A Note from our CEO Mark Young: Legal Advice Versus Non-Legal (Informational Guidance). Does it Matter?
To our legal clients, and followers via our Weekly Legal Brief, social media posts, and free website of forms, FAQ’s, etc. at www.myhrcounselcompliance.com – you no doubt have seen my reactions to the many non-legal “compliance” solutions in the market claiming to provide employers with equivalent legal information and protection for the HR/employment issues. We’ve even observed, since our launch in 2015, changes in explanations of these non-legal solutions offerings, and claims of what they can do for employers.
I have heard from HR experts and C-level executives at conferences, on demos, and even in published articles, that these services are “better than nothing” or “good enough” Wrong!
The practice of law – giving legal advice – comes with many critical protections, but two game changers are 1) the attorney client privilege, and 2) insurance protection for “malpractice”
HR experts, and certified SHRM or HRCI experts are high trained and highly qualified, and this in no way is an article about their ability or claims to say lawyers are better than HR advisors, but instead to say, legal advice can only be given by lawyers, and not by lawyers in a corporation not holding itself out as a law firm. This is not my opinion, this is how the national and state bar associations have written their rules, and thus how the state laws related to the practice of law work.
What Legal Advice is:
Advice from friends or family does not constitute legal advice. True legal advice forms an agreement between an attorney and his or her client based on a particular legal matter the client is experiencing.
In a nutshell, legal advice has the following characteristics:
• Requires legal knowledge, skill, education and judgment
• Applies specific law to a particular set of circumstances
• Affects someone’s legal rights or responsibilities
• Creates rights and responsibilities in the advice-giver
Unlike legal information – such as information posted on a street sign – legal advice proposes a specific course of action a client should take. For instance, it’s the difference between telling someone what to do (legal advice) as opposed to how to do it (legal information).
Examples:
• Selecting, drafting, or completing legal documents or agreements that affect the legal rights of a person
• Representing a person before a court or other governing body
• Negotiating legal rights or responsibilities on behalf of a person
• Speculating an outcome
• Selecting or filling out specific forms on behalf of a client
Specific legal advice questions may include:
• Should I file for bankruptcy?
• Does my disability qualify for federal assistance?
• What kind of recovery can I receive for my accident?
So why does this matter.
As mentioned, only lawyers can provide this information or prepare the documents above for an employer’s specific situation in order for the employer to be “protected”. Protection specifically means being able to seek recourse against the drafter or advisor of that legal information.
You will notice, if you read the small print on each of the non-legal HR advisors term’s, that each of them disclaim their advice or forms, do not guarantee the accuracy, and tell you to seek legal counsel before acting on the advice or forms. Here are just a few examples:
HR Compliance Advisor used by Payroll Companies
“Nothing in the Services, information provided in handbooks or guides, and any other comments, opinions, recommendations, answers, analysis, references, referrals, content or information, should be relied upon or construed as legal advice. Under no circumstance creates an attorney-client relationship.”
HR Compliance Advisor used/provide to Clients by Broker
“Company is not engaged in rendering legal, accounting, or other professional advice or service in any form or matter. The specific application of any law, regulation, or policy to any particular fact, situation, or problem occurring with any employer should always first be reviewed with legal counsel or other consultants who practice in these particular areas and are knowledgeable about applicable federal and state law and regulations and their interpretation. Although every effort has been made to ensure the accuracy and completeness of this information, Company cannot be responsible for any errors or omissions or the change in any courts or agencies’ interpretation or application of any laws or regulations described in these materials.”
HR Compliance Advisor used/provided to Clients by Brokers
“Company and its employees and officers are not permitted to offer legal advice. As the answers to specific questions may vary based on federal or state law, as well as on company documents for the issues in question, it would be prudent to consult knowledgeable benefits counsel for individualized guidance”
Benefit Services Provider (TPA)
“As a third party administrator, Company) does not provide financial, legal, tax, or medical advice regarding any employee benefit programs or otherwise. Content regarding various life events and financial, legal, or tax concerns is provided for informational purposes only, and is not intended to be personalized or professional advice. Please consult with your financial, investment, legal, or tax advisor regarding the applicability of such content to you and its impact on your choice of benefit plans.”
Large Payroll Company with HR Consulting Division
Services Do Not Constitute Legal or Other Advice. CLIENT ACKNOWLEDGES AND AGREES THAT THE SERVICES PROVIDED HEREUNDER (INCLUDING, BUT NOT LIMITED TO, ANY AND ALL INFORMATION, MATERIALS, FORMS AND SERVICE CENTER ACCESS) ARE NOT INTENDED TO BE AND WILL NOT BE RELIED UPON BY CLIENT AS EITHER LEGAL, FINANCIAL, INSURANCE OR TAX ADVICE. TO THE EXTENT CLIENT REQUIRES ANY SUCH ADVICE, CLIENT REPRESENTS THAT IT WILL SEEK SUCH ADVICE FROM QUALIFIED LEGAL, FINANCIAL, INSURANCE, ACCOUNTING OR OTHER PROFESSIONALS. CLIENT SHOULD REVIEW APPLICABLE LAW IN ALL JURISDICTIONS WHERE CLIENT OPERATES AND HAS EMPLOYEES AND CONSULT EXPERIENCED COUNSEL FOR LEGAL ADVICE.
PEO
You acknowledge that we are not providing any legal, tax, accounting or benefits advice and that use of the Company’s Offerings or any Professional Services does not ensure compliance with any Laws. You acknowledge that all information is provided only as general information and may not conform to the laws in your state or jurisdiction or reflect the most current legal developments in any geographic or substantive area. You acknowledge and agree that we may rely on any information that you provide and treat it as if it is truthful, accurate and complete. If you require legal, tax, accounting or benefits advice or assistance, you should obtain the services of a competent professional expert knowledgeable in the applicable area of expertise.
So why do these companies disclaim their advice and any templates/forms they provide? If they didn’t, they would be in violation of the Unauthorized Practice of Law. As I mentioned before, only lawyers can provide legal advice to an employer on their specific facts or scenarios, and/or draft agreements, policies and handbooks to those facts. This is the law in all 50 states and the nation. Period.
But is non legal advice good enough, if I don’t “rely” on it, or recognize I can’t go after the company giving me the advice? Two issues: 1) the doctrine of attorney client privilege is not afforded an employer when seeking advice from a non-lawyer. What that means is that from word one, as soon as you begin sharing information you want to hold confidential, with a non-lawyer, confidentiality per the court of law does not exist. Only when you seek counsel from a licensed attorney does “confidential” information stay confidential – it is call “the attorney-client privilege” – a long standing legal doctrine. So if a situation leads to litigation, and an employer claims “but I sought advice from my HR consultant and their agreement said the information would be held confidential – sorry, you are out of luck – courts allow the other side to subpoena that information, and the “good enough” advice you received has not torpedoed your case!
The second issue, which none of the non-legal advisors talk about, and may not know, is their advice is deemed “legal advice”, in addition to that being against the law, their insurance, which you as their client will want to reimburse you for their damages, will not cover your claim against the non-legal advisor. While the advisor likely has errors and omission insurance, it cannot have legal malpractice insurance, as an insurance company cannot and will not write a policy for legal malpractice to a non-lawyer/law firm. So now you not only have lost your suit from seeking information from a non-lawyer, you have no recourse unless the non-legal company has enough of its own assets, after paying its fines to the bar association.
So if your broker is giving you non-legal advisors for free, or discounted, or you hear from a friend “get this, it’s good enough” – think twice. Instead, find an ondemand, unlimited legal advisory service, that charges a flat monthly fee (for about the same price as the non-legal solutions). It’s a pretty big deal!!