Buyer Beware: Compliance Consultants and the Unlicensed Practice of Law

by Omar Figueroa

January 31, 2022

In the cannabis space, there are many self-professed “compliance consultants” who purport to give their clients advice of a legal nature, in particular advice on how to navigate the tangled maze of laws, regulations, and ordinances that govern the industry.  These compliance consultants are not licensed to practice law; yet they purport to give legal advice.  Is this even legal?  The short answer is no.

The practice of law is a highly regulated endeavor across the United States, and the practice of law without a law license is a crime in numerous jurisdictions across the nation.  For example, in California, the unauthorized practice of law (UPL) is a crime in violation of Business & Professions Code § 6126.  The State Bar of California makes clear that anyone who gives legal advice is engaging in the practice of law, and anyone who gives legal advice without a current, valid law license is engaging in the unauthorized practice of law:

If someone gives legal advice without a license, that’s called the unauthorized practice of law (UPL.) In California, only attorneys can give legal advice. If an attorney loses their license to practice, but continues to take and advise clients, that’s also considered the unauthorized practice of law.

Unauthorized Practice of Law Complaint.  The State Bar of California has a web page devoted to the Unauthorized Practice of Law with an online complaint form for reporting the unauthorized practice of law by persons who are currently non-attorneys. (There is a separate process for reporting misconduct by licensed attorneys.)

How can one find out if a person is licensed to practice law?  Easy: the information is online.  For example, the California State Bar has an online Attorney Search which allows the public to check the license status of individuals claiming to be licensed to practice law in California.  Similarly, the New York State Office of Court Administration has a similar search site to check the license status of individuals claiming to be licensed to practice law in New York.

Because compliance almost always involves giving advice on how to ensure that an organization follows relevant laws, regulations, and ordinances, any non-attorney consultant who gives fact-specific advice is engaged in the unlawful unauthorized practice of law.  This is different than merely providing legal information.  Of course, anyone can provide legal information, which is protected by the First Amendment, but the application of the law to specific facts is what constitutes the practice of law, and the courts do not generally recognize a constitutional right to practice law without a license.  Yet, a First Amendment occupational licensing lawsuit filed by a pastor and a nonprofit against the State of New York is demanding that the state recognize their constitutional right to give free advice to those fighting debt lawsuits, despite not having a license to practice law.  In that case, a court may recognize a limited exception to the unauthorized practice of law for those providing legal advice for free to those who cannot afford to hire lawyers; however, that situation is distinguishable from an unlicensed “compliance consultant” charging money in exchange for legal advice.