Maryland Bar Journal
Publications : MD Bar Journal : Resolving Disputes (v36n4)

The Gray Zone:
Mediation And The Unauthorized Practice Of Law
by Roger C. Wolf

Mr. Wolf is the Director of C-DRUM, the Center for Dispute Resolution
at the University of Maryland School of Law

          The growth of mediation in Maryland has raised concerns among lawyers admitted to practice law in Maryland as well as persons not admitted to practice law in the state that they may be engaging in the unauthorized practice of law (UPL) or violating ethical rules or good mediation practice when they provide information regarding parties’ legal rights or evaluate the merits of party’s case. This concern is not unique to mediation practitioners in Maryland. The American Bar Association (ABA) as well as many state bar associations, Virginia and North Carolina most prominently, have addressed the interplay between mediation and UPL and many articles have been written on the subject. This article will look at the approaches other states have taken and explore the problem in the context of Maryland practice.

WHAT CONSTITUTES UPL

          UPL legislation emerged in the United States after the civil war as bar associations began to develop and sought to keep the practice of law safe from untrained practitioners. Consumer protection -- assuring the competence and professionalism of those who hold themselves out as lawyers – has always been a goal of UPL statutes. Another goal has been to ensure the attorney client privilege. UPL statutes also have the effect of carving out specific tasks exclusively for lawyers, eliminating competition, and protecting income. While the goal of UPL statutes may be clear, defining what constitutes the unauthorized practice of law has not been so simple.

          No one clear definition developed by courts and bar associations cleanly delineates what constitutes the unauthorized practice of law. Rather they have usually adopted one of five approaches. These five approaches were set out in a publication of the Office of the Executive Secretary of the Supreme Court of Virginia entitled Guidelines on Mediation and the Unauthorized Practice of Law, developed pursuant to State Justice Institute Grant SJI-98-N-210 (hereinafter Virginia Guidelines on Mediation and UPL).

          One approach is the “Commonly Understood” Test which defines the practice of law as including those activities which lawyers have traditionally performed. A second approach, the “Client Reliance” Test focuses on the clients’ perception of whether she is receiving legal services. A third approach is the “Application of Law to the Facts” Test which involves relating the general body of law to the specific facts of a particular case or to a set of problems. A fourth approach is the “Affecting Legal Rights” Test which concludes, rather expansively, that one is practicing law if the services provided affect another’s legal rights. The final approach taken by some courts is The “Attorney-Client” Test which focuses on the relationship between the parties to determine if an attorney-client relation was established.

          In Maryland the practice of law is proscribed by the general assembly in sections 10-101et seq. of the Business Occupations and Professions (BOP) Article, MD. CODE ANN. . As set out in the statute the “practice of law” includes giving legal advice and preparing or helping in the preparation of any form or document that is filed in a court or affects a case that is or may be filed in a court. BOP §10-101(h)(1)and (2). The attorney general of the state may investigate and seek injunctive relief against an individual engaged in the unauthorized practice of law, BOP § 10-406, and the individual is guilty of a misdemeanor if found in violation of the statute. BOP § 10-606(a). In addition, the Maryland Rule of Professional Conduct 5.5(b) prohibits a lawyer from assisting “a person who is not a member of the bar in the performance of activity that constitutes the unauthorized practice of law.”

          The determination of what constitutes the practice of law in Maryland is ultimately up to the courts, Public Service Commission v. Hahn Transportation, Inc., 253 Md. 571, 253 A.2d 845 (1969). The approach most frequently applied by the courts is the Application of Law to the Facts Test. See Kennedy v. Bar Association of Montgomery County, 316 Md. 646,663, 561A.2d 200, 209 (1989), “. . . advising clients by applying legal principles to the client’s problem is practicing law.”; Lukas v Bar Association of Montgomery County, 35 Md. App. 442, 448, 371 A.2d 669 (1977) cert. denied, 250 Md. 733 (1977); and Attorney Grievance Commission v. Hallman, 343 Md. 390, 681 A.2d 510 (1996). As the Court of Appeals stated in Lukas (at 35 Md. App. 447) the general rule is:

Where trial work is not involved but the preparation of legal documents, their interpretation, the giving of legal advice, or the application of legal principles to problems of any complexity, is involved, these activities are still the practice of law. On the other hand, where pure engineering, accounting or clerical work is involved, the practice of law is not present, and in these latter areas the layman can adequately perform. (citation omitted).

MEDIATION AND UPL

          Mediation in Maryland is unregulated except for cases referred to mediation through the circuit courts. (17-101, Md. Rules). Understanding that competency in mediation is not dependent upon whether one has the credential of being a lawyer but rather upon one’s training and experience as a mediator, the Court of Appeals set standards for training including content (17-106) and minimum number of hours (17-104) and opened the court lists to anyone, lawyer and non-lawyer alike, over 21 years of age with a bachelor’s degree from an accredited college or university (17-104).

          Having opened the lists, the court sought to proscribe mediation to make clear that mediators approved to practice in the circuit courts of Maryland, regardless of their profession or legal training, were not to engage in activities that would constitute the unauthorized practice of law. As defined in the Rule 17-102(d):

“Mediation” means a process in which the parties work with one or more impartial mediators who, without providing legal advice, assist the parties in reaching their own voluntary agreement for the resolution of the dispute or issues in the dispute. A mediator may identify issues and options, assist the parties or their attorneys in exploring the needs underlying their respective positions, and, upon request, record points of agreement reached by the parties. While acting as a mediator, the mediator does not engage in arbitration, neutral case evaluation, neutral fact-finding, or other alternative dispute resolution processes and does not recommend the terms of an agreement. (emphasis supplied.)

          By defining mediation as a process where the mediator facilitates the parties’ resolution of the dispute “without providing legal advice” or engaging in more evaluative ADR processes and does not draft the agreement for the parties but rather, “upon request, record(s) points of agreement reached by the parties,” the Court addressed the two areas most vulnerable to UPL violations by a mediator.

          While the language of the Rule is clear, the application is fuzzier. Parties not represented by lawyers in mediation, which is the norm in domestic mediation and often occurs in other mediation, may look to the mediator for advice about their legal rights, a recommendation on options, or an affirmation that they are not about to agree to something they will regret. Equally as often lawyers involved in mediation with their clients will have differing interpretations of the law or unrealistic evaluations about the merit and value of their case and the mediator needs to do some reality checking. How does the mediator deal with these issues without crossing the line of UPL?

          Some help may be derived from an opinion of the Maryland Attorney General, 80 Opinions of the Attorney General __ (1995) [Opinion No. 95-056 (December 19, 1995)]. The Opinion responded to a request from Delegate Ann Marie Doory regarding the extent to which lay advocates could provide services to victims of domestic violence without engaging in the unauthorized practice of law.

          The Attorney General concluded that lay advocates “may provide information to victims about their potential legal rights and remedies … (limited) to the unadorned conveyance of information about what rights and remedies exist … (and) may not help victims decide, based upon the victims’ particular circumstances, whether to invoke any of their rights or pursue any of their potential remedies. Providing this latter assistance would be improperly suggesting a ‘course of conduct’.” Opinion No. 95-056, at p. 5.

          The Opinion went on to state that lay advocates may inform victims about purely non legal matters such as an overview about “the kind of proceeding involved” id. and may fill out a form pleading but “only if the assistance is limited to transcribing or recording verbatim the victim’s own language … merely reducing words of another person to writing, does not constitute the unauthorized preparation of a legal document.” Opinion No. 95-056, at p. 6. (emphasis in original, citations omitted).

          The Opinion makes a clear distinction between the scrivener function and a lay advocate using her own words when filling out a form or summarizing information provided by a client. The latter is unacceptable because “it rises impermissibly to the level of applying facts to the law in the ‘preparation’ of a legal document.” Id.

          A recent opinion from the Committee on Ethics of the Maryland State Bar Association, Ethics Docket 2003-02, responding to the inquiry of an attorney seeking guidance on whether partnering with a person not a lawyer would violate Maryland Rule of Professional Conduct 5.4 is also instructive. Rule 5.4 prohibits a lawyer from sharing “legal fees” with a nonlawyer or forming “a partnership with a nonlawyer if any of the activities of the partnership consist of the practice of law.” [Rule 5.4(b)].

          Cautioning that its opinion is only advisory and that the ultimate decision on whether or not an activity constitutes the unauthorized practice of law rests with the Court, the committee concluded that, “(t)o the extent that your practice is limited to court-ordered mediation as defined by Title 17, you and your partners would not be engaged in the practice of law. If, however, either you or your partners engage in any other form of mediation or ADR, this may entail the practice of law …” ETHICS DOCKET 2003-02 at p.4. Thus, in the committee’s view, strict adherence to 17-102 does not constitute the practice of law.

          While these Opinions are helpful there is still a large area of gray. What is the line between providing legal information and legal advice? If pro se parties are mediating a dispute in district court and they reach an agreement providing for biweekly payments over the next three months until the agreed sum is paid in full, is the mediator providing legal information when he tells the parties that their options with respect to a court case are to dismiss it and rely on the agreement, to continue it until the agreement is satisfied and then dismiss it, or to ask the court to enter judgment based upon the agreement?

          Is it the unauthorized practice of law for the mediator in a pro se case where the parties have discussed other potential claims they may have against each other to suggest to them that they may want to include in the agreement a provision that this resolves all outstanding claims between them?

          In the first example the mere articulating of the options would qualify, it seems to me, as providing legal information. Obviously the concern is reduced if the court has a form that includes the options and the parties merely need to check the appropriate box. But what happens when one of the parties asks the consequences of each option is? It seems to me that responding to that question brings one close to, if not across, the line.

          And, in my opinion, it crosses the line if the mediator says to the parties, “since you both are upset that this matter ever got to court and have agreed to put this matter behind you and try to rebuild your friendship, you might want to dismiss this action to demonstrate that you trust each other to do what you have agreed to do.”

          Similarly in the example where the mediator suggests including a clause stating that the agreement is the final resolution of any and all outstanding claims, I believe a mediator in Maryland is engaging in the unauthorized practice of law even if what is being proposed is boiler plate language. This is to be distinguished from the case where the mediator suggests to one of the parties in a mediation that in the mediator’s opinion the other side can be trusted or has probably made their final, best offer. Depending on your orientation, this may be bad mediation practice but it is not applying law to facts or failing any of the other tests that would make it the unauthorized practice of law.

          In discussing the nature of the settlement agreement is it providing legal information when the mediator tells to the parties that they can incorporate their resolution of the problem into an agreement which will be binding and enforceable as any other agreement at law? Does it rise to the level of providing legal advice when the mediator responds to a party’s question about the effect of the agreement she has just entered into that it “is enforceable as a valid contract?”

          Even where the parties are represented by attorneys in a mediation, the mediator is at risk of crossing the line. If in an effort to “reality check” with the plaintiff and her attorney the mediator, instead of asking how they evaluate their chance of success at trial, opines that it appears the defendant has a strong equal pay act claim, the statement probably crosses the acceptable line.

          North Carolina and Virginia have tried to deal with these concerns by giving guidance to mediators in their states. In both states the distinction between legal information and legal advice differentiates acceptable and unacceptable mediation practice. The North Carolina ethical guidelines apply to “certified mediators” approved to mediate in specific programs in the state, including the court system. Section VI of the Dispute Resolution Commission Standards of Professional Conduct provides that:

A mediator may, in areas where he is qualified by training and experience, raise questions regarding the information presented by the parties in the mediation session. However, the mediator shall not provide legal or other professional advice whether in response to statements or questions by the parties or otherwise.

          The guidelines go on to state that if one is not an attorney it would not be a violation of UPL standards for a non-attorney to hand out to the parties the written legal informational brochures prepared by the bar association (suggesting that lawyers are not limited to merely distributing the written brochures) but that in either event, “a mediator who applies general legal information to the specific facts and gives advice based on these considerations at a mediation may be engaged in the unauthorized practice of law if the mediator is not an attorney and may have engaged in the unethical practice of mediation if the mediator is an attorney. There are no bright lines.”

          The North Carolina guidelines further recommend that to avoid charges of the unauthorized practice of law mediators clearly inform the parties that they will not provide legal advice; that the parties should consult independent counsel before signing a binding agreement; that if the parties wish to sign a memorandum of understanding (MOU) at the mediation the mediator should offer no opinion as to the binding effect of the document; and that the mediator should not sign or initial any MOU that the parties may choose to create and sign. DRC Standards of Professional Conduct Section VI.

          The Virginia guidelines are more detailed than those of North Carolina and provide specific examples of acceptable and unacceptable statements or questions. For example, it would be acceptable in Virginia for a mediator in a divorce mediation to tell one or both parties that “under the statutes, a person who is not seeking current spousal support but who wants the ability to get it in the future must expressly reserve the right to future spousal support in the settlement agreement and in the appropriate court order.” Virginia Guidelines on Mediation and UPL at p. 16.

          It would not, however, be permissible to add, “therefore, if you want to be able to get spousal support in the future, you should require a provision in the settlement agreement that permits such a possibility.” Virginia Guidelines on Mediation and UPL at p. 20. It would be permissible in the context of a personal injury dispute to advise a party that “in Virginia, a plaintiff is usually barred from recovering damages in a negligence suit if the plaintiff was guilty of any negligence that contributed to his or her injuries.” Virginia Guidelines on Mediation and UPL at p. 16, but it would not be acceptable to add, “because you were contributorily negligent, you would not be able to recover damages if this case were to proceed to trial.” Virginia Guidelines on Mediation and UPL at p. 20.

          While in North Carolina the mediator is limited to being a scrivener (similar to the Maryland standards in Rule 17-102) in Virginia:

A mediator may take an active role in preparing the agreement for the parties if they want the mediator to perform this function. The mediator may simply copy the agreement as dictated by the parties or may choose particular words or phrases to include in the agreement so long as the parties indicate that the language chosen by the mediator accurately reflects their desires. A mediator is also free to ask questions of the parties to clarify their agreement and may properly raise issues for their consideration. Likewise, a mediator may assist the parties in organizing their agreement by, for example, creating subsections in the document and placing the subsections in a logical order. Virginia Guidelines on Mediation and UPL at p. 25.

          Nationally, the Association of Conflict Resolution (ACR) and the ABA are also focusing on the UPL problem. The Task Force on the Unauthorized Practice of Law of the Association for Conflict Resolution presented a draft report in August 2002 (hereinafter Draft Report). The Task Force focused on what constitutes proper mediation practice regardless of the “source profession” of the specific mediator, seeking to establish consistent standards for all mediators (Draft Report p. 5 at fn. 7).

          While the Task Force members reached consensus on a number of activities that comport with proper mediation practice (Draft Report at pp. 23,24) and many that constitute improper mediation practice (Draft Report at pp. 24-26) they were unable to reach consensus about whether some fairly significant activities of mediators were proper or improper in mediation. Mediator activities such as “recommend a specific course of action; predict court results with respect to the case, including the nature of its outcome or the likelihood of success of any party in court; apply legal principles to concrete facts, including the interpretation of case law with respect to the facts of the case; and provide an evaluation of the merits of the case” fell into this category.

          The Draft Report stated that the majority of the Task Force agreed that these activities were appropriate in other forms of ADR but not in mediation but that others believed the activities could be appropriate in mediation that depending on the context. Draft Report at p. 26.

          The ABA has chosen to deal with the UPL issue by eliminating it altogether for mediators. On February 2, 2002, the ABA Section of Dispute Resolution adopted a resolution stating that mediation is not the practice of law. The ABA Task Force on the Model Definition of the Practice of Law recently followed this approach in its proposed model definition which provides:

(d) Exceptions and exclusions: Whether or not they constitute the practice of law, the following are permitted:
          . . .
          (3) Serving as a mediator, arbitrator, conciliator or facilitator;

CONCLUSION
          If Virginia and North Carolina are any example, a mediator may be at risk if she has a multi state practice or mediates disputes that cross state boundaries because what qualifies as the unauthorized practice of law varies from state to state and so does what is considered proper mediation practice. The fact that ACR with a Task Force of nationally recognized experts in the field has been unable to reach consensus on what constitutes acceptable practice only highlights the problem.

          Nor is adoption imminent of either the resolution of the ABA Section of Dispute Resolution or the Model Definition of the Practice of Law. Until there is uniform articulation of whether mediation is or is not the practice of law and/ or what is acceptable mediation practice mediators are at risk.

          In Maryland what constitutes “providing legal advice” is clear at the edges but still murky in the middle and any mediator not admitted to practice law in the state may, if not careful, cross into the unauthorized practice of law. On the other hand, mediators who are admitted to the practice of law in Maryland risk of violating of Rule 1.7 of the Code of Professional Responsibility prohibiting the representation of clients with conflicting interests or be guilty of improper mediation practice. For Maryland mediators greater clarity is needed.
 

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Publications :MD Bar Journal : v36n4