June 29, 2001
Wayne J. Positan, Chair
ABA Commission on Multijurisdictional Practice
c/o John A. Holtaway
ABA Center for Professional Responsibility
541 No. Fairbanks Ct.
14 th Floor
Chicago, Illinois 60611
Re: Supplemental Comments on Multi-jurisdictional Practice
of the ABA Real Property, Probate and Trust Law Section
Dear Mr. Positan:
We are pleased to submit the following supplemental comments by the Real Property, Probate and Trust Law Section (the "Section") supporting the revision and rationalization of the law and ethical considerations governing the multi-jurisdictional practice of law.
In our written comments of January 23, 2001, and in the undersigned's subsequent oral testimony before the Commission at the mid-year meeting in San Diego, we emphasized: 1) the ongoing multi-state aspects of the practice of real estate law and probate and trust law by the members of our Section's two Divisions (Real Property and Probate, respectively); 2) the uniform laws, standards and methods of practice of real estate, probate and trust law making these areas more similar than dissimilar from state to state; 3) the enhanced access to local law that today's technology provides to all lawyers; 4) the protections that the MRPC 1.1 rule of competence affords all clients; 5) the informed wishes of our clients who ask their counsel to act in multi-jurisdictional contexts; and 6) and the need to cross state borders to represent our clients adequately in transactions and disputes that span more than one state. We concluded that current restrictions on the "unauthorized practice of law" should be changed to permit lawyers to practice on a non-permanent basis in other states.
We note that since our submission to the Commission, the American College of Real Estate Lawyers (ACREL) has submitted its position paper to the Commission. ACREL's views parallel ours and we wholeheartedly support the positions taken by ACREL in its submission. We also expect that the American College of Trust & Estate Counsel (ACTEC), at its summer meeting yet this week, will consider and endorse the positions taken by our Section.
Our observations of and participation in the ongoing hearings and debate reaffirm our commitment to the foregoing principles. For the reasons set forth below, we believe that liberalization of the rules can be accompanied with safeguards to permit the host state to police the practice of law within its borders by lawyers from out of state and to protect the host state's consumers of legal services.
First, the duty of competence imposed on all lawyers by MRPC 1.1 (or its Code of Professional Responsibility corollary) requires a lawyer practicing outside his or her home state to practice competently. That duty presumes that the lawyer will competently advise clients in the host state and, if unable to do so without assistance, will recommend to the client that competent local counsel be retained. Our position also assumes that the host state disciplinary authority will clearly have the jurisdiction to review the activities of and, in appropriate cases, discipline out-of-state lawyers who do not abide by the host state's standards of professional conduct. (The out-of-state lawyer should be responsible for determining whether or not the host state's ethical or legal standards governing the lawyer's practice in the host state differ from the lawyer's home state and, in any event, abide by the host state's standards while practicing there.)
Second, we reiterate the preeminent importance of client choice. If the client makes an informed decision to ask counsel to practice temporarily in another jurisdiction, we believe that decision should be generally respected. Often the client and lawyer form strong bonds and gain a mutual understanding and appreciation for each other, the client's objectives, and the nature and scope of the ongoing representation. To require the client to retain local counsel is an imposition, and often an expensive one. In addition, lawyers with specialities are frequently sought out by informed clients precisely for those specialties and the state of the lawyer's licensing is but one factor in the client's decision and often not a significant one. Of course, in all cases the client should be informed by the lawyer practicing temporarily or on a non-permanent basis in another jurisdiction that the lawyer is not licensed in that jurisdiction. Our approach would not distinguish between pre-existing or current clients and new clients.
In our January 2001 position paper, we commended to the Commission the approach to multijurisdictional practice reflected in the Michigan statute on the unauthorized practice of law. (Mich. Comp. Laws § 600.916.) We trust that the Commission will consider carefully Michigan's experience in its deliberations. We understand that Michigan's approach has in no way undermined the protection of its citizens and their expectations for the competent rendering of legal services by all lawyers in Michigan, whether licensed there or elsewhere.
If a lawyer decides to secure a permanent presence in the host state, we appreciate that the host state's regulatory interests may justify additional requirements. We concur with others who have suggested that the host state should be permitted to require the lawyer seeking permanent status ("admission") in the host state to have practiced for at least three years in another jurisdiction, to be a lawyer in good standing in that jurisdiction, and to have his or her competence and integrity attested to by at least two lawyers licensed in the host state.
Finally, we are compelled to respond to the notion that the practice of real estate, probate or trust law is more localized than other practice areas and thus requires more local counsel involvement. As we highlighted in our January submission to the Commission, the practice of real estate, probate and trust law has become increasingly national in scope requiring attorneys practicing in these areas to cross state borders on a regular basis. Moreover, the laws, regulatory framework and manner of conducting business in these areas have become more uniform. In planning estates and trusts, the issues to be resolved are predominantly national in scope, implicating the federal transfer (estate and gift) tax and income tax systems. Even in smaller, less tax-intensive estate plans and administrations, uniform state laws make the practice area often more similar than disparate from state to state ( e.g., the Uniform Principal and Income Act, the Uniform Trust Act, the Uniform Transfer to Minors Act, the Uniform Health Care Decisions Act, the Uniform Statutory Rule Against Perpetuities and the like.)
Similarly, in the real property context, the reliance upon uniform title insurance policy forms and survey standards, promulgated by the American Land Title Association, standardized forms for construction and design contracts published by the American Institute of Architects and the Association of General Contractors and uniform laws (such as the Uniform Commercial Code and the general application of basic contract law) make the practice of real estate law more alike than dissimilar from state to state. Moreover, title companies located in the state where the property is located (with their own in-house lawyers and outside counsel) are often retained to draft the conveyance documents and the state-specific transfer declarations, to prepare the affidavits necessary to satisfy local law requirements and to collect and disburse the appropriate amounts of transfer fees and conveyance and financing taxes.
Notwithstanding the trends toward uniformity outlined above, the Section acknowledges that laws affecting the practice of real estate, probate and trust law traditionally have varied from state to state. We note, however, that a lawyer's ability to access the statutes, rules, case law and local ordinances of another state have been enhanced greatly in past years. Furthermore, a board-certified estate planning specialist licensed in State A is more likely to identify the possible nuances of State B's probate and trust laws than an attorney licensed in State B who is not experienced in providing estate planning services for clients, and is as likely to understand such nuances as a board-certified specialist in State B. The State A specialist also will know when local counsel knowledgeable in estate planning in State B should be engaged to address complicated local issues. Thus, the standard of competence imposed by Model Rule 1.1, which imposes the duty to gain whatever knowledge of local law the task at hand requires (whether by research or consultation with competent local counsel), protects the consumers of legal services from receiving inadequate or improper advice far better than the current scheme of state-by-state licensing.
We have entered a new era of economic and professional globalization and communication. Our clients' needs and preferences should drive the debate and the ultimate decision about the multi-jurisdictional practice of law. We urge the Commission to adopt the approach suggested by this Section and other interested Sections and affiliated professional organizations to permit the practice of law on a temporary or nonpermanent basis by lawyers not licensed in the host state who are asked by their clients to respond to the clients' need for legal representation in the host state.
Louis A. Mezzullo, Chair of the ABA
Section of Real Property, Probate and Trust Law
David T. K. Tang, Vice Chair of the ABA
Section of Real Property, Probate and Trust Law