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Be wary of ‘the unauthorized practice of law’

Sometimes it can happen in the area of real estate forms

As a practicing lawyer in Bureau County for 39 years, I have observed the unauthorized practice of law can, not often, but occasionally, become an issue.

Practicing law in transactional real estate, the most common unauthorized practice of law complaint I have encountered, is real estate document preparation by non-lawyers. Usually this matter comes up in reviewing work from other states, in jurisdictions where title companies are commonly allowed more leeway.

To legally practice law in Illinois, you must be licensed and subject to the Attorneys Registration & Disciplinary Commission, established by the Illinois Supreme Court.

The ARDC was established in February 1973. The training and license requirements for attorneys are in place to protect the public. The license to practice law allows one to appear in court, but also includes counseling, advising, and rendering of legal service outside of the courtroom.

“Bar related” title insurance means that the title insurance is issued by a licensed attorney on behalf of a licensed title company. Transactional lawyers often spend little time in court, instead using their knowledge and legal skill to, for example, prepare documents for real estate closings.

Other skills may include writing title insurance commitments, and closing loans for lenders. These title commitments are used in preparation of closing on real estate loans, and sales of homes and other real property.

After closing, this leads to issuance of owner’s and mortgage policies of title insurance, to protect the new owner and lender.

Rarely, an individual may also choose to proceed without an attorney. If an unrepresented party buys or prepares their own legal forms, they are (often unknowingly) accepting the attendant risk. There are companies that market such forms for an individual to use.

However, the public using such a form without an attorney’s expertise, rarely understands the effect of such documents. I have seen examples of a bank in the past attempting to give legal advice, and even preparing legal documents. Those behaviors often led to bad results, However, liability and the law have, for the most part, stopped that practice many years ago.

Legal assistants and paralegals may work under the direction of an attorney, but may not give advice or work on preparing documents on their own. They may not give unauthorized legal advice or service while solely in the employ of a title company, in Illinois.

When a person, even a title company, offers to prepare documents for a real estate closing, in Illinois, that may be the unauthorized practice of law. If an unauthorized non-lawyer offers advice as to how to use such a form, or produces a form for use, that may be considered the unauthorized practice of law.

Lawyers have prepared for years in law school, studied and passed the bar exam, and are scrutinized by the ARDC for your protection. Most lawyers carry malpractice insurance for the protection of the public. While complaints about lawyers can be filed with the ARDC, that is not the case for non-lawyers offering legal advice.

It has been my experience that lawyers commonly engaged in the real estate practice of law follow procedure carefully and follow the law. My experience is that members of the Bureau County Bar Association exhibit the finest ethical standards.

Note to readers: Richard C. Fiocchi of Ladd, an attorney, is a partner in the Bernabei, Balestri and Fiocchi Law Firm in Spring Valley and is president of the Bureau County Bar Association.

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