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Illinois State Bar Issues Opinion Regarding Non-Lawyer Representation in FINRA Arbitration

The Doss Firm

The Illinois State Bar Association recently issued an opinion stating that a non-lawyer’s representation of parties in a FINRA arbitration generally constitutes the unauthorized practice of law.

This opinion arose from an inquiring attorney who served as the chair of an FINRA arbitration panel. The arbitrator presided over a dispute between customers and a brokerage firm and he noticed that the customers were represented by a non-lawyer employee of a company, not a law firm.

The Illinois State Bar opinion letter notes that FINRA Arbitration Rule 12208 provides that parties may be represented by a non-lawyer “unless state law prohibits such representation.” In a review of the policy implications as well as Illinois law, the bar association recognized that FINRA arbitrations do not “involve the same degree of legal complexities and formality” as a court proceeding, but “we nonetheless are of the strong belief that the actions of a party representative in a typical FINRA proceeding … involves the giving of legal advice and the rendering of services requiring the use of legal knowledge or skill as to constitute the practice of law.”

The opinion letter also stated that an attorney/arbitrator who becomes aware of a non-lawyer’s representation of a party should inform FINRA and, if necessary, notify the agency that has jurisdiction to investigate unauthorized practice of law in Illinois.

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