People ex rel. Chicago Bar Ass'n v. Goodman, 23052.

CourtSupreme Court of Illinois
Citation366 Ill. 346,8 N.E.2d 941
Docket NumberNo. 23052.,23052.
Decision Date02 June 1937

366 Ill. 346
8 N.E.2d 941


No. 23052.

Supreme Court of Illinois.

Feb. 18, 1937.
Rehearing Denied June 2, 1937.

Original proceeding by the People, on the relation of the Chicago Bar Association, relator, against Albert Goodman.

Respondent found guilty of contempt.

ORR, SHAW, and JONES, JJ., dissenting.

[8 N.E.2d 943]

Charles P. Megan and Charles Leviton, both of Chicago (Werner W. Schroeder, David J. A. Hayes, and L. Duncan Lloyd, all of Chicago, of counsel), for relator.

Leonard J. Grossman, of Chicago, for respondent.

HERRICK, Chief Justice.

On leave granted, the relator, the Chicago Bar Association, filed in this court an information detailing certain acts on the part of the respondent which the relator alleges constitute the practice of law and for which the respondent should be held in contempt of this court. The respondent has filed his motion to strike the information, and also a plea of estoppel. The motion to strike is in the nature of a demurrer. It challenges (1) the sufficiency of the information as a pleading, (2) the jurisdiction of this court, and (3) that the activities charged do not constitute the practice of law.

The information avers that Goodman is not a lawyer. He has offices in Chicago in, and from which, he engages in the business of handling and adjusting workmen's compensaton claims. He obtains business by a widespread plan of solicitation which includes advertisement in the telephone directory, cards, circulars, letters, and radio announcements. He carries on his business under various titles including ‘The Injured Workingmen's Adjustment Bureau,’ ‘Injured Workmen's Bureau,’ ‘The Public Bureau of Investigation and Adjustments,’ and ‘Workingmen's Adjustment Bureau.’

The information further charges that respondent has adjusted over $8,200 workmen's claims and, by means thereof, has collected $4,000,000 on behalf of injured workmen; that he is at present handling compensation claims at the rate of over 750 annually, which involve over $400,000. All claims are taken by respondent on a contingent fee basis, usually 20 per cent. of the amount of recovery. After respondent obtains a contract of employment from the injured workman, he negotiates for settlement with the employer or insurance carrier. If a settlement is effected, he prepares and files a petition with the Industrial Commission and obtains an order approving the settlement, including a lump sum to be paid, if that is part of the agreement. In case no settlement is reached, he prepares and files a claim for adjustment and brings it to hearing before an arbitrator of the commission. On such hearing he presents the evidence and endeavors to obtain a settlement or an award. In the event an award is allowed and an appeal is taken to the Industrial Commission as a whole, he follows the matter. In the vast majority of the cases all the foregoing services are performed by the respondent Goodman, or his lay employees. Only when an especially difficult question of law or fact arises, or when appeals are taken to the circuit court, does he employ a member of the bar. The percentage of respondent's cases represented by attorneys is very small. When he discovers that the claim of his client is enforceable at common law, and not under the Workmen's Compensation Act (Smith-Hurd Ill.Stats. c. 48, § 138 et seq.), he negotiates for a settlement thereof. If a settlement is not reached, he causes suit to be filed at law. He employs an attorney for that purpose.

The respondent, in support of his charge that the information is insufficient, urges that it is not sufficiently specific in stating the time and place when, where, and how the claims were disposed of, persons involved therein, and where such causes were tried, if there was a trial, which it is claimed constitute the practice of law. The information stated the offense charged so plainly and specifically that the nature thereof, and the acts alleged to constitute the offense, could be understood readily by the respondent. The detailing of the particulars would have made the information prolix. Moreover, by reason of the nature of the offense alleged, the activities of the defendant, averred to constitute the unlawful practice of law by him, rested within his knowledge, so that a general statement of the charge was sufficient. It was unnecessary to plead the evidence. The information was sufficiently specific. People v. Colegrove, 354 Ill. 164, 187 N.E. 913;Lincoln Park Coal Co. v. Wabash Railway Co., 338 Ill. 82, 170 N.E. 8;State of Illinois v. Illinois Central Railroad Co., 246 Ill. 188, 236, 237, 92 N.E. 814.

[8 N.E.2d 944]

The power to regulate and define the practice of law is a prerogative of the judicial department as one of the three divisions of the government created by article 3 of our Constitution. The legislative department may pass acts declaring the unauthorized practice of law illegal and punishable. Such statutes are merely in aid of, and do not supersede or detract from, the power of the judicial department to control the practice of law. In re Day, 181 Ill. 73, 54 N.E. 646,50 L.R.A. 519;Rhode Island Bar Ass'n v. Automobile Service Ass'n (R.I.) 179 A. 139, 100 A.L.R. 226. The power is inherent in this court to prescribe regulations for the study of law and the admission of applicants for the practice of that profession. People v. People's Stock Yards State Bank, 344 Ill. 462, 176 N.E. 901; In re Day, supra. It follows, as an incident to such power, that this court has jurisdiction to discipline or disbar, for cause, attorneys licensed by it. It would be an anomalous situation if a layman actively engaged in the practice of law, in definance of the requirements necessary therefor announced by this court, could stay the hand of the court from suppressing his illegal acts. The practice of law, both in courts and out of courts, by one not licensed, is an illegal usurpation of the privilege of an attorney and is a contempt of this court. People v. Chicago Motor Club, 362 Ill. 50, 199 N.E. 1;People v. Motorists Ass'n, 354 Ill. 595, 188 N.E. 827;People v. Ass'n of Real Estate Tax-Payers, 354 Ill. 102, 187 N.E. 823; People v. People's Stock Yards State Bank, supra.

In modern times the affairs of the people requiring the services of a lawyer have become more intricate and complex, demanding a corresponding increase in the standards of the profession through preliminary education and a lengthened and more diversified course of study by those who would engage in the practice. Administrative law, although of comparatively recent growth, is recognized today as an important branch of the law. Classes for the study thereof are now taught in many of our leading law schools. Relatively speaking, not many years ago that part of a legal education was unknown to the curriculums of law colleges. In addition to the rigid educational requirements, the applicant must possess a good moral character. These prerequisites are not for the purpose of creating a monopoly in the legal profession nor for its protection, but are for the better security of the people against incompetency and dishonesty. People v. Alfani, 227 N.Y. 334, 125 N.E. 671;In re Opinion of the Justices, 289 Mass. 607, 194 N.E. 313. The right to practice law is in the nature of a franchise, but the holder thereof may not incorporate himself and assign his franchise to such corporation and pass the right on to others. The privilege to practice law is personal to the holder of the right.

In People v. People's Stock Yards State Bank, supra, 344 Ill. 462, at page 475, 176 N.E. 901, 907, the court stated that the definition of the ‘practice of law’ therein set forth was substantially correct. This court and other courts have always been reluctant to adopt an all-inclusive definition of the term ‘practice of law.’ It has been held that ‘persons acting professionally in legal formalities, negotiations, or proceedings by the warrant or authority of their clients,’ are engaged in the practice of law. In re Duncan, 83 S.C. 186, 65 S.E. 210,24 L.R.A.(N.S.) 750,18 Ann.Cas. 657. Likewise it has been decided that, (a) giving an opinion as to the right to maintain an action against another, (b) furnishing legal services, or giving advice to others on questions of law, and (c) soliciting, settling, or adjusting personal injury claims, constitute the practice of law. Fitchette v. Taylor, 191 Minn. 582, 254 N.W. 910, 94 A.L.R. 356. The procuring of an agreement enabling an unlicensed person to control the negotiations and the litigation that might follow on the failure of the negotiations, and the hiring of licensed attorneys to conduct litigation for others, for the financial profit of the hirer, has been defined as the practice of law. Smallberg v. State Bar of California, 212 Cal. 113, 297 P. 916;Shaw v. State Bar, 212 Cal. 52, 297 P. 532;Howe v. State Bank of California, 212 Cal. 222, 298 P. 25;In re Otterness, 181 Minn. 254, 232 N.W. 318, 73 A.L.R. 1319;Hightower v. Detroit Edison Co., 262 Mich. 1, 247 N.W. 97, 86 A.L.R. 509. For cases holding to the same effect, in principle, see In re Cooperative Law Co., 198 N.Y. 479, 92 N.E. 15, 32 L.R.A.(N.S.) 55, 139 Am.St.Rep. 839, 19 Ann.Cas. 879;Berk v. State, 225 Ala. 324, 142 So. 832, 84 A.L.R. 740;Creditors' National Clearing House v. Bannwart, 227 Mass. 579,116 N.E. 866, Ann.Cas.1918C, 130.

[8 N.E.2d 945]

One who, for a fee, contingent or otherwise, advises others as to their legal rights, the method to be pursued, the forum to be selected, and the practice to be followed for the enforcement of such rights, is engaged in the practice of law. In re Shoe Mfrs. Protective Ass'n (Mass.) 3 N.E.(2d) 746;In re Maclub of America (Mass.) 3 N.E.(2d) 272, 105 A.L.R. 1360.

It is urged that the practice by the respondent before the Industrial Commission is before an administrative body, and that the respondent, therefore, is not practicing law because he is not...

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