Mark W. Gifford 2017-12-07 15:39:25
Should Landmen be Regulated? In 2014, the Committee on the Unauthorized Practice of Law (the “Committee”) engaged in a comprehensive review and rewrite of Wyoming’s rules defining the unauthorized practice of law (UPL). The rules proposed by the Committee and adopted by the Wyoming Supreme Court effective April 29, 2014, define the term “practice law” to mean providing any legal service for any other person, firm or corporation, with or without compensation, or providing professional legal advice or services where there is a client relationship of trust or reliance, including appearing as an advocate in a representative capacity; drafting pleadings or other documents; or performing any act in a representative capacity in connection with a prospective or pending proceeding before any tribunal. The rules go on to list a dozen exempt activities under the heading, “Whether or not they constitute the practice of law, the following are not prohibited: …” Exempt activities include: licensed financial institutions “preparing and informing customers with respect to documents incidental to the regular course of business they are licensed to perform;” “[s]tatutorily authorized acts by a real estate agent or broker licensed by the Wyoming Real Estate Commission;” limited activities by title insurance companies authorized to do business in Wyoming; certain acts of licensed Certified Public Accountants, Professional Engineers and Professional Surveyors; and “[n]onlawyers selling legal forms in any format, so long as they do not advise or counsel another regarding the selection, use, or legal effect of the forms. Such forms shall clearly and conspicuously state that the forms are not a substitute for the advice of an attorney.” The Committee struggled with how landmen should be treated. There was widespread recognition that landmen—the term used by the energy industry to describe both men and women in the profession— serve a vital, multi-disciplinary role within the oil and gas industry as well as other energy endeavors. The Committee looked into how other states deal with the issue. In no state are landmen required to be licensed. There is a trade group, the American Association of Petroleum Landmen (AAPL), boasting more than 16,000 members nationwide, with a well-developed Code of Ethics and Standards of Practice as well as a certification process for its members, but the AAPL’s standards are aspirational and have not been codified into law in any jurisdiction. In the end, the Committee, borrowing heavily from Texas, chose to exempt the following from the definition of UPL: Acts historically performed by landmen relating to the lease, purchase, sale, or transfer of an oil, gas, mineral or mining interest or other interest incident to an oil, gas, mineral or mining interest in real property if: (A) the acts are performed by a landman who does not hold himself or herself out as an attorney licensed to practice law in Wyoming or another jurisdiction; (B) the acts are in conformance with regional best industry practice; and (C) the landman is not a member of the Wyoming State Bar. In other words, landmen are allowed to do what landmen have always done. What is that? As a general definition, a landman is a professional who is primarily engaged in negotiating for the acquisition or divestiture of mineral rights and/or negotiating business agreements that provide for the exploration for and/or development of minerals. According to the AAPL, services provided by landmen include: Negotiating for the acquisition and divestiture of mineral rights; Negotiating business agreements that provide for the exploration for and/or development of minerals; Determining ownership in minerals through the research of public and private records; Reviewing the status of title, curing defects, and otherwise reducing title risk associated with ownership in minerals; Managing rights and/or obligations derived from ownership in minerals; and Unitizing or pooling interests in minerals. Landmen who are employed by energy companies, “take the lead in land negotiations with other oil and gas companies, supervise independent contractors, administer and ensure land contract compliance, and otherwise manage their company’s asset land asset base. Field landmen are typically independent contractors who specialize in due diligence and lease acquisitions.” Clearly, many of the activities of landmen touch upon the practice of law. In larger companies, landmen “may negotiate, draft and finalize complex oil and gas agreements with varying degrees, and sometimes even minimal, involvement of company legal departments. Likewise, field landmen may render ‘stand-up’ title examinations based upon review of courthouse records that oil and gas companies may rely upon to purchase expensive oil and gas leases, or in a pinch, to drill oil and gas wells.” Landmen may negotiate agreements with surface owners, negotiate access easements, and negotiate contracts with outside vendors relating to mineral exploration and production. It has been said that landmen are “the businessmen of the oil patch.” The activities of this group of professionals are so varied and broad ranging as to not lend themselves to a cogent definition. In adopting rules defining the unauthorized practice of law, the Wyoming Supreme Court has implicitly recognized that the oil and gas business (and, by extension, the energy industry) could not operate effectively and efficiently without landmen. It is this pragmatic reality that drives a rule which allows landmen in the Equality State to perform “[a]cts historically performed by landmen relating to the lease, purchase, sale, or transfer of an oil, gas, mineral or mining interest or other interest incident to an oil, gas, mineral or mining interest in real property.”
Published by Wyoming State Bar . View All Articles.
This page can be found at http://digitaleditions.walsworthprintgroup.com/article/Office+of+Bar+Counsel/2957624/459691/article.html.