Advice vs Legal Advice

[Spindrift]

Is there some kind of rule of thumb for when someone is giving generic advice versus when one is giving legal advice? (BTW: I'm in the USA.)

Someone asked me to look at their business and give them advice on how things might work better. I might be compensated for my advice. What I need to know is where the line is for practicing law without a license? There are certain areas of the business that are regulated by state statutes and I'm very familiar with those statues having run an operation similar to my potential client. My idea is that I would highlight areas that seem to be of concern, give them a report, but I don’t what to give the impression I’m rendering a legal opinion.

If I point out something they are doing is illegal, is that giving legal advice? If I disclaim everything with “I’m not a lawyer, but I don’t think you’re allowed to do that.” Or “I’m not a lawyer, but I believe you’re supposed to be doing this.” Is that okay?

Any general guidelines would be helpful.

 

[Puppycow]

IANAL, but I don't think giving advice is a problem. There's lots of management consultants who aren't lawyers, right? As long as you aren't pretending to be one and use common sense I think you are OK. I would put a disclaimer in the the contract just in case.

 

[NewtonTrino]

I would advise you on this but that would be giving legal advice and I don't want to be on the hook for that legally.

 

[roger]

I would advise you on this but that would be giving legal advice and I don't want to be on the hook for that legally.

Ooooooh, I'm sorry, but you should not be advising him that giving legal advice potentially illegal, as that constitutes legal advice. Please PM me your contact details so I can have you arrested immediately.

 

[NoZed Avenger]

Ooooooh, I'm sorry, but you should not be advising him that giving legal advice potentially illegal, as that constitutes legal advice. Please PM me your contact details so I can have you arrested immediately.

Oooooh, I'm sorry, but I guess you can see where this is going.

Except I *am* an attorney and eveyone posting on this thread owes me $300.00 as a consulting fee. PM me for paypal info.

 

[TraneWreck]

Lot's of businesses have "consultants," so there is ample room for you to give suggestions without invoking legal expertise.

Did you go to law school? If you did it might muddy the waters slightly, but if you make it clear to the business that you have no legal expertise and they shouldn't take your advice as such, I think you're in the clear.

Anything that you find in their operation that you suspect is illegal should be forwarded to an attorney. Otherwise you're just an "efficiency expert" or one some similar business-y term.

Edit: by the way, I am a lawyer, but I only really focus on the ethical issues that govern my conduct. I'm not up to speed on how laws and codes bind non-lawyers. If you're really concerned I would recommend calling your local bar association. They have a lot educational publications and you might get your answer that way.

Basically you should avoid claiming something IS illegal or legal. It's mostly for your protection. If the business relies on your advice and has some judgment set against them, they will sue your ass.

 

[Spindrift]

Lot's of businesses have "consultants," so there is ample room for you to give suggestions without invoking legal expertise.

Did you go to law school? If you did it might muddy the waters slightly, but if you make it clear to the business that you have no legal expertise and they shouldn't take your advice as such, I think you're in the clear.

Anything that you find in their operation that you suspect is illegal should be forwarded to an attorney. Otherwise you're just an "efficiency expert" or one some similar business-y term.

Edit: by the way, I am a lawyer, but I only really focus on the ethical issues that govern my conduct. I'm not up to speed on how laws and codes bind non-lawyers. If you're really concerned I would recommend calling your local bar association. They have a lot educational publications and you might get your answer that way.

Basically you should avoid claiming something IS illegal or legal. It's mostly for your protection. If the business relies on your advice and has some judgment set against them, they will sue your ass.

The issue is that a major part of the reason I've been approached is that I've become very familiar with the state statutes that govern the operation. The statutes are a bit obscure and pertain to only about 200 organizations in the state. I have yet to find a lawyer in the state that knows as much as I do without that lawyer having to do research. Even the lawyers for the organizations. I have tried to talk a few into developing a specialty in the area, but no one has ever seemed interested, it's not a huge or really lucrative market.

The state has no one overseeing these organizations, it was something that was cut out of the state budget 20 or so years ago and never restored. They don't even know exactly how many there are. There is almost no case law, because no one seems to even know that these organizations aren't doing things according to the statutes. And there are some very serious ramifications if they are ever found out.

So basically you think I have to couch things in terms like "I believe you might have an issue with X and Y. You should have your attorney look into this." And categorically state that I am not a lawyer and in no way should anything I say be construed as legal advice.

Thanks for the bar association suggestion, I will look into that.

BTW: I have never been to law school.

 

[TraneWreck]

So basically you think I have to couch things in terms like "I believe you might have an issue with X and Y. You should have your attorney look into this." And categorically state that I am not a lawyer and in no way should anything I say be construed as legal advice.

You want to do everything you can to make sure that if they are sued or the state comes after them they can't counterclaim and attach you as a third party defendant. Depending on how well you know these guys and how risky what you're doing happens to be, it might never become an issue at all.

And it doesn't surprise me AT ALL that you're much more of an expert in this area than any lawyer. Honestly, if the company has an attorney that helped them incorporate, just have him/her sit in at the meeting and give the thumbs up to whatever you say. The lawyer can get his lazy ass to a computer and look up the statutes if something dangerous comes up.

BTW: I have never been to law school.

The only reason I asked is that if you had gone they could make an argument that you presented yourself as a legal expert.

If you haven't been to law school, made it clear that your suggestions don't represent actual legal advice, and told them to consult an attorney, then you should be cool. But I would talk to someone at the bar or the state ethics board, they're usually pretty helpful.

 

[Spindrift]

You want to do everything you can to make sure that if they are sued or the state comes after them they can't counterclaim and attach you as a third party defendant. Depending on how well you know these guys and how risky what you're doing happens to be, it might never become an issue at all.

And it doesn't surprise me AT ALL that you're much more of an expert in this area than any lawyer. Honestly, if the company has an attorney that helped them incorporate, just have him/her sit in at the meeting and give the thumbs up to whatever you say. The lawyer can get his lazy ass to a computer and look up the statutes if something dangerous comes up.




The only reason I asked is that if you had gone they could make an argument that you presented yourself as a legal expert.

If you haven't been to law school, made it clear that your suggestions don't represent actual legal advice, and told them to consult an attorney, then you should be cool. But I would talk to someone at the bar or the state ethics board, they're usually pretty helpful.

Thanks for the pointers!

 

[Matthew Ellard]

Thanks for the pointers!

If the person charges money and they are not qualified, it comes under consumer law "fitness for pupose" and there is case law on this exact issue.

 

[Spindrift]

If the person charges money and they are not qualified, it comes under consumer law "fitness for pupose" and there is case law on this exact issue.

I consulted my lawyer Smithers J. Googlington, IV, Esq., but I could only find "fitness for purpose" relating to the construction/architecture consulting. Also I get the impression that it's a UK concept. Does it apply in the USA?

 

[Matthew Ellard]

I consulted my lawyer Smithers J. Googlington, IV, Esq., but I could only find "fitness for purpose" relating to the construction/architecture consulting. Also I get the impression that it's a UK concept. Does it apply in the USA?

Hmmmmm....It is UK & Australian law but I thought it was also the same in the USA. I see here it is called "implied warranty" but only seems to apply to goods. Read the website and ask your solicitor if it only applies to the sale of goods and not services.

http://en.wikipedia.org/wiki/Implied_warranty

In the United States, the obligation is in Article 2, Section 315 of the Uniform Commercial Code. The warranty of fitness differs from a warranty of merchantability in that it applies to all sellers, not only professional merchants. In the United States, this warranty is sometimes referred to simply as a warranty of fitness.

 

[stevea]

I think you are taking considerable risk/liability when you give written advise on legal matters, even regulatory matters for fee. Unless this is some important level of income to you I'd decline to give such advise for fee. It's not smart. Let's say you accidentally mis-state some regulatory requirement or incorrectly mis-state the required licenses for some aspect of the business, and could cause your client to make very expensive mistakes. The state won't sue your client - they will shut down their operations. Then they may look to you for compensation since they relied on your advice. Aside from writing some personal narrative of your recollections of your experiences - I don't think you can advise this client in writing without giving legal advice.

If they want to hire you part-time or as a consultant to assist them in managing the regulatory morass - that's fine. You are just a non-lawyer employee/service, familiar generally with the issues attempting to advise management accurately. State your qualifications clearly in any consulting contract. If you make an honest mistake it's not a legal liability. You may get canned but you shouldn't get sued.

If I point out something they are doing is illegal, is that giving legal advice?

Even a lawyer wouldn't do that. You shouldn't make declarations that something is/isn't illegal. That's a determination for a court.

Your position as consultant would be that to the best of your knowledge the method/procedure does not meet regulation and you advise the client to revise or modify the method/procedure. You can describe what you believe to be a compliant method. You can cite the regulation BUT don't interpret it. With your experience and contacts perhaps you can describe some compliant systems or else contact the regulators about what methods they consider compliant.

BTW a lawyer might also point out the questionable method, but they would never make any claim about what IS compliant except by pointing to the regulation. You may be able to do better.

It's not meant to be weasel-wording, but you have to accurately describe the limited basis for your concern and your limited basis for a suggested solution.

 

[Spindrift]

I think you are taking considerable risk/liability when you give written advise on legal matters, even regulatory matters for fee. Unless this is some important level of income to you I'd decline to give such advise for fee. It's not smart. Let's say you accidentally mis-state some regulatory requirement or incorrectly mis-state the required licenses for some aspect of the business, and could cause your client to make very expensive mistakes. The state won't sue your client - they will shut down their operations. Then they may look to you for compensation since they relied on your advice. Aside from writing some personal narrative of your recollections of your experiences - I don't think you can advise this client in writing without giving legal advice.

If they want to hire you part-time or as a consultant to assist them in managing the regulatory morass - that's fine. You are just a non-lawyer employee/service, familiar generally with the issues attempting to advise management accurately. State your qualifications clearly in any consulting contract. If you make an honest mistake it's not a legal liability. You may get canned but you shouldn't get sued.



Even a lawyer wouldn't do that. You shouldn't make declarations that something is/isn't illegal. That's a determination for a court.

Your position as consultant would be that to the best of your knowledge the method/procedure does not meet regulation and you advise the client to revise or modify the method/procedure. You can describe what you believe to be a compliant method. You can cite the regulation BUT don't interpret it. With your experience and contacts perhaps you can describe some compliant systems or else contact the regulators about what methods they consider compliant.

BTW a lawyer might also point out the questionable method, but they would never make any claim about what IS compliant except by pointing to the regulation. You may be able to do better.

It's not meant to be weasel-wording, but you have to accurately describe the limited basis for your concern and your limited basis for a suggested solution.

Thanks. I appreciate the advice and it makes sense.

 

[blutoski]

Here's a related question: is there an obligation to report?

ie: if/when these violations are revealed, if you failed to raise them as a concern through your role, will this be seen as conspiracy?

 

[stevea]

Here's a related question: is there an obligation to report?

ie: if/when these violations are revealed, if you failed to raise them as a concern through your role, will this be seen as conspiracy?

Conspiracy ? Between whom ? Certainly not!!! But if you make a claims for fee that others should reasonably rely on you may incur personal liability when you are wrong. The first step in avoiding trouble is to never exaggerate your expertise, and to avoid making definite assertions about economically important topics where you have limited expertise.

This isn't some special case for consultants to regulatory issues. Employees shouldn't run around making claims that some practice is/isn't in compliance or legal/illegal. They should raise a red flag where they have concerns, and they should allow the compliance issue to be handled by ppl with specific expertise. If it's a legal/regulatory issue that means a lawyer is involved.

In recent years, both as consultant and employee, I've been involved in projects that use open copyrighted software. Such open software comes with licenses that restrict it's use or attach 'strings' to it's use. I'll raise the red flag if I think we are in violation. when asked I'll take reasonable steps intended to meet license req's, but I will not assert that we are/are_not in compliance. Management & clients aren't fools. They don't ask me for a legal opinion and I'd refuse to offer one. if they did.

A more relevant example:

Some of these projects I currently work on must meet certain federal regulatory requirements. There is a big book of requirements. We produce a 'response' book showing how we meet each requirement specifically. Eventually the product undergoes testing for compliance and receives a pass/fail from regulators.

I contribute to the 'response book' by proposing technical methods how our system meets each related requirement. There is a consulting firm assisting us in both creating an acceptable 'response book' and a system capable of passing the regulatory tests. No one is claiming that our 'response book' or product is perfectly acceptable before review. In fact we all expect several iterations of this process. So by not making excessive claims the consulting firm is free from excessive liability. They never claimed that they could help us produce an acceptable 'response book' in the first try or on the 50th. We are all working on a "good faith" basis toward that end and we are free to discontinue the consulting service if/when we are dissatisfied. The consulting firm talks w/ the regulators, and makes an assessment of what we need to implement and document, then that examine our proposal and give it a tentative yeah/neah. This sort of help from this consultant does make the process faster and simpler, but no one expects the consultants 'yeah/neah' assessment to be a perfect predictor of the regulators assessment.

I think the regulatory consultancy of the OP needs to be on a similar basis. You are there to help/assist using your knowledge and expertice, but you are not making any claims about what the regulators will find compliant/non-compliant. Regulators can be capricious, regulations change, acceptable and preferred methods under regulation change. Just make sure the relationship and expertise is clear to the client and stick to your field.

It's fine to say that you by talking to the regulators or else via experience expect the method A, B, C will meet regulation. The client is likely to suggest modification A' and you may be able to state that A' is likely/unlikely to pass based on experience, or else that it's an unknown. Just don't paint yourself into a corner claiming that something will/won't pass; just your expectations & recommendations based on experience are sufficient.