January 22, 2001
TO: ABA Commission on Multijurisdictional Practice
FROM: Section of Antitrust Law
RE: Multijurisdictional Practice of Law Issues
Interest of the Section
The Section of Antitrust Law comprises nearly 9,000 private practitioners, corporate counsel, federal and state enforcement officials, academicians, and judges interested in antitrust, economic competition, and consumer protection laws and policy. Its members generally have client interests and enforcement responsibilities that span state – and, indeed, international – borders.
The diversity of Section membership provides a variety of vantage points on these issues: as lawyers in private practice competing to provide services to clients; as corporate counsel both directly providing and purchasing legal services for multistate and multinational corporations; as federal enforcers conducting nationwide investigations and litigation; as state officials keenly concerned with protecting consumers and seeing that they enjoy the benefits of free competition; as academicians who may be called for advice from anywhere in the country; and as judges before whom lawyers appear from across the nation.
Section members are keenly interested in multijurisdictional practice issues, both as a matter of general policy and as those issues affect their own practices.
Summary Position of the Section
The Section of Antitrust Law urges the Commission on Multijurisdictional Practice ("MJP Commission") to recommend that the ABA promote measures to facilitate the multijurisdictional practice of law in order to enhance competition and to afford consumers – i.e., clients – the greatest freedom to choose from whom to obtain legal services and to obtain the most competent representation possible, consistent with preserving legitimate state interests in protecting the public from incompetent legal representation and unethical lawyer conduct.
Of the proposals in the Commission’s memorandum, the Section supports at a minimum reform of rules to permit clients to retain lawyers licensed in any state in connection with issues under federal or international law and incidental state law, and the ability of inhouse lawyers licensed in any state to practice law on behalf of their employer and affiliated companies anywhere in the United States. Proposals for national admission by motion or national licensing are deserving of serious consideration but require further study to determine their feasibility and whether their administration will promote or impede consumer choice. The Section is concerned that proposals to require admission pro hac vice to perform investigations prior to filing litigation, to pursue discovery in a jurisdiction other than that in which a suit is filed, or to conduct arbitration or mediation could result in bureaucratic procedures that unduly burden lawyers, clients, and the courts.
The Section generally favors the approach of Section 3 of the new Restatement of the Law Governing Lawyers, which authorizes a lawyer to provide in another jurisdiction legal services related to the lawyer’s practice in a jurisdiction where the lawyer is licensed.
The Section supports the proposed amendment to Model Rule 8.5(a), which subjects a lawyer to discipline for activities within a jurisdiction other than that in which the lawyer is admitted. The Section would prefer that amendments to Rule 5.5 follow the general approach of the Restatement § 3, and offers revisions to the language of the proposed amendments to the Rule and its comments.
Free market competition in the provision of goods and services is the fundamental economic engine of this nation. Lawyers enjoy no general exemption from the policy mandating that they compete with each other to provide clients with the best services at the best prices. See, e.g., FTC v. Superior Court Trial Lawyers Ass’n, 493 U.S. 411, 424 (1990); Goldfarb v. Virginia State Bar, 421 U.S. 773, 786-88 (1975).
Advances in communications and transportation have enhanced consumers’ breadth of choices in selecting legal counsel. Today, potential clients can choose among lawyers and law firms from across the country, weighing their experience, fees, and expenses against those of local lawyers.
Federal antitrust and consumer protection practice is unquestionably national in scope. It is based principally on federal statutes that apply throughout the country. Advice on those statutes and their attending regulations and guidelines is as good in California as it is in Connecticut. Corporate counsel in Michigan will not want to hire different lawyers to conduct antitrust compliance programs in each of the states in which the company operates. Federal antitrust laws, moreover, are enforced by lawyers and officials of the Department of Justice ("DOJ") and Federal Trade Commission ("FTC") who, though based in the District of Columbia, may conduct investigations and file litigation anywhere in the United States. A Washington corporation seeking to acquire a Massachusetts company may well prefer to seek counsel from a law firm with experience in negotiating with the DOJ and FTC that may or may not be located in the state of either of the companies. The target of a federal antitrust investigation in Florida may want to be represented by Texas counsel who previously dealt with DOJ staff attorneys investigating the same industry.
In recent years, state antitrust laws have generally adopted the provisions of federal statutes. See generally ABA Section of Antitrust Law, State Antitrust Statutes and Practice (2d ed. 1999). So too have state consumer protection statutes, often dubbed "Baby FTC Acts." To be sure, there are significant variations from state to state. But those state laws reflect approaches and policies that are familiar to antitrust and consumer protection lawyers everywhere. 1 Moreover, state antitrust and consumer protection officials today frequently coordinate their enforcement actions against alleged practices that are multistate in scope. An experienced Ohio antitrust lawyer may well have more experience in dealing with state assistant attorneys general in New York and California than many lawyers licensed in those states.
In sum, in seeking counseling and representation on antitrust and consumer protection matters, clients today demand broad choices: whether to have inside counsel provide advice on its nationwide and global operations, or to select from a myriad of experienced attorneys across the country. The Section supports all efforts to eliminate barriers restricting the range of client choice.
Promoting Legitimate State Interests
States have a legitimate interest in protecting the public from incompetent legal representation and from unethical lawyer conduct. The Section has enjoyed the participation of members of the National Association of Attorneys General ("NAAG") and will urge NAAG to encourage the participation of state antitrust and consumer protection enforcers in the debate over multijurisdictional practice, and the appropriate balance of state regulatory interests and benefits of competition among providers of legal services. The Section believes that a state’s interest in protecting the public from incompetent or unethical counsel should be implemented by means that least restrict competition and consumer choice for legal services.
As noted earlier, much of today’s legal practice – particularly antitrust and consumer protection – is based on federal statutes and regulations or state laws that have become increasingly uniform. Interstate business transactions are likely to require advice on the laws of several states, not just one. As legal practice becomes more highly specialized, passing the bar of a state provides no guarantee of competence in a desired area. The client may be served best by choosing counsel from another state, particularly on issues of federal law or transactions of interstate or international scope.
If the client feels aggrieved by the alleged noncompetence of out-of-state counsel, it has legal and administrative remedies. It can sue the lawyer for malpractice, or it can file a grievance with the appropriate authority within the state. Some states have adopted a variation of Model Rule of Professional Conduct 8.5(a) that expressly subjects out-of-state lawyers to discipline for conduct within the state. The ABA Commission on Evaluation of the Rules of Professional Conduct (Ethics 2000) has recommended amending Model Rule 8.5(a) to include that express provision. The Section supports that amendment. A state grievance body could impose a variety of sanctions, including a ban on the lawyer’s practicing law again in the state, and could forward its findings to the jurisdiction(s) in which the lawyer is licensed.
Similarly, an out-of-state lawyer who engages in unethical conduct within a state would be subject to discipline by the state’s regulatory authority. In this regard, a lawyer who solicits clients or advertises within a state must expect to abide by the state’s rules governing such conduct. The Section does not believe that a lawyer’s advertisement of services on a website should be subjected to the rules of all 50-plus United States jurisdictions, merely because the site can be accessed from anywhere in the world. Rather, the lawyer must purposefully seek out or serve clients in a particular state before becoming subject to its disciplinary rules.
Section Position on Multijurisdictional Practice Proposals
As explained above, the Section generally favors an approach to multijurisdictional practice that affords the greatest level of competition for legal services, with rules promoting legitimate state interests in protecting the public that least restrict clients’ ability to choose their lawyers.
Proposals in the Commission Memorandum
Your November 1, 2000 memorandum includes a variety of proposals to better accommodate multijurisdictional law practice. The Section urges the Commission to support recommendations that would accommodate (at least) all of the hypothetical situations in the memorandum.
As you note, the proposals for resolving the current uncertainty in connection with interstate practice are offered for discussion purposes, and are not mutually exclusive. But none, standing alone, is sufficient to address client demand for the broadest choice in selection of counsel. At a minimum, the Section urges adoption of the Eighth Proposal, that clients be able to choose from among lawyers licensed anywhere in the nation to provide advice on matters of federal or international law and incidental state law. Federal and state courts today recognize that advising on federal law does not impact legitimate state interests. See, e.g., Sperry v. Florida, 373 U.S. 379 (1963); Attorney Grievance Comm’n of Maryland v. Bridges, 360 Md. 489, 759 A.2d 233 (2000).
The Section also urges adoption of a variation of the Second Proposal, namely, the ability of in-house counsel licensed in any state to practice law on behalf of their corporate employer and affiliated companies anywhere in the United States. As noted in the Restatement, that lawyer’s only client is the corporation "who is presumably in a good position to assess the quality and fitness of the lawyer’s work."
Although the proposals for national motion admission or national licensing may at first blush appear to offer the greatest level of competition and consumer choice, they would require considerable study to determine whether they are feasible and whether their administration may unduly interfere with consumer choice.
The Section has reservations about the Fifth and Sixth Proposals, which essentially call upon states to establish procedures providing for admission pro hac vice to conduct investigations in a jurisdiction prior to filing a lawsuit, to conduct discovery in a jurisdiction other than that in which litigation is filed, and to participate in alternative dispute resolution proceedings such as arbitration or mediation. The Section is concerned that such proposals could lead to states’ adopting procedures that will unnecessarily hamper lawyers trying to serve their clients effectively and efficiently, endanger client confidences ( e.g., by requiring a public filing that the lawyer is investigating the possibility of filing a lawsuit), and add to the workload of already over-burdened courts.
Below, the Section comments on proposals beyond those in the November 1, 2000 Commission memorandum.
Restatement of the Law Governing Lawyers
The Section is impressed with the approach to multijurisdictional practice in the American Law Institute’s Restatement of the Law Governing Lawyers (Proposed Final Draft, December 1999). The Restatement, noted for its protection of client interests, provides in § 3 – Jurisdictional Scope of Practice of Law by a Lawyer:
A lawyer currently admitted to practice in a jurisdiction may provide legal services to a client:
(1) at any place within the admitting jurisdiction;
(2) before a tribunal or administrative agency of another jurisdiction or the federal government in compliance with requirements for temporary or regular admission to practice before that tribunal or agency; and
(3) at a place within a jurisdiction in which the lawyer is not admitted to the extent that the lawyer’s activities arise out of or are otherwise reasonably related to the lawyer’s practice under Subsection (1) or (2).
The Section believes the Restatement § 3 approach, amplified by the Comments and Reporter’s Note, protects the client’s ability to choose counsel from those admitted in various jurisdictions.
Proposed Amendments to Model Rule 5.5
The Ethics 2000 Commission has proposed amendments to Model Rule 5.5 to accommodate multijurisdictional practice. In particular, the amendments identify "safe harbors" for specified lawyer conduct in jurisdictions in which the lawyer is not formally admitted. As the Chair’s Introduction summarizes them: "1) where the lawyer is preparing for a proceeding in which the lawyer expects to be admitted pro hac vice; 2) where the lawyer is acting on behalf of a client of which the lawyer is an employee, or on behalf of the client’s other employees; 3) where the lawyer is handling a matter that is ‘reasonably related’ to the lawyer’s representation of a client in a jurisdiction in which the lawyer is licensed; and 4) where the lawyer is ‘associated in a particular matter’ with a lawyer admitted in the jurisdiction."
The Section commends the Ethics 2000 Commission for its effort to accommodate client choice. The four safe harbors it identifies cover the most common multijurisdictional practice situations. The Section, however, prefers the more general approach of the Restatement and fears that disputes over the language of proposed amendments to Rule 5.5 may be used to support restrictions on multijurisdictional practice and client choice.
In particular, the Section is concerned with the final language change in the third proposed safe harbor, which provides shelter when "the lawyer acts with respect to a matter that arises out of or is otherwise reasonably related to the lawyer’s practice on behalf of a client in a jurisdiction in which the lawyer is admitted to practice." The drafting history, the comments, the Commission’s philosophy, and common sense lead to the conclusion that the phrase "in a jurisdiction in which the lawyer is admitted" modifies "the lawyer’s practice," as was clear in the prior drafts. It could be argued, however, that the final wording requires that the client be in the jurisdiction in which the lawyer is admitted. Such an interpretation would be unduly restrictive, contrary to common practice, and the Section urges the Ethics 2000 Commission to confirm that this was not its intent. A model rule, or an interpretation of an existing rule, that limits client choice would unduly interfere with current attorney-client relationships, and should be avoided.
Further, although the language of the second safe harbor is clear, some could read Comment 4 as suggesting that in-house counsel should be admitted to practice in the jurisdiction in which they reside, except "in circumstances that may make it impractical." The Section includes many who are or who have served as in-house counsel and whose acceptance of an inhouse position may require a move to a jurisdiction in which he or she is not admitted, or whose tenure within a corporate organization requires transfer to different locations. The Section does not believe corporate counsel should be subjected to another bar examination with each move. It agrees with Comment 4’s observation that "Given that these clients are unlikely to be deceived about the training and expertise of these lawyers, lawyers may act on behalf of such a client without violating this Rule."
Harmonization of Federal Local Rules
The Section fully supports the ABA’s efforts to encourage the Federal Judicial Center to develop uniform local rules on the admission of attorneys to the bars of federal district courts, as set forth in the October 17, 2000 letter to Hon. John W. Lungstrum from Robert D. Evans of the ABA Governmental Affairs Office. Specifically, among other things, that letter urged consideration of a 1995 ABA resolution recommending the elimination of a requirement of state bar membership in the forum state.
Because of the shortness of time, these comments are limited to multijurisdictional practice issues raised by interstate practice in the United States. But the Section believes that the ABA should diligently support efforts to work with officials of other countries and organizations to develop reciprocal rules or agreements to facilitate multijurisdictional practice across international borders. Extending the tenure of the MJP Commission for an additional year would permit fuller consideration of recommendations affecting international practice. The Section is currently working with officials from the European Commission on recognizing that the attorney-client privilege attaches to clients that confer with legal counsel from outside the European Community and with corporate counsel.
The Section of Antitrust Law appreciates the opportunity to comment on these issues and looks forward to working with the MJP Commission.
1. The phenomenon is international as well as interstate. A sitting member of Mexico's Federal Competition Commission told a gathering of antitrust lawyers in Texas that he would advise Mexican clients to consult American antitrust lawyers on Mexico's newly enacted Federal Economic Competition Law because they would be more familiar with the economic concepts and policies of the new law than Mexican lawyers. Similarly, the head of Competition Directorate of the European Commission has noted that it applies many of the principles of U.S. antitrust laws. A multinational corporation may wish to have one international firm or even one lawyer advise it on the competition law consequences of a merger with global impact.