Find Legal Information

Docket No. 98075-Agenda 22-November 2004.
FORD MOTOR CREDIT COMPANY, Appellant, v. THOMAS B.
SPERRY, d/b/a Thomas B. Sperry, Inc., Appellee.

Opinion filed March 24, 2005.

CHIEF JUSTICE McMORROW delivered the opinion of thecourt:

The circuit court of Kane County entered an order declaring voida previous order of that court awarding attorney fees to plaintiff, FordMotor Credit Company (Ford Credit). The circuit court held thatbecause the law firm representing Ford Credit had failed to registerwith this court, pursuant to our Rule 721(c) (166 Ill. 2d R. 721(c)),the firm's practice of law was unauthorized, and, accordingly, therewas no valid basis upon which the court could award legal fees. Amajority of the appellate court affirmed the judgment of the circuitcourt. 344 Ill. App. 3d 1068. For the reasons that follow, we reversethe judgment of the appellate court and vacate the order of the circuitcourt.

BACKGROUND

In June 1993, defendant, Thomas B. Sperry, leased an automobilefrom Sycamore Auto Center, Inc. (Sycamore). Thereafter, Sycamoreassigned the lease to Ford Credit. In December 1994, Ford Creditfiled suit against defendant, alleging that defendant had breached theterms of the motor vehicle lease. As a remedy for defendant's breach,Ford Credit sought the return of the vehicle and monetary damages.

In response to the lawsuit lodged against him by Ford Credit,defendant filed a counterclaim against Ford Credit and a third-partyaction against Sycamore. Defendant alleged that Ford Credit andSycamore had engaged in various fraudulent activities with respect tothe vehicle lease. Only defendant's counterclaim against Ford Creditis at issue in this appeal. In August 1999, Ford Credit's lawsuit againstdefendant, as well as defendant's counterclaim against Ford Credit,went to trial. Following defendant's presentation of his case, FordCredit moved for a directed verdict on several counts of defendant'scounterclaim, including count V. In count V, defendant alleged thatFord Credit had violated provisions of the Consumer Fraud andDeceptive Business Practices Act (815 ILCS 505/1 et seq. (West2000)). After hearing the evidence, the circuit court granted FordCredit a directed verdict against defendant on this consumer fraudcount.

Thereafter, on November 15, 1999, Ford Credit petitioned thecircuit court for statutory attorney fees available to it as the prevailingparty in the consumer fraud action (see 815 ILCS 505/10a(c) (West2000)). The evidence adduced with respect to this claim showed that,during the entire course of these proceedings, Ford Credit wasrepresented by attorney Mary K. Schulz. At the time Ford Credit'scomplaint was filed, Schulz practiced with the professional servicecorporation law firm of Vigil, Berkley, Schulz and Gordon, P.C. Afterthat firm dissolved, Schulz continued to represent Ford Credit in theseproceedings as the principal in her own newly created professionalservice corporation law firm, Schulz & Associates, P.C.

On May 8, 2000, the circuit court awarded Ford Credit-as theprevailing party in the consumer fraud action-statutory attorney feesin the amount of $31,717.25. Defendant neither filed a motion withthe circuit court to reconsider this award, nor filed an appeal of thisjudgment with the appellate court. In May 2001-one year after thejudgment for attorney fees was entered-Ford Credit commencedcollection proceedings against defendant on the attorney fees award. On February 5, 2002-21 months after the circuit court enteredthe original judgment against defendant for attorney fees-defendant,pro se, filed in the circuit court a pleading entitled "First AmendedMotion to Vacate the Void Orders of This Court." In this pleading,brought pursuant to section 2-1401(f) of the Code of Civil Procedure(735 ILCS 5/2-1401(f) (West 2000)), defendant requested that thecircuit court vacate the May 8, 2000, order awarding statutoryattorney fees to Ford Credit. Defendant asserted that when theprofessional service corporation of Vigil, Berkley, Schulz and Gordon,P.C., initiated the lawsuit against him in 1994, that firm lacked acertificate of registration with this court, as required pursuant to ourRule 721(c) (166 Ill. 2d R. 721(c)). Defendant also alleged that whenthat same law firm petitioned the circuit court for attorney fees in1999, it remained unregistered under Rule 721(c). Based upon thefirm's lack of registration with this court, defendant asserted that FordCredit was "not represented by any entities authorized by the IllinoisSupreme Court to practice law in the State of Illinois," and that thelaw firm was thereby "prohibited from opening or maintaining anoffice for that purpose." Accordingly, defendant argued, the filing ofthe lawsuit against him "did not confer jurisdiction" upon the circuitcourt. Thus, defendant concluded, because the law firm was"prohibited *** from practicing law in the State of Illinois" as a resultof its failure to register pursuant to Rule 721(c), the attorney feesaward was null and void ab initio.

A hearing on defendant's motion was held on March 7, 2002. Atthat time, defendant had retained counsel and was no longer appearingpro se. Counsel for defendant argued that pursuant to the CorporationPractice of Law Prohibition Act (705 ILCS 220/0.01 et seq. (West2000)), a corporation is prohibited from practicing law, unless thatentity falls within the ambit of the Professional Service CorporationAct (805 ILCS 10/1 et seq. (West 2000)). In turn, counsel argued, theProfessional Service Corporation Act specifies that it is this courtwhich shall determine how professional corporations shall beorganized to practice law, and it is through the provisions of Rule 721that this court allows professional corporations to practice law.

Counsel further argued that because the professional servicecorporation law firms representing Ford Credit were not registeredwith this court pursuant to Rule 721(c), those firms were engaged inthe unauthorized practice of law. Accordingly, counsel stated, theorder granting those law firms attorney fees was therefore void. Inaddition, counsel further asserted that because the motion to vacatethe judgment granting Ford Credit attorney fees was brought pursuantto section 2-1401 of the Code of Civil Procedure (735 ILCS5/2-1401(f) (West 2000)), the motion was not untimely, as section2-1401 provides that a void order can be set aside at any time.

At the hearing on defendant's motion, Ford Credit was againrepresented by attorney Mary K. Schulz. In response to defendant'sarguments, Ford Credit's counsel first noted that there was no disputethat, during these proceedings, she was a duly licensed attorney ingood standing with this court. Counsel then stressed that the licensingrequirements imposed by this court upon attorneys is distinguishablefrom the registration requirements for professional service corporationlaw firms contained within Rule 721(c). Counsel argued that Rule 721is an administrative rule which allows this court to identify theindividuals who are involved in a professional service corporation andto assure that these persons are licensed to practice law in this state.The administrative provisions of Rule 721, counsel asserted, are incontrast to the licensing and regulation provisions in our rules.Counsel emphasized that licenses to practice law are not given to lawfirms; rather, they are awarded to individuals. Further, counsel stated,the law firms for which licensed attorneys practice are not,themselves, licensed to practice law.

During the course of the hearing, counsel also advised the courtthat the firm with which she practiced at the time Ford Credit'scomplaint was filed, Vigil, Berkley, Schulz and Gordon, P.C., hadsince dissolved in May 2000, and she believed that firm had not beenregistered with this court pursuant to Rule 721. Counsel further statedthat she then set up her own professional service corporation law firm,Schulz & Associates, P.C., which was, at the time of the hearing, inthe process of Rule 721 registration with this court. Counselconcluded her argument by reiterating her position that registrationunder Rule 721 is purely administrative and is not analogous to thegrant of a license to practice law.

On April 9, 2002, the circuit court granted defendant's motion tovacate the judgment order of May 8, 2000, which had awarded FordCredit statutory attorney fees. As an initial matter, the court foundthat it was uncontroverted that Ford Credit's attorney throughoutthese proceedings, Mary K. Schulz, was duly licensed to practice lawin this state. In addition, the circuit court acknowledged that, at thetime of its ruling, the law firm of Schulz & Associates, P.C., hadregistered with this court pursuant to Rule 721(c).

However, the circuit court also found that it was uncontrovertedthat the law firms with which Schulz practiced during this litigationhad not registered under Rule 721(c). The circuit court held that the"most pertinent" case was Kaplan v. Tabb Associates, Inc., 276 Ill.App. 3d 320 (1995), because it presented "striking similarities" to thecause before it. The circuit court explained that in Kaplan, the plaintiffand the defendant architectural firm signed a contract for architecturalservices. When a monetary dispute arose between the plaintiff and thedefendant firm, that firm sought to invoke the contract's arbitrationprovision. The plaintiff sought to have the contract declared void dueto the failure of the defendant firm to be licensed under the IllinoisArchitecture Practice Act of 1989 (225 ILCS 305/21 (West 1992)).The circuit court in the instant cause emphasized that the Kaplancourt held that, even though the sole owner of the defendant firm wasa duly licensed architect, the contract was nevertheless void due to thefailure of the defendant firm to become licensed under theArchitecture Practice Act.

The circuit court acknowledged that there were factualdifferences between the Kaplan case and the matter before it.Nevertheless, the circuit court followed Kaplan and held that, in theinstant cause, the law firms representing Ford Credit were in violationof the registration requirement of Rule 721(c) at the time of trial andalso when the attorney fees award was made in May 2000. The circuitcourt reasoned:

"The Kaplan case is essentially controlling here ***. Themere fact that the attorneys here were licensed is immaterialto the court's determination. *** Since the corporations werenot registered *** they cannot now claim the benefit ofstatutory fees when the lack of registration of thesecorporations precluded them from holding themselves out asorganizations for the practice of law in the state of Illinois."

As a result, the circuit court held that the order for award of attorneyfees was void ab initio, and the court therefore vacated that order.

Ford Credit appealed. A majority of the appellate court affirmed.344 Ill. App. 3d 1068. The appellate majority equated a law firm'sfailure to register pursuant to Rule 721(c) with the unauthorizedpractice of law. In support of this determination, the appellatemajority principally relied on Remole Soil Service, Inc. v. Benson, 68Ill. App. 2d 234 (1966), which held that legal proceedings prosecutedby those without authority are null, and that the judgments resultingfrom such proceedings are void. Thus, the appellate majorityconcluded that because the law firms representing Ford Credit duringthe instant litigation performed legal services without authorizationand in violation of the law, the circuit court correctly determined thatthe order awarding Ford Credit statutory attorney fees was void abinitio.

Justice Kapala dissented. First, the dissenting justice asserted thatthe circuit court erred in allowing defendant's motion to vacate thejudgment granting Ford Credit attorney fees because that motion wasan improper collateral attack on a final order. Second, Justice Kapalabelieved that even if defendant had properly appealed the award ofattorney fees within the applicable time to appeal that order, theappellate court's prior decision in Joseph P. Storto, P.C. v. Becker,341 Ill. App. 3d 337 (2003), controlled and defeated defendant'sclaim. Justice Kapala explained that in Storto, the court held that Rule721(c) was not enacted for the protection of public safety and,therefore, contractual obligations owed to a law firm not properlyregistered under Rule 721(c) could not be voided absent a showing ofprejudice resulting from a failure to register. Thus, based upon theholding in Storto, the dissenting justice concluded that the circuitcourt erred in voiding the judgment order awarding statutory attorneyfees to Ford Credit.

We granted Ford Credit leave to appeal to this court. 177 Ill. 2dR. 315(a).

ANALYSIS

In the instant cause, the circuit court, pursuant to section2-1401(f) of the Code of Civil Procedure (735 ILCS 5/2-1401(f)(West 2000)), vacated a prior judgment order entered on May 8,2000, reasoning that the May 8 order awarding statutory attorney feesto Ford Credit was void ab initio because the law firms representingFord Credit lacked Rule 721(c) registration with this court. At issuein this appeal is whether a law firm's failure to register as aprofessional service corporation with this court, pursuant to therequirement set forth in our Rule 721(c), renders the legal servicesprovided by that law firm the unauthorized practice of law, nullifiesthe proceedings in which the firm participated, and causes theresulting judgments of such proceedings to be void. Our review of thisissue is de novo. People v. Johnson, 206 Ill. 2d 348, 359 (2002).

Petitions for relief from judgments filed pursuant to section2-1401 of the Code of Civil Procedure (735 ILCS 5/2-1401 (West2000)) "invoke[ ] the equitable powers of the circuit court, whichshould prevent enforcement of a *** judgment when it would beunfair, unjust, or unconscionable." Smith v. Airoom, Inc., 114 Ill. 2d209, 225 (1986). At issue in the instant cause is subsection (f) ofsection 2-1401, which provides: "Nothing contained in this Sectionaffects any existing right to relief from a void order or judgment, or toemploy any existing method to procure that relief." 735 ILCS5/2-1401(f) (West 2000). Section 2-1401(f) codifies a common lawrule allowing litigants to attack a void judgment at any time. SeeSarkissian v. Chicago Board of Education, 201 Ill. 2d 95, 104-05(1992). In a petition to vacate a void judgment brought pursuant tosubsection (f) of section 2-1401, the general rules pertaining topetitions filed under section 2-1401-that they must be brought withintwo years of the order of judgment, that the petitioner must allege ameritorious defense to the original action, and that the petitioner mustshow that the petition was brought with due diligence-do not apply.Sarkissian, 201 Ill. 2d at 104. Rather, "[t]he allegation that thejudgment or order is void substitutes for and negates the need toallege a meritorious defense and due diligence." Sarkissian, 201 Ill. 2dat 104.

A void order or judgment is, generally, one entered by a courtwithout jurisdiction of the subject matter or the parties, or by a courtthat lacks the inherent power to make or enter the order involved. Inre Estate of Steinfeld, 158 Ill. 2d 1, 12 (1994); People v. Wade, 116Ill. 2d 1, 5 (1987). A void judgment is from its inception a completenullity and without legal effect. In re Application of the Cook CountyCollector for Judgment & Sale Against Lands & Lots ReturnedDelinquent for Nonpayment of General Taxes for the Year 1985, 228Ill. App. 3d 719, 731 (1991); In re Marriage of Allcock, 107 Ill. App.3d 150, 153 (1982). We have cautioned, however, that in declaring aprior order to be void, the court must be mindful that it is setting asidea final judgment based upon a collateral attack. Accordingly, we haverecently held that " '[b]ecause of the disastrous consequences whichfollow when orders and judgments are allowed to be collaterallyattacked, orders should be characterized as void only when no otheralternative is possible.' " Belleville Toyota, Inc. v. Toyota MotorSales, U.S.A., Inc., 199 Ill. 2d 325, 341 (2002), quoting In reMarriage of Vernon, 253 Ill. App. 3d 783, 788 (1993).

In its submission to this court, Ford Credit contends that thelower courts erred in holding that the judgment order awarding FordCredit statutory attorney fees was void ab initio. According to FordCredit, the appellate court majority improperly equated a law firm'sfailure to register with this court pursuant to Rule 721(c) with theunauthorized practice of law. Ford Credit notes that the sole claimraised by defendant in the circuit court to support his argument thatthe attorney fees award is void and should be vacated is that the lawfirms hired by Ford Credit did not register with this court under Rule721. The circuit court held, and the appellate majority agreed, that thisdefect alone was sufficient to void the previously entered judgmentorder.

Ford Credit argues that there are several points upon which theappellate court should be reversed. First, Ford Credit notes that inarriving at its ruling, the appellate majority improperly relied uponRemole Soil Service, Inc. v. Benson, 68 Ill. App. 2d 234 (1966), acase which Ford Credit asserts is factually inapposite to the matter atbar. Ford Credit additionally contends that, by relying upon Remole,the appellate majority failed to follow its own factually relevantprecedent. Ford Credit notes that only a few months prior to filing itsruling in the instant cause, the appellate court decided Joseph P.Storto, P.C. v. Becker, 341 Ill. App. 3d 337 (2003), wherein the courtruled that a law firm's failure to register pursuant to our Rule 721(c)did not result in the voiding of a contract for attorney fees.

Second, Ford Credit observes that the appellate majority failed toconsider that the judgment award for statutory attorney fees was in itsown favor as the prevailing party in the consumer fraud action, andwas not awarded to its law firms. Third, Ford Credit notes that, at alltimes during this litigation, it was represented by attorneys who wereduly licensed to practice law in this state. As such, Ford Creditcontends, there was no unauthorized practice of law by any lawyerinvolved in this case. In addition, Ford Credit asserts that the lowercourts failed to consider the fact that the law firm of Schulz &Associates, P.C., was properly registered with this court on April 9,2002, the date on which the circuit court entered its decision to voidthe attorney fees judgment order. Finally, Ford Credit contends thatthe judgment order awarding statutory attorney fees was not "void,"because there was no claim that the circuit court lacked jurisdictionover either the subject matter or the parties. As such, Ford Creditconcludes, defendant's motion to vacate the judgment order awardingattorney fees was an improper collateral attack.

In response, defendant asserts that the circuit court properlygranted his motion to vacate the judgment order awarding Ford Creditstatutory attorney fees, and that the action of the circuit court wasproperly affirmed by the appellate majority. In his submission to thiscourt, defendant contends that by failing to advise the circuit courtthat their law firms lacked registration with this court pursuant to Rule721(c), "Ford's attorneys had committed a fraud on the court."Defendant contends that all work performed on behalf of Ford Creditand itemized in the fee petition occurred while the law firms lackedthe required registration, and that "Illinois statutes and Rule 721prohibit the collection of legal fees by a corporation that has failed toobtain a certificate of registration." As a result, defendant contends,the judgment order awarding attorney fees to Ford Credit is voidagainst public policy.

In his brief to this court, defendant further urges this court tohold that the "fee award to Ford was void because it exceeded the trialcourt's inherent power and authority by infringing on the exclusiveauthority of the Illinois Supreme Court to regulate the practice of lawin Illinois by professional service corporation law firms." Defendantconcludes by arguing that because Ford Credit had no right to recoverattorney fees paid to professional service corporations which "werenot authorized to practice," the circuit court "did not acquire subjectmatter jurisdiction to adjudicate such a claim for fees nor to enterjudgment thereon in favor of Ford." We reject each of defendant'sarguments.

This court has the inherent power to define and regulate thepractice of law in this state. In re Anastaplo, 3 Ill. 2d 471, 475 (1954);People ex rel. Chicago Bar Ass'n v. Goodman, 366 Ill. 346, 349-50(1937). More specifically, "the power to prescribe rules governingattorney conduct, and to discipline attorneys for violating those rules,rests solely in this court." People ex rel. Brazen v. Finley, 119 Ill. 2d485, 494 (1988).

To this end, our court has promulgated rules which set forthdetailed regulations for the study of law and which govern theadmission of applicants to our state bar. See 134 Ill. 2d Rs. 701through 720. This court has also created a comprehensive scheme toregulate attorneys and discipline them for misconduct. As part of thisregulatory scheme, we have promulgated rules of professional conductfor state-licensed attorneys (See 134 Ill. 2d Rs. 1.1 through 8.5), andhave constituted an Attorney Registration and DisciplinaryCommission (ARDC) (134 Ill. 2d R. 751), and created the office of anAdministrator (134 Ill. 2d R. 752) to supervise "[t]he registration of,and disciplinary proceedings affecting, members of the Illinois bar."134 Ill. 2d R. 751(a). In addition, this court has promulgated detailedrules which prescribe the appropriate discipline when the Rules ofProfessional Conduct are violated. See 134 Ill. 2d Rs. 751 through775; 137 Ill. 2d Rs. 776, 777; 188 Ill. 2d R. 778; 155 Ill. 2d R. 780.This court has also created a procedural framework within which theARDC performs its duties to investigate complaints of misconductagainst licensed attorneys, hold hearings on those complaints, andprovide review of the findings with respect to those complaints. 166Ill. 2d R. 753.

The above-described regulatory rules which govern the admissionof lawyers to our state bar, regulate the practice of law and theconduct of lawyers, and prescribe discipline for lawyer misconduct areintended to safeguard the public and assure the integrity of our legalsystem. These regulatory provisions assure that only those individualswho are fit and qualified to practice law will be licensed in this state,that those individuals will practice law ethically and with competence,and that any infractions of the Rules of Professional Conduct will beinvestigated and discipline will be imposed if appropriate.

In contrast to the regulatory rules discussed above, the provisionscontained in our Rule 721 do not have as their primary purpose theprotection of the public safety. Rather, Rule 721 is designed to permitduly licensed lawyers the business option of organizing in professionalservice corporations as a means of providing them with limited liabilityprotection.

Under the Corporation Practice of Law Prohibition Act (705ILCS 220/0.01 et seq. (West 2000)), a corporation is prevented frompracticing law. However, with the passage of the Professional ServiceCorporation Act (805 ILCS 10/1 et seq. (West 2000)), licensedprofessionals were afforded the choice of organizing their practices ina corporate form. By enacting the Professional Service CorporationAct, the legislature intended to

"provide for the incorporation of an individual or group ofindividuals to render the same professional service or relatedprofessional services to the public for which such individualsare required by law to be licensed *** while preserving theestablished professional aspects of the personal relationshipbetween the professional person and those he servesprofessionally." 805 ILCS 10/2 (West 2000).

Section 7 of the Professional Service Corporation Act requires thatthe corporations organized and incorporated under this Act mustrender professional services only through "its officers, employees andagents who are duly licensed *** to render such professional serviceswithin this State." 805 ILCS 10/7 (West 2000). Section 16 of theProfessional Service Corporation Act specifically applies to attorneysat law and provides:

"[T]he provisions of this Act shall be applicable to attorneysat law only to the extent and under such terms and conditionsas the Supreme Court of Illinois shall determine to benecessary and appropriate." 805 ILCS 10/16 (West 2000).

It is through Rule 721 that this court allows duly licensed lawyersthe option to organize their law firms under one of several statutoryvehicles providing limited liability, including professional servicecorporations. Paragraph (a) of Rule 721 requires that each corporateshareholder and any employee engaged in the practice of law must belicensed to practice law, and that the entity "shall do nothing which,if done by an individual attorney, would violate the standards ofprofessional conduct applicable to attorneys licensed by this court."166 Ill. 2d R. 721(a)(3).⁽¹⁾ Paragraph (b) of this rule requires that thecorporation, and the attorneys practicing through this entity, mustabide by the standards of professional conduct applicable to attorneyslicensed by this court. 166 Ill. 2d R. 721(b). Paragraph (c) requireseach corporation or association that seeks to practice law to registerwith this court. See 166 Ill. 2d R. 721(c). Specifically, Rule 721(c)provides:

"(c) No corporation or association or limited liabilitycompany shall engage in the practice of law in Illinois, oropen or maintain an establishment for that purpose in Illinois,without a certificate of registration issued by this court."

The initial registration application requires a fee of $50 (166 Ill. 2d R.721(e)), and annual renewals must be accompanied by a $40 fee (166Ill. 2d R. 721(f)). Finally, any violation of this rule by the entity "is aground for the court to terminate or suspend the right of the [entity]to practice law or otherwise to discipline it." 166 Ill. 2d R. 721(b).

In the matter before us, defendant's sole claim in the circuit courtto support his argument that the judgment order awarding attorneyfees to Ford Credit is void and must be vacated is that the law firmsrepresenting Ford Credit throughout the litigation were not registeredwith this court pursuant to Rule 721(c). The circuit court held, and theappellate majority agreed, that this defect alone rendered thepreviously entered judgment order void, as the law firm's failure toregister under Rule 721(c) equated with the unauthorized practice oflaw. We reject this analysis. We hold that a correct interpretation ofthe scope and purpose of our Rule 721(c) was set forth in Joseph P.Storto, P.C. v. Becker, 341 Ill. App. 3d 337 (2003), a decision whichthe appellate court below acknowledged but refused to follow.

The Storto case also involved the question of a law firm's failureto register with this court pursuant to Rule 721(c). That case arosefrom an attorney fees dispute between the plaintiff law firm and itsformer client. After the parties ended their attorney-client relationship,the firm filed suit against the client seeking unpaid fees. The defendantclient moved for summary judgment, arguing that because the firmwas not properly registered with this court pursuant to Rule 721(c),the contract for legal fees was void as a matter of public policy, andshe was entitled to judgment as a matter of law. The trial courtgranted the motion, holding that because the law firm was notproperly registered under Rule 721(c), it was without authority toprovide legal services and the contract it had entered into with theclient was invalid. On appeal, the appellate court reversed.

The Storto court observed that although Rule 721(c) requires thatprofessional service corporations register with this court, the rule alsolacks civil or criminal penalties for noncompliance. "[C]riminal or civilpenalties would indicate that the licensing requirements were enactedbecause they have a significant impact on public health or safety."Storto, 341 Ill. App. 3d at 344. Because Rule 721(c) fails to includecivil or criminal liability for the failure to register, the Storto court heldthat this indicated that the registration requirement was notpromulgated for the protection of the public safety. Storto, 341 Ill.App. 3d at 344. In addition, the Storto court reasoned that thisconclusion was supported by the fact that a law firm "generally doesnot incorporate to benefit its clients or to advance the public welfare.[Citation]. Rather, a law firm incorporates to enjoy certain tax benefitsand to reduce its potential civil liability." Storto, 341 Ill. App. 3d at344.

Accordingly, the Storto court determined that, because Rule721(c) was not enacted for the protection of the public, thecontractual obligations owed to a professional service corporation lawfirm which lacked registration under Rule 721(c) could not be voidedabsent a showing of prejudice resulting from the failure to register.Storto, 341 Ill. App. 3d at 342-44. Under the circumstances presentedin that case, the court concluded that allowing the client to escape hercontractual obligations would be disproportionate to the wrongcommitted by the law firm. Storto, 341 Ill. App. 3d at 343.

We adopt the analysis of Rule 721 set forth by the court in theStorto decision. We hold that a violation of the registrationrequirement contained in Rule 721(c) does not lead to the conclusionthat the lawyers of the unregistered firm lacked either the authority orthe competence to practice law. We emphasize that there is afundamental difference between an unlicensed individual representinga party in legal proceedings or performing activities traditionallyconsidered to be the 'practice of law' and duly licensed attorneys whohappen to belong to a law firm that has not filed its registration andpaid its fees pursuant to Rule 721(c). The material inquiry in assessingwhether there has been an unauthorized practice of law is whether theindividual who acts on behalf of a client is duly licensed by this court,as it is only individuals-and not corporations-who are granted theprivilege to practice law.

When unlicensed individuals engage in the practice of law, thepublic is at risk of harm. In contrast, when a law firm fails to complywith the registration requirement in our Rule 721(c), it is thenoncomplying firm that is harmed, not the public. By failing toregister, the law firm loses its right to invoke the corporateprotections of limited liability that are set forth in Rule 721. Thisreality further underscores that the registration requirement in Rule721(c) was not enacted to safeguard the public welfare, but to benefitthose law firms seeking the tax and limited liability advantages ofincorporation. Therefore, duly licensed attorneys who belong to a firmthat lacks Rule 721(c) registration do not, by virtue of theunregistered nature of the firm, engage in the unauthorized practice oflaw. Cf. People v. Brigham, 151 Ill. 2d 58 (1992) (defendant was notautomatically deprived of his sixth amendment right to counselbecause his attorney had failed to pay his annual registration dues withthis court; counsel's oversight of nonpayment did not diminish hiscompetency as an attorney).

Accordingly, the appellate court erred in applying the nullity ruleset forth in Remole Soil Service, Inc. v. Benson, 68 Ill. App. 2d 234(1966), to a violation of the registration requirement of Rule 721(c).In affirming the circuit court's holding that the judgment orderawarding Ford Credit attorney fees was null and void, the appellatecourt principally relied on Remole. We hold that Remole is factuallyinapposite to the cause before us.

In Remole, an Illinois corporation initiated a lawsuit in smallclaims court against the defendant. The suit was filed and tried tojudgment by the corporation's office manger, who was an unlicensedattorney. Thereafter, the defendant filed a motion with the court tofind the corporation and its office manager in contempt for practicinglaw without a license. The circuit court denied the motion. On appeal,the appellate court reversed.

The Remole court cited the rule that, generally, corporations areprohibited from the practice of law, and determined that thecorporation in that case violated that rule when its office manager filedand tried the corporation's lawsuit. "It is clear that the office managerwas engaged in the practice of law. We find nothing in the statutes,case law, or Supreme Court Rules which directly or by reasonableimplication permits a business corporation to prosecute or defend itsown suits in our courts, on any level except through a licensedattorney. It necessarily follows that the plaintiff and its sales managerare in technical contempt of court." Remole, 68 Ill. App. 2d at 239.The Remole court then held that " '[p]roceedings in a suit by a personnot entitled to practice are a nullity, and the suit may be dismissed. Ifthe cause has proceeded to judgement, the judgment is void and willbe reversed.' " Remole, 68 Ill. App. 2d at 239, quoting 7 C.J.S.Attorney & Client