In re Lerner

197 P.3d 1067

In the Matter of DISCIPLINE OF Glen LERNER, Esq., Bar No. 4314.

No. 49331.

Supreme Court of Nevada.

December 24, 2008.

Gordon & Silver, Ltd., and Dominic P. Gentile and Paola M. Armeni, Las Vegas, for Glen Lerner.

Rob W. Bare, Bar Counsel, and David A. Clark, Deputy Bar Counsel, Las Vegas, for State Bar of Nevada.

Anderson, Dorn & Rader, Ltd., and Bradley B. Anderson, Reno, for Amicus Curiae Estate Planning Council of Northern Nevada.

Robison, Belaustegui, Sharp & Low and F. DeArmond Sharp and Jennifer L. Baker, Reno, for Amicus Curiae State Bar of Nevada Real Property Section.

BEFORE THE COURT EN BANC.

OPINION

By the Court, HARDESTY, J.:

In this case, we engage in an automatic de novo review of a Southern Nevada Disciplinary Board hearing panel's recommendation that attorney Glen Lerner receive a public reprimand for violating Nevada Rule of Professional Conduct (RPC) 5.5, which prohibits a lawyer from assisting in the unauthorized practice of law. The violation was based on certain activities by Lerner's employee, who was a licensed attorney in Arizona but not in Nevada. In deciding whether clear and convincing evidence supports this violation, we are primarily concerned with the issue of whether the employee engaged in the "practice of law."

Our prior precedent and authority from other jurisdictions support the conclusion that what constitutes the practice of law must be determined on a case-by-case basis, bearing in mind the overarching principle that the practice of law is involved when the activity requires the exercise of judgment in applying general legal knowledge to a client's specific problem. When the person engaged in the activity is a lawyer licensed in another state, we must also consider whether that activity may be permissible under Nevada's limited exceptions for multijurisdictional practice, when the activity is limited and incidental to the lawyer's representation of clients in his home state.

Here, consideration of the key principle— exercise of legal judgment on a client's behalf, together with ample authority from other jurisdictions faced with similar facts, demonstrates that Lerner's employee without doubt engaged in the practice of law. Also, the employee worked in Lerner's Las Vegas office for Nevada clients, so he was not engaged in limited, incidental, multijurisdictional practice related to his representation of clients in Arizona, where he is licensed. Consequently, the employee's practice of law was unauthorized. The employee's activities were further performed as part of his regular duties, in conformity with the policies and practices of Lerner's firm, and thus, Lerner assisted in the unauthorized practice of law. We therefore conclude that clear and convincing evidence supports the violation of RPC 5.5. We further agree with the hearing panel's recommendation of a public reprimand as the appropriate discipline.

FACTS AND PROCEDURAL HISTORY

Attorney Glen Lerner focuses his practice on personal injury cases. From 1998 until 2005, Kevin Rowe was employed as a paralegal/law clerk in Lerner's Las Vegas office. In March 2005, Rowe was admitted to practice law in the state of Arizona. He is not and never has been admitted to practice law in Nevada. Testimony at the hearing indicates that Rowe is now a partner in Lerner's Bullhead City, Arizona, office and that he splits his time between the Las Vegas and Bullhead City offices.

In April 2005, Lerner's Las Vegas firm was retained to represent injured plaintiffs in two separate cases. The defendants in both cases were insured by Progressive Insurance Company. Rowe appears to have been assigned primary responsibility for these plaintiffs' cases, despite his lack of a Nevada license while regularly working in the Las Vegas office. He conducted negotiations with Progressive, including preparation and transmission of policy limits demand letters between April and June 2005, after he was licensed in Arizona. He signed the letters as "Kevin Rowe, Esq." In June 2005, Progressive contacted the State Bar of Nevada to determine whether Rowe was a licensed Nevada lawyer, and upon learning that he was not, it filed a grievance against Lerner.

A hearing was conducted before a Southern Nevada Disciplinary Board hearing panel. At the hearing, Lerner indicated that it was common practice for Rowe and other law clerks and paralegals to handle prelitigation negotiations with an insurance company's nonlawyer claims adjustor. Rowe testified that he did not believe that he had engaged in any improper activity because the claim was in the prelitigation stage, and he essentially acted as the counterpart to the insurance claims adjustor—also a nonlawyer. Lerner similarly distinguished between litigation, which must be handled by a lawyer, and negotiation of a claim, which he contended was not the practice of law and could be handled by nonlawyer staff. Finally, Lerner asserted that RPC 5.5 is unconstitutionally vague and ambiguous because it was not clear what actions were permissible for Rowe. Lerner has received several private reprimands, including three for identical conduct. One of these reprimands concerned Rowe himself and one was issued pursuant to a stipulation between Lerner and the State Bar. Lerner also maintained that Rowe was a lawyer, and so RPC 5.3, pertaining to supervision of nonlawyer staff, did not apply.

The State Bar argued that valuing a client's claim was the practice of law, that Rowe was not an insurance claims adjuster, a role which is subject to regulation by the insurance commissioner, and therefore, his actions constituted the unauthorized practice of law. The State Bar further asserted that a lawyer who is not licensed in Nevada is a nonlawyer for purposes of Nevada's professional conduct rules and thus requires supervision by a Nevada-licensed lawyer. Finally, the State Bar maintained that RPC 5.5 was not impermissibly vague and was properly enforced in this instance.

The hearing panel determined that since Rowe was licensed in Arizona, he did not meet the definition of "nonlawyer." Thus, the duty of supervision set forth in RPC 5.3 did not apply to him.¹ But the panel rejected Lerner's constitutional challenges to RPC 5.5 and concluded that his conduct impermissibly assisted Rowe's unauthorized practice of law. The panel recommended a public reprimand and payment of costs.² This appeal followed.

After initial consideration of the parties' arguments, this court invited participation by a broad cross-section of bar organizations on the issue of how best to define the practice of law. Two entities responded to the invitation and filed amicus briefs, the Estate Planning Council of Northern Nevada and the State Bar of Nevada's Real Property Section.

DISCUSSION

Our de novo review of this lawyer disciplinary matter³ begins with the language of RPC 5.5(a)(2), which provides that "[a] lawyer shall not ... [a]ssist another person in the unauthorized practice of law." As an initial matter, then, we must determine whether Rowe engaged in the unauthorized practice of law. We conclude that what constitutes the practice of law must be determined on a case-by-case basis, and under ample authority from other jurisdictions, Rowe's conduct was the practice of law. Rowe is not a licensed attorney in Nevada, and his conduct was therefore unauthorized. And since Rowe's actions were in conformity with the policies of Lerner's firm, Lerner assisted in his unauthorized practice of law. Accordingly, clear and convincing evidence supports the violation found by the hearing panel. We also consider and reject Lerner's vagueness challenge to the enforceability of RPC 5.5. Finally, we agree with the panel's recommendation of a public reprimand as the appropriate discipline in this case.

Rowe's conduct constitutes the practice of law

This court has held that it has the inherent power to define the practice of law.⁴ On only one occasion, however, has the issue been explored in Nevada.⁵ In the 1958 decision, Pioneer Title v. State Bar,⁶ the State Bar had obtained an injunction against Pioneer Title Company from preparing any documents for parties to a typical real estate sales transaction, and Pioneer appealed. This court engaged in a thoughtful discussion of the purposes served by prohibiting the unauthorized practice of law and the factors that impacted whether certain tasks should be viewed as the practice of law.

First, the Pioneer Title opinion identified the purpose of the prohibition on the unauthorized practice of law as protecting the public, stating

[t]he public interest therefore requires that in the securing of professional advice and assistance upon matters affecting one's legal rights one must have assurance of competence and integrity and must enjoy freedom of full disclosure with complete confidence in the undivided allegiance of one's counsellor in the definition and assertion of the rights in question.⁷

For this reason, high standards of training and ethics are imposed on lawyers. Other courts have similarly emphasized the overarching reason for requiring that only lawyers engage in the practice of law: to ensure that the public is served by those who have demonstrated training and competence and who are subject to regulation and discipline.⁸

But, the Pioneer Title court noted, the public is not well-served by defining the practice of law in such a manner as to require a person faced with a routine transaction to incur the expense of a lawyer unnecessarily.⁹ And those transactions that may be considered "routine" evolve over time: as new areas involving legal rights develop, expert legal advice becomes more important, and as certain transactions become standardized, specific legal advice becomes less necessary.¹⁰ But this court also emphasized that a person's decision not to obtain legal counsel must be one based on the person's self-reliance, not reliance on a nonlawyer third party:

The need for...