Legal Updates for Lawyers Professional Liability
Marshall Dennehey Counsel Prevails on Appeal of a Legal Malpractice Judgment for the Unauthorized Practice of Law Under New Jersey’s Criminal Statute
John “Jack” Slimm, highly accomplished trial attorney in Marshall Dennehey’s Professional Liability Department, prevailed on an appeal of a legal malpractice judgment for the unauthorized practice of law under New Jersey’s Criminal Statute, N.J.S.A. 2C:21-22a.
In Johnson v. McClellan, A-2683-19 (App. Div. July 19, 2021), a matter of first impression before the Appellate Division, Jack was retained by a law professor to argue an appeal of a trial court’s ruling which held that the law professor, an attorney admitted to practice in Pennsylvania, was liable for hundreds of thousands of dollars in damages in connection with the alleged unauthorized practice of law and obtaining a referral fee. The trial court entered judgment against the professor ordering a disgorgement of the referral fee, treble damages and attorneys’ fees under New Jersey’s Criminal Statute N.J.S.A. 2C:21-22(a). The trial court ruled that the professor, by accepting a referral fee and by consulting on an underlying medical malpractice case which was filed in New Jersey, had committed the unauthorized practice of law because the professor was not admitted to practice in New Jersey.
On appeal, the Appellate Division held that the trial court erred in finding that the professor violated New Jersey’s Criminal Statute. In addition, the Appellate Division agreed with Jack’s argument that the professor had not violated the Rules of Professional Conduct. The court held that an attorney admitted to practice before the highest court of another state may engage in the lawful practice of law in New Jersey if the out-of-state lawyer’s practice in New Jersey is occasional, and the lawyer associates himself with a lawyer admitted in New Jersey who will be responsible for the conduct of the out-of-state lawyer in the matter.
The Appellate Division also ruled that the trial court erred in determining that the receipt of a fee would amount to an independent instance of unauthorized practice of law. The Appellate Division found that such a finding would have rendered every attorney who violates an RPC relating to the unauthorized practice of law open to criminal prosecution. Commentators have written that this case could spare other attorneys from criminal prosecution.
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