly to Jon and Bev, who upon receipt immediately place it on
Jon’s bookshelf with his other corporate documents.

UPL

Corporate Formalities – PCV Factor.
 Jon and Bev need more money, so they decide to
start pitching potential investors for capital.

Securities Violations – Fraud – PCV Factor.
Avoiding the Unauthorized Practice of Law
William (Bill) Dolan, Esq.
Dolan Law LLC
484-508-8582 (office)
302-547-3903 (direct)
888-547-4414 (fax)
wdolan@dolanlawpa.com
 Jon and Bev find that the movie business is tougher
than they thought, so they want to generate some
cash flow, so they can make some money for their
time and effort. Luckily, they have a friend at
Budweiser, who convinces the head of marketing
to make a $100,000 product placement deal with
Picture LLC to have Budweiser beer in the movie. Ecstatic, Jon uses his $50,000 to put
a deposit down on a new car. Bev puts a big dent into her husband’s gambling
debts with her half.

Duty of Loyalty – Breach of Fiduciary Duty.
Avoiding the Unauthorized Practice of Law
 While doing her grocery shopping at Target, Bev learns that
her Target card is maxed out. Unshaken by the embarrassment
of her card denial, Bev pulls out her Picture LLC Master Card
and completes her purchase with confidence.

Co-Mingling Assets and Liabilities – PCV Factor.
 With insufficient capital to complete the film due to some
unpredicted expenses, Jon and Bev decide to trim the production
budget. By allowing Picture LLC to self-insure, they save twenty
thousand dollars in overhead while preserving the creative
integrity of the picture. On top of the world, Jon and Bev spring
for an all expenses paid trip for them and their families to go to
Caesars’ in Atlantic City, on Picture LLC.

Undercapitalization – PCV Factor.

Co-Mingling Assets and Liabilities – PCV Factor.
William (Bill) Dolan, Esq.
Dolan Law LLC
484-508-8582 (office)
302-547-3903 (direct)
888-547-4414 (fax)
wdolan@dolanlawpa.com
Avoiding the Unauthorized Practice of Law
 Bob, the second assistant director tripped on some
loose wires that, contrary to custom, were not
affixed to the floor. Sadly, Bob landed on several glass
bottles of Budweiser, which tore up his hands and
will prevent him from ever playing professional
badminton. With no other option, Bob sues Picture LLC
for negligence. Unfortunately, Bev’s husband went on a
bender while they were in Atlantic City and disappeared
for three days with Picture LLC’s debit card, leaving the
bank account drained. So, Picture LLC has no money
(or insurance coverage) to compensate Bob.

Undercapitalization – PCV Factor

Negligence – No Assets –
Fraud – PCV Factor.
William (Bill) Dolan, Esq.
Dolan Law LLC
484-508-8582 (office)
302-547-3903 (direct)
888-547-4414 (fax)
wdolan@dolanlawpa.com
Avoiding the Unauthorized Practice of Law
William (Bill) Dolan, Esq.
Dolan Law LLC
484-508-8582 (office)
302-547-3903 (direct)
888-547-4414 (fax)
wdolan@dolanlawpa.com
 Since the Atlantic City trip left Picture LLC with no money
to pay for food service, Jon asks Pizza Brother’s, Inc., the
business he uses to cater his other company’s events,
to bring a food cart to the set. Pizza Brother’s, Inc.
requests payment in advance in accordance with its
normal business practices for a new customer. Jon tells the
sales person that “it’s all one and the same. It’s all under me.”

Identity Confusion – PCV Factor

Holding Out – Personal Guaranty or Guaranty by Other Company – General Liability by
Contract.