Court ruling slows down contractors and agents in favor of lawyers – Capitol Weekly | Capitol Weekly
Every day, California entrepreneurs negotiate written and oral contracts for clients and other third parties. The same goes for art dealers, retail store clerks, auto brokers, insurance companies, real estate and talent agents, auctioneers, architects and others.
If the State Supreme Court denies review of a recently released decision 2nd District Court of Appeal decision, all such transactions made without a lawyer approving the terms will be illegal.
Bacall vs. Shumway, B302787, certified for publication March 16, 2021, upheld a trial court ruling that an arbitrator had the power to find a personal manager who was, “Corresponding with lawyers, rewriting agreements and commenting on proposed contracts” had engaged in the practice of law without a license.
As it is a crime to practice law without a license, there will be a risk of losing money owed and facing a potential prison sentence.
The retort of this holding company becoming the state’s interpretation of how business transactions are to be negotiated can be overwhelming.
Most likely sooner than later, a general contractor or architect will successfully complete a project, but instead of receiving the balance owed, they will be asked to prove that they are a practicing lawyer. If they cannot, the client will claim that by negotiating contracts with electricians, landscape architect, swimming pool engineers, plumbers and carpenters without the required license, the builder has entered into practicing law without a license.
There are more reasons why companies that regularly negotiate for third parties may wish to file an amicus letter with the state’s Supreme Court, to help legal professionals consider this issue before Baccalaureate detention is taxable.
As it is a crime to practice law without a license, there will be a risk of losing money owed and facing a potential prison sentence. Before another litigant has the financial means and the determination to argue before the Court of Appeal, many will walk away or settle for fractions of what was originally owed.
This execution will not only compromise those who ignore it or choose not to follow it, as the holding is absolute and does not take into account the simplicity or sophistication of the proposed transaction. it will create a dead end for those who respect this change in law.
Although the State Bar Act does not speak of the elements of negotiation, it is understood that the negotiation of contracts is a defining activity of a lawyer.
For example, everyone who appears on a TV show or movie – from stars to the atmospheric to backstory actors – signs written contracts. If a scene requires 400 extras, production will now be delayed until lawyers can facilitate the execution of 400 contracts.
Likewise, it will be almost impossible to find people willing to accept an “extra” job. Extras pay between $ 60 and $ 120 per day plus 10% for the agent’s commission; it will cost the actors more than they gain to pay a lawyer to negotiate the agreement.
Although the State Bar Act does not speak of the elements of negotiation, it is understood that the negotiation of contracts is a defining activity of a lawyer. The question Bacall raises, and one of the great concerns of the public, is whether the activities of defining an authorization scheme are axiomatically regulated activities, or should there be legal directives which expressly reserve this activity for license holders. Licence ?
To a layman, it seems obvious that just like with contractors, locksmiths, and most other licensing regimes, there must be laws clearly indicating which activities are regulated, requiring licensing and sometimes additional certification.
Since the Law on the State Bar does not provide such exemptions for specialists, there is a cruel irony should Baccalaureate support.
The Accounting Act expressly defines the activities which are reserved for licensees and the activities which unlicensed may exercise – as long as the unlicensed “does not show up, solicit or advertise for clients using the chartered accountant or accountant designation ”.
Other licensing regimes, such as state pharmacy and real estate laws, provide exemptions for qualified specialists – doctors and veterinarians for the former, lawyers for the latter.
Since the Law on the State Bar does not provide such exemptions for specialists, there is a cruel irony should Bacall support. The case revolves around a talent representative negotiating a deal for a screenwriter, and now that only licensed attorneys have the authority to negotiate contracts, talent agents will be legally prohibited from engaging in any significant activity of their business. profession, to procure employment opportunities and contracts for artists.
from Los Angeles County Licensed Law Practice Manual for Prosecutors lists several examples of activities California courts have reserved for licensees: providing legal advice and advice before legal action is taken, preparing a trust deed, operating an eviction service, providing services bankruptcy lawsuits, preparing marriage dissolution documents, selling estate planning services, operating a bogus “legal aid” business and posing as a licensed attorney.
Not only is the execution of a commercial contract not on the list, but the whole manual only mentions the term “negotiate” once: noting that the negotiation of a tax settlement was the responsibility of ‘an accountant.
Baccalaureate is currently under consideration by the California Supreme Court (S268407). The final brief was filed on May 24, which means judges have up to ninety days to decide whether this case is worth considering.
Having to use a lawyer to negotiate all contracts could be the biggest change in the way business is handled in the history of this state.
It is time for all Californians to know if a critical activity is also regulated, regardless of the existence of a law expressing that limitation.
Editor’s Note: Rick Siegel is a personal manager and President of Marathon Entertainment.