Proposal to the American Bar Association
Commission on Multijurisdictional Practice
The Association of Professional Responsibility Lawyers ("APRL") was formed to meet the growing demand for expertise in the law of lawyering, melding substantive law, procedural rules and regulatory standards governing various aspects of a lawyer's professional life. APRL provides a national clearinghouse of information regarding recent developments and emerging issues in the areas of admission to practice law, professional ethics, disciplinary standards and procedures, and professional liability. APRL fulfills its mission in a variety of ways: annual meetings; seminars; articles written by academics and practitioners; and through informal networking.
APRL is an independent national organization of lawyers concentrating in the fields of professional responsibility and legal ethics, including: law professors; bar association counsel; counsel for respondents in disciplinary hearings; ethics expert witnesses; legal malpractice litigators; counsel to disciplinary committees; and in-house law firm ethics counsel. Consistent with its diverse membership, APRL speaks freely on issues of vital importance to the legal profession.
APRL wishes to express its gratitude to the American Bar Association Commission on Multijurisdictional Practice (the "ABA MJP Commission") both for the courtesy shown to APRL in permitting it to have a permanent liaison to the ABA MJP Commission and for this opportunity to present its views.
APRL established a committee to prepare an organizational submission to the ABA MJP Commission almost immediately after the formation of the ABA MJP Commission. The Committee has had several meetings, the outcome of which was the preparation of this proposal. The proposal was adopted at a meeting of APRL on February _, 2001, by the organization at its mid-year meeting, and is now submitted to the ABA MJP Commission on behalf of APRL.
II. EXECUTIVE SUMMARY
APRL believes that it is of crucial importance for the bar, the states, and the public that the issue of multijurisdictional practice ("MJP") be addressed and substantive changes made to the way in which lawyers are regulated when they practice across state borders.
The essence of the APRL proposal is that the states establish a common, uniform system permitting the free movement of lawyers, and the free trade in legal services, across state lines, without derogating from the states' legitimate and historic interests in regulating the legal profession. APRL believes that the value of its proposal is that it does not discriminate against any particular kind of law practice. The proposal is intended to apply equally to in-house counsel (in states that do not already permit practice by such lawyers for their employer), litigators who may wish to engage in practice activities prior to or in contemplation of the initiation of litigation – at which point the ordinary rules of pro hac vice admission would apply and "transactional" lawyers whose practice principally involves counseling clients.
The APRL proposal for dealing with the issues has two tiers.
First, APRL believes that all of the states should be encouraged to modify, in whatever form is appropriate, their laws defining the unauthorized practice of law ("UPL") (i.e., by statute, court rule or constitutional amendment as the case may be) so as to exclude from UPL prosecution lawyers duly admitted in another state who are temporarily in another state and who are either "engaged in a particular matter," or who are "engaged in more than one matter which arise out of or are reasonably related to the lawyer's practice" in the state where the lawyer is duly licensed. APRL presents the proposed language for such change to the states' laws. The language proposed is based in part on Michigan Compiled Laws Annotated § 600.916, and in part on language suggested in § 3 of the American Law Institute's Restatement of the Law Governing Lawyers. This first tier of the APRL proposal is intended to "decriminalize" the purely temporary presence – whether physically, or electronically (including the Internet) – by lawyers in states where they are conducting business on behalf of clients, in situations where there are no indicia arising from such activity of any intent to establish a permanent presence of any kind.
The second tier of the APRL proposal is for the establishment of a uniform registration system for the states that will permit lawyers who are duly admitted in a state to establish practices in other states subject to the supervision of the states where they wish to establish themselves. Lawyers who comply with the registration system would also be excluded from the application against them of the UPL laws. The registration system proposed has several key elements. The states would continue to regulate the profession, including the out-of-state registering lawyers; the states adopting the system would be empowered to levy appropriate fees from the registering lawyers to defray both the costs of establishing and maintaining the system and of disciplining such lawyers as needed. Registering lawyers would be required to submit to the jurisdiction of the host states' grievance and disciplinary system, and to comply with all local laws, and rules, including the local ethics code, in all activities within the host state. Lawyers registering under the system would also be required to make clear and explicit disclosure to individual clients of the states in which they are admitted, and that they are not admitted in the host state, in all communications with clients and potential clients. States may wish to add other conditions to such registration, such as mandatory professional liability insurance, or a time limit on such registration, although APRL believes that since the purpose of the system is to encourage the free trade in legal services across state lines, any additional conditions should be as narrowly focused and as limited as possible.
III. THE APRL PROPOSAL
1. TEMPORARY PRESENCE
Consistent with the goals described in the Introduction above, the model law (i.e., legislation, or court rule, as appropriate to modify each state's current UPL statute) which APRL proposes is as follows:
"The prohibition on the unauthorized practice of law shall not apply to an attorney duly licensed and authorized to practice law in another state while such attorney is temporarily in this state and is engaged in either (i) a particular matter, or (ii) particular matters to the extent such matters arise out of or are otherwise reasonably related to the lawyer's practice in such other state."
2. REGISTRATION OF LAWYERS ADMITTED IN OTHER STATES
A. Permanent registration of non-admitted lawyers. A draft prototype rule to a system for permanent registration of non-admitted lawyers follows as Appendix A. (The draft uses Illinois as the reference jurisdiction.) Registration would not be required in those situations where the lawyer expects to practice only on a "temporary" basis in the jurisdiction. However, if a non-admitted lawyer wishes to maintain an office in the jurisdiction or otherwise engage in the continuous, regular, or repeated representation of clients in the jurisdiction, the lawyer should seek a "green card" or permanent registration for such practice.
The application requirements are straightforward: three years' prior admission to another United States jurisdiction; a certificate of good standing from the home jurisdiction; and the statements of two sponsors, who are members of the state's bar, affirming the applicant's character and fitness. The first two paragraphs of the prototype rule, the paragraphs that list the qualifications and documentation required for registration, were taken, almost verbatim, from Rule 5 of the Rules of the United States Supreme Court. The requirements to practice before the nation's highest court should provide sufficient guidance for registration in the several states.
The prototype rule would nevertheless give the state's character and fitness group an opportunity to review and object to any particular applicant on an "exception" basis. Applicants would have the right to a hearing and judicial review under existing rules of an adverse character and fitness action. Applicants must certify they have read the states' ethics rules.
The prototype rule could limit a registered lawyer's practice in several ways. A registered lawyer would be required to provide written notice of the lawyer's status as a registered, but not fully admitted, lawyer to individual, but not corporate, clients. A registered lawyer could be excluded from certain particularly local matters (real estate and family law matters) without the "supervision" of an admitted lawyer. Nor could a registered lawyer appear alone in any court without an admitted co-counsel unless the court granted permission under the existing pro hac vice rule. With admitted co-counsel, however, a registered lawyer could appear in any court as often as necessary for a client's business without leave of court.
Registration would require payment of an initial fee of $500 [or more], as well as annual fees similar to those paid by admitted lawyers. A registered lawyer would also be required to certify annually that the lawyer remained in good standing in any other jurisdictions where the lawyer is registered or admitted.
The prototype rule provides that registered lawyers are subject to the jurisdiction of the state's disciplinary agency. The rule also contains an optional provision for mandatory professional liability insurance coverage. This provision has obvious relevance in Oregon. Other states might wish to consider insurance as another method of protecting their citizens from "foreign" lawyers.
B. Advantages of registration. The most significant advantage of a permanent registration system is that it provides clarity and certainty to both lawyers and their clients. There would be no need to worry about whether a lawyer's activity was either "occasional" or "incidental" or whether the particular representation related to a distinct home-office engagement. Nor would the lawyer be required to interpret any specific "safe harbor" rules provision.
The disciplinary authorities would also gain a new level of certainty. There would be no question of jurisdiction over registered lawyers. The required fees would provide a new source of resources to administer the system.
As proposed in the prototype rule, non-business clients would be given written notice of a registered lawyer's status. There seems to be little reason to warn corporate clients. If the state wishes, it might require a registered lawyer to carry professional liability insurance as an additional measure of consumer protection.
A registration scheme would also provide a remedy for most situations where in-house corporate counsel are assigned to new positions in states where they may not be admitted and do not qualify for admission on motion under existing rules.
Another advantage to the proposed legal "green card" system is that each state can act on its own. Permanent registration offers a workable compromise between the current patchwork and a truly national system in which the states, if they retain any presence at all, would simply administer the federal scheme.
C. Disadvantages of registration. As noted above, the concern that registration might be too administratively cumbersome and expensive can be resolved. Another concern about permanent registration might be the "race-to-the-bottom" effect. This theory suggests that lawyers from states with purportedly lower standards will be able to indirectly gain admission in more selective states, and ultimately the standard for admission everywhere will be that of the least demanding state.
A race to the bottom seems possible, but it has not appeared to have been a problem for states with liberal reciprocal admission rules. It also seems unlikely to occur in the future on any meaningful scale. For this to become a serious problem, one or more jurisdictions would need to become notorious as "admission mills" to law students and lawyers. Any state in that limelight is likely to react quickly to disavow that reputation.
[Prototype Registration Rule]
Rule 714 Registration of Non-Admitted Lawyers
(d) Qualifications. To qualify for registration with this Court an applicant must have been admitted to practice in the highest court of a State, Commonwealth, Territory or Possession, or the District of Columbia for a period of at least three years immediately before the date of application; must not have been the subject of any adverse disciplinary action pronounced or in effect during that three-year period; and must appear to the Court to be of good moral and professional character.
(e) Application. Each applicant shall file with the Clerk (1) a certificate from the presiding judge, clerk, or other authorized official of that court evidencing the applicant's registration, to practice there and the applicant's current good standing, and (2) a completely executed copy of the form approved by this Court and furnished by the Clerk containing (a) the applicant's personal statement, and (b) the statement of two sponsors endorsing the correctness of the applicant's statement, stating that the applicant possesses all the qualifications required for registration, and affirming that the applicant is of good moral and professional character. Both sponsors must be admitted to practice before this Court who personally know, but are not related to, the applicant.
(f) Reference to Committee on Character and Fitness. Each applicant's completed form, personal statement, sponsors' statements, and related documents shall be promptly provided to the Committee on Character and Fitness. If the Committee fails to file an objection to the applicant's registration with the Clerk within thirty (30) days of receipt of the application materials by the Committee, the Clerk may proceed with the application process. If the Committee objects to the applicant's registration, it shall file a statement of its reasons with the Clerk within the time required. In any such case, an applicant for registration shall have the same rights of hearing and review as an applicant for admission under Rule 708.
(g) Certificate. If the documents submitted demonstrate that the applicant possesses the necessary qualifications and the Committee on Character and Fitness has filed no objection within the required time, and if the applicant has signed the required oath or affirmation and paid the initial required fee of five hundred dollars ($500), the Clerk will notify the applicant and issue a certificate of registration.
(h) Oath. Each applicant shall sign the following oath or affirmation: I ___________, do solemnly swear (or affirm) that as an attorney and as a counselor of this Court, I will conduct myself uprightly and in accordance with the Rules of this Court.
(i) Limitations on Practice. A lawyer registered in accordance with this rule shall be permitted to practice law to the same extent and subject to the same regulation as a lawyer admitted pursuant to Rule 701, except as follows:
(1) In any professional engagement involving the representation of a natural person resident in this state at the commencement of the representation, a registered lawyer must provide each client a written statement of the basis or rate of the lawyer's fee and a description of the lawyer's status as a registered lawyer.
(2) A registered lawyer may appear in every court in this state without regard to Rule 707 [provision for pro hac vice admission], provided that an admitted lawyer has also appeared for the same party.
(3) [Optional] A registered lawyer shall not prepare any deed, mortgage, assignment, discharge, lease or other instrument affecting real estate located in this state without the supervision of an admitted lawyer.
(4) [Optional] A registered lawyer shall not prepare any instrument or other paper relating to the marital relations, rights or duties of a resident of this state or the custody or care of the children of such a resident without the supervision of an admitted lawyer.
(5) [Optional] A registered lawyer shall provide proof of professional liability insurance applicable to any practice in this state in such amounts as the Court may require from time to time.
(j) Annual registration. A lawyer registered in accordance with this rule shall, as a condition of maintaining the registration, register and pay an annual registration fee on or before the first day of January as provided in Rule 756. At that time, a registered lawyer shall also certify that the lawyer remains in good standing in any other jurisdiction(s) in which the lawyer is registered or admitted.