A bill

 

TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ENACTING THE "UNAUTHORIZED PRACTICE OF LAW PREVENTION ACT" BY ADDING ARTICLE 9 TO CHAPTER 5, TITLE 40 SO AS TO PROHIBIT UNLICENSED INDIVIDUALS FROM PROVIDING LEGAL SERVICES FOR COMPENSATION, TO PROVIDE DEFINITIONS, TO ESTABLISH CRIMINAL PENALTIES, AND TO PROVIDE FOR CIVIL ENFORCEMENT, INJUNCTIVE RELIEF, AND THE DISGORGEMENT OF COMPENSATION RECEIVED IN VIOLATION OF THIS ARTICLE, AMONG OTHER THINGS.

 

Be it enacted by the General Assembly of the State of South Carolina:

 

SECTION 1.  This act may be cited as the "Unauthorized Practice of Law Prevention Act."

 

SECTION 2.  Chapter 5, Title 40 of the S.C. Code is amended by adding:

 

Article 9

 

Unauthorized Practice of Law Prevention

 

    Section 40-5-910.  For purposes of this article:

    (1) "Legal services" means providing advice, counsel, or assistance on matters involving the law or legal rights including, but not limited to:

       (a) drafting, completing, or preparing legal documents such as pleadings, settlement agreements, parenting plans, separation agreements, or court filings;

       (b) advising an individual regarding his or her legal rights, remedies, or obligations;

       (c) representing or purporting to represent another person in any legal negotiation, mediation, arbitration, or proceeding; or

       (d) advertising, holding oneself out, or implying the ability to perform any of the foregoing services.

    (2) "Compensation" means any fee, payment, donation, retainer, or thing of value received directly or indirectly for providing services.

    (3) "Drafting, completing, or preparing" includes editing, reviewing, selecting, recommending, or customizing language for any legal document, whether typed, handwritten, templated, or completed in whole or in part by the non-attorney.

    (4) "Licensed attorney" means an attorney duly licensed and admitted to practice law in the State of South Carolina and in good standing with the South Carolina Bar.

    (5) "Unauthorized person" means any person or entity that is not a licensed attorney in South Carolina and who provides, advertises, or offers legal services to another for compensation.

 

    Section 40-5-920.  (A) In addition to the provisions of Article 5, it is unlawful for any unauthorized person to:

       (1) draft, complete, or prepare any parenting plan, separation agreement, settlement agreement, court pleading, or other legal document on behalf of another for compensation;

       (2) provide legal advice, strategy, or guidance on divorce, custody, visitation, support, or other family law matters for compensation;

       (3) represent themselves in advertising, websites, or social media as a custody coach, family law consultant, legal coach, or any title suggesting authority or expertise to provide legal services in family law;

       (4) offer guidance on what to say, request, argue, or present in any legal proceeding that constitutes legal advice;

       (5) create, sell, customize, or distribute templates, worksheets, guided forms, or questionnaires intended for use as legal documents in family court;

       (6) provide case-specific recommendations, interpretations, or suggested courses of action that constitute legal advice; or

       (7) engage in, or attempt to engage in, the practice of law as defined by the South Carolina Supreme Court without a valid license.

    (B)(1) Provision of divorce coaching by an individual certified by a nationally recognized divorce coach program does not constitute the practice of law under this article, provided that the individual:

           (a) does not provide legal advice, interpret law, draft legal documents other than those permitted for self-represented litigants, or represent any person in a legal proceeding;

           (b) provides services limited to education, organization, communication support, goal-setting, and guidance on the nonlegal aspects of separation and divorce for which he received training as part of his certification process;

           (c) does not engage in any of the prohibited activities in subsection (A); and

           (d) clearly discloses in writing to each client that the coach is not an attorney and may not provide legal advice.

       (2) Nothing in this subsection authorizes a divorce coach to engage in any activity that constitutes the practice of law under South Carolina law.

    (C) If the notice provided in item (1)(d), any advertisement, or any other communication by an unauthorized person expressly disclaims that the person is not a licensed attorney in this State, the disclaimer does not:

       (1) provide a defense to, or immunity from, any enforcement action, civil liability, or criminal penalty arising from engaging in the unauthorized practice of law or any action prohibited in this article; or

       (2) cure, mitigate, or otherwise excuse conduct that would constitute the unauthorized practice of law if performed by a nonlawyer.

    (D) Each act of providing or advertising unauthorized legal services constitutes a separate offense.

 

    Section 40-5-930.  (A) An attorney licensed to practice law in this State who knows or reasonably should know that a person has engaged in conduct constituting the unauthorized practice of law under this article shall report the conduct in writing to the Office of Disciplinary Counsel within fifteen days after acquiring such knowledge.

    (B) Upon receiving a report under this section, the Office of Disciplinary Counsel shall, within ten days, refer the matter and all supporting documentation to the Office of the Attorney General for investigation and enforcement under this article.

    (C) The Office of the Attorney General shall open an investigation into each referral made under this section and may take any enforcement action authorized by this article, including injunctive relief, civil penalties, restitution, disgorgement, or criminal prosecution.

    (D) A report made under this section, including the disclosure of any document, template, parenting plan, agreement, communication, or material prepared by an unauthorized person, does not violate the attorney-client privilege or Rule 1.6 of the South Carolina Rules of Professional Conduct. Such disclosure is deemed a permitted disclosure required by law for purposes of Rule 1.6(b)(6) and does not constitute a waiver of privilege for any other purpose.

    (E)(1) The exception in subsection (D) is limited to the disclosure of information reasonably necessary to:

           (a) identify the unauthorized person or entity;

           (b) describe the unauthorized services provided; and

           (c) provide copies of materials created, drafted, edited, completed, or supplied by the unauthorized person.

       (2) The reporting attorney may not disclose privileged or confidential client information beyond what is permitted in this subsection.

    (F) A report made pursuant to this section does not create, imply, or establish an attorney-client relationship between the reporting attorney and any person involved in the underlying unauthorized conduct.

 

    Section 40-5-940.  (A) A person who violates this article is guilty of a misdemeanor and, upon conviction, must be fined not more than one thousand dollars or imprisoned for not more than one year, or both, for each offense.

    (B) A second or subsequent offense within five years constitutes a felony, punishable by a fine of not more than five thousand dollars or imprisonment for not more than five years, or both.

 

    Section 40-5-950.  (A) The Attorney General or any solicitor of competent jurisdiction may bring a civil action in circuit court to enjoin any violation of this article.

    (B) In addition to the provisions of subsection (A), the Attorney General may issue an immediate cease-and-desist order upon reasonable cause to believe a violation has occurred.

    (C) In addition to injunctive relief, the court may:

       (1) impose civil penalties of up to five thousand dollars per violation;

       (2) order restitution to affected consumers; and

       (3) award reasonable attorney's fees and costs to the State.

    (D) In a civil action under this article, a person or entity found to have engaged in the unauthorized practice of law must disgorge all fees, payments, donations, or other compensation received, directly or indirectly, from such conduct. Disgorged funds shall be applied first to restitution for affected consumers and any remainder deposited in the South Carolina Bar Foundation or a fund designated for enforcement of unauthorized practice of law violations. Disgorgement is mandatory, in addition to any civil, criminal, or other sanction, and inability to pay does not limit the court's authority to order injunctive or other relief.

    (E) The remedies provided in this article are cumulative and do not preclude any other remedies available under law.

 

    Section 40-5-960.  This article does not prohibit:

    (1) individuals representing themselves pro se in a legal matter;

    (2) licensed mediators conducting court-approved mediation without giving legal advice;

    (3) life coaches or counselors providing emotional or practical support without preparing legal documents or advising on legal rights;

    (4) paralegals, legal assistants, or law firm staff performing legal work under the direct supervision of a licensed South Carolina attorney, including billing for their time through a law firm as part of attorney-supervised representation;

    (5) activities expressly authorized by statute, such as notarial acts or real estate transactions permitted under existing law; or

    (6) guardians ad litem acting with their scope of duty.

 

SECTION 3.  This act takes effect upon approval by the Governor.

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