Jan. 22, 2010 – An Indiana trust mill that admitted last year to engaging in the unauthorized practice of law in Ohio is now actively soliciting clients in Wisconsin for its estate planning services.

However, because Wisconsin Supreme Court rules currently lack both a workable definition of the practice of law and an effective enforcement mechanism comparable to the Ohio board that enforces that state’s statutes against UPL, it is unlikely anything can be done about this and other probable instances of UPL in Wisconsin – unless the Wisconsin Supreme Court adopts the State Bar of Wisconsin’s 2007 petition regarding the unauthorized practice of law.

In March 2009, United Financial Systems Corporation (UFSC) of Indianapolis entered into a consent decree with the Ohio State Bar Association, before the Board on Unauthorized Practice of Law of the Supreme Court of Ohio. In the consent decree, UFSC admitted to engaging in the unauthorized practice of law and was enjoined from doing so in the future.

The Ohio settlement also requires UFSC to contact all of the approximately 2000 Ohio residents to whom UFSC had sold living trusts and other estate planning and transfer documents for fees ranging from $695 to $2,595. The consent decree also requires UFSC to inform its former clients that it had engaged in UPL and that the clients should seek advice from an attorney licensed to practice in Ohio as to whether the documents they purchased from UFSC are valid and meet the clients’ legal needs.

The Ohio UPL board adopted the consent decree in August and has recommended that the Ohio Supreme Court also approve it. In addition, the Ohio Supreme Court has suspended for two years an attorney who aided UFSC in committing acts constituting UPL in that state.

The Supreme Court of Ohio has a strong track record of UPL enforcement, having just fined another trust mill $6.4 million in October for engaging in UPL – the highest such penalty on record in that state.

The State Bar of Wisconsin recently learned about UFSC’s activity in Wisconsin when it received a copy of a UFSC estate planning solicitation from a member of the public.

Seemingly consistent with its practice in Ohio, the UFSC solicitation seeks to establish a client relationship with promises of “free information” on how to avoid the costs and delays associated with probate and “save thousands in federal estate taxes.”

The UFSC solicitation claims “the probate process creates unreasonable legal fees estimated to be $14 billion nationally each year. Are you aware that in Wisconsin whether you have a valid will or not, your estate is subject to probate if the entire estate value exceeds only $50,000? Are you also aware that 1) probate expenses can consume 5-10% of your total estate and 2) that probate delays can run as long as 2-5 years?”

State Bar UPL petition would protect consumers

In Wisconsin, the State Bar’s initiative, called the Legal Services Consumer Protection Act, responds to a directive issued by the court in 2004 asking the State Bar to document the consumer impact of unqualified individuals practicing law and to recommend changes. Wisconsin residents seeking legal services will gain additional consumer safeguards against organizations such as UFSC if the court approves the petition.

The State Bar’s petition asks the court, which has exclusive jurisdiction over the practice of law in the state, to take two actions: 1) Adopt a new rule to clearly define what constitutes the “practice of law” for consumer protection purposes; and 2) Create an administrative system to enforce the new rule.

The Supreme Court has ordered a public hearing and open administrative conference on the petition at 9:45 a.m. on Monday, March 8, 2010, in the Supreme Court’s hearing room in the Capitol. It is the second public hearing and third administrative conference to be held on the petition in the two and a half years since the State Bar filed the petition with the court.

The court previously held a public hearing and open administrative conference on the petition in December 2007, as well as two additional open conferences in March and October 2008. The court deferred the petition last session without acting to approve it.

The original State Bar petition offers dozens of examples of instances where Wisconsin consumers have been hurt when people without proper training or oversight attempt to practice law. In 2008, based on feedback from other interested parties, the State Bar filed an amended version of the petition and supporting comments.

The State Bar’s petition notes that in recent years 25 other states and the District of Columbia have adopted rules or statutes similar to those proposed in the petition for Wisconsin: Alabama, Alaska, Arizona, Colorado, Hawaii, Idaho, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, Oregon, Pennsylvania, South Carolina, Utah, Virginia, Washington, West Virginia, Wyoming and the District of Columbia.

While the Wisconsin Supreme Court has adopted rules regulating who can practice law in Wisconsin, no clear definition of what constitutes the practice of law is spelled out. The State Bar’s proposed rule, which is modeled after similar initiatives successfully implemented in other states, would resolve this ambiguity and create a Legal Services Office of Consumer Protection to allow civil remedies such as injunctions when violations occur.

A series of weekly articles being published on Wisbar.org in January and February is detailing recent examples of UPL in Wisconsin and giving State Bar members the opportunity to contact the Wisconsin Supreme Court directly and voice their support for the State Bar’s UPL petition. It is imperative that State Bar members communicate to the court their concern about the adverse impact of UPL on the public - today.

In December, the State Bar’s Board of Governors unanimously approved a resolution urging the court to adopt the State Bar’s petition in order to protect the public from harm by those such as UFSC who engage in the unauthorized practice of law.

In addition, the State Bar’s UPL Policy Committee published a strongly worded editorial in the October 2009 issue of Wisconsin Lawyer urging the court to approve the petition. State Bar President Doug Kammer reappointed the committee in July and added several new members, including former Supreme Court Justice Jon Wilcox.

Justice Wilcox calls on State Bar members to support petition

Retired Wisconsin Supreme Court Justice Jon Wilcox recently spoke of the need for the court to approve the State Bar’s UPL petition in an address to the 2009 Class of Fellows of the Wisconsin Law Foundation.

“There is a need for a mechanism to address this problem,” Wilcox told the audience. “I believe some consumer protection is warranted here.”

“The Wisconsin Supreme Court has the exclusive power to regulate the practice of law,” Wilcox said. “The court’s regulation of the practice of law is intended to protect society from the harm that can result from the activities of unlicensed practitioners.”

“The majority of other states that have adopted a definition of the practice of law and court rule to deal with the unauthorized practice of law,” Justice Wilcox concluded. “Our supreme court should do no less . . . on the unauthorized practice of law question I urge you to get involved and let the court know your concerns.”

By Adam Korbitz, Government Relations Coordinator, State Bar of Wisconsin

• Learn more about the State Bar’s petition and the UPL Policy Committee

• History of the State Bar's UPL petition

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