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settlementattorneyinjunctioncompliance
settlementattorneyinjunctioncompliance

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In re First Escrow, Inc., 840 S.W.2d 839

Facts

The General Chairman of the Bar Committee charged First Escrow, Inc. and Best Escrow, Inc. with unauthorized practice of law regarding their real estate closing services. Neither company employed licensed attorneys, yet they completed pre-printed forms for various real estate transactions. The companies had been operating since the 1980s and charged a flat fee for closing services, without representing themselves as legal experts or providing legal advice.

The General Chairman of the Bar Committee charged First Escrow, Inc. and Best Escrow, Inc. with unauthorized practice of law regarding their real estate closing services. Neither company employed licensed attorneys, yet they completed pre-printed forms for various real estate transactions.

Issue

Whether the real estate closing services provided by escrow companies constitute the unauthorized practice of law.

Whether the real estate closing services provided by escrow companies constitute the unauthorized practice of law.

Rule

Escrow companies may complete simple, standardized forms under the supervision of a licensed attorney or an entity with a direct financial interest in the transaction, but they may not charge separate fees for document preparation or provide legal services.

Escrow companies may complete simple, standardized forms under the supervision of a licensed attorney or an entity with a direct financial interest in the transaction, but they may not charge separate fees for document preparation or provide legal services.

Analysis

The court applied the rule by determining that while escrow companies could fill in standardized forms, they lacked the personal financial interest necessary to safeguard the transaction, as established in Hulse v. Criger. The court emphasized the need for supervision by licensed attorneys or entities with a direct financial interest to ensure public protection.

The court applied the rule by determining that while escrow companies could fill in standardized forms, they lacked the personal financial interest necessary to safeguard the transaction, as established in Hulse v. Criger.

Conclusion

The court dismissed the charges against First Escrow and issued an injunction against Best Escrow from preparing nonstandard settlement documents, allowing them to continue their operations under specific conditions.

The court dismissed the charges against First Escrow and issued an injunction against Best Escrow from preparing nonstandard settlement documents, allowing them to continue their operations under specific conditions.

Who won?

First Escrow, Inc. and Best Escrow, Inc. prevailed as the court dismissed the charges against them, recognizing their compliance with the established rules regarding the completion of standardized forms.

First Escrow, Inc. and Best Escrow, Inc. prevailed as the court dismissed the charges against them, recognizing their compliance with the established rules regarding the completion of standardized forms.

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