Wednesday, May 13, 2009

From Utah With Advice

A Utah law firm may not provide credit counseling services to South Carolina residents without complying with statutory licensing requirements. The South Carolina Supreme Court held that an exemption in the statute for attorneys at law applies only to attorneys licensed to practice in the state and rejected a variety of claims by the Utah law firm:

Lexington Law Firm’s final argument is that the providing of credit counseling services does not constitute the practice of law, and as such, its actions cannot constitute the unauthorized practice of law.  The untenable dichotomy Lexington Law Firm advances is they fall under the attorney exemption but do not commit the unauthorized practice of law in South Carolina because they are conducting a business.  Lexington Law Firm cannot have it both ways.  As discussed, the statutory scheme limits the listed exemptions to those professions or businesses “when acting in the regular course of their respective businesses and professions.”  S.C. Code Ann. § 37-7-101(2)(b) (Supp. 2008).  If Lexington Law Firm is, in fact, acting in the regular course of the practice of law in South Carolina, then it is engaging in the unlawful unauthorized practice of law.  Conversely, if Lexington Law Firm is merely conducting a credit counseling business, then it may not gain relief from the statutory compliance requirements through the “attorneys at law” exemption.

In sum, we are not barring Lexington Law Firm from providing credit counseling services to South Carolinians, we are simply requiring Lexington Law Firm comply with the statutes enacted by our Legislature.  Lexington Law Firm may not avail itself of an exemption for which it is not statutorily entitled.

(Mike Frisch)

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