BRIEF OVERVIEW OF RULES GOVERNING MULTI-JURISDICTIONAL PRACTICE. B.J. Chisholm, Altshuler Berzon LLP

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1 BRIEF OVERVIEW OF RULES GOVERNING MULTI-JURISDICTIONAL PRACTICE B.J. Chisholm, Altshuler Berzon LLP Issue 1: What ethical rules apply to lawyers who are licensed in more than one jurisdiction or who are licensed in one jurisdiction but perform legal functions outside that jurisdiction. 1 I. Authority to Discipline Lawyers If an attorney is admitted to practice in a state, that state will have authority to discipline the attorney, regardless of where the conduct at issue occurred. Additionally, most states provide that an attorney performing legal services within the state is subject to its disciplinary authority, even if the attorney is not admitted to practice in the state. II. Choice of Law A. Model Rule of Professional Conduct 8.5. A majority of the states have adopted the Model Rule rules on choice of law (with some variations). 1. Proceedings before a tribunal. For conduct in connection with a matter pending before a tribunal, the rules of the jurisdiction where the tribunal sits will be applied, unless the rules of the tribunal provide otherwise. Model Rule 8.5(b)(1). 2. Other conduct. The default rule for all other conduct is the rule of the jurisdiction in which the conduct occurred. Two exceptions: (a) if the predominant effect of the conduct is in a different jurisdiction, the rules of that jurisdiction will apply; and (b) if the lawyer s conduct conforms to the rules of a jurisdiction in which the lawyer reasonably believes that the predominant effect of the conduct will occur, the lawyer will not be subject to discipline for that conduct. Model Rule 8.5(b)(2). (Some states do not include the second exception. E.g., Illinois, Indiana, New Jersey, New York.) B. Restatement of the Law Governing Lawyers. The Restatement adopts a somewhat more flexible approach based on a significant relationship analysis. 1 This outline of choice of law rules relies heavily on a paper by Julia Penny Clark of Bredhoff & Kaiser, P.L.L.C., presented at the 2008 LCC Conference, and entitled Legal Ethics Choice of Ethics Rules in Multi-Jurisdictional Practice. 1

2 1. In situations where the lawyer s conduct violates the disciplinary rules of one jurisdiction but not another, the Restatement provides that choice of law should be based on: the nature of the charged offense; the nature of the lawyer s work; the impact of the questioned conduct on the interests of third persons and on public institutions such as tribunals, administrative agencies, or legislative bodies; the residence and place of business of any client or third person whose interests are materially affected by the lawyers action; the place where the affected conduct occurred; and the nature of the regulatory interest reflected in the different provisions in question. 2. Three presumptive rules would apply: a. If the lawyer is admitted in only one state, that state s rules presumptively apply. b. If the lawyer is admitted in two states, the rules of the lawyer s principal place of practice presumptively apply. c. If the matter arises before a litigation tribunal, the rules of the tribunal presumptively apply. 3. States variations. a. D.C., Tennessee, Vermont, Virginia, and Wyoming have adopted the presumptive rules of the Restatement as their actual choice of law rules, with a modification to (b) that the rules of the lawyer s principal place of practice presumptively apply unless the particular conduct has its predominant effect in another jurisdiction in which the lawyer is licensed to practice. b. Vermont adds a rule that if the lawyer is not licensed to practice in Vermont and engages in the practice of law in Vermont, the rules to be applied shall be the rules of Vermont. C. Eighteen states specify no choice of law rules in their code of professional responsibility. (Alabama, Alaska, California, Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Mississippi, Montana, Nevada, New Mexico, North Dakota, Texas, Utah, Washington, and West Virginia) 2

3 Issue 2: What conduct will constitute the unlicensed practice of law in another state? Very few states have statutory definitions of the practice of law. 2 Instead, many states have left the definitions of practice of law to the courts. This outline is not an exhaustive review of the various states precedent on the issue, but is instead intended to assist in issue spotting. When you are performing legal services in another state or to a client located in another state, you should make sure to check your home state s and the other state s statutory and case law on what constitutes the practice of law. 3 I. Representation of Clients in Administrative Proceedings A. Benninghoff v. Superior Court, 136 Cal.App.4th 61, (2006). In this case, a lawyer who had resigned from the State Bar with disciplinary charges pending argued that his representation of clients in administrative proceedings did not constitute the practice of law, in part because non-lawyers are allowed to represent people before administrative agencies. The court disagreed, and found that the former lawyer was engaged in the practice of law because his representation involved the application of legal knowledge and technique. II. Arbitration and Mediation A. Birbower, Montalbano, Condon & Grank v. Superior Court, 17 Cal.4 th 119, 949 P.2d 1 (1998). The court held that lawyers at a New York firm could not collect fees from their client, a California corporation, because they had engaged in the unauthorized practice of law when they represented the client in connection with a dispute relating to a software development and marketing contract with another company that was headquartered in California. The work in question included filing a demand for arbitration, interviewing 2 One notable definition is found in Connecticut, where the practice of law includes a number of exemptions, including: (a) an exemption for [p]articipating in labor negotiations, arbitrations, or conciliations arising under collective bargaining rights or agreements, Conn. Practice Book 2-44A(b)(4); [s]erving in a neutral capacity as a mediator, arbitrator, conciliator or facilitator, id. 2-44A(b)(3); and [a]cting as a lay representative authorized by administrative agencies or in administrative hearings solely before such agency or hearing where: (A) Such services are confined to representation before such forum or other conduct reasonably ancillary to such representation; and (B) Such conduct is authorized by statute, or the special court, department or agency has adopted a rule expressly permitting and regulating such practice, id. 2-44A(b)(2). 3 In this section, the author has drawn extensively from the paper presented by Andrew Strom, Associate General Counsel, SEIU Local 32BJ, at the 2008 LCC conference, entitled Crossing State Lines Without Crossing Ethical Lines: an Overview of Rules Governing Multijurisdictional Practice. 3

4 potential arbitrators, and giving advice regarding a proposed settlement. The court reasoned that any arbitration exception to the prohibition of unlicensed practice of law should come from the legislature. In dicta, the court also noted that the state s unauthorized practice of law statute does not apply to the preparation of or participation in labor negotiations and arbitrations arising under collective bargaining agreements in industries subject to federal law. B. Williamson v. John d. Quinn Construction corp., 537 F.Supp. 613 (S.D.N.Y. 1982). In light of the informal nature of arbitration proceedings, participation in an arbitration does not constitute the practice of law. III. Drafting and Negotiating Collective Bargaining Agreements A. Ohio State Bar Ass n v. Burdzinski, Brinkman, Czarzasty & Landwehr, 112 Ohio St.3d 107, 858 N.E.2d 372 (2006). In a particularly disturbing case for labor attorneys, the Ohio Supreme Court held that labor relations consultants were engaged in the unauthorized practice of law when they drafted collective bargaining agreements for their clients. However, the court found that the act of negotiating collective bargaining agreements (as opposed from drafting the contract language) is not the practice of law because the NLRB publishes a list of mandatory, permissible, and prohibited subjects for bargaining. 112 Ohio St.3d at 111. Given the faulty factual basis for this conclusion, the distinction is unlikely to be considered persuasive authority in other jurisdictions. (According to Westlaw, this case has not been cited by another court.) IV. Location of Client and Attorney A. Spivak v. Sachs, 16 N.Y.2d 163 (1965). Where a lawyer traveled to New York briefly and assisted his friend in finding a New York divorce attorney, met with the friend and New York attorney, and engaged in negotiations, he was practicing law in New York. B. Estate of Condon, 65 Cal.App.4th 1138, 1146 (1998); In Re Chimko, 444 Mass. 743, 831 N.E.2d 316 (2005). The domicile of the client and the attorney may be important to the question of the state s interest in regulating the practice of law. In Estate of Condon, the court reversed a denial of fees where a Colorado firm was retained by an estate s executor and the executor resided in Colorado, noting that the State of California has no interest in disciplining an out-of-state attorney 4

5 practicing law on behalf of a client residing in the lawyer s home state. Similarly, in In Re Chimko, the court held that Massachusetts had no interest in regulating an out-of-state attorney with an out-of-state client. 444 Mass. at (no unauthorized practice of law where Michigan attorney filled out standardized forms for an out-of-state client to be filed in federal bankruptcy court in Massachusetts, and services were temporary and related to work for the client in another jurisdiction where the attorney was licensed to practice law). C. El Gemayel v. Seaman, 72 N.Y.2d 701 (1998). Phone calls to New York client to inform her of the progress of legal proceedings in Lebanon did not constitute practice of law in New York. D. Winterrowd v. American General Annuity Insurance, 2009 WL (9th Cir. Feb. 17, 2009). Approved award of attorneys fees for work performed on a case in federal district court to an attorney based in Oregon who was not licensed to practice in California, but who worked in association with local counsel who was licensed in California. The court noted that the attorney could be granted fees if he would have been admitted to appear pro hac vice as a matter of course had he applied, relying on Spanos v. Skouras, 364 F.2d 161 (2d Cir. 1966). Additionally, the court found that the attorney s conduct did not rise to the level of appearing before the district court, and that his work was similar to litigation support or consultants, and distinguishable from an appearance WL at *7 (citing United States v. Wunsch, 84 F.3d 1110, 1115 (9th Cir. 1996) (finding that attorney had appeared when he identified himself as counsel in court s appearance form, physically came to court, signed pleadings, and identified himself as counsel to opposing counsel)). V. ABA s Commission on Multijurisdictional Practice. A. Model Rule 5.5 Unauthorized Practice of Law; Multijurisdictional Practice of Law Rule 5.5 sets forth four different circumstances under which a lawyer may provide legal services in another jurisdiction on a temporary basis, and two circumstances under which a lawyer may provide legal services in another jurisdiction on a permanent basis. Model Rule 5.5. (a) A lawyer shall not practice law in a jurisdiction in violation of the regulation of the legal profession in that jurisdiction, or assist another in doing so. 5

6 (b) A lawyer who is not admitted to practice in this jurisdiction shall not: (1) except as authorized by these Rules or other law, establish an office or other systematic and continuous presence in this jurisdiction for the practice of law; or (2) hold out to the public or otherwise represent that the lawyer is admitted to practice law in this jurisdiction. (c) A lawyer admitted in another United States jurisdiction, and not disbarred or suspended from practice in any jurisdiction, may provide legal services on a temporary basis in this jurisdiction that: (1) are undertaken in association with a lawyer who is admitted to practice in this jurisdiction and who actively participates in the matter; (2) are in or reasonably related to a pending or potential proceeding before a tribunal in this or another jurisdiction, if the lawyer, or a person the lawyer is assisting, is authorized by law or order to appear in such proceeding or reasonably expects to be so authorized; (3) are in or reasonably related to a pending or potential arbitration, mediation, or other alternative dispute resolution proceeding in this or another jurisdiction, if the services arise out of or are reasonably related to the lawyer s practice in a jurisdiction in which the lawyer is admitted to practice and are not services for which the forum requires pro hac vice admission; or (4) are not within paragraphs (c)(2) or (c)(3) and arise out of or are reasonably related to the lawyer s practice in a jurisdiction in which the lawyer is admitted to practice. (d) A lawyer admitted in another United States jurisdiction, and not disbarred or suspended from practice in any jurisdiction, may provide legal services in this jurisdiction that: (1) are provided to the lawyer s employer or its organizational affiliates and are not services for which the forum requires pro hac vice admission; or (2) are services that the lawyer is authorized to provide by federal law or other law of this jurisdiction. Comments to Model Rule 5.5. The comments to the Model Rule are instructive, and a few deserve particular mention. 6

7 The Rule provides no definition of what constitutes providing services on a temporary basis. Comment [6] provides: There is no single test to determine whether a lawyer s services are provided on a temporary basis in this jurisdiction, and may therefore be permissible under paragraph (c). Services may be temporary even though the lawyer provides services in this jurisdiction on a recurring basis, or for an extended period of time, as when the lawyer is representing a client in a single lengthy negotiation or litigation. Comment [5] provides that the four circumstances in which an attorney may provide legal services on a temporary basis are not exclusive: There are occasions in which a lawyer admitted to practice in another United States jurisdiction, and not disbarred or suspended from practice in any jurisdiction, may provide legal services on a temporary basis in this jurisdiction under circumstances that do not create an unreasonable risk to the interests of their clients, the public or the courts. Paragraph (c) identifies four such circumstances. The fact that conduct is not so identified does not imply that the conduct is or is not authorized. Comment [11] makes clear that other attorneys associated with an attorney who has been, or who reasonably expects to be admitted to appear before a court or administrative agency, may perform work on a case: When a lawyer has been or reasonably expects to be admitted to appear before a court or administrative agency, paragraph (c)(2) also permits conduct by lawyers who are associated with that lawyer in the matter, but who do not expect to appear before the court or administrative agency. For example, subordinate lawyers may conduct research, review documents, and attend meetings with witnesses in support of the lawyer responsible for the litigation. B. State Implementation of Model Rule As of March 3, 2009, twelve states have adopted a rule identical to Model Rule 5.5. These states are: Alaska, Arkansas, Indiana, Iowa, Maryland, Massachusetts, Nebraska, New Hampshire, Oregon, Rhode Island, Utah, and Washington. [NB: some of these states have not adopted the Comments to the Rule in their entirety.] 2. Florida Florida Rule governs appearances by a non-florida lawyer in arbitration proceedings in Florida, and provides that prior to appearing in an arbitration that takes place in Florida, the non-florida lawyer must file a verified statement with the State Bar with a filing fee. 7

8 3. New Jersey Requires any lawyer seeking to practice under the rule to register with the state and pay an annual fee equivalent to the fee paid by lawyers who are licensed to fully practice in the state. Following enactment of Model Rule 5.5, New Jersey s Committee on the Unauthorized Practice of Law has asserted that out-of-state attorneys must register with the State and pay the annual fee in order to represent a party at an arbitration hearing. See Opinion 43 of the Committee on the Unauthorized Practice of Law, 187 N.J.L.J. 123 (Jan. 8, 2007), 16 N.J.L. 191 (Jan. 29, 2007). 4. Nevada Nevada s model rule does not include the exemption for representation in arbitration proceedings, and its in-house counsel exception does not apply where the lawyer acts in Nevada as a regular or repetitive course of business. Nevada Rules of Professional Conduct 5.5(b)(3). There is a broad exception for representation of labor unions since it allows an out-of-state lawyer to represent a client on an occasional basis and not as part of a regular or repetitive course of practice in areas governed primarily by federal law. Nevada Rules of Professional Conduct 5.5(b)(6). 8