Restricting paralegals is harmful, unnecessary

THE ISSUE The state high court has extended the period for public comment on a bill that would ban simple legal services by nonlawyers.

The Hawaii State Bar Association has decided to alter a protectionist proposal designed to eliminate competition following a barrage of protests by nonlawyers who perform mundane legal services. The lawyers have yet to explain why any change of the rules is needed.

Accountants, insurance companies, real estate agents, paralegals and others have recognized the proposal as a ploy to run them out of business, forcing their clients to pay high fees to licensed attorneys for simple chores. The initial proposal by the bar would prohibit nonlawyers from "selecting, drafting or completing documents that affect the legal rights of another person."

"In a Feb. 29 letter to the state Supreme Court, Jeffrey Sia, the bar association's president, said, "Bad and improper legal advice by untrained, unlicensed and unregulated individuals" can have an "adverse personal and financial impact" on people and "result in loss of legal rights or opportunities." The letter lacks evidence that such a problem exists.

The Supreme Court had asked for public comment by Jan. 25 but has extended the comment period to May 30 at the request of the bar association to give it time to respond to the complaints. Sia says the association will consider changing the proposal to better define the "practice of law." The unauthorized practice of law is punishable by a year in jail and a $2,000 fine.

A similar proposal by an American Bar Association task force several years ago was met with opposition by the Justice Department's antitrust division and the Federal Trade Commission. They pointed out that "formal legal training" is unnecessary to perform many functions, such as filling out and explaining purchase and sale agreements for home purchases.