“Non-lawyer legal aid” no longer banned words in New York

Welcome to the Big Law Business section on the evolution of the legal market written by me, Roy Strom. Today we are considering a case that pits freedom of expression against the provision of legal advice by people who are not lawyers. Register to get this column delivered to your inbox on Thursday mornings. Programming note: Big Law Business will be off next week for Memorial Day.

The late comedian George Carlin said there are seven words you can’t say on TV.

For non-lawyers, there are far more than seven words they cannot say, if they approach the practice of law. These prohibited words include “Check this box”.

But now that’s changing.

A federal judge in Manhattan ruled this week that a nonprofit can train ordinary people to provide free help to New Yorkers by filing responses to debt collection lawsuits.

The order allows Upsolve Inc.’s “justice attorneys” to tell debt collection defendants which boxes to tick on a one-page response to the lawsuit.

The decision could create a roadmap for other programs to provide less expensive legal advice in other types of cases. The rising cost of hiring a lawyer is prompting similar efforts in other states.

Everyone involved in the New York case agreed that Upsolve, through its box-checking exercise, would expose itself to a potential lawsuit from the state’s attorney general. This is because the case law points to an activity as the “unauthorized practice of law”.

But Judge Paul Crotty granted a preliminary injunction to stop the AG from pursuing a lawsuit against Upsolve or its attorneys on those grounds.

Licensing requirements targeting professionals do not automatically escape scrutiny under First Amendment arguments, he said in a 33-page notice and order, citing a series of court decisions supreme.

“There are special categories of pure speech that the government can regulate without review,” Crotty wrote. “But legal advice doesn’t seem to be one of them.”

Legal advice is different from defamation, incitement or fraud, he said, in part because it lacks a regulatory history dating back to the founding of the country.

The decision is a “historic decision,” Upsolve CEO Rohan Pavuluri said in an interview. “We are optimistic about what this means for the future of our country.”

He added: “The trial is about a very specific issue, but there is a central question about the future of the United States. It’s about whether we want to live in a country where equal rights under the law are a reality, and today’s decision is a big step toward fulfilling that fundamental American promise.

Remember, this fight was about whether someone without a law degree can tell someone else which box to tick.

Upsolve and its attorneys have developed a training manual for attorneys to provide guidance on debt collection lawsuits. Failure to respond to lawsuits can lead to wage garnishment, eviction, lower credit scores and other financial problems, Upsolve said.

One of the plaintiffs in the Upsolve case is Bronx pastor John Udo-Okon. He wanted to be a lawyer after members of his congregation told him they had been sued for consumer debt and were unsure what to do next.

Before Udo-Okon or any other advocates began giving advice under the program, Upsolve filed a lawsuit in Manhattan in January to shield itself from lawsuits.

Weil Gotshal & Manges represented Upsolve. Partner Robert Niles-Weed led a team that included appeal practice co-heads Greg Silbert and Zack Tripp, and partners Elena De Santis, Liz Grefrath and Sara Weiss.

The team argued that there is a pressing unmet legal need in these cases. Their complaint cited estimates that up to 90% of defendants in debt collection cases fail to respond, resulting in default judgments against them.

To make matters worse, a study by the Legal Aid Society of New York found that more than a third of sample debt collection cases were without merit. They were the result of mistaken identity, involved a debt already paid, or were unaware that the statute of limitations for collecting the debt had expired.

After large groups of defendants failed to respond to cases, New York had gone to great lengths to resolve this issue on its own. This included creating a simple one-page form that asked defendants to check off one of 24 defences, such as having already paid the alleged debt or having had no business relationship with the applicant.

Upsolve has decided to limit its free advice to filling out the form.

Crotty’s decision wasn’t “groundbreaking,” but could still lead to the development of similar programs to help low-income defendants respond to other types of lawsuits, said Georgetown ethics counselor Michael Frisch. University Law Center.

The decision aligns with efforts elsewhere, such as Arizona’s “regulatory sandbox,” that aim to provide legal services at lower cost, he said.

“The general trend has been to recognize that a lot of people just can’t afford lawyers and that there’s a need that has to be met that can’t be met at $600 or even $300 an hour. “, said Frisch. “This decision recognizes that and tells the bar that if you want to regulate this, it has to be in the public interest and not in the interests of lawyers.”

Carlin’s stint on the seven words you can’t say on TV led to his arrest in Milwaukee in 1972. A judge dismissed the charges against him, noting that the words provoked laughter, not anger. incentive.

Carlin had argued that words alone are not right or wrong – context matters.

Crotty’s drive shares that sentiment. Upsolve’s program is not likely to harm consumers; on the contrary, he governed.

In doing so, Crotty sent a signal that context matters when providing legal advice. Telling someone something as simple as “check this box” shouldn’t always be punished.

worth your time

On the diversity of law firms: A report by the American Bar Association shows that white lawyers were nearly twice as likely to achieve partnership ranks as members of other racial groups, reports Sam Skolnik. Male lawyers were twice as likely to have become partners as females.

On Big Law billing rates: Hogan Lovells’ partner Neal Katyal is facing backlash from the Justice Department’s bankruptcy watchdog after a Johnson & Johnson unit hired him to work on his Chapter 11 case for nearly $2,500 an hour, reports James Nani. The US administrator objected to Katyal’s fees, noting that they were more than $1,000 an hour higher than Jones Day’s or Skadden’s lawyers.

On SPACs: The poor trading performance of a recently listed SPAC deal puts a dent in the fortunes of Miami attorney John Ruiz, reports Tom Maloney for Bloomberg. Ruiz’s MSP Recovery, which seeks refunds for erroneous government health care payments, plunged more than 60% after a SPAC combination led to its first day of public trading on Tuesday. Ruiz’s fortune plunged from $21.4 billion to $8.3 billion.

That’s all for this week (and next)! Thanks for reading and please send me your thoughts, criticisms and advice.

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