Staying In Bounds: When Fantasy Sports Leagues Are Legal In California

Fantasy sports leagues that charge entry fees and award cash prizes are a largely unregulated industry. Internet sites that sponsor these leagues, however, are coming under scrutiny: according to the Wall Street Journal, the Department of Justice has announced it may investigate these sites’ operations, and sites offering one-day fantasy-league contests in Nevada must now obtain a gaming license.

The obvious question is what types of fantasy sports contests are legal when they involve the exchange of money, given the many laws against gambling. The question is important not only for the Internet sites under investigation, but for the people who participate in them and for those who would like to operate their own competing league.

This post summarizes the federal and California law governing contests in the fantasy sports world. That law is a patchwork of statutes and court decisions, and requires a separate analysis of each contest. There are certain hallmarks of legal games, however, that can guide the structuring of fantasy sports contests so that they comply with California and federal law.

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The Unauthorized Practice of Law in California: What Non-Lawyers Can Lawfully Do For Others.

An earlier post established that only active members of the California State Bar have a general right to “practice law” in that state, and that the “practice of law” included many activities far removed from the courtroom.  Among other things, the “practice of law” includes the drafting of wills and contracts, the conducting of legal research the giving of legal advice, and the selection of legal forms for even routine matters.

This post addresses the converse question.  It examines what law-related activities that non-lawyer professionals can legally perform without engaging in the illegal and unauthorized practice of law.  It first discusses the seminal decision in People v. Landlords Professional Services (1989) 215 Cal.App.3d 1599, 264 Cal.Rptr 548, and the restrictions that decision imposes on non-lawyers.  It then discusses the California regulatory scheme for non-attorney professionals, which essentially codifies the holdings in Landlords Professional.  Read together, these authorities reinforce the idea that the non-lawyer’s role in the legal field is narrowly drawn, and that the non-lawyer can act as little more than a scrivener without an attorney’s supervision.  Non-lawyers certainly cannot independently draft pleadings, agreements, or other legal documents whenever that work would require them to make substantive decisions regarding the contents of those documents or the language to be used.

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The Unauthorized Practice of Law In California, and The Jobs Reserved For Lawyers

Everyone concedes that only licensed lawyers can practice law, but that statement begs an important question:  what does it mean to “practice law”?  The question is not an academic one, as the California legal marketplace fills with non-lawyers providing services that only lawyers used to provide.  “Legal document assistants,” for example, now help people fill out court forms.  Lawyers and legal professionals from outside California, and indeed outside the United States, use the Internet to find freelance legal work drafting contracts and other legal documents.  A number of companies use software to create wills, articles of incorporation, and contracts for people, based on data their clients input into their website.

These outside lawyers, non-lawyer professionals, and companies strongly prefer a narrow definition of the term “practice of law,” so they can expand the range of services they can provide.  Consumers are tempted to use these alternatives to California lawyers in order to save on legal fees, and rely on these alternatives to be honest as to the services they can and cannot legally provide.  The result is constant pressure on the line that divides the activities constituting the practice of law from the activities that do not.  Given that the unauthorized practice of law is illegal, however, it serves everyone’s interest to know exactly what constitutes the “practice of law,” and who may legally perform various law-related tasks.

This article begins a series on the unauthorized practice of law in California.    It first confirms that the practice of law in California is generally restricted to lawyers who are active members of the California State Bar.  It then addresses the more difficult question of what constitutes “the practice of law” in California, and identifies the broad range of activities that can only be performed by active State Bar members.  Despite the position of many non-lawyers, California law makes clear that most activities in the legal arena in California must be performed by a California lawyer or under that lawyer’s supervision.  Non-lawyers who perform any of these tasks are thus squarely  violating California law.

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Law Firms Can Earn Profits By Hiring Contract Lawyers

 

Contract lawyers can solve the short-term crisis that occurs in a law firm with too many pressing deadlines. A question arises, however, when the firm goes to invoice its clients for the contract lawyers’ time. Can the firm bill that time at its standard hourly rate for associates with similar skills, even though it pays the contract lawyers a substantially lesser amount? Or must the firm simply “pass through” the contract lawyers’ fees, without a markup?

The answer depends on the applicable rules of ethics as to the “splitting of fees” between lawyers in different firms. In many cases, however, any potential problem with those rules can be avoided through the use of appropriate language in the client retainer agreement.

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Our Work and the Element of Surprise

It happens in a majority of our cases. Right after a favorable settlement or ruling, we receive a call or an E-mail from an excited lead counsel. At some point after the blow-by-blow description of what happened and the expression of thanks for our help, counsel blurts out “They didn’t see it coming.” In response, I simply smile and nod.

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