This post discusses only New Jersey law.
I notice that some non-attorneys are publishing blanket statements that preparing Business Ownership Information filings is not the unauthorized practice of law. I am not convinced. That is not an easy or clear conclusion, at least not under the laws of New Jersey. This does not mean that I perceive any risk for my practice or other CPAs, but rather that it appears that the terminology being used is not agreed and conclusions are inconsistent.
A bit of background: About a decade ago my firm Freedom Benefits was a prominent provider of assistance with custom-designed employee benefit plan documents. I left employment of a benefits-focused law firm about a decade before that and I built a library of sample and template documents that were used in a variety of small business circumstances. A competitor firm felt this was an unfair advantage and made a complaint to the New Jersey Committee on the Unauthorized Practice of Law. Long story short – I learned a lot about Unauthorized Practice of Law but did not get into any legal trouble. My firm was engaged in unauthorized practice of law but was not at risk of consequences of criminal behavior. I published a few prior articles, including this 2014 blog post, about this experience and spoke with peer NJCPA members about it. My blog post is well documented so I do not reproduce those references here except in summary points below.
In New Jersey, the unauthorized practice of law is defined by the New Jersey Rules of Professional Conduct. This 2019 blog post written by Adrienne C. Rogove, a partner at Blank Rome, and the Chair of the New Jersey Supreme Court Committee on the Unauthorized Practice of Law is a well-known reference used by many practitioners today. Rogove writes (emphasis added) “It is important for the legal community and for consumers of legal services in New Jersey to be aware of what constitutes the unauthorized practice of law. As noted in the Appellate Division’s opinion, the practice of law is not only the representation of a party in court, but is also that conduct engaged in ‘whenever and wherever legal knowledge, training, skill and ability are required.’” It seems reasonable to conclude that this is a broad and encompassing interpretation of the criminal statute. In my case, it is clear that I met the statutory definition of Unauthorized Practice of Law. Yet the Committee made it clear that I was not at risk of criminal accusation. The Committee emphasized that nonstatutory factors were important in interpreting the law. A third party legal publication wrote: “They consistently reflect the conclusion that the determination of whether someone should be permitted to engage in conduct that is arguably the practice of law is governed not by attempting to apply some definition of what constitutes that practice, but rather by asking whether the public interest is disserved by permitting such conduct.” This 1999 position was monumental in my case.
Later, in 2023, N.J.S.A. 2C:21-22 was updated to clarify and expand on the distinction of when Unauthorized Practice of Law is a third degree vs fourth degree crime (and more important in this discussion, when it is not a more serious crime). Non-attorney firms like mine that practice law rely heavily on the exclusions from criminal conduct in our daily activities. In my limited experience, the difference in consequence between a third degree and fourth degree disorderly persons case are enormous. For example: an agreement to cease and desist vs a prosecution. These changes took away the scare factor. Yet we have no statutory authority to assert that our practice of law will not be interpreted as ‘crossing the line’ under the statute as a fourth degree crime.
Note that the legal definitions never changed:
“Practice of law” remains the same. An early case cited in my prior post states that what “constitutes the practice of law does not lend itself to precise and all-inclusive definition.”
“Unauthorized practice of law” remains the same. The Board’s position contrary to Appellate Court in 2021 makes it even more difficult to apply a precise definition.
What did change (or was clarified) in 2023 are the actions that do not meet the definition of a third degree criminal act of unauthorized practice of law.
Most recently, in July 2024, the New Jersey Supreme Court’s Committee on the Unauthorized Practice of Law issued a letter to the New Jersey Society of CPAs directly in response to the NJCPA’s request for clarification about Business Ownership Information filings. It was no surprise that the Board confirmed that this was allowed by CPAs and EAs, under appropriate conditions. However, the letter does not attempt to modify the definition of the practice of law or the unauthorized practice of law. It simply says that a CPA or EA who filed Business Ownership Information filings is permitted.
Most important, is their finding (emphasis) in this most recent publication of the topic of business ownership information filings:
“The Committee finds that the filing of beneficial ownership information reports is the practice of law”.
It seems clear that the preparation of a Business Ownership Information filing is the practice of law. The Committee does not give the green light to all non-attorneys, but only CPAs and EAs. The Committee also adds specific requirements for the CPA or EA to avoid criminal behavior under the statute. Given the ‘thin ice’ interpretation of the exclusion, it is risky to reach a blanket conclusion the Business Ownership Information filings are not an Unauthorized Practice of Law.