multijurisdictional practice issues for traveling lawyers ethics michael_downey

© 2014 Armstrong Teasdale LLP


Multijurisdictional Practice Issues for Traveling Lawyers

Michael Downey

June 2014


Consequences of Unauthorized Practice

Criminal liability Discipline Civil liability (plus perhaps statutory fees and damages) (Greater) malpractice liability Privilege issues Fee forfeiture issues Invalidity of actions (e.g., invalid answer or notice of appeal)

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Today's Program

What is the practice of law Who can practice law Where can a lawyer practice Which rules/court regulate practice

Review

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What is the Practice of Law?

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"Practicing Law" – 3 Categories

Activities only lawyers can do (for someone else/for pay)• Appear in court

• Sign pleadings

• Take depositions

• Hold oneself out as a lawyer

Activities lawyers – and select professionals – can do Activities that, when done by a lawyer, constitute the

practice of law

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ABA Effort to Define "Practice of Law"

2002 Commission ran into resistance from FTC Final recommendation in 2003:

• States should adopt own definition

• Include the "basic premise that the practice of law is the application of legal principles and judgment to the circumstances or objectives of another person or entity"

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Missouri Definition

It is "impossible to lay down an exhaustive definition of the 'practice of law.'" In re First Escrow, Inc., 840 S.W.2d 839, 843 n.6 (Mo. 1992)

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Missouri Statute – "Practice of Law"Mo. Rev. Stat. § 484.010.1 The "practice of law" is . . . defined to be and is

• the appearance as an advocate in a representative capacity or

• the drawing of papers, pleadings or documents or

• the performance of any act in such capacity in connection with proceedings pending or prospective before any court of record, commissioner, referee or any body, board, committee or commission constituted by law or having authority to settle controversies.

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Missouri Statute – "Law Business"Mo. Rev. Stat. § 484.010.1 The "law business" is . . . defined to be and is

• advising or counseling for a valuable consideration of any person, firm, association, or corporation as to any secular law or

• the drawing or the procuring of or assisting in the drawing for a valuable consideration of any paper, document or instrument affecting or relating to secular rights or

• the doing of any act for a valuable consideration in a representative capacity, obtaining or tending to obtain or securing or tending to secure for any person, firm, association or corporation any property or property rights whatsoever.

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What Is Not the Practice of Law

Filling in forms – but helping select which form to use is likely the practice of law – MO Opinion 20000029

Reviewing lease to make sure it accurately states parties' agreement (without evaluating whether to add extra provisions) – MO Opinion 940126

Performing basic investigatory services like requesting and reviewing medical or police records – Mo Opinion 970045

Taking a sworn statement during an investigation – Mo Opinion 2003002

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Who Can Practice Law?

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Bar Admissions – Three-Steps

Legal Education or Substitute

Bar Examination or Substitute

Character & Fitness Examination

• ABA Accredited Law School

• (Foreign/non-approved law school plus practice)

•(Foreign/non-approved law school plus 24 credits at ABA-approved school)

• State bar examination

• Motion/reciprocity (5 of 10 prior years)

•In-house admission

•(Diploma privilege)

• Character and fitness examination

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Temporary Admission – Rule 8.06

Qualified for admission In good standing in another jurisdiction Seeking admission through another means Lasts up to one year (lost if other attempt at admission fails) Need supervising Missouri lawyer

(Very short, simple form)

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Other Means of Admission Pro hac vice admission Foreign legal consultants – only on the law of the jurisdiction

where the foreign legal consultant is admitted (Rule 9.05) Responding to disasters

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Reciprocity Issues

Many states limit practice to lawyers whose home states allow that state's lawyer to practice

Example: Missouri Rule 9.02 allows non-resident lawyers who are Missouri Bar members to practice only if the lawyer's home state allows non-resident bar admittees to practice

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Where can a lawyer practice?

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Practice Permitted

In state where licensed Before federal court (agency) where admitted In other jurisdictions where actions are "temporary"

and "permitted"

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Federal Courts

Supreme Court – special rule Appellate Courts – admitted to any other state or federal court District Courts – quite a lot of variation

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"Multijurisdictional Practice"

Old – Simple rule (two principles) and precedent

New – Much more complicated rule

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Missouri Rule 4-5.5(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

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So, What is UPL? Rule 4-5.5(b)

A lawyer who is not admitted to practice in this jurisdiction shall not:

(1) except as authorized by this Rule 4 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.

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Permitted "Temporary" Practice – Rule 4-5.5(c) A lawyer admitted and authorized to practice law 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 and authorized to practice law and are not services for which the forum requires pro hac vice admission;

(4) . . .; or

(5) ….

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A lawyer admitted and authorized to practice law 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) …

(2) …

(3) …

(4) 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

(5) are not within Rule 4-5.5(c)(2), (c)(3), or (c)(4) and arise out of or are reasonably related to the lawyer's practice in a jurisdiction in which the lawyer is admitted and authorized to practice law.

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Summarizing Rule 4-5.5(c)

Temporary practice is permitted when

• Local counsel actively participates

• Pro hac vice has been obtained or is anticipated

• It is ADR and arises from jurisdiction where admitted

• Temporary practice by in-house lawyer

• "Arise out of and are reasonably related" to practice in jurisdiction of license

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Unauthorized v. Authorized Practice

Danger

Activities in jurisdiction

that probably equal UPL

Safety

Activities in jurisdiction that

are not UPL

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What's on Continuum

Danger – Rule 4-5.5(b)

- Establishing Office

- Systematic & Continuous Presence

- Hold out as Lawyer in

Jurisdiction

Safety – Rule 4-5.5(c)

- Licensure (in-house, temporary, etc.)

"Temporary" practice –Local CounselPro Hac ViceArbitration

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Active Local Counsel A lawyer . . . 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;

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Pro Hac Vice Admission A lawyer . . . may provide legal services on a temporary basis in


(1) …

(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;

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Pro Hac Vice Rule

A lawyer seeking to appear pursuant to Rule 9.03 shall pay a fee equal to the fee paid by lawyers under Rule 6.01(j)(1), with the fee to be paid for each case in each court or administrative tribunal in which the lawyer seeks to appear.

The fee shall be paid to the clerk of this Court, who shall transfer the fee to The Missouri Bar as provided in Rule 6.07.

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ADR Exception A lawyer . . . may provide legal services on a temporary basis in


(1) …

(2) …

(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 and authorized to practice law and are not services for which the forum requires pro hac vice admission;

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(1) …

(2) …

(3) …

(4) 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

(5) ….

In-House Counsel Exception

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(1) …

(2) …

(3) …

(4) …

(5) are not within Rule 4-5.5(c)(2), (c)(3), or (c)(4) and arise out of or are reasonably related to the lawyer's practice in a jurisdiction in which the lawyer is admitted and authorized to practice law.

"Arising Out of" Licensed Practice

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Case

Deposition

Deposition

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"Federal Practice" Exception – Rule 4-5.5 cmt [4] Federal law, including but not limited to international treaties,

may require that a lawyer be permitted to practice in this jurisdiction. Federal law that admits a lawyer to appear in a federal court or other tribunal does not authorize a lawyer to establish an office or other systematic and continuous presence to engage in other aspects of the practice of law in this jurisdiction.

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ABA Model Rule 5.5(d) A lawyer admitted in another United States jurisdiction or in a foreign

jurisdiction, and not disbarred or suspended from practice in any jurisdiction or the equivalent thereof, may provide legal services through an office or other systematic and continuous presence in this jurisdiction that :

(1) are provided to the lawyer's employer or its organizational affiliates; are not services for which the forum requires pro hac vice admission; and, when performed by a foreign lawyer and requires advice on the law of this or another jurisdiction or of the United States, such advice shall be based upon the advice of a lawyer who is duly licensed and authorized by the jurisdiction to provide such advice; or

(2) are services that the lawyer is authorized by federal or other law or rule to provide in this jurisdiction.

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Model Rule 5.5 comment [16]

To further decrease any risk to the client, when advising on the domestic law of a United States jurisdiction or on the law of the United States, the foreign lawyer authorized to practice under paragraph (d)(1) of this Rule needs to base that advice on the advice of a lawyer licensed and authorized by the jurisdiction consult with a U.S. lawyer authorized to provide it that advice.

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Which Bar Can Discipline


Missouri Rule 4-8.5(a)

A lawyer admitted to practice in this jurisdiction is subject to the disciplinary authority of this jurisdiction regardless of where the lawyer's conduct occurs.

A lawyer not admitted in this jurisdiction is also subject to the disciplinary authority of this jurisdiction if the lawyer provides or offers to provide any legal services in this jurisdiction.

A lawyer may be subject to the disciplinary authority of both this jurisdiction and other jurisdictions for the same conduct.

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Which Rules Govern?


Choice of Ethics Rules --

In any exercise of the disciplinary authority of this jurisdiction, the rules of professional conduct to be applied shall be as follows:

(1) for conduct in connection with a matter pending before a tribunal, the rules of the jurisdiction in which the tribunal sits, unless the rules of the tribunal provide otherwise; and

(2) for any other conduct, the rules of the jurisdiction in which the lawyer's conduct occurred or, if the predominant effect of the conduct is in a different jurisdiction, the rules of that jurisdiction.

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"Safe Harbour" – Rule 4-8.5(a)

A lawyer shall not be subject to discipline if the lawyer's conduct conforms to the rules of a jurisdiction in which the lawyer reasonably believes the predominant effect of the lawyer's conduct will occur.

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Lawyer-Client Agreements – Model Rule 8.5 comment (Ethics 20/20) [5] When a lawyer's conduct involves significant contacts with

more than one jurisdiction, it may not be clear whether the predominant effect of the lawyer's conduct will occur in a jurisdiction other than the one in which the conduct occurred. . . . With respect to conflicts of interest, in determining a lawyer's reasonable belief under paragraph (b)(2), a written agreement between the lawyer and client that reasonably specifies a particular jurisdiction as within the scope of that paragraph may be considered if the agreement was obtained with the client's informed consent confirmed in the agreement.

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Who Can Be Disciplined?


Supervisory Responsibility – Rule 4-5.1

(a) A partner in a law firm, and a lawyer who individually or together with other lawyers possesses comparable managerial authority in a law firm, shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that all lawyers in the firm conform to the Rules of Professional Conduct.

(b) A lawyer having direct supervisory authority over another lawyer shall make reasonable efforts to ensure that the other lawyer conforms to the Rules of Professional Conduct.

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"Vicarious" Liability – Rule 4-5.1(c)

(a) ….

(b) ….

(c) A lawyer shall be responsible for another lawyer's violation of the Rules of Professional Conduct if:

(1) the lawyer orders or, with knowledge of the specific conduct, ratifies the conduct involved; or

(2) the lawyer is a partner or has comparable managerial authority in the law firm in which the other lawyer practices, or has direct supervisory authority over the other lawyer, and knows of the conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable remedial action.

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Review


Scenario 1

Lawyer admitted only in Missouri Lawyer moves to office another state (say, Illinois) Lawyer begins to practice law from an office in that

other state Is this UPL?• What if Lawyer only works on cases pending in

Missouri?• What if Lawyer only works for Company XYZ as in-

house counsel?

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Scenario 2 In-House Counsel (IHC) is licensed only in Missouri While located in Missouri, IHC constantly

negotiates contracts with Company's employees in another state (Illinois)

IHC also handles all EEOC/State employment investigations

IHC will retain local counsel if litigation or a regulatory proceeding results

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Scenario 3

Lawyer licensed only in Missouri Client in Other State (Arkansas) calls and needs an

answer filed immediately in lawsuit pending in Other State (Arkansas)

Lawyer files answer in Other State along with request for pro hac vice admission

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Scenario 4

Lawyer is licensed only in Missouri Lawyer moves to Colorado to do non-legal work for

Corporate Employer Friend in Colorado asks Lawyer to review a mineral

lease

Based on Office of Lawyer Regulation v. Bolte (Wis. 2005)

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Scenario 5

Lawyer licensed in Missouri is litigating case pending in Missouri

Lawyer needs to depose or interview witness in Other State (Delaware)

Lawyer licensed in Other State (Delaware) represents witness

Who needs to worry about UPL? Whose rules apply?

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Scenario 6

Lawyer is licensed only in Missouri Lawyer moves to Michigan and opens office only to

practice federal bankruptcy litigation

Key cases – Sperry v. Florida Bar (US 1963) In re Desilets, 247 B.R. 660 (Bankr. W.D. Mich 2000),

aff'd, Rittenhouse v. Delta Home Improvement, Inc., 255 B.R. 294 (W.D. Mich. 2000)

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Scenario 7

In-House Counsel is licensed only in Missouri Company has case pending in Other State In-House Counsel works on case including

investigation, meeting to discuss settlement, and taking depositions

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Scenario 8 Other State Firm (OSF) has litigation in Missouri OSF has no lawyers licensed in Missouri, so OSF hires local

counsel in Missouri (just to sign and file pleadings) OSF Firm prepares brief that misstates governing law Missouri lawyer signs and files brief

Has anyone engaged in UPL? Who is responsible for misstatement of the law?

Based on In re Wilkins (Ind. 2002)

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Scenario 9

Missouri Firm has no attorneys licensed in Other State Client in Other State hires Missouri Firm to conduct

internal investigation in Other State Is this UPL in Other State?

Based on Decker, Hallman, Barber & Briggs matter

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Scenario 10

Lawyer is licensed only in Missouri Lawyer receives case likely to be filed in Other State

for Missouri client Lawyer travels to Other State many times to meet

with client and investigate claim Lawyer settles matter before filing suit in Missouri

Was this UPL?

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Trends in Other Jurisdictions


Virginia New UPL Law

(C) Definition of "Non-lawyer." – the term "non-lawyer" means any person, firm, association or corporation not duly licensed or authorized to practice law in the Commonwealth of Virginia. However, any lawyer not licensed to practice law in Virginia, but licensed in any other state or territory of the United States or the District of Columbia, or a foreign nation, who provides legal advice or services to clients in Virginia, shall not be subject to these Unauthorized Practice rules but shall be subject to the laws, rules and regulations of the jurisdiction(s) in which he/she is licensed to practice, as well as otherwise applicable Virginia Law including the Virginia Rules of Professional Conduct.

(D) The Unauthorized Practice rules which follow represent a nonexclusive list of specific types of practice which would violate these rules.

January 11, 2010

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Other States on UPL District of Columbia Court of Appeals Rule 49(c)(6) expressly

exempts "[p]roviding legal advice only to one's regular employer, where the employer does not reasonably expect that it is receiving advice from a person authorized to practice law in the District of Columbia" from conduct that constitutes the unauthorized practice of law.

North Carolina generally provides under State v. Pledger (NC 1962) and its progeny that a corporate employee is not practicing law as long as (a) the corporate employer has a primary interest in the matter and (b) the work does not involve appearing in court, other than small claims court.

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Possible Changes

GATS – General Agreement on Trade in Services – impact on licensure?

Federalization of Bar Admissions and Regulation• Securities lawyers• Gramm-Leech Bliley and FTC Red Flags

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Litigation over MJP NAAMJP v. Simandle (D.N.J. June 9, 2014) – challenging NJ federal court local rule

for admitting only NJ-admitted attorneys to NJ federal court

• Exceptions to NJ Rule – resident patent attorneys, criminal defense attorneys

NAAMJP v. Roberts (D.D.C. 2013) – challenging DC federal local court rule for admitting only those licensed in states that give reciprocity to DC lawyers to DC federal court

• 25 of 94 courts (15 states)

NAAMJP v. Castille (E.D. Pa. 2013) -- challenging PA federal local court rule for admitting only those licensed in states that give reciprocity to PA lawyers to PA federal court

• 38 states plus DC

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Thank You

Michael Downey Armstrong Teasdale LLP 314-342-8072 (extension 7032) [email protected]

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