Rule 5 Comments

(A) Definition of “tribunal”: The term “tribunal” shall include any agency, authority, board, commission or court when it determines the rights and obligations of parties to proceedings before it, as opposed to promulgating rules and regulations of general applicability.

(B) Real Estate Settlement Agents. A non-lawyer licensed real estate agent may, pursuant to Va. Code § 54.1-2101.1, prepare contracts incident to the regular course of conducting a licensed real estate business. Paragraph 3(F) of this rule allows attorneys licensed by the Virginia State Bar, a title insurance company licensed by the State Corporation Commission, a title agency or title agent licensed by the State Corporation Commission, or a real estate broker licensed by the Virginia Real Estate Board to serve as a “settlement agent” and provide “escrow, closing or settlement services” to close a transaction involving any real estate located within the Commonwealth, subject to the requirements of Chapters 27.2 and 27.3 of Title 55 of the Code of Virginia. No other person may lawfully act or hold himself or herself out as a settlement agent. See Va. Code §§ 55-525.19(2)-(3), 55-525.18(B)(1).

(1) In connection with a real estate closing, the following tasks may be performed by a non-lawyer settlement agent or a non-lawyer employed by such settlement agent, and do not involve the practice of law:

(a) ordering a survey, termite or other inspection(s), casualty insurance or certificates of insurance, lien payoff figures, loan checks or title insurance;

(b) creating or preparing a title abstract;

(c) determining the status of utility services and assisting in their transfer;

(d) making mathematical calculations involving the proration of taxes, insurance, rent, interest and the like in accordance with the contract or local custom;

(e) completing form documents selected by and in accordance with the instructions of the parties to the transaction, but not drafting or selecting such documents;

(f) obtaining lien waivers from mechanics or materialmen in a form acceptable to the parties in interest, but not drafting such waivers or giving advice as to the legal sufficiency thereof;

(g) preparing settlement statements;

(h) receiving and disbursing settlement funds;

(i) drafting receipts and certificates of satisfaction, but not deeds, deeds of trust, deed of trust notes, or deeds of release;

(j) completing other forms such as the Owner's/Seller's Affidavit, Notice of Availability, and tax reporting forms.

(2) A non-lawyer settlement agent cannot provide any legal representation or give legal advice to any party to a transaction. Examples of legal advice which, if provided by a Settlement Agent, would be the unauthorized practice of law, include:

(a) explaining the legal obligations of the parties under the real estate sales contract;

(b) explaining the meaning of legal terms used in taking title to property or advising the parties to the transaction which way to take title to the property;

(c) explaining the legal obligations of the parties under the loan documents;

(d) explaining the legal effect of an item reported as an exception in a title commitment;

(e) explaining the legal effect of a document in the chain of title;

(f) drafting legal instruments for a party to the transaction, other than completing form documents selected by and in accordance with the instructions of the parties to the transaction;

(g) selecting a legal instrument for a party if to do so requires the exercise of legal judgment;

(h) instructing or assisting a party in the completion of a legal document if to do so requires the exercise of legal judgment;

(i) providing legal opinions in response to the following types of questions:

(1) "What should I do?"

(2) "What are my rights or obligations under this document?"

(3) "What are the lender's rights or obligations under this document?"

(C) It is now well settled that a lay corporation may not ordinarily employ an attorney to provide legal services to customers or clients of the corporation. See, e.g., Richmond Ass’n of Credit Men v. Bar Ass’n of Richmond, 167 Va. 327, 189 S.E. 153 (1937). The underlying basis of this rule was explained by the Virginia Supreme Court in Richmond Association of Credit Men as follows: [The practice of law] is not a lawful business except for members of the Bar who have complied with all the conditions required by statute and the rules of the Courts. As these conditions cannot be performed by a corporation, it follows that the practice of law is not a lawful business for a corporation to engage in. The relation of attorney and client is that of master and servant in a limited and dignified sense, and it involves the highest trust and confidence. It cannot be delegated without consent, and it cannot exist between an attorney employed by a corporation to practice law for it, and a client of the corporation, for he would be subject to the directions of the corporation, and not to the directions of the client. Independent of statute, it is contrary to public policy for a corporation to practice law, directly or indirectly. UPL Opinion 60 (1985).

(D) The following are examples of activity that fall within the scope of paragraph 3(R) (“Providing other legal services as authorized by state, federal or other law”):

(1) Serving as a legal representative or lay advocate for a party in a state or federal administrative proceeding as permitted by, and subject to, the rules of that agency. (For example, the Social Security Administration and the Virginia Employment Commission.)

(2) Serving as lay advocate for parents in IDEA cases and parents litigating their own child’s IDEA claim.

(3) A non-lawyer entity, such as an insurance company, that employs staff lawyers or captive law firms to provide legal services to its insureds so long as the lawyer employed is able to comply with the Virginia Rules of Professional Conduct. See UPL Op. 60.

(4) Any non-profit entity that employs a licensed staff lawyer to assist its consumers and provide pro bono or nominal fee legal services. Provided, however:

(a) the staff lawyer shall exercise independent professional judgement on behalf of each client;

(b) the board or management, if composed of non-lawyers, shall not direct or control the lawyer’s independent professional judgement on behalf of any client;

(c) the initial screening or interview of prospective clients must be done by a lawyer or a non-lawyer under the direct supervisory authority of a staff lawyer; and (d) access to confidential information of clients served by the organization shall be restricted to a lawyer or non-lawyers under their direct supervisory authority.

(5) Non-lawyers making any disclosures or advisements required by state or federal law, e.g., police officer explaining Miranda rights to an arrestee.

(6) When Congress grants authority to an agency to prescribe regulations governing the recognition and conduct of a person representing the interests of another before such agency, the state is preempted from enforcing its own rules of practice while such person is acting reasonably within the scope of the practice authorized by the agency. Sperry v. Florida ex rel. Florida Bar 373 U.S. 379 (1963) (Florida may not prohibit non-lawyer patent agent from performing within Florida tasks which are incident to the preparation and prosecution of patent applications before the Patent Office).

(E) Paragraph 4(B) (“Sale of legal forms”) permits the sale of legal forms provided no legal advice is provided to complete the forms.

(F) The following are examples of activity which fall within the scope of paragraph 4(G) (“Teaching law or providing legal information”):

(1) A law professor instructing a class in the application of law to an actual situation is not engaged in the practice of law because he or she is not undertaking to provide advice or services for one or more clients as to their legal interests.

(2) Non-lawyer employees of an entity or organization providing legal information or education about law, regulations, legal procedures or compliance issues for the purpose of training other employees or members of the entity or organization. For example, a human resource manager or FOIA officer is not engaged in the practice of law when advising the employer as to what the employer must do to comply with state or federal laws.

(3) Non-lawyer providing information about the application of the law to a product or service that the non-lawyer is otherwise authorized to provide to the public. For example:

(a) Lender explaining right of rescission to borrower in a refinancing of real estate.

(b) Preparation of privacy notices for customers by credit card companies.

(c) Preparation of authorization to share patient’s medical information under HIPAA.

(d) Tax accountants, real estate agents, title company attorneys, securities advisors, pension consultants, and the like, who do not indicate they are providing legal advice or services based on competence and standing in the law are not engaged in the practice of law, because their relationship with the customer is not based on the reasonable expectation that learned and authorized professional legal advice is being given.

(4) Non-lawyer employees and supervised volunteers of nonprofit entities, whose primary purpose is assisting domestic violence and sexual assault victims, may explain to victims how to seek legal recourse, accompany victims throughout all stages of court proceedings, and respond to inquiries by the court. However, they shall not examine witnesses, make arguments to the court, or otherwise act in a representative capacity for the victims.

(5) A lay trustee on a deed of trust may prepare the legal instruments necessary to sell or encumber real estate to which he holds the legal title, e.g., contracts, deeds, deeds of trust, etc.

(G) Pro se representation. Every jurisdiction recognizes the right of an individual to proceed pro seby providing his or her own representation in any matter, whether or not the person is a lawyer. Because the appearance is personal only, it does not involve an issue of unauthorized practice. The right extends to self‑preparation of legal documents and other kinds of out‑of‑court legal work as well as to in‑court representation.