LAW WITH NO BORDERS:UNAUTHORIZED PRACTICE OF LAWIN THE MULTIJURISDICTIONAL AGE

LAURA M. FRANZEAkin, Gump, Strauss, Hauer & Feld, L.L.P.

1700 Pacific AvenueSuite 4100

Dallas, Texas 75201

ADVANCED EMPLOYMENT LAW COURSE 2002January 24-25, 2002

Houston, TexasCHAPTER 12

LAURA M. FRANZEAkin, Gump, Strauss & Hauer & Feld, L.L.P.

1700 Pacific Avenue, Suite 4100Dallas, TX 75201

214 969-2779FAX: 214 969-4248

BIOGRAPHICAL INFORMATION

EDUCATION

Thiel College, Greenville, Pennsylvania (B.A., summa cum laude, 1976)Duke University School of Law (J.D., 1979)

PROFESSIONAL ACTIVITIES

Partner, Akin, Gump, Strauss, Hauer & Feld, L.L.P. - Dallas - Head of Labor SectionBoard Certified, Labor and Employment Law (since 1984)

Past Chair of the Dallas Bar Association Employment Law Section (1993-present)Past-President, Dallas Area Labor and Employment Law Group (1986-87)Advanced Labor Law Committee, State Bar of Texas (1993-present)Member, Fellows of the Dallas Bar Association (1994-present)Vice Chair, Dallas AIDS Commission Legal/Ethical Task Force (1988)Member, College of the State Bar of Texas (since 1991)Member, Pro Bono College of the State Bar of Texas (since 1996)Member, Leadership Dallas (1996-97)

Legal commentator on employment and civil rights matters on KXAS TV Channel 5 —Dallas/Fort Worth Local NBC Affiliate

LAW RELATED PUBLICATIONS, ACADEMIC APPOINTMENTS AND HONORS

Appears in BEST LAWYERS IN AMERICA , all editions since 1995, and in numerousWHO'S WHO, editions

Editor and Chief Author of TEXAS EMPLOYMENT LAW , published by James Publishing (1998,updated through 2001)

Author, PRIVACY IN THE WORKPLACE ANSWER BOOK, to be published by Aspen Law &Business in 2002

General Editor/Author, EMPLOYMENT ISSUES FOR TECHNOLOGY COMPANIES, to be published byLaw Journal Press in 2002

Author, Certification of Employment Discrimination Class Actions under Civil Rights Act of 1991,Washington Legal Foundation (March, 2000)

Author, Costly Discrimination, Texas Lawyer (July 12, 1999)Author, The Linda Tripp Phenomenon, Texas Lawyer (February 12, 1999)Author, Temp Work May Lead to Long-Term Problems, Texas Lawyer (June 1, 1998)Author, Joe’s Stone Crab Case, Texas Lawyer (1998)Author, Employers’ Hiring Practices and Disparate Impact Analysis: The Case of EEOC v.

Joe’s Stone Crab, The Washington Legal Foundation (April, 1998)Author, Not Ready for Prime Time , Texas Lawyer (December 15, 1997)Author, The New Sex Discrimination Issues: Funneling, Shoulder Tapping and the Interest

Defense, State Bar of Texas (1996)

278940/2

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TABLE OF CONTENTS

I. I N T R O D U C T I O N.................................................................................................................................................................. 1

II. C O M P L E X I T Y O F A M U L T I J U R I S D I C T I O N A L P R A C T I C E............................................................................. 1A. Defining the Practice of Law................................................................................................2B. Birbrower, Montalbano, Condon & Frank, P.C. v. Superior Court, 949 P.2d 1 (Cal.

1998)....................................................................................................................................3C. Other Recent Cases Impacting UPL Precedent ...................................................................5

1. Estate of Condon v. McHenry, 76 Cal. Rptr. 2d 922 (Cal. Ct. App. 1998) .........................52. Fought & Co., Inc. v. Steel Eng’g and Erection, Inc., 951 P.2d 487 (Haw. 1998) ...............5

D. Areas of Law Most Likely to be Impacted by UPL Restrictions ..........................................61. Out-of-State Litigation and the Rules for Admission Pro Hac Vice ..................................62. Non-Litigation Activities ...............................................................................................63. Exceptions for In-House Counsel...................................................................................74. Sanctions for Committing UPL......................................................................................7

III. P R O P O S E D M O D E L R U L E S A D D R E S S I N G U P L I N A M U L T I J U R I S D I C T I O N A L A G E......................... 8A. ABA Commission on Multijurisdictional Practice ...............................................................8

1. State judicial licensing and regulation of lawyers should be continued. .............................82. As a general rule, attorneys licensed in another United States jurisdiction should

not be guilty of UPL by rendering legal services on a temporary basis in anotherjurisdiction....................................................................................................................9

3. Safe harbors for out-of-state attorneys ............................................................................94. Safe harbors for in-house counsel...................................................................................95. Adoption of a model “admission on motion” rule. .........................................................106. Adoption of a model state pro hac vice rule for practice before state courts and

administrative agencies................................................................................................107. Establishment of an ABA Coordinating Committee on Multijurisdictional Practice.........10

B. Restatement (Third) of the Law Governing Lawyers ........................................................10

IV. Texas Law............................................................................................................................................................................... 11

V. IMPACT OF TECHNOLOGY ON THE UPL DEBATE.......................................................................................... 12A. Self-help Computer Programs and UPL ............................................................................12B. E-mail and Law Firm Websites .........................................................................................13

VI. C O N C L U S I O N ..................................................................................................................................................................... 13

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LAW WITH NO BORDERS: UNAUTHORIZED PRACTICEOF LAW IN THE MULTIJURISDICTIONAL AGEI. I N T R O D U C T I O N

The practice of law is primarily regulated bythe states. Unfortunately, many of the states’definitions of “the practice of law” and “theunauthorized practice of law” (“UPL”) areoutdated and do not protect attorneys engaged inmultijurisdictional practices. This paper discussesthe areas practitioners should be aware of to avoidUPL violations.

II. C O M P L E X I T Y O F AM U L T I J U R I S D I C T I O N A L P R A C T I C E

Virtually everyone agrees that employment-related litigation has exploded in the last twodecades. According to some reports, more thantwenty-five percent of the nation’s civil docketinvolves workplace disputes. And no wonder,virtually any employment decision --from hiring totermination and everything in between-- canbecome the subject of a potential lawsuit. For themulti-jurisdictional employer, discriminationavoidance has always made consistency of policyimportant, but that importance has been increasedexponentially with work-sharing aspects of theinternet, the resulting increased communicationsamong plaintiffs’ lawyers and local unions indifferent parts of the country, and the increasedease in gathering information on the workforce inthe information age. Nationwide employers, suchas Wal-Mart, have found that positions taken inlitigation in one part of the country directly impactcases thousands of miles away. Moreover, newtechnology has made nearly every major employergrist for the “chat room” on specialized anti-employer or industry websites, overshadowing thetraditional water cooler exchange of information.

While coordination of labor and employmentlitigation and policy has become essential for themultijurisdictional employer, attorneys for suchcompanies continue to be bound by outdatedexclusionary practice provisions in at least 49states, raising the specter of an unauthorizedpractice of law (“UPL”) violation wheneverlawyers cross state lines –literally and figuratively-in representing their clients. The unauthorizedpractice of law rules have traditionally beenapplied to individuals who are not licensed in any

jurisdiction. However, more and more frequently,these rules have been applied to lawyers who giveadvice and counsel outside of the borders of thestate or states in which they hold a license.

The issue is seldom a problem for litigatorssince a lawyer who is licensed to practice in onestate is generally allowed to appear before thecourt of another state with permission of the court,or “pro hac vice.” But for the transactionalattorney, or for the attorney who practices non-traditional litigation, the issue is less clear. Sincelabor and employment attorneys are both litigatorsand transactional attorneys, the issue takes centerstage within our practice. The employmentattorney counsels, negotiates, investigates, andpursues strategy on the “restructuring” of theworkforce. Employment lawyers also representtheir clients before governmental agencies—likethe NLRB, OSHA, DOL, and their statecounterparts—outside of traditional state andfederal courts. Increasingly, employment lawyersare also called to participate in alternative disputeresolution proceedings such as arbitration,conciliation, and mediation. Each of these facetsof employment law representation may raiseethical issues when the lawyer engages in multi-jurisdictional practice. Many states place anemphasis on where the attorney is physicallylocated when giving advice. Therefore, the use ofe-mail and the internet in dissemination of legaladvice raises its own concerns.

Although multijurisdictional practice hasbecome the norm, state UPL provisions make nodistinction between work performed by non-lawyers versus out-of-state lawyers. And whileMaryland, Michigan, Virginia, and the District ofColumbia have modernized their rules somewhat,the vast majority of states adhere to rules bettersuited to a slower age. The following provides anoverview of the current status of UPLjurisprudence in the United States, discussesimportant cases weighing in on this issue, andassesses the potential impact of computertechnology on the future formation of new UPLrules and statutes.

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A. Defining the Practice of LawThe practice of law is primarily regulated by

the states. Each state has its own rules andprocedures for gaining admittance to the bar, aswell as its own definitions of what constitutes theunauthorized practice of law. Moreover, thestates’ definitions of what encompasses “thepractice of law” and “the unauthorized practice oflaw” are equally diverse. (See Appendix A for alisting of state statutes). For example, in Texas,the practice of law is defined as:

the preparation of a pleading or otherdocument incident to an action or specialproceeding or the management of the actionor proceeding on behalf of a client before ajudge in court as well as a service renderedout of court, including the giving of advice orthe rendering of any service requiring the useof legal skill or knowledge, such as preparinga will, contract, or other instrument, the legaleffect of which under the facts andconclusions involved must be carefullydetermined. TEX. GOV’T CODE § 81.101(a)(Vernon Supp. 2002 ).

However, the Texas Legislature recently amendedsection 81.101 to exclude from the definition ofthe practice of law “the design, creation,publication, distribution, display, or sale” ofwritten material, computer software “or similarproducts” designed to allow lay people to rendertheir own legal services, such as drafting a will orcontract, as long as the products “clearly andconspicuously state that the products are not asubstitute for the advice of an attorney.” TEX.GOV’T CODE § 81.101(c) (Vernon Supp. 2002).This amendment was in direct response to theHonorable Barefoot Sanders’ decision inUnauthorized Practice of Law Committee v.Parsons Technology, Inc., No. Civ. A. 3:97CV-2859H, 1999 WL 47235 at *1 (N.D. Tex. Jan. 22,1999), vacated by 179 F.3d 956 (5th Cir. 1999)(vacated in light of amendment to § 81.101). (SeeV,A infra).

Unfortunately, not all statutes clearly andspecifically define what constitutes “practicinglaw.” In fact, many state statutes relating to the“unauthorized practice of law” simply make itunlawful for attorneys not licensed in the state to“practice law” while others describe in great detail

what actions constitute UPL. Compare KY Rev.Stat. Ann. §524.130(1) (Banks-Baldwin,WESTLAW through 2001 Reg. Sess.) (“a personis guilty of unlawful practice of law when, withouta license issued by the Supreme Court, he engagesin the practice of law, as defined by the SupremeCourt) and S.C. Appellate Court Rules, Rule 5.5(“a lawyer shall not [p]ractice law in a jurisdictionwhere doing so violates the regulation of the legalprofession in that jurisdiction.”), with Minn. Stat.Ann. §481.02 (1990 & Supp. 2001) (making itunlawful for individuals not admitted to theMinnesota State Bar to practice law, including“giv[ing] legal advice . . . prepar[ing] legaldocuments . . . advising or counseling in law . . .furnishing to others the services of a lawyer . . .prepar[ing] . . . any will or testamentarydisposition or instrument of trust [or] any otherlegal document”). But what each states’regulations have in common is this: they areusually vague and ambiguous, outdated, and rarelyenforced, despite rampant noncompliance. Thepurpose behind these laws has also remainedconstant throughout the United States: to protect“the public against the rendition of legal servicesby unqualified persons.” Comment to ABAModel Rule of Professional Conduct Rule 5.5.

Under traditional analysis, providing legalservices while being physically within a statewhere you are unlicensed to practice and notassociated with local counsel or engaged inlitigation, would appear to be a clear violation ofthe unauthorized practice of law provisions. Infact, that basic standard still holds true today inthat an attorney cannot legally “hang out hisshingle” and provide legal services in a statewhere he is not licensed. However, the impact ofnew technology, combined with the increasingnumbers of national corporations and thesubsequent need for and growth in the number ofmultijurisdictional practices in this country, hasgiven rise to situations where attorneys licensed inone state frequently find themselves representingclients in disputes outside their state of licensure.More often than not, such representations pose nothreat to the client or the sanctity of law in the“foreign” jurisdiction. However, outdated UPLlaws often fail to except these new types ofrepresentation. For example, few states have prohac vice type procedures to allow an attorneylicensed in another state to represent clients in

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arbitration, mediation, or administrative hearings.Two other areas of a potential conflict involve in-house counsel and attorneys conducting purelytransactional or investigatory work not likely tolead to litigation. For example, many in-houseattorneys are licensed in one state and aresubsequently transferred by their employer to acorporate office in another state. Few statutescreate exceptions to UPL rules for in-housecounsel, despite rampant no-compliance with lawsthat would encompass the in-house counsel’s“practice.” Similarly, few statutes allow attorneysto represent clients in alternative dispute resolutionor administrative settings if they are not licensedin the state where the proceedings take place.Although it is rare that a UPL complaint will arisefrom such representations, the threat of sanctionsis always present for these practitioners. To makematters worse, the most likely scenario for a UPLviolation to surface is when the client decides itdoes not want to pay the out-of-state lawyer forher services. To avoid paying fees owed, clientscan easily defend by claiming that the attorneywas not licensed to practice in that state,committed a UPL, and, therefore, should besanctioned by not receiving payment for thoseillegal services. This scenario is not far-fetchedand has been played out recently in California.

B. Birbrower, Montalbano, Condon & Frank, P.C.v. Superior Court, 949 P.2d 1 (Cal. 1998)

In 1998, the California Supreme Courtbrought the issue of UPL in the age ofmultijurisdictional practice to the forefront of legaldebate across the country. In Birbrower, theCalifornia Supreme Court held that a New Yorklaw firm, whose attorneys were not licensed topractice law in California, engaged in theunauthorized practice of law by representing theirclient in preparation for arbitration in California.949 P.2d at 2-3. Specifically, the New Yorkattorneys traveled to California on a number ofoccasions to advise the client on various mattersrelating to a contract dispute as well as tointerview potential arbitrators to conductarbitration of the contract dispute. Id. at 3-4. Theattorneys also completed some work in New York.Id. The case settled before going to arbitration andthe client subsequently sued the New York firmfor legal malpractice and related claims. Id. at 4.The firm counterclaimed for payment of attorneys’

fees for the work it performed in California andNew York. Id.

The court determined that the Birbrower firmhad violated section 6125 of the State Bar Act,which simply states “[n]o person shall practice lawin California unless the person is an activemember of the State Bar.” CA L. BUS. & PROF.CODE § 6125 (West 2001). A violation of section6125 is a misdemeanor. CA L. BUS. & PROF. CODE§ 6126(a) (West 2001). More importantly, aperson who violates the section may not recoverattorneys’ fees for the violative services.Birbrower, 949 P.2d at 5, 10-11. The Birbrowercourt noted that section 6125 does not define“practice of law” or “in California,” which areboth crucial phrases when applying the statute. Id.at 5. The court held that in California, the practiceof law included the rendition of services inside andoutside the scope of litigation, including givinglegal advice and drafting legal instruments. Id. at5. The court also discussed at length the definitionof “in California.” The court held that practicinglaw “in California entails sufficient contact withthe California client to render the nature of thelegal service a clear legal representation.” Id. Thecourt explained that courts should decide whetheran attorney practiced “in California” on a case-by-case basis by focusing on the unlicensed attorney’sactivities in the state and primarily consideringwhether the attorney “engaged in sufficientactivities in the state, or created a continuingrelationship with the California client that includedlegal duties and obligations.” Id. However, thecourt opined that the unlicensed lawyer’s physicalpresence in the state was not determinative, butwas just one factor in the analysis. The courtreasoned that an attorney can practice law inviolation of section 6125 even if he is notphysically present in California by “advising aCalifornia client on California law in connectionwith a California legal dispute by telephone, faxcomputer, or other modern technological means.”But the court affirmatively rejected the converse,that an attorney “automatically practices law ‘inCalifornia’” simply by practicing California law inthe state, by his physical presence in California orhis virtual presence there. Id. (emphasis added).

The court then declined to create an exceptionfor work done that is incidental to privatearbitration or other alternative dispute resolutionproceedings. Id. at 133-34. Finding that the

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firm’s work did not fall into any exception to therule, the court held that the Birbrower firmviolated section 6125 by practicing law inCalifornia without a license and was not entitled torecover its attorneys’ fees for work done illegallyin California. Id. at 13. The court did, however,remand the case for determination of whetherpayment for services rendered in New York couldbe severed from the otherwise illegal feeagreement. Id.

Birbrower illustrates many of the potentialinadequacies current statutes regulating theunauthorized practice of law and theiraccompanying consequences. The CaliforniaSupreme Court’s unwillingness to create anexception for out-of-state attorneys to conductarbitration related services for a California client isespecially troubling because there is no alternativeadmissions process, such as pro hac viceadmission, in the alternative dispute resolutioncontext. As such, Birbrower essentially barred allout-of-state attorneys from representing Californiaclients in California in an alternative disputeresolution proceeding. Moreover, associating withlocal counsel would not allow an out-of-stateattorney to avoid Birbrower’s implicationsbecause California does not recognize anexception to section 6125 for attorneys whoassociate local counsel. See Birbrower, 949 P.2dat 4, n. 3.

Sensing the negative ramifications ofBirbrower, the California legislature stepped inand amended Rule 983.4 of the California Rules ofCourt and section 1282.4 of the California Code ofCivil Procedure, to allow out-of-state attorneys torepresent a party in a California arbitrationproceeding. Cal. Rules of Court, Rule 983.4 Out-of-State Attorney Arbitration Counsel; CA L. CIV.PROC. CODE § 1282.4 (West 2001). The newprocedures are similar to traditional pro hac vicerules. Under section 1282.4, an attorney in goodstanding in another state, but unlicensed inCalifornia, may represent a client in a Californiaarbitration by filing a certificate with the State Barof California and obtaining approval for appearingfrom the arbitrator or abritral forum. CA L. CIV.PROC. CODE § 1282.4(b) (West 2001). Thecertificate must state the following:

(1) the attorney’s residence and officeaddress

(2) the courts where the attorney s admittedto practice and the dates of admission;

(3) that the attorney is currently in goodstanding and eligible to practice lawbefore those courts;

(4) that the attorney is not currentlysuspended or disbarred in any court;

(5) that the attorney is not a resident ofCalifornia and not regularly employed inCalifornia;

(6) that the attorney is not regularly engagedin substantial business, professional, orother activities in California;

(7) that the attorney agrees to be subject tothe jurisdiction of the California courtswith respect to the laws governing theconduct of California attorneys;

(8) the title of any cases and courts wherethe attorney has filed an application toappear pro hac vice or has filed acertificate under this section in thepreceding two years; and

(9) the name, address, and telephone numberof the active member of the State Bar ofCalifornia who is the attorney of record.CA L. CIV. PROC. CODE § 1282.4(c)(West 2001).

Section 1282.4 also provides that attorneys ingood standing in another jurisdiction may renderlegal services in California “in the course of and inconnection with an arbitration pending in anotherstate.” CA L. CIV. PROC. CODE § 1282.4(f) (West2001). These changes clearly abrogate Birbrowerand are a clear example of the steps legislaturesmust take to appropriately expand what constitutesthe legal practice of law by attorneys not licensedin a given jurisdiction. But, at the same time, theyadd new steps that attorneys must take to ensurethey are not violating the laws of a state and, asillustrated by section 1282.4, may require an out-of-state attorney to associate with local counsel innon-litigation proceedings. While many statesmay view this as a necessary safeguard forallowing out-of-state attorneys to practice in theirjurisdiction, such requirements also increase thecosts of doing business, both for the attorney andhis client.

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C. Other Recent Cases Impacting UPL Precedent1. Estate of Condon v. McHenry, 76 Cal. Rptr.2d 922 (Cal. Ct. App. 1998)

In this post-Birbrower case, a Californiaappellate court held that an out-of-state attorneyand his out-of-state firm representing an out-of-state client in a California probate proceeding didnot engage in the unauthorized practice of law andcould, therefore, recover attorneys’ fees for all ofthe services rendered, including work done inCalifornia. Condon, 76 Cal. Rptr. 2d at 928. Thecourt distinguished Condon from Birbrowerbecause the client in Condon was not a Californiaresident and was, thus, not a “California client” asdiscussed in Birbrower. The court correctly notedthat the result in Birbrower was largely becausethe client there was a California resident. Id.(“Implicit in the court’s formulation of the rule isthe ingredient that the client is a ‘Californiaclient,’ one that either resides in or has itsprincipal place of business in California.”). TheCondon court also put to rest concerns thatBirbrower stood for the illogical proposition thatan attorney engages in the unauthorized practice oflaw if any services are rendered dealing withCalifornia law or are rendered by an out-of-stateattorney while he is present in California(physically or virtually). As the court aptly noted,“it would be presumptuous of this court to assumethat in a multi-state business transaction whereparties are located in diverse states andrepresented by counsel in those states, the lawyersare practicing ‘California law’ . . . Surely thecitizens of states outside of California should nothave to retain California lawyers to advise them onCalifornia law.” Id. However, the Condon courtstated in a footnote that this result assumes that theparties have not agreed to resolve the disputeexclusively under California law, indicating thatan attorney may find himself violating section6125 if the contract at issue is governed solely byCalifornia law, even though both he and his clientare not residents of California. Id. at n. 10. Thattroubling proposition has far-reachingramifications for practitioners rendering non-litigation services requiring the interpretation ofCalifornia law. For example, if an out-of-stateattorney has an out-of-state client who wants totransact business with a California resident, theattorney may find himself engaging in theunauthorized practice of law under Condon by

advising his client on the ramifications ofCalifornia law on a proposed deal. Again, withoutsafeguards for transactional attorneys, such as asystem similar to pro hac vice admissions, andnothing but vague statutes ill-equipped to dealwith the demands of today’s legal market,attorneys are left wondering if they are illegallyrending legal services.

2. Fought & Co., Inc. v. Steel Eng’g andErection, Inc., 951 P.2d 487 (Haw. 1998)

In Fought, the Supreme Court of Hawaiidecided whether an out-of-state general counselpracticed law “within the jurisdiction” within themeaning of the state’s UPL statutes by renderinglegal services as a consultant to client and client’sHawaii counsel. 951 P.2d at 494-95. The courtheld that these actions did not constitute theunauthorized practice of law because the generalcounsel did not practice law “within thejurisdiction” as contemplated by the Hawaiilegislature. Id. at 497-98. Fought was originally acontract dispute between Kiewit Pacific Company(“Kiewit”), a general contractor, and twosubcontractors, Steel Engineering (“Steel”) andFought & Company (“Fought”). Id. at 491-93.Fought’s general counsel, who were licensed topractice law in Oregon, assisted Fought’sHawaiian attorneys during the appeal processregarding the contract dispute. The generalcounsel assisted by consulting Fought’s Hawaiiancounsel regarding the appeal and preparation ofFought’s statement of position for mediation,assisting with legal research, analyzing briefs andpapers, and assisting in the planning Fought’sappeal strategy. Id. at 496. Fought’s generalcounsel did not make any appearances on Fought’sbehalf, did not draft or sign any of the papers filed,and did not communicate with the counsel forother parties on Fought’s behalf. Id. at 498. Steelopposed Fought’s request for attorneys’ feesrelated to the general counsel’s services,contending those services were rendered inviolation of the state’s UPL statutes by assistingthe Hawaiian attorneys. Id. at 493. The courtdisagreed. Although the court found that theservices rendered by Fought’s general counsel didconstitute the “practice of law,” it held thatFought’s general counsel did not render thoseservices “within the jurisdiction” as required bystatute. Id. at 497-98.

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In so holding, the court noted that “[w]hilethe scope of these statutes must be expansiveenough to afford the public needed protectionfrom incompetent legal advice and counsel, thetransformation of our economy from a local to aglobal one has generated compelling policyreasons for refraining from adopting an applicationso broad that a law firm, which is located outsidethe state of Hawaii, may automatically be deemedto have practiced law ‘within the jurisdiction’merely by advising a client regarding the effect ofHawaii’s law or by ‘virtually entering’ thejurisdiction on behalf of a client via ‘telephonefax, computer, or other modern technologicalmeans.’” Id. at 497 (quoting Birbrower, 949 P.2dat 6). In fact, the court opined that a companyserving “interstate and/or international markets islikely to receive more effective and efficientrepresentation when its general counsel, who isbased close to its home office or headquarters andis familiar with the details of its operations,supervises the work of local counsel in each of thevarious jurisdictions in which it does business.”Fought, 951 P.2d at 497. In this case, the courtfound that the general counsel acted solely as aconsultant and local counsel was at all times “incharge” of the case. Id. Therefore, Fought wasentitled to fees for the general counsel’s work. Id.

Although there is clear language in Foughtthat simply advising a client about theramifications of another jurisdiction’s law does notautomatically establish that the attorney practicedlaw “in that jurisdiction,” the court also noted thatin Fought, Fought was not a Hawaiian clientbecause it was headquartered in Oregon. Id. at498. This fact opens the door for argument that anout-of-state attorney who renders pre-litigationservices to a Hawaiian client may be violating thestate’s UPL laws. However, this opinion doesestablish that corporations may utilize theirgeneral counsel as consultants even in out-of-statelitigation.

D. Areas of Law Most Likely to be Impacted byUPL Restrictions1. Out-of-State Litigation and the Rules forAdmission Pro Hac Vice

The problems associated with UPL effectlitigators to a much less extent than they dotransactional attorneys simply because a litigatorcan universally seek admission pro hac vice in

courts across the U.S. Although admission prohac vice requirements differ by jurisdiction, theygenerally require the out-of-state attorney to applyfor admission with the court in which the case ispresiding, show that the attorney is a member ingood standing in another state, and associate withlocal counsel during the pendency of the case.What is less clear, however, is whether an attorneyengages in the unauthorized practice of law whenshe provides legal services in anticipation oflitigation and being admitted pro hac vice butbefore gaining admission. Although an attorneymay seek admission pro hac vice, what happens ifthe case settles before the attorney seeksadmission, or the client discharges the attorneyand then refuses to pay for services rendered? Ifthe jurisdiction does not have exceptions for pre-admission services, the courts would likely findthat the attorney engaged in the unauthorizedpractice of law because the attorney rendered legalservices without being admitted to practice in thatstate. Applying this analysis leads to the ludicrousresult of essentially requiring attorneys to gainadmission to a foreign court and associate withlocal counsel before doing any work for the out-of-state client. See Shapiro, Lifschitz, & Schram,P.C. v. Hazard, 24 F. Supp. 2d 66, 82 (D.D.C.1998) (holding that retainer agreement was validdespite fact that attorney had not sought admissionpro hac vice before entering into the retaineragreement). Unfortunately, Birbrower illustratesthat such strange results can and will occur ifoutdated UPL laws are not updated to reflect therealities of today’s legal market.

2. Non-Litigation ActivitiesAs seen in Birbrower, arbitration and other

alternative dispute resolution proceedings areareas of prime concern under UPL statutes simplybecause most states have no process by which anattorney can seek admission pro hac vice for theseproceedings. The same holds true for generalcounseling services provided by out-of-stateattorneys and other temporary transactional legalservices. At least one state has directly addressedthis problem. Michigan’s UPL statute wasamended in 2000 to exclude attorneys who arelicensed and authorized to practice law in anotherstate and is “temporarily in [Michigan] andengaged in a particular manner.” Mich. Comp.Laws. § 600.916 (2000). The District of Columbia

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and Virginia have similar statutes. District ofColumbia Rules of Court, Rule 49(b)(3)(excepting from the definition of the unauthorizedpractice of law work done “where the person’spresence in the District of Columbia is not ofincidental or occasional duration.”); Va. R. S. Ct.Pt. 6, § 1 (UPL rules do not apply to attorneyslicensed and in good standing in anotherjurisdiction and [t]he services provided [were] onan occasional basis only and incidental torepresentation of a client whom the attorneyrepresents elsewhere.”).

The commentary to D.C. Rule of Court 49makes clear that simple physical presence in theDistrict does not automatically indicate that theattorney has committed the unauthorized practiceof law. However, the commentary does indicatethat the client’s location could make a differencein the analysis. Commentary to Rule 49(b)(3)(“While the rule is not intended to requireadmission to the District of Columbia Bar wherean attorney is incidentally required to come intothe city to participate in continuing service to aclient located elsewhere; it is intended to requireadmission where an attorney is using the Districtof Columbia as a base from which to practice.”)(emphasis added). Once again, although Rule 49is more explicit then most UPL regulations, thereis still room for interpretation that leavespractitioners susceptible to committing a possibleviolation. However, the D.C. rule is a positivestep in recognizing the realities of today’smultijurisdictional practices.

Similarly, the Supreme Court of Florida hasindicated that non-Florida attorneys may give legaladvice to Florida clients regarding federaladministrative agency practice if the attorney is“in Florida on a transitory basis” and tells theclient in writing that the attorney is not a memberof the Florida Bar. The Florida Bar v. Savitt, 363So. 2d 559, 561 (Fla. 1978). This concept of a“transitory practice exception” would allowtransactional attorneys, as well as attorneyspracticing solely in front of administrative panels,to represent clients in other jurisdictions withoutfacing UPL sanctions. Requiring that the client benotified of the attorney’s lack of bar membershipin that jurisdiction will sufficiently protect theclient’s rights as contemplated by these UPLstatutes. However, until such an exception isuniversally adopted via statute or case

development, attorneys still face possible UPLsanctions by rendering these types of services.

3. Exceptions for In-House CounselOne final area of concern deals with the

unauthorized practice of law by in-house counsel.In-house counsel of national companies are oftenasked to travel to offices in different states to givelegal advice, provide training, conductinvestigations, and counsel executives in thecompany’s individual offices. Moreover, in-housecounsel are often transferred between offices andchoose not to become licensed in the new state.Whether physically present in another state, orsimply advising other members of the corporationwithin those states, in-house counsel “practicelaw” on a daily basis for the corporation withoutobtaining licenses from every jurisdiction wheretheir employer is located. As such, they are primetargets for UPL sanctions. Currently, few stateshave created statutory exceptions for the practicesof in-house counsel. See, e.g., District of ColumbiaRules of Court, Rule 49(b)(6); Fla. Stat. Ann. §§17; 17-1.4(c); 17-1.3 (West 1994); Kan. Sup. Ct.R. 706; Ky. Sup. Ct. R. 2.11; Md. Bus. Occ. &Prof. Code Ann § 10-102 (Michie Supp. 1995);Minn. Sup. Ct. R. 6(D) (exception provides for aone-year grace period, after which the attorneymust become licensed to practice in Minnesota);Mo. Sup. Ct. R. 8.105; Ohio Sup. Ct. R. VI §§4(A); 4(C); Okla. Stat. Ann. App. Tit. V, § 6(West 1995); S.C. Sup. Ct. R. 405(b)(1), (2), (3);Va. R. S. Ct. Pt. 6, § 1. These statutes generallyexcept in-house counsel from the UPL statutes ifthe counsel is working for her employercorporation when she renders the legal services,and some require the counsel to gain pro hac viceadmission if she will represent the corporation in ajudicial proceeding. But, once again, if nostatutory exception exists, in-house counsel areplacing themselves at risk for a UPL violationeach time they provide legal services to offices instates other than where the counsel is licensed.

4. Sanctions for Committing UPLThere are four common sanctions for

violating a UPL statute: (1) denial of payment offees, (2) criminal misdemeanor charges, (3)contempt or injunctive relief, and (4) disciplinaryaction, such as disbarment. As seen in Birbrower,the most common of these sanctions, and possibly

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the most damaging to a law firm, is the denial offees charged for work done in violation of theUPL statute. However, individual attorneysshould be aware that engaging in the unauthorizedpractice of law can lead to severe personalconsequences as well. (For a list of possiblesanctions in various U.S. jurisdictions, seeAppendix A). The severe nature of possiblesanctions, combined with the vague nature ofmany of these UPL statutes and the prevalentviolation of them, illustrates the dire need forchange in this area of law. The American BarAssociation is currently working to place thatprocess at the forefront of the states’ legislativeagendas.

III. P R O P O S E D M O D E L R U L E S A D D R E S S I N GU P L I N A M U L T I J U R I S D I C T I O N A L A G E

The American Bar Association has takensteps to address these issues by establishing theABA Commission of Multijurisdictional Practice.Similarly, the Restatement Third of the LawGoverning Lawyers addresses the jurisdictionalscope of the practice of law.

A. ABA Commission on MultijurisdictionalPractice

In July 2000, ABA President Martha Barnettappointed a Commission on MultijurisdictionalPractice to research and study current ethics andbar admission rules related to themultijurisdictional practice of law, “analyze theimpact of those rules on the practice of in-housecounsel, transactional lawyers, litigators andarbitrators and on lawyers and law firmsmaintaining offices and practicing in multiple stateand federal jurisdictions,” and recommend policies“to govern the multijurisdictional practice of law.”ABA Interim Report of the Commission onMultijurisdictional Practice, November 2001, at10, available at http://www.abanet.org/cpr/mjp-home.html (last visited December 17, 2001)(hereafter Interim Report). This Commissiongrew out of the California Supreme Court’sdecision in Birbrower, Montalbano, Condon &Frank, P.C. v. Superior Court, 949 P.2d 1 (Cal.1998), and concerns raised at the American BarAssociation Center for Professional Responsibilitysymposium on “Multijurisdictional Practice ofLaw” held at Fordham University on March 10-11,2000.

On November 30, 2001, the ABACommission on Multijurisdictional Practicereleased a preliminary report recommending thatthe ABA relax the definition of the unauthorizedpractice of law in the Model Rules of ProfessionalConduct. Specifically, the Commission suggestedchanges to Model Rules 5.5 and 8.5 that wouldallow out-of-state lawyers to temporarily practicelaw in a state where they are not licensed if therepresentation does not create an “unreasonablerisk” to the client, the public, or the courts.Interim Report at 4. The report and its proposedrules are open for comment until Friday, March15, 2002. The Commission hopes to present aFinal Report and Recommendation forconsideration by the ABA House of Delegates atthe August 2002 Annual Meeting in WashingtonD.C.

The Commission found that the Bar agrees ontwo propositions relating to UPL: (1) that“multijurisdictional practice of law is a practicalreality derived from the merging needs of clientsand a necessary and appropriate practice[; and (2)]existing UPL laws as written inhibit lawyers fromrendering legal services in a manner that bestserves the public.” Interim Report, at 12.Moreover, the Commission found thatcommentators only differed on what degree ofrevision was necessary to address these concerns.Id. After hearing testimony, researching currentlaw, and analyzing written submissions, theCommission issued eight recommendations,including proposed drafts of Rules 5.5 and 8.5.The following is a summary of therecommendations relevant to the issues addressedin this paper. The paper will not discuss theCommission’s recommendations regarding thepractice of law in the United States by attorneyslicensed in other countries.

1. State judicial licensing and regulation oflawyers should be continued.

The Commission’s first recommendationanswered what the Commission called “the mostfundamental question” for the Commission –whether national-licensing regulations should beimplemented. Interim Report at 18. TheCommission recommended that “[t]he ABAshould affirm its support for the principle of statejudicial licensing and regulation of lawyers.” Id.Although the Commission agreed that the ABA

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should take steps to revise its model rules, itreiterated the importance of state regulation oflawyers and rejected a national licensing scheme.Id. at 18-20. Instead, the Commissionrecommended that efforts should be made todetermine areas of practice that should bepermitted through something comparable to prohac vice representation. Id. at 20. TheCommission’s other recommendations seek todesign such programs.

2. As a general rule, attorneys licensed inanother United States jurisdiction should not beguilty of UPL by rendering legal services on atemporary basis in another jurisdiction.

The Commission’s second recommendationasserts that attorneys should be allowed totemporarily practice in other jurisdictions if doingso does not pose an “unreasonable risk” to theattorney’s client, the public, or the courts. (InterimReport at 4) Specifically, the Commissionrecommended that “[t]he ABA should amend Rule5.5(b) of the Model Rules of Professional Conduct(Unauthorized Practice of Law) to provide that, asa general rule, it is not the unauthorized practice oflaw for a lawyer admitted in another United Statesjurisdiction to render legal services on a temporarybasis in a jurisdiction in which the lawyer is notadmitted if the lawyer’s services do not create anunreasonable risk to the interests of a lawyer’sclient, the public or the courts.” Id. at 21. TheCommission also proposed revising Rule 5.5 toinclude the “safe harbor” provisions outlinedbelow.

3. Safe harbors for out-of-state attorneysThe Commission recommended that the ABA

adopt proposed rule 5.5(c), which identifies “safeharbors” that would specifically apply the generalprinciple annunciated in Rule 5.5(b). UnderProposed Rule 5.5(c), the following situationswould not constitute the unauthorized practice oflaw:

• Work as co-counsel with a lawyeradmitted to practice law in thejurisdiction;

• Providing services that a non-lawyer islegally permitted to render in thejurisdiction;

• Work ancillary to pending or prospectivelitigation;

• Representing clients in, or ancillary to, analternative dispute resolution setting,such as arbitration or mediation

• Providing non-litigation work ancillary tothe lawyer’s representation of a client inthe lawyer’s “home state” or ancillary tothe lawyer’s work on a matter that is inthe lawyer’s home state; and

• Providing services that involve primarilyfederal law, international law, the law ofa foreign jurisdiction, or the law of alawyer’s home state.

Interim Report at page 22.

Proposed Rule 5.5(c) addresses many of theconcerns discussed infra by allowing attorneys tolegally serve client’s across state lines on atemporary basis, both in transactional work and inlitigation, and will also allow attorneys the samedegree of freedom to represent their clients inalternative dispute resolution proceedings withoutfearing UPL repercussions.

4. Safe harbors for in-house counselThe Commission also recognized the need for

rules allowing in-house counsel to “practice” instates other than their state of licensure when thework is for their corporate employer. To facilitatemeeting the needs of in-house counsel, theCommission recommended the following “safeharbors” for in-house counsel:

Rule 5.5(d) states that a lawyer admitted topractice in another state does not engage inthe unauthorized practice of law if:

• The lawyer is an employee of a client andacts on behalf of the client or itscommonly owned organizationalaffiliates except for work for which prohac vice is required; or

• When the lawyer renders services in thejurisdiction pursuant to federal law to thelaw or court rule of this jurisdiction.

Under Rule 5.5(d) an in-house counsel cancontinue her normal activities despite beingtransferred to a new state or being sent to an out-

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of-state office to conduct an investigation,complete research, counsel management, or attendan arbitration. In addition, this rule acknowledgesthat in-house counsel must also abide by local prohac vice rules when necessary. The proposed rulerecognizes the importance of allowing in-housecounsel to do their jobs no matter what locale theyare in. This balances the needs of the client tomaintain continuity of in-house representationwhile still protecting the integrity of the courtsystem.

5. Adoption of a model “admission on motion”rule.

The Commission also recommended that theABA adopt a model “admission on motion” rule,addresses the needs of experienced attorneysseeking admission to an out-of-state Bar afterbeing licensed in another state for a significantperiod of time. Under the proposed rule, anattorney can be admitted to practice upon motionif the attorney has primarily engaged in the activepractice of law for five of the seven years beforeseeking admission in the new jurisdiction, and cansubmit evidence of a passing Multistate BarExamination score, as well as evidence theattorney is a member in good standing in alljurisdictions where admitted, and possesses thecharacter and fitness to practice law in the newjurisdiction Interim Report at 30, and AppendixK. This rule would allow experienced attorneys toavoid the time and costs involved in preparing forand taking another bar examination before gainingadmission to practice in another jurisdiction. TheCommission noted that this procedure would notbe a substitute for individual pro hac viceprocedures. Id. at 31.

6. Adoption of a model state pro hac vice rulefor practice before state courts and administrativeagencies.

Similarly, the Commission recommended thatthe ABA should endorse a model pro hac vicerule. Interim Report at 33. This would allow thestates to uniformly enforce and administer pro hacvice admissions. The Commission hopes that aconsistent rule throughout the U.S. wouldeliminate unduly restrictive admission provisionsthat hamper an attorney’s ability to serve hisclients in different states. Id. The Commissionalso reiterated its support of the ABA’s position

that the Federal Rules of Civil and CriminalProcedure should be amended to allow for moreconsistent federal pro hac vice requirements andrecommended the ABA “renew its efforts toimplement” its 1995 recommendation “[t]hat theAmerican Bar Association supports efforts tolower barriers to practice before U.S. DistrictCourts based on state bar membership byeliminating the state bar membership requirementsin cases in U.S. District Courts. . . .” Id. TheCommission also reiterated that restrictive pro hacvice requirements found in the federal rules inhibitcompetition and substantially increases the cost oflitigation because attorneys are forced to associatewith local counsel. Id.

7. Establishment of an ABA CoordinatingCommittee on Multijurisdictional Practice

Finally, the Commission recommended theABA establish a Coordinating Committee to“monitor changes in law practice and the impact ofregulatory reform, and to identify additionalreform that may be needed.” Interim Report at 37.

While all of these recommendationsadequately address the needs of attorneys involvedin a multijurisdictional practice, if adopted theyare only “model rules.” As such, there is noguarantee the states will follow suit and adopt themodel rules or a substantial equivalent. However,the Commission’s report has been highlypublicized and, if nothing else, has elevated thisissue in the minds of practitioners and legislatorsacross the country.

B. Restatement (Third) of the Law GoverningLawyers

Section Three of the Restatement Third of theLaw Governing Lawyers also addresses the plightof the multijurisdictional attorney. That sectionstates:

§ 3 Jurisdictional Scope of the Practice ofLaw By A Lawyer: A lawyer currentlyadmitted to practice in a jurisdiction mayprovide legal services to a client:

(1) at any place within the admittingjurisdiction;

(2) before any tribunal or administrativeagency of another jurisdiction or thefederal government in compliance with

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requirements for temporary or regularadmission to practice before that tribunalor agency; and

(3) at a place within a jurisdiction in whichthe lawyer is not admitted to the extentthat the lawyer’s activities arise out of orare otherwise reasonably related to thelawyer’s practice under Subsection (1) or(2).

Although section three is an obvious attempt toallow attorneys to practice in jurisdictions wherethey are not licensed, it is also extremelyambiguous. This ambiguity would require greaterthan average interpretations by the courts, whichwill most certainly lead to different standards ofapplication across the U.S. However, section threeof the Restatement Third of the Law GoverningLawyers does illustrate the need for statutoryallowances for the interstate practice of law.

IV. Texas LawIn Texas, the unauthorized practice of law,

and the regulation of it, is governed by Chapters81 and 83 of the Government Code, as well ascase law and rules promulgated by the TexasSupreme Court. The Unauthorized Practice ofLaw Committee, composed of nine personsappointed by the Supreme Court, is charged withinforming the Texas Supreme Court and the StateBar regarding the unauthorized practice of law bylay persons and lay agencies and any participationby attorneys in that unauthorized practice of law,for developing methods for preventing theunauthorized practice of law, and for takingappropriate action for eliminating the unauthorizedpractice of law, including filing lawsuits in thename of the Committee. TEX. GOV’T CODE. §§81.103, 81.104 (Vernon 1998).

A person may not practice law in Texasunless she is a member of the State Bar of Texasor meets the requirements of Supreme Court rulesallowing for limited practice by attorneys licensedin another jurisdiction. TEX. GOV’T CODE §81.102 (Vernon 1998). For example, Rule XV ofthe Rules Governing Admission to the Bar ofTexas (adopted by the Supreme Court of Texas,amended September 1, 1985) sets out this state’spro hac vice rule and reads as follows:

(a) A reputable non-resident attorney,although not licensed to practice law inTexas, may, after first complying with therequirements hereinafter set forth, participatein the trial or hearing of any particular causein this State, provided a resident practicingattorney of this State, a member of the StateBar of Texas, is actually employed andassociated and personally participates withsuch nonresident attorney in such trial orhearing. If such admission is sought to anycourt of this State by a non-resident attorney,applicant shall first file with the courtwherein said attorney seeks admission awritten sworn motion requesting admission.

Texas defines the “practice of law” as:

the preparation of a pleading or otherdocument incident to an action or specialproceeding or the management of the actionor proceeding on behalf of a client before ajudge in court as well as a service renderedout of court, including the giving of advice orthe rendering of any service requiring the useof legal skill or knowledge, such as preparinga will, contract, or other instrument, the legaleffect of which under the facts andconclusions involved must be carefullydetermined. TEX. GOV’T CODE § 81.101(a)(Vernon Supp. 2002 ).

The practice of law in Texas embraces all adviceto clients and all action taken for them inconnection with the law. Crain v. UnauthorizedPractice of Law Committee, 11 S.W.3d 328 (Tex.App.--Houston [1st] 1999, pet. denied). Likeother UPL laws, the purpose behind these laws inTexas is to protect the public from individuals whoare unskilled, inexperienced, and uneducated inlegal matters and attempting to practice law inTexas. Brown v. Unauthorized Practice of LawCommittee, 742 S.W.2d 34, 41-42 (Tex. App.--Dallas 1987, writ denied).

The Texas UPL statutes and pro hac vicerules are quite explicit in their definitions andrequirements. The explicit nature of theseprovisions has allowed the courts to easilydelineate whether someone has engaged in theunauthorized practice of law. Although there areno published cases dealing with an out-of-state

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attorney’s alleged unauthorized practice of law inTexas, the courts have even-handedly applied thesection 81.101 definition of the “practice of law”to activities of lay people in the state. Forexample, when a lay person gives legal advice,holds himself as a lawyer, or drafts or files anytype of legal document the court’s unanimouslyhold that the law person has engaged in theunauthorized practice of law. E.g., Palmer v.Unauthorized Practice Committee, 438 S.W.2d374, 377 (Tex. Civ. App.—Houston[14th] 1969,no writ) (holding that layman’s sale of will formswas prohibited by statute); Davies v. UnauthorizedPractice Committee, 431 S.W.2d 590, 594 (Tex.Civ. App. –Tyler 1968, writ ref’d n.r.e.) (holdingthat layman committed unauthorized practice oflaw by giving legal advice on taxes, trusts, andformation of corporation, and prepared legalinstruments); Quarles v. State Bar of Texas, 316S.W.2d 797, 802 (Tex. Civ. App. –Houston 1958,no writ) (holding that layman engaged in theunauthorized practice of law by giving legaladvice and information The only exceptionsoccur when the law person is in an industry inwhich its professionals are allowed by law toperform certain tasks that fall under the definitionof practicing law in Texas, such as insuranceadjusters and real estate brokers. E.g.,Unauthorized Practice of Law Committee v.Jansen, 816 S.W.2d 813, 816-17 (Tex. App.. –Houston [14th] 1991, writ denied).

Although the UPL laws in Texas are notvague, there are still no statutory safe harbors forout-of-state attorneys involved in transactionalwork or alternative dispute resolution proceedingsin Texas. Reform may become necessary if thecourts begin strictly applying these rules topractitioners involved in non-litigation work inTexas. Similarly, the role of the UnauthorizedPractice of Law Committee (“UPLC”) inprosecuting UPL violations should not beoverlooked because the UPLC often decidessingularly what types of practices it will litigate asUPL violations, and what practices it will let pass.For example, the UPLC has begun informingindependent companies that they “may haveengaged in activities which may constitute theunauthorized practice of law” by soliciting classmembers and helping them file claims as part of a1998 nationwide settlement in Naef, et al. v.Masonite Corp. John Council, Identity Crisis:

UPLC Alleges Companies May Violate Law ByHelping Class Members File Claims, TEXASLAWYER, January 2, 2002 (available atwww5.law.com/tx/stories/edt1231_identity.shtml).The UPLC has obtained temporary restrainingorders against two of the out-of-state companies.Id. Although some companies are fighting back,the Committee apparently strongly believes in itscase and has shown no signs of backing down. Id.These actions are similar to the Committee’shighly publicized crack-down in 1998 against thesale and marketing of legal self-help books andsoftware. Id.; see also V,A infra.. Such actionsindicate that practitioners can never be sure whatpractices will be next on the Committee’s list ofUPL violations.

V. IMPACT OF TECHNOLOGY ON THE UPLDEBATE

A. Self-help Computer Programs and UPLThe Texas Legislature has recently addressed

one of the problems associated with newtechnologies – the influx in recent years of self-help legal software programs. As noted in sectionII,A,1 supra, the Texas Legislature recentlyamended section 81.101 to exclude from thedefinition of the practice of law “the design,creation, publication, distribution, display, or sale”of written material, computer software “or similarproducts” designed to allow lay people to rendertheir own legal services, such as drafting a will orcontract, as long as the product “clearly andconspicuously state that the products are not asubstitute for the advice of an attorney.” TEX.GOV’T CODE § 81.101(c) (Vernon Supp. 2002).

This legislation was passed shortly afterJudge Barefoot Sanders’ decision in UnauthorizedPractice of Law Committee v. ParsonsTechnology, Inc., No. Civ. A. 3:97CV-2859H,1999 WL 47235 at *1 (N.D. Tex. Jan. 22, 1999),vacated by 179 F.3d 956 (5th Cir. 1999) (vacatedin light of amendment to § 81.101). In ParsonTech., Judge Sanders held that ParsonsTechnology engaged in the unauthorized practiceof law by developing, publishing, and marketingQuicken Family Lawyer, a software program thatoffers the user over 100 legal forms, such asemployment agreements, real estate leases,premarital agreements, and wills, and provides theuser with instructions on how to fill out the forms.

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Id. at *1. The software also allows the user to fillout a questionnaire that allows the software toindicate what form would be best suited for thatparticular user. Id. The software’s packaging alsoindicated that the software would “tailor[ing]documents to your situation.” Id. Applying TexasUPL law and previous cases that found that laypeople violated the UPL laws by distributing legalforms and instructions for filling the forms outand/or preparing such forms, Judge Sanders heldthat Parsons had violated the Texas unauthorizedpractice of law statute by developing andmarketing this software. Id. at *4-7. Specifically,Judge Sanders held that the interactive qualities ofthe software, combined with the promises ofindividual analysis on the software’s packagingmaterials, made the software “far more than astatic form with instructions.” Id. at *7. Thisdecision was vacated by the Fifth Circuit in lightof the Texas Legislature’s subsequent amendmentto section 81.101 of the government code, whichspecifically excludes these types of softwareprograms from the definition of practicing law inTexas. Unauthorized Practice of Law Committeev. Parson Tech., Inc., 179 F.3d 956 (5th Cir.1999); TEX. GOV’T CODE § 81.101(c) (VernonSupp. 2002).

B. E-mail and Law Firm WebsitesAnother area that will undoubtedly surface in

this debate is the effect of email communicationsand law firm websites. As discussed above,attorneys can virtually enter a state, and, thus,practice law in that state, by faxing or emailinginformation to a client in that state. Today clientsand potential clients can easily seek legal advicevia email. Once an attorney responds to such anemail, one can argue that an attorney-clientrelationship has developed. Moreover, some statesmay view the email as the rendition of legalservices under their UPL statutes, thereby makingthe attorney susceptible to UPL sanctions.Similarly, websites that offer any type of legaladvice, such as a service allowing a visitor to thesite to submit a legal question via email or into asite search engine, can render the firm, thewebsite’s webmaster, and individual attorneys inthe firm subject to UPL sanctions if out-of-statevisitors solicit “advice” through the website.Although these scenarios have not yet been thesubject of published litigation, it is just a matter of

time before such situations surface. As technologycontinues to rapidly change and improve, the stateUPL statutes will become more and more outdatedif not reformed to account for these types ofemerging technologies.

VI. C O N C L U S I O NAlthough rarely litigated, all practitioners

should be aware that state UPL statutes widelydiffer and are mostly vague and outdated. Assuch, a UPL sanction could be lurking where youleast expect. To meet the needs of an increasinglymultijurisdictional legal landscape, and to keep upwith merging technologies, states must updatetheir UPL statutes to account for legitimateinterstate legal practice. The ABA Commission’sproposed rules address these issues well, but thereis no guarantee the states will adopt them. So,until they do, practitioners should remain attune tothe possibility that their work may ultimately beconsidered the unauthorized practice of law insome jurisdictions.

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APPENDIX A

State Statutes and Court Rules Regarding the Unauthorized Practice of Law

KEY:

Detailed definition – Indicates whether the statute contains a detailed definitionof the “practice of law” or the “unauthorized practice of law.”

In-House Counsel Exception – Indicates whether the state has a statutory exceptionfor in-house counsel.

Transitory Practice Exception – Indicates whether the state has a statutory exceptionfor out-of-state attorneys practicing in the jurisdictionon a transitory, occasional, or incidental basis.

Other exceptions – Indicates whether the state has other statutory exceptions.

Penalty – Indicates the possible statutory penalties for engaging in theunauthorized practice of law. “N/A” indicates that there is nostatutory penalty, although penalties are likely judicially mandated.

State Statute(s) / Rule(s) Detailed definition? In-House Counsel Transitory Exception Other Exceptions PenaltyAL Ala. Code §§ 34-3-

6, 34-3-7 (1975)Yes No No Yes Misdemeanor

AK Alaska Stat. §§08.08.210,08.08.230 (Michie,WESTLAWthrough 2001 1stSpecial Session);

Yes, in Alaska BarRules

No No No Misdemeanor

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Alaska Bar Rule 63AZ Ariz. Rev. Stat.,

Sup. Ct. Rule 42;Rules of Prof.Conduct 5.5

No No No No N/A

AR Ark. Code Ann §§16-22-202, 16-22-206, 16-22-209(Michie,WESTLAWthrough 1999 Reg.Sess.); Rules ofProf. Conduct 5.5

No No No No Contempt

CA Cal. Bus. & Prof.Code §§ 6125,6126 (West 2001);Cal. Rules ofCourt, Rule 983.4 ;Cal. Civil Proc.Code §1282.4(b)(West 2001)

No No No Yes – arbitration. Misdemeanor

CO Colo. Rev. Stat.Ann § 12-5-101(West 1996); Rulesof Prof. Conduct5.5

No No No No Contempt

CT Conn. Gen. Stat.Ann. § 51-88(West, WESTLAWthrough 1/1/01)

No No No No Fine up to$250 and/orjail up to 2months

DE Rules of Prof.Conduct 5.5

No No No No N/A

DC D.C. Rules of Yes Yes Yes Yes N/A

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Court, Rule 49 ofthe D.C. Court ofAppeals; Rule ofProf. Conduct 5.5

FL Fla. Stat. Ann §454.23 (West2001); Fla. Stat.Ann. §§ 17, 17-1.4(c), 17-1.3(West 1994); Fla.R. Jud. Admin.2.060, 2.061; Fla.Bar Rules 1-8.2, 4-5.5, 10-2.1, 10-4.1

No Yes No Yes Misdemeanor

GA Ga. Code. Ann §§15-19-50, 15-19-51(WESTLAWthrough 2001 Gen.Assembly)

Yes No No No N/A

HI 2001 Haw. Laws.Act 47 (H.B. 523)(amending Haw.Rev. Stat. Ann §§605-14, 605-17(Michie 2000))

No No No No Misdemeanor

ID Idaho Code §§ 3-104, 3-401, 3-420(Michie,WESTLAWthrough 2000Cumulative Supp.),Rules of CourtRule 801; Rule of

No No No No Contempt;Fine up to$500 and/orjail up to 6months

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Prof. Conduct 5.5IL 705 Ill. Comp. Stat.

Ann. 205/1 (West,WESTLAWthrough P.A. 92-85, apv. 7/12/2001)

No No No Yes Contempt

IN Ind. Code Ann. §31-1-5-1 (West1996); Ind. CodeAnn § 33-21-2-1(West, WESTLAWthrough 2001 1stReg. Sess.);Admission &Discipline Rule 24;Rule of Prof.Conduct 5.5

No No No No Misdemeanor

IA Iowa Court Rules118A, 118A.3,120.1; Code ofProf. Resp.Disciplinary Rule3-101

No No No No N/A

KS Rule of Prof.Conduct 5.5; Kan.Sup. Ct. R. 706

No Yes No No N/A

KY Ky. Rev. Stat. Ann.§§ 341.470,524.130 (Banks-Baldwin,WESTLAWthrough 2001 Reg.Sess.); Ky. Sup. Ct.

No Yes No No Misdemeanor

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R. 2.11LA La. Rev. Stat. Ann.

§ 37:212 (West2000); 2001 La.Sess. Law Serv.Act 835 (HB 718)(amending La. Rev.Stat. Ann. §37:213)

Yes No No Yes Fine up to$1,000and/or jail upto 2 years.

ME Me. Rev. Stat.Ann. Tit. 4, § 807(West 1989)

No No No Yes Class Ecrime

MD Md. Code Ann.,Bus. Occup. &Prof. §§ 10-102,10-206, 10-601,10-602, 10-606(WESTLAWthrough Reg. Sess.Of 2000 Gen.Assembly)

No Yes No Yes MisdemeanorFine up to$5,000and/or jail upto 1 year

MA Mass. Gen. LawsAnn. Ch. 221, §§39, 41, 46A (West1993); Sup. Jud.Ct. Rule 3:05; Ruleof Prof. Conduct5.5

No No No No 1st Offense:Fine up to$100 or jailup to 6months;Subsequentoffenses:Fine up to$500 or jailup to 1 year

MI Mich. Comp.Laws. Ann. §

No No Yes No Contempt

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600.916 (West,WESTLAWthrough 2001 Reg.Sess.)

MN Minn. Stat. Ann. §481.02 (West2001); Minn. Sup.Ct. R. 6(D)

Yes Yes – Limitedexception for oneyear

No Yes MisdemeanorContempt

MS Miss. Code Ann.§§ 73-3-55, 97-23-43 (1999)

Yes No No No Misdemeanor1st offense:Fine of $100-200 and/orjail from 3-12 months2nd offense:Fine of $200-500 or jailfrom 1-2years;3rd offense:Court’sdiscretion, upto a $5,000fine or 5years in jail.

MO Mo. Ann. Stat.§484.010 (West1987); Mo. Sup.Ct. Rules 5.29,8.105, 9.01, 9.02,9.03, 9.04; Rule ofProf. Conduct 5.5

Yes Yes No Yes N/A

MT Mont. Code Ann. No No No No Contempt

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§§ 37-61-201, 37-61-210(WESTLAWthrough 2001 Reg.Sess.);UnauthorizedPractice of LawRule 2; Rule ofProf. Conduct 5.5

NE Neb. Rev. Stat. 7-101, 7-101.01(WESTLAWthrough 2000 Reg.Sess.)

No No No Yes N/A

NV Nev. Sup.Ct. Rule189

No No No No N/A

NH N.H. Rev. Stat.Ann. §§ 311:6,311:7, 311-7a(WESTLAWthrough Chap. 297of the 2001 Reg.Sess.); Rule ofProf. Conduct 5.5

No No No No Injunction

NJ N.J. Stat. Ann. §2C:21-22 (West,WESTLAWthrough L.2001,c.257); Rule ofProf. Conduct 5.5

No No No No N/A

NM N.M. Stat. Ann. §§36-2-27, 36-2-28(Michie,

No No No Yes Contempt

015000.0002 DALLAS 533124 v1

WESTLAWthrough 2001 Supp.And 1st Sess. Of45th Legislature);Rule of Prof.Conduct 16-505.

NY N.Y. Judiciary Law§§ 476-a, 476-b,478, 479, 484, 485(McKinney 1983);Code of Prof.Resp., Discipl.Rule 3-101

No No No Yes MisdemeanorInjunction

NC N.C. Gen. Stat. §§84-2.1, 84-4.1(WESTLAWthrough 2000 Reg.Sess.)

Yes No No Yes N/A

ND N.D. Cent. Code §27-11-01(WESTLAWthrough 2001 Reg.Sess.); N.D. Ct.Rules Rule 11.1,Rule of Prof.Conduct 5.5

No No No No N/A

OH Ohio Rev. CodeAnn. § 4705.01(West, WESTLAWthrough 124th GA,Files 1 to 47, apv.7/27/01); Gov. Bar.R. 7; Ohio Sup. Ct.

No Yes No No N/A

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R. VI, §§ 4(a), 4(c)OK Okla. Stat. Ann.

Tit. 5, §§ 5, 12(West 2001); Okla.State Bar RuleArt.2, § 7

No Yes No No N/A

OR Or. Rev. Stat. §9.160 (WESTLAWthrough 1999 Reg.Sess.)

No No No No N/A

PA Pa. Stat. Ann. Tit.42, §§ 2524, 2525(WESTLAWthrough Act 2001-83); Rule of Prof.Conduct 5.5

No No No Yes MisdemeanorInjunction

RI R.I. Gen. Laws §11-27-2(WESTLAWthrough 2000 Reg.Sess.)

Yes No No No N/A

SC S.C.Code Ann.§40-5-310 (Law.Co-op. 2001); S.C.Sup. Ct. R. 405

No Yes No No FelonyFine up to$5,000and/or jail upto 5 years

SD S.D. Codified Laws§§ 16-16-1, 16-18-1, 16-18-2 (Michie,WESTLAWthrough 2001 76thLegislativeAssembly), Rule of

No Yes No Yes MisdemeanorInjunction

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Prof. Conduct 5.5TN Tenn. Code Ann.

§§ 23-1-108, 23-3-101, 23-3-103(WESTLAWthrough 2001 Leg.Sess)

Yes No No No MisdemeanorTrebledamages

TX Tex. Gov’t Code§§ 81.101, 81.102,81.103, 81.104(Vernon 1998)

Yes No No No N/A

UT Rule of Prof.Conduct 5.5

No No No No N/A

VT Rule of Prof.Conduct 5.5; Codeof Prof. Resp.,Discipl. Rule 3-101

No No No No N/A

VA Va. R. S. Ct. Pt. 6,§ 1; UnauthorizedPractice Rule 9

Yes Yes Yes Yes N/A

WA Wash. Rev. CodeAnn. §§ 2.48.170,2.48.180 (West1988)

Yes No No No Grossmisdemeanor2nd offense:Class Cfelony

WV W.Va. Code Ann. §29C-7-201 (1966);Rule of ProfConduct 5.5

Yes No No No Injunction

WI Wis. Stat. Ann.§757.30 (West2001)

Yes No No No Fine of $50-500 and/orjail up to 1year and/or

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contemptWY Wyo. Stat. Ann. §

33-5-117 (Michie1977); Rule ofProf. Conduct 5.5;Rule of Ct. 302

No No No Yes Contempt