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July 24, 2015

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anon

Are you considering the "practicing law under the supervision of local attorneys" view of it? Is every lawyer practicing under the supervision of another no longer practicing law?

Michael Risch

This is great, but I don't know that you had to get so complex about it. Your discussion implies that he can't work there unless he is supervised by a lawyer admitted in NC. Any other supervision would be by someone not authorized to practice law.

Why isn't the better answer NC rule 5.5(c)(2):
"(2) the lawyer acts with respect to a matter that arises out of or is otherwise reasonably related to the lawyer's representation of a client in a jurisdiction in which the lawyer is admitted to practice and the lawyer’s services are not services for which pro hac vice admission is required;"

I suppose if the client had no California presence, this wouldn't work, but you could easily fix it by a pro hac vice admission in Ohio.

Bernie Burk

To Mike Risch:

Thanks for the thoughts, but sorry, they don't work. The Rule you quote is a lawyer disciplinary rule only; like most other states, North Carolina has other statutory law defining the "practice of law" and the "unauthorized practice of law." Those statutes are discussed at length in the Lola decision. Additionally, there was no indication that Lola's California license had anything to do with the case or the client. Nor would I imagine that BigLaw firms would be interested in applying for admission pro hac vice for the dozens of document reviewers who might come and go on a case, and courts would hate it. (The fact that no one has ever done this is an indication of the universal understanding that you don't need to under governing law, which is pretty clear pretty much everywhere.) And it wouldn't solve the problem of people who are not barred anywhere, such as the many paralegals who do doc review side by side with licensed lawyers, or the thousands of foreign lawyers who do offshore outsourced legal process work.

This case is problematic because of the federalistic nature of lawyer regulation and the historically incoherent definition of the scope of the guild's monopoly. There is no simple solution. I wrote the post to illustrate the problem.

--Bernie

Michael Risch

Well, I agree with all that. I as addressing more the problem of: if it is practice of law, then how can they do it and not face discipline in NC? One answer is supervision, which you discuss at length. Another answer is Rule 5.5.

And maybe 5.5 doesn't cut it in this case for Lola; my point was that you could get to a "practice of law" finding without having to implicate supervision. In any event, that rule would have to cut it for the NY lawyer who is supervising, unless Skadden has a locally barred lawyer supervising.

[M][@][c][K]

My understanding is that the reason:

"In every American jurisdiction I know of, if a lay person selected by the lawyer applies legal principles to the client’s specific circumstances under the lawyer’s supervision, the lawyer rather than the subordinate is the one “practicing law.” With a skilled secretary or paralegal and a responsible supervising lawyer—and there are hundreds of thousands of both all over the country—this supervisorial arrangement works just fine, saves lawyers a lot of time, and saves clients a lot of money."

Is privilege under attorney client and work doctrine. In effect because the lay person is acting at the direction of the supervising lawyer to fulfil that lawyer's obligations to the client, the information and materials developed by the lay person is privileged. That is why, especially in litigation, it is a sensitive issue. It is also infamously, what the Tobacco Institute exploited when having couple like Covington and Shook commission research projects on tobacco and lung cancer - and was known as "taking a privilege bath."

The Most Interesting Breh in the World

Bernie, just a general comment - I enjoyed the post and thought you articulated the issue very well.

Orin Kerr

Great post. And I loved the what Lola wants, Lola gets line.

Steve

I've worked on, and supervised, many projects of this type as a contract lawyer. It's true that many of them are mind-numbing, ministerial jobs. I've spent days stamping one page after another "highly confidential" pursuant to a confidentiality agreement, where the toughest judgment call I had to make was if you find a blank page in the midst of a 100-page "highly confidential" document, do you also stamp the blank page highly confidential?

Having said that, there is presumably a reason why firms insist on hiring JDs to perform this type of work. One is that even in the most workmanlike piece of document review, something unforeseen may come up. Sometimes it takes a lawyer's judgment to say hey, even though I was given very specific instructions, something about this particular document makes me think I should bring it to a supervising attorney's attention. You don't know when or if this will happen, but it does happen.

In any event, this was probably the correct result in the context of a 12(b)(6) motion, for the reasons the post explains. But while my sympathies are generally with the grunts of the legal profession rather than the white-shoed titans, I still tend to think the lawyer-plaintiff is trying to have it both ways here. He wants to accept a job that, presumably, he could not have landed without being a licensed attorney, but then he wants to argue the work was really paralegal work so that he can have the legal rights of a non-professional. Skadden could surely find a large supply of smart non-lawyers, fully capable of determining whether a document contains specified keywords, without paying $25 an hour.

twbb

Steve, one of the reason firms insist on hiring JDs to perform this work is that there are enough of them who will work $25 an hour, and the firm can then bill them out at much more than that on the strength of the JD. Skadden could have prevented the problem by simply paying overtime, but law firm, particularly biglaw culture is to suck every penny out of low-level workers to maintain profits per partner as high as possible. I remember reading once that the firm had to convince Joe Flom to actually take more money; can you imagine a Skadden partner now in that situation?

anon

Bernie states:

"In short, either all those document reviewers are “practicing law” without a license under the governing state law the FLSA borrows, and Skadden (while it need not pay them overtime) is the mastermind of an ongoing criminal conspiracy unless henceforward it hires only document reviewers who are licensed to practice law in the state whose laws govern the service provided, or else none of the document reviewers are “practicing law” and they should all get overtime. But you can’t have it both ways."

Nope. False dichotomy. One can be practicing law by way of document review in a jurisdiction in which one is not admitted, and not be engaged in the "unauthorized practice of law."

NC rule 5.5(c):(c) A lawyer admitted to practice in another United States jurisdiction, and not disbarred or suspended from practice in any jurisdiction, does not engage in the unauthorized practice of law in this jurisdiction if the lawyer’s conduct is in accordance with these Rules and ... (3) the lawyer acts with respect to a matter that is in or is reasonably related to a pending or potential arbitration, mediation, or other alternative dispute resolution proceeding in this or another jurisdiction, if the lawyer’s services arise out of or are reasonably related to the lawyer's representation of a client in a jurisdiction in which the lawyer is admitted to practice and are not services for which pro hac vice admission is required.

Bernie thinks the rule is irrelevant. He says:
"The Rule you quote is a lawyer disciplinary rule only; like most other states, North Carolina has other statutory law defining the "practice of law" and the "unauthorized practice of law." So?

The slip opinion made very clear the authorities it found relevant. Unless Bernie has a cite to back up his claim that N. Carolina's rules regarding the "unauthorized practice of law" are irrelevant to establish the "unauthorized practice of law" it appears that his "unauthorized practice of law" prong is based on a false dichotomy and most of the post above about so-called "crime" is irrelevant to the actual case.

Derek Tokaz

Bernie,

Looking to your last paragraph, this is one of the issues we considered in creating the LST methodology. The courts (and BLS!) not withstanding, doc review isn't what most students would consider to be a law job. You are neither providing advice to nor representing clients. And more importantly, the job is not training you to do so, and is not on a career trajectory that would lead to that sort of work (thus distinguishing doc review from first year associate work). Fortunately, most doc review jobs are temporary, so they can be excluded from our Employment Score through other means.

Getting to the rest of your post, if doc review is legal work because of the 'preliminary determinations' the reviewer has to make, what distinguishes doc review from the work of a private detective? He doesn't turn over everything to the attorney who's hired him. Instead he makes decisions about what might be relevant to the case.

Steven Harbour

I am not sure what you mean by “there was no indication that Lola's California license had anything to do with the case or the client.” The Second Circuit opinion states, “He (Lola) conducted document review for Skadden in connection with a multi‐district litigation pending in the United States District Court for the Northern District of Ohio.” If one of the pre-consolidated cases had been filed in California or even if the client has a reasonable expectation that litigation might occurred, related to the same set of facts, in California, then would not NC rule 5.5(c)(2) apply, and Lola would not be engaged in the unauthorized practice of law? The opinion does not describe the litigation, but it would be unusual for multi-district litigation to have no relationship to conduct that arguably occurred in California.

Bernie Burk

There have been Comments suggesting that the dilemma my post poses is imaginary, principally because there is a Rule of Professional Conduct, Rule 5.5, that exempts certain licensed lawyers from disciplinary consequences for unauthorized practice under certain circumstances. When I previously pointed out that the Rules of Professional Conduct by their terms define disciplinary consequences only, the response was disbelief. The bottom line here is that I was right about the limited scope of Rule 5.5, but more importantly, even if I’m not, Rule 5.5 by its own terms doesn’t solve the basic problem that Lola v. Skadden illustrates. Here’s an explanation:

North Carolina Rule of Professional Conduct 0.2 (entitled “Scope”) provides, in relevant part: “The Rules [of Professional Conduct] presuppose a larger legal context shaping the lawyer's role. That context includes court rules and statutes relating to matters of licensure, laws defining specific obligations of lawyers, and substantive and procedural law in general. . . . Failure to comply with an obligation or prohibition imposed by a Rule is a basis for invoking the disciplinary process. . . . Violation of a Rule should not give rise itself to a cause of action against a lawyer nor should it create any presumption in such a case that a legal duty has been breached. In addition, violation of a Rule does not necessarily warrant any other nondisciplinary remedy, such as disqualification of a lawyer in pending litigation. The rules are designed to provide guidance to lawyers and to provide a structure for regulating conduct through disciplinary agencies” (paragraph breaks omitted).

I would never suggest that the scope or purpose of state laws defining the “practice of law” and the “unauthorized practice of law” is coherent; the whole point of the post is that they’re not. I also wouldn’t rule out the possibility that some court might construe the safe harbors from discipline for unauthorized practice in Rule 5.5 as informing (or, despite the Rules’ plain terms, even defining) licensure requirements, and thus helping to define safe harbors from any sanction for unauthorized practice, including the civil fee forfeiture that often accompanies a determination of unauthorized practice, or the misdemeanor criminal liability to which my post refers.

But what the comments don’t take into account is the fact that, even if you consider Rule 5.5 to directly or indirectly contribute to the definition of “unauthorized practice,” it doesn’t answer the basic question at the heart of Lola v. Skadden. That’s because Rule 5.5(c) applies only to “a lawyer admitted in another United States jurisdiction” who is not suspended or disbarred anywhere, and it allows such a person to perform “legal services” within the regulating state free of disciplinary consequences without ever defining “legal services” (or the “practice [of] law” referred to in Rule 5.5(a)).

So the most you can say about Rule 5.5 is that it doesn’t govern the situation, and even if you stretch it beyond its terms to say it does, it doesn’t tell you what “legal services” or the “practice of law” are (which is the critical question in Lola), and thus does not address the problem the post raises for any document reviewer who is not a member of some state bar. There are many unlicensed legal assistants and paralegals who work side-by-side with licensed lawyers in BigLaw document reviews. And the defining feature of overseas outsourcing of legal process work (particularly document review) is that the work is done by scores of people who, while quite literate and competent not to mention educated in the law in another country, are not admitted to practice in any U.S. jurisdiction. Thus, even if you conclude that Rule 5.5 saves David Lola from any sanction for practicing law without a license in North Carolina, it tells you nothing about whether he was “practicing law” in the first place, and it provides no help to countless other document reviewers who are not admitted to practice somewhere in the United States, and their employers. It also completely fails to address the problem that, if David Lola was “practicing law” by reviewing documents in a fashion requiring any judgment, then so are hundreds of thousands of unlicensed paralegals and legal secretaries all over the country who routinely support their licensed bosses by providing services requiring at least “a modicum of independent legal judgment.” They also get no comfort from Rule 5.5 or any of the penumbras or emanations from it that some Commenters imagine might exist.

In the big picture, I would say that it trivializes the “practice of law” to argue that document reviewers like David Lola are doing it (even if you accept what I anticipate will be Skadden’s version of the facts, and assume contrary to his pleading that Lola did regularly exercise some degree of judgment in his work). Given the highly constrained and nondiscretionary nature of his employment (not to mention the modest wage and lack of any hope for permanency or advancement), Lola and his ilk, licensed or not, deserve time-and-a-half for overtime.

Skadden has to argue that people like Lola are "practicing law" in order to avoid paying them time-and-a-half. My guess is that, to the extent Skadden thought about the UPL implications at all (and I wouldn't assume they haven't given what good lawyers they are), they just don't think they'll get in trouble as a practical matter. They have a safe harbor from discipline by the most vigilant protectors of the practice monopoly under Rule 5.5, and criminal consequences are unlikely as a practical matter given how big an employer and how politically connected they are.

But let there be no mistake here: Many, many legal secretaries and paralegals exercise legal judgment every day, and regularly receive time-and-a-half for overtime, apparently reflecting a judgment that they are NOT "practicing law." Why should David Lola be treated differently?

It would be nice if the easy solution for which our Commenters yearn existed, but it doesn't. As I noted earlier, the fundamental problems here are the fiercely federalistic and localized nature of lawyer regulation, and the longstanding incoherence of the scope of the guild’s monopoly. Those remain intractable for the time being.

--Bernie

Bernie Burk

One more point: Comment [13] to North Carolina Rule of Professional Conduct 5.5 provides: "The definition of the practice of law is established by N.C.G.S. §84-2.1. Limiting the practice of law to members of the bar protects the public against rendition of legal services by unqualified persons."

NCGS §84-2.1 is the statute that the Second Circuit attempted to construe in Lola.

--Bernie

anon

Bernie

You are simply eliding the fact that you posted a question based on a false dichotomy that isn't relevant to the Lola case.

You stated:

"In short, either all those document reviewers are “practicing law” without a license under the governing state law the FLSA borrows, and Skadden (while it need not pay them overtime) is the mastermind of an ongoing criminal conspiracy , or else none of the document reviewers are “practicing law” and they should all get overtime. But you can’t have it both ways."

Nope. False dichotomy. You have left out a fairly important alternative. One can be practicing law by way of doc review in a jurisdiction in which one is not admitted, and not be engaged in the "unauthorized practice of law" and a firm employing such an attorney need not be engaged in an "ongoing criminal conspiracy."

Your entire and repeated references to "an ongoing criminal conspiracy" unless Skadden "henceforward hires only document reviewers who are licensed to practice law in the state whose laws govern the service provided" was not even arguably correct in this instance, or even at issue. You appear to concede this without expressly admitting this error.

The issue is, as you say, "what [constitutes] “legal services” or the “practice of law.” Was the doc reviewer "practicing law" or not?

This seems to be a fairly straightforward question, which won't be resolved on a categorical basis (e.g., sometime doc review involves legal services, sometimes it doesn't). If the former conclusion is reached, the court certainly need not decide whether Skadden engaged in an "ongoing criminal conspiracy."

Bernie, you then seem to repeatedly drift to yet another issue: you repeatedly seek to "address the problem the post raises for any document reviewer who is not a member of some state bar."

Ok. You want to consider some other case - e.g., whether paralegals or other non-attorneys will be deemed to be engaged in the unauthorized practice of law when conducting a document review if Lola finds the doc review at issue in that case was the practice of law. Fair enough.

But that other issue - paralegal document review - seems to be, as you stated, resolved by a different set of rules. So, we can't be sure what your point is there.

See the disconnect, Bernie? YOu are conflating several issues - the supposed unauthorized practice of law by an admitted attorney in a jurisdiction other than the jurisdiction of his admission (not an issue), the supposed unauthorized practice of law by a non-attorney (not an issue), whether document review is the practice of law (at issue) and the attorney exemption under FSLA.

There's nothing inherently wrong with these other inquiries. But, please, you've got a long post above with lots of talk about Lola presenting a choice between a criminal conspiracy and a finding that doc review is not the practice of law. That discussion is not apt.

Bernie Burk

Anon: Nope, sorry. I agree that my suggestion that Skadden hire only document reviewers who are licensed to practice law in the state whose laws govern the service provided was inadvertently a little overbroad, but it is you who's missed the point. My last comment explains it adequately, and I suggest you read it again. Or not; your choice. And since I'm familiar with your rhetorical habits, let me warn you in advance that I am not going to argue with you any more on this topic in this space.

Any reader who's actually interested in these issues as opposed to a sad little campaign to prove he's the smartest guy in the room is invited to contribute constructively. Bye-bye, anon.

--Bernie

anon

Wow. A bit of an overreaction, Bernie. ARe you really in a position to speak of "rhetorical habits", especially give the tone and content of your last paragraph? (Which, by the way, is tame compared with earlier retorts I've read when you've been challenged on other posts !)

I'm not the only one who has pointed out that the whole "unauthorized practice" issue as you've presented here is really sort of confused. I'm glad at least you've conceded that a central point in the long road above - that either Skadden claims practice of law and thereby concedes a criminal conspiracy or the work must be deemed not have been the practice of law - was wrong. There is a third, very obvious alternative.

I count at least three commenters above making more or less the same point.

As for the accusation that these obvious points are just part of a "sad little campaign to prove he's [they] the smartest guy[s] in the room," again, I would say it is indeed ironic that this projection in your retort (complaining about tone, and then attacking in such a vicious way) is completed by the way you are ever so slowly conceding some faulty analysis. You, Bernie, are indeed the "smartest guy in the room"!

Former Editor

Just as a toss-in, I think it's worth noting that not every state follows the model version of Rule 5.5. Most notably for purposes of these big firm document reviews, New York State does not have the liberal multi-jurisdictional practice exceptions that the model rules (and many states like NC) do. New York's Rule 5.5 reads, in it's entirety:

Unauthorized Practice of Law
(a) A lawyer shall not practice law in a jurisdiction in violation of the
regulation of the legal profession in that jurisdiction.
(b) A lawyer shall not aid a nonlawyer in the unauthorized practice of law.

Lola looks to the Second Restatement on Conflicts to decide which state law to apply, rather than applying a bright-line "where the services were performed" test. It certainly seems possible, then, that in a future case where New York's law applies to the doc reviewer's employment (by dint of a choice of law clause, an state interests, or something else), there won't be the kind of "out" for the reviewer and the firm that others have suggested above.

Bernie Burk

Former Ed: A very fair point, and thank you. I think that leaves the state of play on Rule 5.5 as follows: My original post somewhat overstated the scope of the UPL concern for doc reviewers like David Lola because of the possibility that Rule 5.5 could have some mitigating effect. BUT (1) there is some question whether a jurisdiction would apply Rule 5.5 to anything but discipline, leaving civil and even criminal remedies alone; (2) Rule 5.5(c), the key provision here, applies (if at all) only to lawyers licensed in some American jurisdiction, and some doc reviewers are not, including quite probably members of Lola's putative class as well as virtually all employees of offshore legal process outsourcers; (3) the Second Circuit adopted a definition of practicing law that is unduly cramped, and inconsistent with existing practice regarding other skilled but nonlicensed legal workers.

--Bernie

anon

Some comments on the last comment (“state of play”).

1. The Lola opinion considers at length an Ethics Opinion, which in turn relies on the rules of professional conduct, to “shed light on” what constitutes the practice of law and what constitutes the unauthorized practice of law. Second, anything is possible, one supposes, but is anyone aware of any state pursuing criminal charges for “unauthorized practice of law” against someone who is not engaging in the “unauthorized practice of law” according to the rules of professional conduct in the state? Any prosecutions for “massive criminal conspiracies” based on conduct that is legit according to every non-statutory state rule and interpretation regarding the meaning of “unauthorized practice of law” in the state?

2. Regarding whether doc reviewers who are “employees of offshore legal process outsourcers” engage in the unauthorized practice of law - or, more precisely, whether their hirers engage in a crime/violation of the rules of professional conduct by facilitating/employing their services – one need only read the ethics opinion cited at length in the slip opinion in Lola. The Second Circuit took into account a distinction that that ethics opinion found between hiring persons to engage in “reviewing documents; conducting due diligence; drafting contracts, pleadings, and memoranda of law; and conducting legal research” and the “exercise independent legal judgment in making decisions on behalf of a client.” The Second Circuit found (relying on the applicable ethics opinion) that document review may be the practice of law under certain circumstances, but that such review may be lawfully “performed by a non‐lawyer … if that non‐lawyer is supervised by a licensed attorney.”

3. The conclusion - “the Second Circuit adopted a definition of practicing law that is unduly cramped” – thus seems to have it the wrong way around, with all due respect. The Second Circuit noted that the District Court had too categorical a view that “any level of document review is considered the “practice of law” in North Carolina.” To the contrary, the Second Circuit held, some document review is, some isn’t. And, the Second Circuit relied on the language of the Ethics Opinion, not statutes, to support this point. The standard adopted by the Second Circuit is flexible and situation specific, not “unduly cramped.”

4. The “unauthorized practice of law” and criminal conspiracies and finding all paralegals to be engaged in unlawful practice of law if they exercise a modicum of legal judgment are not really the issues in Lola. There is, however, a parity point: why should paralegals get overtime when crossing the line into document review that should be considered the “practice of law” when a lawyer doesn’t get overtime for the same work? In short, the same activity may be at issue: but performed by different actors under different circumstances leading to different conclusions?

The “independent judgment” with an emphasis on independence is very familiar in the FLSA litigation context. The categorical treatment of professionals is another legit issue. But, these latter points were not the main thrust of Bernie’s post, nor is the major issues in Lola, and thus remain for another discussion.

Commence the outrage!

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