Bar Rules

UPL Advisory Opinion No. 2003-1

State Bar Programs / Part XIV - Rules Governing the Investigation and Prosecution of the Unlicensed Practice of Law / Unlicensed Practice of Law Advisory Opinions / UPL Advisory Opinion No. 2003-1

Issued by the Standing Committee on the Unlicensed Practice of Law on March 21, 2003. Approved by the Supreme Court of Georgia on November 21, 2005. In re UPL Advisory Opinion 2003-1, 280 Ga. 121 (2005).

Attorney representing the creditor on an account files a lawsuit against the debtor. The attorney receives a letter and agency power of attorney from a company stating that it has been authorized to act as the agent for the debtor in settlement negotiations. Is the company engaged in the unlicensed practice of law? Is the individual directing the company engaged in the unlicensed practice of law?

Yes. Under the circumstances set out above, the company is representing one of the parties to a lawsuit in settlement negotiations. Since such representation can only be lawfully undertaken by an individual who is duly licensed to practice law, and cannot legitimately arise out of an agency power of attorney, the company and its personnel are engaged in the unlicensed practice of law.

The Committee conducted a public hearing concerning the question set out above. It heard testimony from the owner of one such company, who described his business operations. The company routinely obtains from Georgia court dockets the names and addresses of debtors against whom suit has been filed. The amount of the alleged indebtedness typically ranges from $500-$8,000. The company contacts the debtors by means of a direct mail solicitation, which contains the following introductory language: "Dear ____: I may have some good news concerning your civil case. You will soon be served with a Court Summons [emphasis in original] and time is very important. Please contact me as soon as possible...." When the debtor responds to the solicitation, he is informed that the company, if retained, will contact the plaintiff and attempt to negotiate a settlement of the outstanding indebtedness. If the debtor agrees to the representation, he executes a power of attorney in favor of the company, appointing it as the debtor's "attorney-in-fact," with the stated authority "[t]o mediate creditor's claim(s) and to effect a reasonable settlement with" the plaintiff. Once the company obtains the power of attorney, its employee contacts the plaintiff or, if represented by counsel, the plaintiff's attorney. The company's employee provides a copy of the power of attorney to the plaintiff, then attempts to settle the lawsuit through negotiation. The company sometimes charges the debtor a fee for its negotiation services, while at other times provides its services free of charge. The decision as to whether to charge a fee is a matter of discretion, to be determined by the financial plight of the debtor. The company makes it clear to all involved that it is not a law firm, and that none of its employees are licensed Georgia attorneys. Because the company's employees are nonlawyers, they are not bound by the Georgia Rules of Professional Conduct or otherwise subject to disciplinary regulation by the State Bar of Georgia.

A company operating in the manner described above is engaging in the unlicensed practice of law. The company's activity necessarily involves the delivery of legal services, because it is advocating the legal position of another relative to a pending lawsuit. O.C.G.A. §10-6-5 states that "[w]hatever one may do himself may be done by an agent, except such personal trusts in which special confidence is placed on the skill, discretion, or judgment of the person called in to act...." The Committee finds that negotiating a settlement to a lawsuit on behalf of another involves precisely the "special confidence" and "skill, discretion, or judgment" that can only be lawfully exercised by a duly licensed attorney. An individual cannot confer upon another the right to practice law simply by entering into a private agreement that purports to allow the representation. Such agreements, if they had force and effect, would allow literally anyone to represent another in a legal matter, thereby circumventing the rigorous attorney licensing procedures established by the Supreme Court of Georgia. The potential for public harm under such circumstances is clear, and those inclined to enter into such agreements should keep in mind that "[n]o rights shall arise to either party out of an agency created for an illegal purpose." O.C.G.A. §10-6-20.

In addition to any unlicensed practice of law issues, the Committee notes, without further comment, that O.C.G.A. §18-5-1 et seq. generally prohibits "the business of debt adjusting."

GO TO UPL Advisory Opinion No. 2003-2
GO TO UPL Advisory Opinion No. 2002-1
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