U.S. Says Plan to Restrict Nonlawyers’ Legal Advice Would Hurt Consumers

The Justice Department and the Federal Trade Commission said a plan to restrict nonlawyers from offering some forms of legal advice would result in “significant consumer harm.”

The American Bar Assn. has proposed a rule that would prevent nonlawyers from giving advice on situations such as closing real estate loans and making wills, the Justice Department said. The rule also might prohibit accountants and bankers from advising their clients about relevant laws, the government said.

In a letter sent Friday to the largest U.S. lawyers’ organization, the department said the rule would hurt consumers by reducing their choices in getting help and forcing them to pay higher prices for legal information.

“There is no evidence before the ABA of which we are aware that consumers are hurt by this competition and there is substantial evidence that they benefit from it,” wrote Acting Assistant Atty. Gen. R. Hewitt Pate.

The public benefits from competition between lawyers and nonlawyers in areas such as tenant rights and income tax preparation, the Justice Department said.

An ABA task force plans to hold meetings next year on the proposed rule, which would broaden the activities considered legal practice. A person practicing law must be licensed to do so.

The rule also would put restrictions on software allowing consumers to write up their own legal papers, the Justice Department said.