1 AMERICAN BAR ASSOCIATION
2 COMMISSION ON MULTIJURISDICTIONAL PRACTICE
13 TRANSCRIPT OF PROCEEDINGS
14 JANUARY 26, 2001
21 On January 26, 2001, at 2:35 p.m., the meeting
22 of the American Bar Association Commission on
23 Multijurisdictional Practice was held at the Le Meridien
24 Hotel, 650 North Pearl Street, Dallas, Texas, reported
25 by Therese J. Casterline, CSR.
1 A P P E A R A N C E S
3 Mr. Wayne J. Positan, Chair
4 Mr. Peter D. Ehrenhaft
5 Mr. Stephen Gillers
6 Mr. Charles E. McCallum
7 Mr. Larry Ramirez
9 Mr. Bruce A. Green
10 Ms. Pamela Manson
12 Mr. Lucian T. Pera
13 Mr. William P. Smith
15 Mr. Brian D. Melton
16 Ms. Chris Tozer
17 Ms. Donna Fraiche
18 Ms. Nancy Gourley
19 Ms. Carol Needham
21 Ms. Jeanne P. Gray
22 Mr. John A. Holtaway
1 P R O C E E D I N G S
2 MR. POSITAN: I'm Wayne Positan. I've
3 been asked to act as Chair, after the departure of
4 Harriet Miers to Washington, D.C. and her position
5 there, in the interim until President Martha Barnett
6 selects a chair.
7 We have come here today as part of a
8 process that started back last fall, in which this
9 Commission was created and charged with undertaking an
10 objective and comprehensive national study on the
11 application of current ethics in bar admission rules
12 concerning the multijurisdictional practice of law.
13 We've been asked to analyze the impact of
14 those rules on practices of in-house counsel,
15 transactional lawyers, litigators, administrators and
16 lawyers and law firms maintaining offices and practicing
17 in multiple states, in federal jurisdictions, and also
18 review international issues related to MJP in the United
20 We have, as a Commission, decided at our
21 very first meeting to seek as much input as we can from
22 the various components of the bar, including state bars
23 and sections of the ABA and other groups of lawyers.
24 And I know that effort has gone on in
25 states that formed their own MJP studies: New Jersey,
1 for example, where I live and practice. We're heavily
2 engaged in that effort. We've sought input from county
3 bar leaders and various committees of the bar.
4 And what we're attempting to do is to
5 hold the hearings, and really something beyond hearings
6 at this point, really educational sessions, which are to
7 solicit viewpoints of people, talk about problems,
8 educate attorneys in all areas of practice, to the
9 extent that they're not aware of the problem, to get as
10 much input as we can possibly as to how attorneys feel
11 about it.
12 We haven't shaped any views ourselves at
13 this point. We really want to get around the country.
14 We're having meetings here in Dallas today, which is the
15 first. We're having further sessions in San Diego at
16 the midyear meeting of the ABA coming up in a couple of
17 weeks. We're also pretty much committed at this point,
18 although we haven't set dates, to do some hearings in
19 Chicago, Atlanta and New York.
20 And, once again, what this really is is
21 an outreach, so that we can better understand people's
22 perceptions of problems and concerns; and, hopefully, in
23 the end, come up with some kind of a consensus to take
24 some recommendations back to the ABA and to see what
25 kind of process we can then recommend.
1 Whether we'll do that, ultimately, or not
2 is open to question. But that's what we're here for
3 today, is to talk to people and to try to get that kind
4 of communication.
6 MS. GRAY: Should we go around the table
7 and have people -- introduce them before we --
8 MR. POSITAN: Sure.
9 At this point, I would really like the
10 members of the Commission and the others here -- we have
11 a bunch of liaisons -- also to just kind of say who they
12 are and a word or two about what their particular role
13 is in the law, just so that we all kind of have an idea
14 of everybody at the table.
15 Maybe I'll start with Lucian.
16 MR. PERA: Oh, with me?
17 MR. POSITAN: Yeah, sure.
18 MR. PERA: Oh, all right. I'm Lucian
19 Pera. I'm a lawyer from Memphis, and I'm here as
20 liaison from Ethics 2000.
21 MS. NEEDHAM: My name is Carol Needham,
22 and I teach -- I'm a law professor at St. Louis
23 University School of Law, and I've had a longtime
24 interest in multijurisdictional practice, especially as
25 it applies to transactional and in-house counsel work.
1 MR. EHRENHAFT: I'm Peter Ehrenhaft. I'm
2 an lawyer in Washington, D.C., newly appointed to this
3 Commission. I'm an international transactions lawyer.
4 And these rules have a very significant impact on what I
5 do and what American lawyers wishing to practice abroad
6 will be doing.
7 MR. GILLERS: Stephen Gillers. I teach
8 at New York University Law School, including a course on
9 lawyer regulation. The rules have almost no impact on
10 what I do, but I'm very interested in what they are.
11 MR. RAMIREZ: I'm Larry Ramirez. I'm a
12 solo practitioner from Las Cruces, New Mexico. I'm also
13 past chair of the general practice solo/small firms
14 section, and also past chair of the Disciplinary Board
15 of the Supreme Court of New Mexico. I guess my major
16 focus is in solo/small firm practitioners, how these
17 rules affect that.
18 MR. GREEN: I'm Bruce Green. I teach at
19 Fordham University School of Law. I'm their reporter to
20 the Commission.
21 MR. HOLTAWAY: I'm John Holtaway. I'm
22 with the ABA Center for Professional Responsibility, and
23 I'm staffing the Commission on Multijurisdictional
24 Practice, and I also staff the standing committee on
25 client protection.
1 MR. POSITAN: Wayne Positan. Once again,
2 just to add a few details about my practice, I'm
3 managing director of a 30-attorney firm in New Jersey,
4 specialize in labor/employment law and litigation. And
5 I'm also director of Divisions Designate of the ABA
6 Section of Litigation Council, and I chair their Council
7 Committee on MJP, as well as the New Jersey State Bar
8 Association MJP Committee, and the Board of Trustees of
9 the State Bar as well.
10 MS. GRAY: Jeanne Gray, director of the
11 ABC Center for Professional Responsibility. And we are
12 the division within the American Bar Association that
13 deals with issues of ethics and regulation and
14 discipline of both lawyers and judges, and this
15 committee is housed within our group.
16 MS. FRAICHE: My name is Donna Fraiche.
17 I'm with the law firm Locke, Liddell & Sapp, and
18 therefore I'm Harriet Miers' former partner. Or she's
19 my former partner, actually. I'm with the New Orleans
20 office of the multistate firm. We've got over 500
21 lawyers, and I'm managing partner of that office.
22 And I was asked to be a member of the
23 Louisiana Commission, which is, like this larger
24 commission, studying the issue with an effort to report
25 back to the Louisiana State Bar Association with
1 recommendations at this time.
2 I am not in a position to testify on
3 behalf of the Louisiana State Bar's Commission, because
4 we were only still discussing the issue. We've had one
5 meeting, and we'll have another meeting in a couple of
7 MS. TOZER: I'm Chris Tozer. I'm with
8 ABA Media Relations and Communications Services, and I'm
9 here to help the Commission with its communications and
10 with its media relations. Part of that was inviting
11 some reporters here, one of whom showed up, Pam Manson,
12 from The Texas Monthly.
13 MS. MANSON: Texas Lawyer.
14 MS. TOZER: Texas Lawyer, I'm sorry.
15 MS. GOURLEY: I'm Nancy Gourley. I am a
16 solo practitioner from Tulsa, Oklahoma. I'm a member of
17 the Board of Governors of the Oklahoma Bar Association,
18 and I'm here as its official representative, but not to
19 make any statements. We, too, are -- like Donna's group
20 is beginning to look at the issue and gathering
21 information ourselves.
22 I am a member of the MJP subcommittee of
23 our board, and members of our subcommittee will be
24 attending all the hearings that we can attend.
25 I'm also a member of the Rules Committee
1 of our bar, and so whatever we decide on doing, I will
2 be involved in the committee that works with it.
3 MR. POSITAN: In terms of this proceeding
4 today, really, it's not -- not a hearing at this
5 juncture. And we certainly realize that your
6 participation is, at this juncture, one that I find
7 myself confronted with, although we got a little bit
8 earlier start in New Jersey. We haven't come to any
9 kind of conclusions yet, but we're still seeking all the
10 input that I referred to.
11 And from the standpoint of the really
12 moving forward on this, from my perspective -- and I
13 open it up to the other Commission members as well -- I
14 would certainly like to take the time today that we can
15 have together to perhaps engage in some discussion or
16 some perceptions, questions, guidance that we may be
17 able to give you in terms of the kinds of things that
18 we've been talking about, at least as identifying issues
19 and things that we have seen some consensus perhaps
20 building on, and other things that we haven't, or any
21 other questions that you might have that we may assist
22 you really in going forward and getting the kind of
23 input that we're looking for as well as you.
24 So, you know, I don't really see this
25 as, you know, it's your turn to speak, and let's go for
1 15 minutes, and then we'll have questions and answers.
2 I would rather see some kind of a round-table
3 discussion, really, and, you know, kind of just discuss
4 issues and see where we go from there.
5 If either of you would like to kind of
6 start in terms of -- I've been doing a lot of talking,
7 so --
8 MS. GOURLEY: I can tell you kind of what
9 Oklahoma does. In looking at the information that's
10 been provided by the Commission -- I think I've read
11 pretty much everything that's come out so far, because
12 we have a chair of our little committee that e-mails us
14 Oklahoma actually has a fairly liberal
15 ability of people to practice in our courts. We have a
16 rule that permits pro hac admission on motion. And one
17 version of it that we haven't exactly been able to
18 determine whether it's really been repealed or not,
19 because we do that sometimes, pass new things and don't
20 repeal the old ones --
21 MR. POSITAN: A problem in every state.
22 MS. GOURLEY: Yes -- permits reciprocity
23 practice without local practioners present. You know,
24 if the other state would permit Oklahoma lawyers to
25 appear without a local practitioner, then our rule, one
1 version of it, would as well. Otherwise, you have to
2 appear with a local practitioner.
3 Our State Bar admission rules, which the
4 board I'm on has absolutely no authority over -- it's a
5 separate board of bar examiners, as it is in most
6 states, I think -- also has rules for temporary or
7 special licenses for in-house counsel and provisions for
8 lawyers who practice solely in federal court, and
9 they're similar to the other states that have them that
10 require only that you not take money from any outside
11 clients or people outside that category for doing legal
13 MR. EHRENHAFT: Could I ask a question --
14 MS. GOURLEY: Sure.
15 MR. EHRENHAFT: -- about the federal
16 court aspect? Because so many federal causes of action
17 have related state court aspects.
18 So if you talk about patent law, for
19 example, you have a contract issue, government
20 procurement, you often have state law issues of contract
21 law and so on. How is that handled in that --
22 MS. GOURLEY: I don't have the rule in
23 front of me, and I can't -- I can't say. My
24 recollection is that it just has to do with practicing
25 in federal courts.
1 MR. EHRENHAFT: Well, but a federal court
2 case --
3 MS. GOURLEY: Right.
4 MR. EHRENHAFT: -- a patent infringement
5 case, for example, could --
6 MS. GOURLEY: I know. I know.
7 MR. POSITAN: We see that in New Jersey.
8 Employment discrimination cases usually have -- if
9 they're brought in federal court, most practitioners in
10 New Jersey, because of certain liberal rules we have on
11 punitive damages and the like, and because of the sense
12 that they have about juries, tend to bring
13 discrimination only under the state statute, and avoid
14 bringing any federal causes of action, so that we can't
15 remove them on the defense side.
16 But if you do get cases, for example,
17 where there's a 42 USC 1983 case, oftentimes you'll see
18 some kind of a state cause of action in there as well.
19 So, apropos, there are a variety of areas that lower
20 that habit, I think.
21 MS. GOURLEY: Our rule also permits
22 special -- temporary special admission for law
23 professors, with severe restrictions on what they can
25 MR. EHRENHAFT: Grading the judge.
1 MS. GOURLEY: They can act as consultants
2 to practitioners, and there are some other things that
3 they can do, but it's not an unlimited ability to appear
4 in court. They also can get an admission without
5 motion -- I mean, without examination, admission on
6 motion, if they want to generally practice law.
7 MR. POSITAN: Are there any kind of
8 limitations on pro hac vice admissions; in other words,
9 case limitation, let's say, per attorney per year or
10 something like that?
11 MS. GOURLEY: No. And, in fact, it's
12 such a loose procedure that there's no -- there is no
13 procedure for it; it's just a one-paragraph rule,
14 basically. And each court just takes a motion and
15 really doesn't have any particular requirements. I
16 usually do them with an affidavit and a proof of
17 admission in the other state, but it's really not
18 required under the rule.
19 MR. POSITAN: Do they have to pay IOLTA
20 fees and things like that --
21 MS. GOURLEY: No.
22 MR. POSITAN: -- or any other kind of fee
23 for admission?
24 MS. GOURLEY: No.
25 MR. POSITAN: In New Jersey, you have to
1 make an IOLTA deposit, and it gets reviewed every year
2 and renewed every year, the application.
3 MS. GRAY: I had a question. You were
4 saying that law professors can be admitted on motion to
5 practice in a particular case or to engage in the
6 general practice of law?
7 MS. GOURLEY: No, I'm talking about under
8 the usual rules for admission on motion, which is five
9 years' practice, five out of the last seven years, kind
10 of the standard provision.
11 MS. GRAY: Right.
12 MS. GOURLEY: If they qualify, of course,
13 they can be admitted under the general rule.
14 MS. GRAY: I see. Okay.
15 MS. GOURLEY: If they don't qualify under
16 that rule, they can get the special law professor
17 admission. It's not just a general license to
19 MS. GRAY: Okay.
20 MR. POSITAN: One of the things that
21 we've been talking about in the litigation context is
22 whether you can do prelitigation things: investigation
23 or, in my field, let's say somebody wants you to come in
24 and do an antiharassment investigation or review their
25 policy or thinking that it may ultimately lead to a
1 lawsuit, or you think you're going to be retained,
2 but you're still interviewing witnesses and going down
3 to the site or talking to people about whatever happened
4 that might be the subject matter of litigation, where
5 you could ask to do a mediation or an arbitration,
6 because there's a clause in the agreement, let's say.
7 You know, that's the part of pro hac vice that really
8 isn't covered in most states, at least that I'm aware
10 MS. GOURLEY: Our rule is not restricted
11 to that, one way or the other.
12 MR. POSITAN: Obviously, you can't make
13 an application anywhere where nothing is going on yet.
14 Or maybe you should be able to. That's one of the
15 things we're kind of wrestling with.
16 MS. GOURLEY: Right.
17 MR. HOLTAWAY: For the in-house counsel
18 or law professor, is there any registration form or --
19 MS. GOURLEY: Through the Board of Bar
20 Examiners, there is a form, and you have to have a
21 character and fitness report.
22 MR. HOLTAWAY: Do they pay an annual
23 registration fee?
24 MS. GOURLEY: Yes.
25 MR. HOLTAWAY: Is it the same as what an
1 in-state generally --
2 MS. GOURLEY: I believe it is. I believe
3 they have to pay a -- I don't have the rule in front of
4 me, but they do pay an application fee, a one-time
5 application fee, and it's a fairly typical-type fee. I
6 don't remember how much it is, $750 or something like
7 that, that covers the cost of the Board of Bar
8 Examiners' application process, plus the character and
9 fitness report. I mean, that's all included in the fee.
10 And then they pay -- I think they pay dues annually.
11 MR. EHRENHAFT: Assuming that there are
12 lots of oil companies down there --
13 MS. GOURLEY: Not so many anymore.
14 MR. EHRENHAFT: There may have been at
15 one time.
16 MS. GOURLEY: In fact, one just left and
17 went to Houston this week.
18 MR. EHRENHAFT: Darn. But, anyway, you
19 had some --
20 MS. GOURLEY: Uh-huh.
21 MR. EHRENHAFT: -- most of whose
22 headquarters may have been in other states or at least
23 the general counsel's office may have been in New York
24 or something like that.
25 I mean, as a practical matter, what does
1 Oklahoma do or what is its experience with regard to
2 lawyers from the general counsel's office coming to
3 brief people on sexual harassment or patent records or
4 antitrust advice or almost anything else a general
5 counsel's office would send troops into the field to
6 brief management and local law offices?
7 MS. GOURLEY: All I can say is, I don't
8 think it's ever come up in any kind of official way, not
9 that I'm aware of. I don't think there's been any
10 complaint against anybody or any adjudication of any
11 issue like that or any bar action.
12 MR. EHRENHAFT: Do you think that your
13 board would object to a statement to be transparent,
14 saying that we don't think that it is necessary to
15 regulate that kind of behavior?
16 MS. GOURLEY: I have no idea what my
17 board would say.
18 MR. EHRENHAFT: Well --
19 MS. GOURLEY: I really don't.
20 MR. POSITAN: That's one of the areas
21 that we're really kind of looking for, is one of the
22 points that really came up that is triggering all of
23 this: What do you think of transactional lawyers, not
24 employed lawyers, in-house counsel?
25 You know, somebody I had at my New Jersey
1 meeting about two weeks ago, one of the people told me
2 that they had a partner -- a fairly large firm in
3 New Jersey; it was a very large corporate practice --
4 the partner in question has pretty good expertise in
5 very sophisticated leasing arrangements, and was
6 approached by a client, not an actual firm client but
7 kind of a related entity, who had business in about 20
8 states, and they wanted this partner to go around and be
9 their leasing expert, none of the work involved in
10 New Jersey, which is where his office is. And I know
11 some of the states were in this area.
12 But that's an interesting question that
13 we really kicked around, never came up with an answer in
14 our discussions.
15 MS. GOURLEY: I don't think --
16 MR. POSITAN: But, you know, what do you
17 think about somebody like that?
18 MS. GOURLEY: I don't think Oklahoma is
19 any different than any other state in that regard. We
20 have areas of practice where we have lawyers in Oklahoma
21 who are probably the world's expert in some areas of
22 agriculture-related law and other things, that my guess
23 is, they provide legal advice to people all over the
25 And we have had in the past,
1 historically, a number of worldwide headquarters of
2 companies in Oklahoma. The oil companies used to all be
3 headquartered there. They no longer are. But I'm sure
4 that we've had these issues come up all the time.
5 We have very few law firms in Oklahoma
6 that are either branches of out-of-state firms or have
7 out-of-state branches. It just -- there's probably a
8 handful that do.
9 MR. PERA: But, Wayne, following up on
10 your point is that -- I noticed how you phrase that.
11 But doesn't everybody in the room understand or agree
12 that that's going on every day; in other words, that
13 those engagements are in fact accepted, and those
14 lawyers are in fact traveling to those 20 states, and
15 are in fact soliciting clients for work in those 20
16 states, and probably 15 of the 20 would probably never
17 dream of hiring local counsel?
18 MR. POSITAN: Well, this person indicated
19 the person that was doing that. The other people around
20 the table that night were uncomfortable with that.
21 MR. EHRENHAFT: Who were the people
22 around the table?
23 MR. POSITAN: Very varied practitioners
24 from very different areas of practice. There were
25 about -- you know, our committee in New Jersey has about
1 10 people on it, ranging from in-house counsel to solos,
2 bond attorneys, commercial litigators. It's a pretty
3 diverse group.
4 I mean, it was a split. Probably half
5 the people voted it was okay, and the others said they
6 had a problem; that's something we ought to talk about
7 further. Again, no conclusions any more than --
8 MR. PERA: Well, but as a factual
9 matter -- and maybe we need to verify this, but I sure
10 see it quite a bit. I mean, surely -- I mean, is there
11 any doubt that this is going on? I mean, I could only
12 assume, for example, that, you know, the big move over
13 the last three or four or five years, at least in our
14 part of the country, has been for law firms to be more
15 and more regional, to go from being in one state to
16 three, or three to 12 or whatever.
17 And the reason for that is so that their
18 Nashville labor law expert can get business from the
19 other 12 states, right? I mean, isn't that the --
20 that's the economics driving the profession right now.
21 MR. POSITAN: There is no question that a
22 lot of these things are happening. But the other day,
23 with Susan Hackett, I made a presentation with Chief
24 Justice Shepard down at the conference of chief
25 justices, and some of the feedback we got was
2 A couple of the chief justices remarked
3 that they really didn't want to hear an analytical
4 framework for us saying that you're all breaking the
5 law; so now fix it; bring us into conformance. That's
6 not the way you should start your debate.
7 The second thing I came away from that
8 with by way of comments that we were getting back,
9 people who came up to the lectern afterwards, was, you
10 know, please take the message back to the Commission:
11 Don't underestimate how important we think disciplinary
12 procedures are.
13 Those are the two things that I came away
14 with that were said rather strongly from different
15 quarters. I think we're going to probably hear a little
16 bit of that out in San Diego when Chief Justice
17 VandeWalle talks out there.
18 One of the people that expressed that --
19 some of that -- I think the Chief Justice from Arizona,
20 I believe, was the one that first brought it up.
21 But, you know, those comments were made
22 by the people who ultimately will make the rules.
23 MR. RAMIREZ: I understand that they feel
24 that way. But UPL prosecutions, for example, in my
25 knowledge and experience, are almost nonexistent. The
1 Supreme Court of the State of New Mexico, when I was the
2 chair of the disciplinary board, talked about, you know,
3 the need to enforce the disciplinary rules, do this and
4 do that. When one would take a case before them, they
5 always kind of backtracked or reached instant results.
6 So, you know, I agree that the law is the
7 law, and these rules are on the books, but they're
8 just -- I don't see where they're really being enforced.
9 MR. EHRENHAFT: I think the comments
10 that you received were very encouraging, to a radical
11 like me, because I think the comment is absolutely
12 right, that we can't start from the premise everybody's
13 doing it and therefore let's make the law conform to the
15 That isn't, I don't think -- that would
16 be, I think, an inappropriate way to respond to the
17 phenomenon. But it also suggests that perhaps that our
18 law ought to be looked -- we shouldn't preserve a law
19 that is so widely flouted or not followed, and therefore
20 we have a cleaner slate on which to write in making a
21 proposal for the profession, as it is today, and not be
22 as concerned, as perhaps people, well, we've done it
23 this year for 100 years and how can we dismantle it.
24 It's not a question of making the law
25 conform to the profession, but what is an appropriate
1 law for the profession, and don't worry about what has
2 gone before.
3 MR. POSITAN: I think the approach is
4 important, and that's -- a lot of times, like everything
5 else in our practice, how you present, how you approach,
6 how you get the message across -- and we've been
7 talking -- I know in some of our respective e-mails
8 about do you use a top-down approach or a bottom-up
9 approach, and I think it becomes apparent, when you get
10 this kind of feedback, as to what approach you have to
11 take, as least in terms of how you phrase the debate,
12 how you move forward into it, and then try to shape some
14 So what I got was, be careful how you do
15 it, how you say it, because you may end up saying the
16 same thing, but how it gets received is very important.
17 MR. PERA: Well, can I take a stab at
18 that? Because the first person I heard express this,
19 and did so well, and it's exactly -- it's exactly the
20 record at that point, was Bill Lawrence, who is the like
21 in-house counsel at Dorsey & Whitney, a huge, huge firm.
22 And what he said was that we've gotten to
23 a point where good, competent, respected lawyers who try
24 to do the right thing in following established practices
25 of a number of years, have now woken up and realized,
1 wait a minute, what I'm doing does not comport with the
2 black-letter law.
3 Now, you can spin that the other way, as
4 you did a couple of minutes ago, and say, well, we can't
5 change the law just because people are breaking it. But
6 if there is in fact a consensus, by action, by the fact
7 that, you know, apparently Bill's partners who do this
8 quite a bit, I gather, are not being, you know, stripped
9 of their law licenses, and in fact people look up to
10 them and believe they're doing the right thing, you
11 know, that's a little different spin on it.
12 And I suspect that those folks who
13 don't -- who don't practice in areas that -- where this
14 is an issue, whether that's because they're on the state
15 supreme court or because they practice, you know, in
16 personal injury law in their own state, and they don't
17 get clients from out of state -- just because they don't
18 know what's going on or because, in their circles, it's
19 not accepted, doesn't mean that, you know, the law is
21 MR. POSITAN: Well, that's why we're
22 lucky to be blessed with such fine academicians on our
23 Commission who are going to have write this in the end.
24 MR. PERA: And spin it.
25 MR. POSITAN: I mean, in New Jersey, we
1 have actually had a couple of cases. In fact, one of
2 them is still pending, the Benedetto case. There's a
3 fellow who got indicted in South Carolina for taking
4 on -- or attempting to take on a personal injury client
5 down there, where he didn't represent the person before.
6 That's before a supreme court right now.
7 We just had the Jackman decision, which
8 was the fellow from Massachusetts who was admitted to
9 Massachusetts, came down to New Jersey, worked for six
10 years in one of our large Newark law firms doing
11 transactional work, discussed it with the managing
12 partner as to whether he should take the license exam,
13 apparently, and was not encouraged to do so, because he
14 was very busy, so he testified, I believe, and the end
15 result by the Supreme Court a couple of weeks ago was
16 finding that he had engaged in the unauthorized practice
17 of law.
18 He had been held up on being admitted for
19 several years. The law came around when he went to
20 another firm, and the other firm got nervous about it
21 and said, you better go and get it.
22 And when the character committee reviewed
23 it, they found -- they asked him what he had been doing
24 for the last six years, and that's when the problem came
1 So the Supreme Court said that he had
2 violated the rules and -- but, however, they let him be
3 admitted a couple of weeks ago, which most people found
4 a little incongruous in terms of how that ultimately
5 played out. So we weren't sure whether they were --
6 what message they are sending.
7 MR. PERA: But is that a situation
8 that -- I mean, I have not heard any of you-all's debate
9 that has led me to think there's a consensus that I
10 ought to be able to move to New Jersey and practice
11 there for six years and not consider myself at risk for
12 UPL. I mean, has anybody --
13 MR. POSITAN: I didn't hear any
14 New Jersey lawyers that I spoke to -- and I probably
15 spoke to 100 of them -- who thought that that was a bad
16 decision, saying that he shouldn't be allowed to do
17 that. In other words, if you come into the state and
18 you hang your shingle up, you better go get admitted.
19 And I think that was a clear consensus.
20 MR. EHRENHAFT: I think that there is an
21 issue about that as to the basis upon which that
22 admission would be admitted. If one is saying that
23 someone who is coming in and regularly practicing within
24 the state in an office ought to at least register with
25 an organization so that their whereabouts can be
1 determined and readily found by people who they are
2 serving, that they can be taxed for their pro bono
3 activities, and they could be monitored for continuing
4 legal education, other kinds of appropriate criteria for
5 the people who continue to claim that they are competent
7 I mean, I think -- it seems to me, from
8 the point of view of someone coming in permanently, as
9 this guy was doing for six years, that it is not
10 inappropriate to require such a person to register.
11 What may be inappropriate is to make them take a silly
12 bar exam which has nothing to do with what he's actually
13 going to be doing or has done for years, or to look at
14 what law school he ever graduated from, in order to
15 determine whether he can be admitted, which is another
16 barrier that has existed in some states, or to have
17 other, as this lady from Oklahoma indicated,
18 nontransparent procedures where, in a black box, some
19 unknown people are making decisions.
20 It's something that is contrary to our
21 entire present view. The government should be
22 transparent, objective and rational criteria for their
23 regulation and be as limited as necessary to achieve an
24 appropriate response, which is other than protecting
25 local whatevers.
1 MR. POSITAN: Well, reciprocity is
2 certainly an issue that comes up in a lot of states.
3 And it's come up in New Jersey with out -- I waived into
4 New York, after being admitted to New Jersey, under a
5 procedure that existed back then, which has since been
6 done away with, because New York didn't feel that
7 New Jersey was being appropriately reciprocal.
8 Subsequent to 1987, I think it was, you can't do that
10 We have the other litigation pending
11 right now with the Philadelphia Bar Association about
12 New Jersey's requirement that you have a bona fide
13 office in New Jersey. That's before the Supreme Court,
14 and there's been a committee appointed to the Special
15 Master to develop further information on that issue,
16 which people also say is not necessarily an MJP issue;
17 it's a principal office kind of issue in terms of what
18 you're sending to the public by way of a message as to
19 your location.
20 I mean, if you're going to say, I have an
21 office here; I have a managing partner here -- for
22 example, in that case, I've seen a brief that's been
23 filed by the firm representing the Philadelphia Bar.
24 They basically propose -- and this isn't a problem with
25 the firms who have come in from Philadelphia and
1 New York and established offices, and they have taken
2 over New Jersey law firms, and certainly that's a
3 phenomenon that's affected us, and that ground has been
5 This is more an amalgam of solos and
6 small firms who want to have the appearance of a larger
7 office or office suite, where they have a,
8 quote/unquote, managing partner who has nothing to do
9 with them, but appears to be managing partner; shared
10 office space, shared secretarial staff, shared file
11 cabinets, shared desks, using the same office on
12 different days, shared telephone, fax, et cetera.
13 There, I think, you know, the position
14 that has been taken by the State Bar has been that,
15 well, that's different, because now you're really
16 raising some serious questions about appearances to the
17 public, you're raising questions about confidentiality,
18 privilege, you know, the integrity of that office in
19 terms of protecting those kinds of core value issues.
20 And, really, when our MJP committee
21 looked at it, we kind of distinguished that as really
22 not being an MJP question, per se, but more being one
23 that -- you know, the New Jersey test is whatever is
24 happening, does it disserve the public.
25 And in this case, I think you can make a
1 cogent argument, whether the court agrees with it or
2 not, that there is a disservice to the public, because
3 the public thinks they're walking into a firm where
4 there's 120 lawyers, and there's really only 20.
5 MR. PERA: That's not -- that's more of
6 an advertising issue and not an admission issue.
7 MR. POSITAN: Well, I think it is an
8 issue that comes into our discussions --
9 MR. PERA: No, I'm not suggesting --
10 MR. POSITAN: -- because that's the
11 existing client versus can you ask for a new client in
12 the jurisdiction where you're not originally licensed.
13 MR. PERA: But it's a -- but it comes up
14 in New Jersey as a UPL issue or as an admission issue or
15 just as an advertising issue?
16 MR. POSITAN: Well, they're attacking the
17 statute itself and the regulation that says you have to
18 have a bona fide office. First, they attacked that, and
19 they lost that. And now they're saying, well, this
20 really is a bona fide office.
21 MR. EHRENHAFT: This is an important
22 issue in the way that Americans practice abroad, because
23 many of the big American law firms that have opened an
24 office in Budapest or Jakarta and Tokyo and so on have
25 one person from the New York or Washington office in
1 that foreign country, if they have that.
2 And if they have an office, as many of
3 the large ones do in Budapest, with 14 local lawyers who
4 all speak Hungarian and so on, but it's very important
5 to the clients there that they know that that is the
6 office of White & Case, or whatever the law firm is.
7 And this is something that the
8 international firms are very much eager to promote in
9 the world and we think is a very important area in which
10 the comparative advantages of American lawyers can be
11 exploited and under which we can train lawyers in a
12 place like Hungary, who never had opportunities to know
13 how international transactions are conducted, to learn
14 from our -- from their association with our people, all
15 of which -- I mean, we would be concerned about a rule
16 that says, well, if you've only got one guy and 14
17 people from the other place, that it's not a bona fide
19 I mean, I think that the larger
20 ramification on the world stage is something that all of
21 us need to consider, which is one of the reasons why I
22 think that Harriet appropriately asked that someone from
23 the international be included on the Commission, and why
24 it's one of the issues that we're all to address.
25 MS. GRAY: Well, Peter, in your example,
1 what is the relationship between the one American lawyer
2 and the 14 Hungarian lawyers? Are they functioning as a
3 firm? Are they functioning as sharing office space and
4 supporting --
5 MR. EHRENHAFT: I don't think that one
6 answer fits all.
7 MS. GRAY: Okay.
8 MR. EHRENHAFT: But I would say that,
9 first of all, then, this is something that, as an ABA
10 representative -- in fact, I was objecting to the
11 Hungarian law. They are 180 degrees the opposite of the
13 The Japanese have said American law firms
14 coming into Tokyo cannot hire, cannot be hired by and
15 cannot be partners of local bengoshi. They must be in
16 their own little -- American foreign legal consultants.
17 MS. GRAY: Okay. You're limited?
18 MR. EHRENHAFT: And you can't associate
19 with the local bar.
20 The Hungarians had the exact opposite.
21 They said, in order to come into Budapest, you must be a
22 partner of a Hungarian lawyer, because they want to be
23 sure that they are getting the know-how transferred and
24 so on.
25 So then the New York partner said, well,
1 wait a second. We have criteria for partnership no
2 Hungarian guy is going to meet. So how are we going to
3 do this? So what did they do? They --
4 MR. POSITAN: That's what we want to do
5 in New Jersey with all you international characters.
6 Maybe we might get some of that experience.
7 MR. EHRENHAFT: That's right.
8 So what we will do is, we will have a
9 Hungarian partnership, where the best of those Hungarian
10 lawyers are partners together with our New York
11 partnership, but those Hungarian partners of that
12 partnership are not necessarily also then partners of
13 the New York partnership. And the individual may be a
14 partner in both.
15 But it's the Hungarian office, so there's
16 an entity that is related to the partnership in
17 New York. That's kind of the way that it's been
18 handled, as a practical matter.
19 MR. POSITAN: I also want to encourage
20 Donna to jump in whenever you want. Louisiana -- we've
21 been drilling Oklahoma pretty good, and we're
22 digressing --
23 MS. FRAICHE: We're the northernmost
24 Caribbean state, so I guess, you know, as far as it
25 gets, we have Napoleonic, so we really don't let anyone
1 in, because they don't have a clue what Napoleonic Code
2 is. In fact --
3 MR. POSITAN: I always wondered why the
4 Napoleonic Code is now --
5 MS. FRAICHE: You know, in fact, when the
6 bar association went to France to do some comparative
7 law study -- I'll never forget this -- the Ministeres de
8 Justice had the little things on their ears, and they
9 were listening to us, and one of them perked up and
10 said, you know, you think you have the Napoleonic Code
11 in Louisiana, but it was 1803, and you know that
12 Napoleon changed the code in France, and you've got the
13 old code. He said, you must be here for the tax
14 benefit. Well, I guess we were there for the tax
16 In any event, we don't have reciprocity.
17 And I dare say that it is probably because of the French
18 Civil Code tradition, that we always little felt that
19 lawyers that came into Louisiana, to advise on Louisiana
20 law, at the very least, and if they were going to do it
21 for more than a transient period of time would have had
22 to have taken the Louisiana Bar to have been exposed to
23 the Code and courses and so forth.
24 I mean, I don't know that many of us
25 really care much about the Civil Code anymore. I mean,
1 I hate to say that, but I think most commercial
2 transactions are commercial transactions. And even in
3 Louisiana, where we may change the verbiage a bit,
4 there's still pretty much -- a corporate lawyer from
5 Texas can certainly handle a corporate transaction in
6 Louisiana without being incompetent to do so.
7 So our discussions -- and although I'm
8 not speaking for the committee now, but more as an
9 individual than anything -- our discussions, really,
10 from a procedural standpoint, were focused on concern
11 about competency, and how can you ensure for competency,
12 and does the license of a particular state really tell
13 the public that this individual holds themselves out to
14 practice law in that state, of that state, and therefore
15 are competent, and therefore answers to the disciplinary
16 competency minimum standards of competency.
17 So we got off on that, which was a very
18 interesting way to approach this issue, in light of the
19 fact that a number of us in the room had different kinds
20 of backgrounds that were more interested in this subject
21 than others.
22 For example, one person was an in-house
23 lawyer with perhaps -- I think it may have been an oil
24 company or an oil service business of some kind, and so
25 was concerned about some of the things that you raised
1 in Oklahoma.
2 I think everybody felt, that's not a
3 big-deal problem. Why is everybody so concerned about
4 it? And then when we looked at our quite antiquated
5 law, which I'm certain a number of states have on their
6 books, but this one was back from the thirties or
7 forties, the practice of law as defined means in a
8 representative capacity, the appearance as an advocate
9 or the drawing of papers, which includes transactions,
10 pleadings or documents, or the performance of any act in
11 connection with pending or prospective proceedings
12 before any court of record in this state or ...
13 And then they go through the different
14 kinds of advising and counseling with respect to
15 transactions and immovable property, which is title of
16 property and that sort of thing.
17 What struck me, when we looked at our
18 very antiquated statute, was before any court of record
19 in this state? Hold on. The Fifth Circuit, the US
20 Fifth Circuit, is in New Orleans. We have lawyers from
21 Oklahoma and Texas every day practicing in violation of
22 the definition of this statute.
23 And they said, oh, no, no, no, that can't
24 possibly mean that. You know, if you're practicing in
25 federal courts, that's preempted. And I said, that's a
1 great argument, but that's not what this says.
2 So the point is that, you know, whether
3 the Supreme Court justices want to admit it or not, the
4 courts are allowing for the violation of state laws,
5 where you've got federal courts that allow for other
6 through pro hac vice, which isn't even discussed here,
7 or through the fact that you happen to have a United
8 States Court sitting in a territory within a state,
9 you're allowing violations every day. So it is pretty
11 The other thing we talked about was that
12 because we do a lot of maritime law and a lot of law
13 that arises where we are as part of the earth, a number
14 of our lawyers do a lot of federal kinds of cases, and
15 do US law kinds of things, and take depositions in other
16 states under the auspices of a federal court or even a
17 state court.
18 And every time a lawyer goes into another
19 state to take a deposition, which is one of the examples
20 I think you gave in some of the materials that you sent
21 us, the lawyer's violating the unauthorized practice of
22 law in that state.
23 So we had a discussion about transient
24 practice, and the difference between transient practice
25 and the -- I think, Wayne, the example that you gave,
1 which is coming into New Jersey for six years and just
2 not bothering to take the bar, register for the bar,
3 whatever you have to do in New Jersey, was where I think
4 we were able to make a distinction, despite this very,
5 very broad statute.
6 And that is that if somebody is coming
7 into this state to do a transaction that maybe nobody
8 else knows how to do, or even if they do, they're not
9 lucky enough to have the client agree to have them
10 represent them, wherever it might be, we felt that that
11 was fine. We felt that pro hac vice was fine, because
12 it's there; it's been on the books for a long time.
13 And we felt that the distinction
14 probably -- and again, this is premature; it's
15 preliminary, but this is where the debate is headed --
16 that we ought to make a distinction if somebody is going
17 to make their home there, have an office there, hang a
18 shingle there and have more permanency in the situation.
19 And, you know, that pretty much is where we are.
20 Now, from a process standpoint, we used
21 the questions that you were so kind to give us and
22 attempted to answer those yes, no and maybe. And those
23 were on page 5 of 6 of the Harriet Miers November 1st
24 memorandum on multijurisdictional practice law issues.
25 I don't know how the other commissions of
1 the other states will do it. But we just felt that for
2 ease of reporting back to you, that might be a way that
3 we might be able to do it in a uniform way so that you'd
4 get back similar information.
5 MR. EHRENHAFT: There is a survey form.
6 There is a survey.
7 MS. FRAICHE: Yes, and we do have the
8 survey form as well.
9 But we got sort of intrigued by the
10 questions, and the questions really spurred the debate,
11 and I thought that was very helpful.
12 The other thing I wanted to mention is
13 that, unlike Oklahoma, we do not allow law professors to
14 actually engage in the practice of law in the state
15 without having taken the bar exam and being sworn by the
16 bar of the state.
17 So we have the dean of a number of law
18 schools on the Commission, and, you know, we kind of
19 asked them, do they do sort of an adjunct practice. Oh,
20 you know, we might do an adjunct teaching assignment.
21 Do they do adjunct practice?
22 And, you know, there was kind of a bit of
23 an awkwardness to that, because there are a number of
24 consultants, for lack of a better description, who are
25 very bright and very capable and very competent people
1 when it comes to law, but, ah, that's teaching law, and
2 there is a difference between teaching a practitioner
3 law and practicing law. Even in a setting -- and I
4 guess you could charge for your teaching services, I
5 would expect.
6 So, again, I think -- again, with all due
7 respect to the Supreme Court justices, the reality is,
8 this is a very difficult thing to get your arms around.
9 And I don't think anybody was very concerned about some
10 professor consulting with some downtown lawyer about
11 some esoteric issue, but, you know, that was sort of
12 where we are in terms of the debate.
13 One last thing I want to suggest to the
14 Commission, and this is speaking personally and not from
15 my Commission that I sit on, the state Commission, and
16 that is that I've been practicing law for 26 years in an
17 area called healthcare law, which is very national in
19 There are associations -- I'm sure there
20 are a number of practice area associations, like health
21 law. The ABA has a health law section. You may want to
22 get some testimony from that section in that you will
23 find there are -- there are very competent lawyers that
24 hold themselves out and have national respect and have
25 clients in almost every jurisdiction in the United
1 States, because they feel rather uniquely qualified to
2 be able to give advice on the subject of healthcare.
3 And most of that happens to be national and regulatory
4 in focus.
5 But where it may include looking at the
6 state law -- and an example might be if you're doing an
7 SEC registration and you have to disclose certain state
8 and federal laws with respect to that offering, then you
9 may have to get lawyers in all 50 states to opine as to
10 that offering, because in healthcare, for example, every
11 state has regulatory law that's also impacted on the
12 federal basis.
13 So these were examples of things that we
14 never talked about, but that you might, because with the
15 focus on national issues and federal and state areas of
16 practice, where there are certain competencies that have
17 emerged, that might be an area that you might want to
18 talk about recommending a national licensure of some
20 And I'm sure that that's a section, and
21 there are probably other sections within the ABA that
22 would be very happy to give testimony on that issue.
23 MR. GILLERS: I have an anecdote about
24 law professors teaching practitioners. I once sat in on
25 the deposition of a law professor who was going to be an
1 expert witness, and he was not a member of the bar of
2 the state in which he lived and taught, and that came
3 out at the deposition.
4 And it also came out in the deposition
5 that he had a rather active practice of consulting with
6 law firms in the state that spoke to him about the
7 problems of their clients in the area of his expertise.
8 And he was asked whether or not he was
9 engaged in the unauthorized practice of law for some
10 20 years by virtue of that very lucrative practice. And
11 he said, no, I was engaged in teaching.
12 And then he was asked, well, are the
13 conversations you had with these lawyers protected as
14 privileged? And he said, of course. And he was asked,
15 but what's the name of the privilege?
16 MR. EHRENHAFT: One point that you made
17 that bears on the comment that Wayne made about the
18 healthcare practitioner being able to actually offer his
19 or her services in 50 states, the day in which it is
20 necessary to have that little office and so on with the
21 person there is gone, or it's going.
22 And I think that, as a practical matter
23 today, people are able, adequately and responsibly, to
24 offer their services nationwide without ever leaving
25 their computer.
1 And in fact an article that John brought
2 to our attention about that guy who's written up in the
3 Wall Street Journal, was sort of an inflammatory example
4 of that, but many lawyers, including right here, do
5 indeed have Web sites, which are available everywhere,
6 in which we offer our services to anyone around the
7 world that requires the particular expertise that we
8 offer, and I don't see how the laws can really deal with
9 that effectively, except in the way that they can deal
10 with anybody.
11 The people who really malpractice, the
12 people who really defraud clients, those are the people
13 that the regulatory agencies should go after. That's
14 the focus that ought to be pursued.
15 The front end, who can offer services,
16 who's qualified, who can call themselves a lawyer, don't
17 bother about that. That is a long-gone tradition.
18 Today, we've got to find out who is
19 offering services, and if they're doing a bad job, get
20 after those people. And there's more than enough to do
21 for bar organizations to go after those people without
22 worrying about the front-end qualification.
23 MR. POSITAN: A couple of observations by
24 way of concern, just to, again, encourage some more
25 discussion and debate about it, in terms of what Peter's
1 statements have been. There are a couple of areas that
2 pop up when you use that analysis.
3 First of all, there seems to be a
4 difference sometimes -- and I think it's also perhaps
5 sensitive to areas of practice in terms of looking at it
6 from the perspective of the larger firms, the people
7 with the larger practices, practices that tend to cross
8 state lines, like yours in international, or mine in
9 labor/employment, versus people who are more the solo
10 PI/matrimonial/trust and estates attorneys who maybe are
11 not on the same footing.
12 Maybe they have Web sites now and maybe
13 they have the same capacity on a laptop that we all do,
14 but the presence and the ability to respond may not be
15 as great. The ability of the client to find that person
16 may not be as great.
17 And the second aspect of that is, what
18 about when you couple it with states which have
19 mandatory CLE requirements, for example, as Pennsylvania
20 does, or states that have mandatory pro bono
21 requirements, like New Jersey does.
22 We have had a running debate in
23 New Jersey for the past several years with one southern
24 county, which is basically a rural county with a very
25 small number of practitioners, but yet they have an
1 overwhelming burden of pro bono assignments, and they're
2 very unhappy with that. You know, they get six, eight,
3 10 cases a year, some of which end up in two-week
5 It's a real problem explaining to them
6 why it is that they have to take these cases, but
7 somebody who is coming down to that county to work on
8 the incinerator deal with the corporate leasing doesn't
9 have to take one of those cases. So they're not real
10 happy about that prospect.
11 And I don't say that as something that
12 expresses any anti-sentiment on my part. But, once
13 again, I'm just trying to spur debate. I'm trying to
14 give you what I'm hearing from different constituencies
15 of people who say, well, you know, that's all well and
16 good. What do you care? You're going over and you can
17 practice federal law anywhere. But how about me? I'm a
18 matrimonial lawyer in Gloucester, New Jersey, and all I
19 know is I get eight mandatory pro bono cases a year.
20 How many of them are these people going to take when
21 they come out of state and eat my lunch?
22 I mean, that's -- so you can say, well,
23 you know, the time has passed for you. But explain that
24 to them when they're down at the courthouse trying that
25 two-week mandatory pro bono case. You've got somebody
1 who's upset.
2 MR. EHRENHAFT: The pro bono obligation
3 is a separate one from the competition. I was going to
4 ask you, how many lawyers from Washington and so on are
5 coming in to compete with them on the matrimonials, the
6 core of his profession? None. So there's no real
7 competition there. As far as --
8 MR. PERA: Well, that's not completely
9 accurate in all places. I don't know if it is --
10 MR. POSITAN: You don't think there are
11 Philadelphia lawyers who aren't doing matrimonial work
12 in this county? There are.
13 MR. PERA: I can tell you, I live in a
14 border city, and, you know, there are lots of places
15 that are not far from a border these days, and it is
16 clearly the case that it has been -- small firm and solo
17 lawyers face these issues just as much as big-firm
19 And in fact within cases these days -- I
20 mean, matrimonial practice, for example, the reason it's
21 getting into these issues more and more is because
22 people move. I mean, I don't know if any of you
23 all have ever tried to read -- and I don't do this kind
24 of work -- this uniform child custody jurisdiction
25 statute, and how it works from North Carolina to
1 Tennessee to New Jersey?
2 Talk about -- I mean, that's
3 sophisticated stuff. I mean, you know, I'm sure that it
4 takes a sophisticated lawyer to do an international bond
5 deal or something. But to figure that out when the
6 stakes are, you know, a child's custody, is fairly
7 serious, particularly when you can have dueling lawsuits
8 in multiple jurisdictions with the need for possibly two
9 lawyers. And, you know, it's not 75-lawyer firms like
10 mine that do a lot of that work these days.
11 So, I mean, it is not -- and I've been
12 sensitive since this group was founded -- I think the
13 group needs to be very sensitive to the notion either of
14 seeing itself as or of being perceived as driven by
15 big-firm concerns, because I don't think that's
16 completely accurate. I just don't think that's the
17 complete marketplace out there.
18 Now, I agree with you that, for example,
19 the folks who are in that category often don't think of
20 their problems in that context, but I think that's an
21 issue of being not as sensitive as they ought to be.
22 Even though they're dealing with North Carolina law
23 sometimes, under the Child Custody Jurisdiction Act,
24 they just don't think of themselves as engaged in
25 interstate practice as much.
1 MR. POSITAN: A lot of those people that
2 I have spoken to who are solos on contiguous borders
3 would be the first to admit to you that they engage in
4 MJP. So it's not only big firms, big practices or
5 people with reputations that maybe transcend their
6 borders, but a lot of PI attorneys on the river on one
7 side, and, you know, whether you're in Kansas City or
8 whether you're in Philadelphia, in Camden or, you
9 know, in the New York metropolitan area or some of the
10 other states, Gary, Indiana perhaps, places that are
11 obvious, you go up and down the Mississippi River and I
12 guarantee you have that problem in every state that sits
13 on it.
14 So it's not peculiar to just large firms
15 or international practices or federal practices; it's
16 something that a lot of lawyers will find -- those that
17 are doing it, they don't even think about it.
18 MR. PERA: The playing field is not
20 MR. POSITAN: Right.
21 MR. PERA: Let's just be very clear about
22 that. I mean, you mentioned healthcare; we do a lot of
23 that. I know of another firm other than ours that
24 basically bought a healthcare practice in Jackson,
25 Mississippi, and moved it to Nashville.
1 They've now used it -- they've used it
2 throughout at least 10 states that I'm aware of, and I
3 think nationally. They market it nationally. The
4 person in charge of that practices nationally. And he
5 practices, not just as you pointed out, in federal law,
6 you know, but the law of the states of all the
7 jurisdictions they're in. And the game they play, God
8 bless them, is that when it's necessary, they have in
9 their 10-state footprint -- they have an associate or a
10 partner in that state that they can use to be local
11 counsel, effectively. So they're just -- the
12 permutations of this are just endless.
13 (Mr. McCallum entered the room.)
14 MR. RAMIREZ: Could I ask Donna --
15 MS. FRAICHE: Yes.
16 MR. RAMIREZ: Donna, I have some -- plus
17 I do agree with Lucian. I think, given the fact that
18 approximately two-thirds of all practitioners in the
19 United States are solo or small-firm practitioners, it's
20 got to affect the way you practice.
21 But, Donna, I want to try to understand
22 your rule a little bit. You said there was no
24 MS. FRAICHE: Right, no reciprocity.
25 MR. RAMIREZ: Does Louisiana allow
1 pro hac vice?
2 MS. FRAICHE: Yes, through the states --
3 I mean, through the state court system and the federal
4 court system.
5 MR. POSITAN: As long as you went to
6 Tulane Law School, right?
7 MS. FRAICHE: Yeah. I mean, you have
8 to -- you have to register with the court pro hac vice.
9 You have to move for and you have to be associated with
10 a Louisiana local counsel in order to be pro hac vice.
11 You just can't walk into the courtroom
12 alone and say you want to waive in. You have to have an
13 association with a Louisiana licensed attorney to appear
14 in court. They don't have to go with you after your pro
15 hac vice, but the first time that you're introduced to
16 the court.
17 (Mr. Smith entered the room.)
18 MR. RAMIREZ: What about associated with
19 local counsel?
20 MS. FRAICHE: You mean for transactional
22 MR. RAMIREZ: Or for litigation purposes
23 or whatever.
24 MS. FRAICHE: Yes, you can associate with
25 local counsel.
1 MR. RAMIREZ: And then does local counsel
2 have to appear?
3 MS. FRAICHE: Not necessarily. But
4 you're not of record in the case unless you waive in
5 pro hac vice. You can't just put your name on the
6 pleadings without the court agreeing to it. They rarely
7 deny such a motion, if that's your question.
8 MR. RAMIREZ: You still would have --
9 because in my jurisdiction, I can sign a pleading with
10 an out-of-state counsel and there is no pro hac vice
11 admission required or anything. They're just in the
12 case. My state does not require that I appear with that
13 attorney in all matters. If the court says, well,
14 you're going to be there, then I have to be there. But,
15 otherwise, no; they can come in and practice and do
16 whatever they need to do. But you say in Louisiana --
17 MS. FRAICHE: I think it's a pretty
18 conservative state.
19 MR. POSITAN: Do you have any limitation
20 on how many times you can be admitted pro hac vice?
21 MS. FRAICHE: No, there is no limitation,
22 and that was part of our discussion: Should there be a
23 limitation, or is the limitation just a false way of
24 measuring the transient nature of the practice? You
25 know, if somebody does it 1,000 times, should they then
1 pass the bar and that sort of thing? But there is no
3 MR. EHRENHAFT: Wayne, in order to
4 address the issue that you talked about where the people
5 were objecting to their pro bono obligations, is there a
6 way of monitoring pro bono obligations?
7 I mean, there are places which have said
8 that if you, instead of practicing yourself, because you
9 may be incompetent, really, to provide the pro bono
10 representation that people need, and therefore the idea
11 that you have to personally provide the service is not
12 as good as providing the cash with which the -- some
13 agency or somebody can retain a competent counsel to do
14 that, and that also is in fact a way that one can tax
15 people who are offering their services from out of
17 If you aim your ads to a particular state
18 and in fact derive income from that state, you could be
19 required to contribute to a pro bono pool, which would
20 relieve that kind of a pressure on the pro bono
22 MR. POSITAN: That could lead us
23 ultimately to some different level of cuts as to what's
24 de minimis and maybe very transient versus when you're
25 kind of there a little bit more, but not enough to be
1 permanent, so that maybe you have some kind of
2 gatekeeper or reporting responsibility, where you are
3 picking up some burden. Maybe you have some mandatory
4 CLE burden at that point, even. It becomes a question
5 of fairness as well as a question of practicality, I
7 MR. EHRENHAFT: Well, the issue is also
8 going to be in part addressed by tax law, because this
9 is one of the hot issues of our day is the extent to
10 which you can be taxed for delivery of legal services by
11 sitting in your computer versus walking into the state.
13 And this is also a real existing problem
14 today in Europe. We've had Budapest law firms, if they
15 deliver their opinion in Budapest, they have to apply
16 VAT at 17 percent, whereas if they mail it from
17 New York, they don't, at the moment. And what about if
18 they send it by e-mail? And that is an issue that is
19 big bucks and is going to be addressed soon.
20 But if there is a move saying, we can't
21 differentiate the method of delivery of the legal
22 services, it's the delivery of the legal services that
23 counts and the source of the payment for it, but that
24 also then raises questions, because you change the place
25 where the lawyer's paid. It could be the affiliate in
1 Luxembourg or -- you know.
2 MR. POSITAN: Let's take a five-minute
4 (Recess 3:35-3:50 p.m.)
5 (Mr. Melton entered the room.)
6 MR. POSITAN: All right. We're ready to
7 go back on the record now.
8 Donna had mentioned to me that she has to
9 leave in about 10 minutes to catch a plane. So if there
10 is anything further that you would like us to talk about
11 or any other observations that you had, we'll give you
12 first dibs here.
13 MS. FRAICHE: Thank you very much. I
14 just wanted to follow up with something that Peter had
15 discussed with respect to sort of e-commerce in the
16 context of practicing law.
17 And although I don't have much to offer,
18 I think that the Commission ought to look at the issues
19 that are raised by practicing law through the Internet,
20 and that, you know, you could be advising a client or
21 sending a contract over interstate lines, and how is
22 that being dealt with under the statutes, some of which
23 we've looked at, that really were in place long before
24 there was any such thing.
25 I mean, we may be used to using the mails
1 to mail a contract across state lines, and then someone
2 might look at it and send it back. But now it's so much
3 easier, that you'll find lawyers and law firms in
4 different states now practicing literally together over
5 the Internet.
6 So that's -- I just thought that was
7 something that we can't lose sight of, and you raised it
8 in the context of the tax question.
9 MR. POSITAN: I also want to welcome a
10 few people.
11 Brian Melton, I see you've joined us.
12 And Bill Smith.
13 Maybe if you can just say a word or two
14 as to what your type of practice is, and if you have any
15 particular constituency that you're showing up on behalf
16 of, even though you may be not be making a formal
17 statement as such, please let us know that.
18 MR. MELTON: Thank you. My name is Brian
19 Melton. I'm a Dallas lawyer. The nature of my practice
20 is commercial litigation. I'm board-certified in civil
21 trial law and in consumer law, and I'm this year vice
22 president of the Dallas Bar Association. So I'm here as
23 a Dallas lawyer and as a Dallas Bar officer to listen
24 and learn and contribute, to the extent that I'm able to
25 do that.
1 Thank you for having me.
2 MR. SMITH: I'm Bill Smith. I'm general
3 counsel for the State Bar of Georgia. I'm also a past
4 president of the National Organization of Bar Counsel,
5 and I'm here as their liaison. I'm delighted to be
6 here. I'm from the State Bar of Georgia, and I'm here
7 to help you.
8 MR. RAMIREZ: How is my friend Rudy
10 MR. SMITH: Just as ornery as ever.
11 MR. POSITAN: And one of our Commission
12 members, Charles McCallum, has joined us as well.
13 MR. McCALLUM: Thank you.
14 MR. POSITAN: Just for the benefit of
15 Brian and Bill, we've not having formal testimony as
16 such, even though we are on the record. We're trying to
17 track some of the proceedings and questions that come up
18 and comments. We're really engaged in part of our
19 outreach to try, you know, to get to everybody and
20 really get down to the very grass roots of the
21 profession and get a lot of feedback in shaping this
22 debate and what comes out of it.
23 So it's a rather freewheeling round-table
24 we're having here. We're just kind of talking out
25 problems, concepts, what people's experiences have been,
1 what they think, and really just trying to add to that
2 growing body of materials that we can all consider as we
3 weigh in on the problems.
4 Thanks, Donna.
5 (Ms. Fraiche left the room.)
6 MR. SMITH: I'll tell you about that
7 growing pile of material; it's getting kind of dull, and
8 I think we ought to try to tighten it up a bit.
9 MR. POSITAN: There you go.
10 MR. SMITH: It's something else.
11 MR. POSITAN: I was out of the office for
12 about five days, and I came back to about -- I was in
13 Jamaica, where I couldn't take my laptop, and I came
14 back to about 450 e-mails, I think. It took me about a
15 half a day just to get through them.
16 MS. GOURLEY: I have a question about who
17 you're soliciting input from, and specifically are you
18 soliciting input from the boards of bar examiners or law
19 examiners or whatever they're called in the states?
20 MR. POSITAN: Everybody. I believe --
21 Haven't we, John, received an indication
22 that somebody from the National Association of Bar
23 Examiners was coming to testify in San Diego?
24 MR. PERA: Erica Moeser.
25 MR. HOLTAWAY: First of all, one of the
1 liaisons to the Commission is Erica Moeser, who is the
2 president of the National Conference of Bar Examiners.
3 Chief Justice VandeWalle from North
4 Dakota has signed up to give testimony in San Diego, and
5 he's involved both with the ABA section of legal
6 education and admission to the bar and the National Bar
7 Examiners. And actually another gentleman from North
8 Carolina, I think it's Jerry Hafter, has signed up also,
9 and he's a past president of the National Conference.
10 MR. GOURLEY: It seems to me that it
11 is -- a very important aspect of this -- I know it will
12 be in Oklahoma, because it is a separate -- we're all
13 under the jurisdiction of the Supreme Court and we are
14 an integrated bar, but the Board of Bar Examiners is a
15 separate entity under the Supreme Court and has its own
16 responsibilities, as it understands them, and may have
17 some feeling about the State Bar itself opining on those
19 MR. POSITAN: Well, the question of ABA
20 accreditation to law schools has also come up in certain
21 states where that's an issue in terms of reciprocity and
22 whether you would admit somebody if they weren't from an
23 ABA-accredited law school in terms of a graduate.
24 Yeah, Brian brings up another interesting
25 point in terms of talking about certification. You
1 know, we, in New Jersey, for example, have certified
2 civil and certified criminal trial experience mandates.
3 The query is, what do you do with those when you cross
4 state lines?
5 You may be certified in New Jersey
6 because you have the expertise under New Jersey law in
7 civil procedure; but, you know, when you go to Georgia
8 and say, well, I'm a certified civil trial attorney,
9 probably not, I would suspect.
10 MR. SMITH: Why is that?
11 MR. POSITAN: You can say, I'm certified
12 in New Jersey, I guess, but I don't know what that
14 MR. PERA: That problem is out there
15 today for firms that are multistate. I mean, we just
16 put out an announcement -- we're only in three states.
17 We just put out an announcement; I've got to comply with
18 three states' disclaimer requirements.
19 And, you know, the flip side of that is,
20 though, don't you have a -- I mean, it's pretty
21 well-established now, isn't it, that you have some level
22 of constitutional right to tell the truth about an
23 official certification, I think.
24 So much as Bill would like to, if you
25 were actually certified as something or other by the
1 Tennessee Commission on whatever, I don't know -- I
2 mean, I don't know if you could keep them from -- you
3 know, a Tennessee and Georgia firm from really saying
5 MR. SMITH: I want you to know that we
6 are enlightened in Georgia.
7 MR. PERA: I knew that.
8 MR. SMITH: Our rule says that you can
9 call yourself an expert if you are one.
10 MR. PERA: Well, there you go.
11 MR. POSITAN: They haven't forgotten
12 Jacksonian democracy in the state of Georgia.
13 MR. SMITH: Amen.
14 MR. POSITAN: One of the things we've
15 been talking about, Brian and Bill, in terms of
16 your input, we've been talking about pro hac vice
17 requirements. You know, do you have them? What are
18 they? Is there a frequency standard; in other words,
19 you can't appear more than once or twice a year, as some
20 states have? Some have -- you know, a lot of them have
21 no limits. But, you know, how does that work in your
23 And we've been talking about
24 transactional lawyers in terms of what transactional
25 lawyers are allowed to do, and other types of lawyers,
1 international lawyers or labor and employment lawyers,
2 environmental lawyers, healthcare lawyers. What
3 experiences do you have or what can you add to our body
4 of knowledge in terms of talking about things like
6 MR. SMITH: Well, pro hac vice is a real
7 problem in our state, because we don't have a unified
9 MR. GILLERS: Because what?
10 MR. SMITH: We do not have a unified --
11 integrated -- well, yeah, we've got an integrated bar,
12 but we don't have a unified court system. And so you've
13 got 159 counties in Georgia, and there's no real way for
14 them to talk to one another.
15 So if you come and have a pro hac vice
16 admission in Chatham County, and then the next day go to
17 Fulton County, there is no way for Fulton County to know
18 you just got through doing that in Chatham County.
19 So, no, we don't have a -- we don't have
20 a numerical cap, and it's just sort of what the judge
21 wants to do.
22 MR. POSITAN: Is the state rule mandated
23 by anybody?
24 MR. SMITH: Yes, the state rule leaves it
25 up to the discretion of the judge, and some judges are
1 real tough about it and some could care less. And when
2 you've got 159 counties, and each one has two or three
3 superior court judges, and maybe four or five state
4 court judges, and then you've got municipal judges and
5 probate judges and judges' judges, I mean, they're just
6 all over the map.
7 And, I mean, pro hac vice sounds good;
8 but unless you have unified court system, I just don't
9 think it's really an effective regulatory tool.
10 MR. POSITAN: If the bar commission comes
11 up with a recommendation, it's safe to say that all 159
12 counties probably aren't going to adopt it, huh?
13 MR. SMITH: Probably no.
14 MR. McCALLUM: Wayne, could I ask a
15 question? And you stop me if I cover ground you've gone
16 over before. I'm sorry I got delayed getting in here.
17 I'm not a litigator. My last litigation
18 experience was probably 35 years ago, and I was not very
19 satisfied with it, so I didn't do it again.
20 So I'm really asking for a sense of how
21 this is handled in the states. For instance, in
22 Georgia, let's suppose a client of Lucian's firm in
23 Tennessee comes to his firm and says, we've had an
24 incident in Georgia, and we think there's going to be
25 litigation, and if it comes up, we want you to handle
2 And the lawyer says, well, that's fine.
3 I've been admitted pro hac vice in Georgia. I don't see
4 any problem. We worked with such-and-such firm as local
6 And they say, fine, but we don't know
7 that it's going to be in Georgia, of course. We don't
8 know where the action is actually going to be filed, any
9 more than whether it's in state or federal court. In
10 fact, we don't even know if it's going to be filed.
11 Well, what we want you to do is to handle
12 investigation, go take a few statements, look at some
13 records, kind of figure this matter out.
14 And so he takes off, goes into Georgia
15 and begins to do this activity, I think fully expecting
16 that if he's talking, for instance, to his client's
17 officers, that their communications would be protected
18 by an attorney-client privilege, because he would
19 consider himself to be practicing law, and then maybe
20 the case never actually is filed, so there's never been
21 a pro hac vice admission.
22 Is that -- from the point of view of
23 Georgia, does that kind of activity, sort of in
24 anticipation of what might be a lawsuit someday, cause
25 anybody any concern or problem? I mean, he's pretty
1 clearly in the state doing what is the practice of law.
2 And he is not admitted in Georgia, let's say. Is that a
3 concern or problem for the local lawyers in Georgia?
4 MR. SMITH: Is it a concern? Yes. Is it
5 technically the unauthorized practice of law? Yes. How
6 is it honored? Mainly in the breach. Our definition of
7 the practice of law comes out of the legislature, not
8 out of the -- not out of the court. And it's an
9 antiquated definition, unfortunately.
10 And so you can look at it from either the
11 point of view of the State Bar seeking an injunction
12 against the lawyer, or you can look at it from the
13 standpoint of the solicitor in the county bringing a
14 criminal action. The solicitor is not going to bring a
15 criminal action, and I won't get into all of that, but
16 that's just not going to happen.
17 For us to bring an action for an
18 injunction, first we'd have to contact the lawyer and
19 tell them, here is what you're doing, and that's the
20 unauthorized practice of law, and don't do it again.
21 And then the lawyer would have to do it
22 again. And then we'd have to go before our Board of
23 Governors that only meets four times a year. They would
24 have to authorize us to bring an injunction action.
25 And by the time we got through all of
1 this procedure, the lawyer's probably back in Tennessee,
2 and the superior court judge is going to say, well,
3 what's going on? I mean, where is the activity? And
4 then there's not any, so there's nothing to enjoin.
5 The point is, as a practical matter,
6 there's really not a good way to enforce it.
7 MR. PERA: Would you accept a bar -- what
8 would you do with a bar complaint from counsel for my
9 opponent if, you know, you investigate some kind of
10 thing, and the other side already has a lawyer, and they
11 realize what I'm doing, and they've heard all this
12 debate the last couple of days, and they say, well,
13 we're not going to mess with him; I'm going to send a
14 complaint to Bill Smith, because he's obviously engaged
15 in the unauthorized practice of law?
16 MR. SMITH: I would send it to Lance
17 Bracey, and I'd say, you've got a rule that a lawyer
18 can't practice in the jurisdiction where they're not
19 admitted. This lawyer's practicing down here and he's
20 not admitted; do something about it.
21 MR. GILLERS: Bill, could I ask you --
22 MR. PERA: Before we get to that, let me
23 just say, that is starting to happen. I've seen at
24 least two instances of tactical use of these laws. I'm
1 MR. GILLERS: You said it was a concern.
2 Is that true because of your definition of the practice
3 of law, that is, it's a formal concern, or would the
4 Georgia -- the members of the Georgia Bar actually care
5 about this?
6 MR. SMITH: Most of the concern is
7 expressed in the border communities, and I think it
8 has -- it has some concern for protection of the public,
9 but I think it also has some concern for a perceived
10 economic loss.
11 MR. GILLERS: Let me just change your
12 hypothetical a second. Let's assume the incident
13 occurred in Tennessee and the lawsuit was expected in
14 Tennessee, but there were some witnesses in Georgia, and
15 the Tennessee lawyer was asked to go to Georgia and do
16 factual investigation in connection with a likely
17 Tennessee action. How would that sit in Georgia?
18 MR. SMITH: Well, technically, under our
19 definition, it would be the unauthorized practice of
21 As a practical matter, I really can't see
22 anybody doing anything about it, because it happens all
23 the time, and it's sort of reciprocal.
24 MR. GILLERS: Yeah.
25 MR. SMITH: I mean, we don't fuss about
1 Tennessee lawyers coming into Georgia to take
2 depositions, and Tennessee doesn't fuss with Georgia
3 lawyers going up there and taking depositions.
4 MR. GILLERS: And my last variation is,
5 would it matter to you, in your original answer, if the
6 Tennessee lawyer was affiliated with the Georgia lawyer,
7 but did the exact same thing in that investigation?
8 MR. SMITH: No.
9 MR. GILLERS: It wouldn't matter? It
10 would still be --
11 MR. SMITH: It would still be the
12 unauthorized practice.
13 MR. GILLERS: But we would agree that if
14 there was a Georgia lawyer doing the investigation
15 through a nonlawyer investigator, someone who wasn't
16 admitted anywhere, who was working for the Georgia
17 lawyer, that would be okay, right?
18 MR. SMITH: Probably.
19 MR. GILLERS: But if the person doing the
20 investigation with the Georgia lawyer happened to be
21 admitted in Tennessee, it's not okay?
22 MR. SMITH: I'm not going to try to
23 defend the definition. It's absolutely insane.
24 MR. GILLERS: Yeah.
25 MR. SMITH: And so if what you're trying
1 to show is that these rules we have right now make no
2 sense, you're preaching to the choir.
3 MR. GILLERS: Well, no, I'm not -- I'm
4 trying to figure out, when you said that there was a
5 concern, my concern is that concern; that is, any
6 proposal we come up with has to avoid exacerbating the
7 concern of lawyers who mostly practice within a single
8 state, or most lawyers in the United States.
9 And so, as a practical matter, if not as
10 a theoretical matter -- although I think you could
11 defend it as a theoretical matter, too -- we have to
12 worry about the lawyers in the border communities. And
13 I'm just wondering where the -- where the alarm bells
14 will go off.
15 MR. SMITH: These people are concerned
16 because people from the other state are coming in and
17 taking their business. I mean, what are you going to do
18 about that? You know, it seems to me that if that's a
19 real concern of theirs, the only way you're going to
20 make them happy is to put up a wall. Anyone that takes
21 the wall down they're going to perceive as an economic
22 threat, and they're not going to like it.
23 MR. EHRENHAFT: I think among the
24 materials that John provided to us for this meeting was
25 a very interesting article which touched on an issue I
1 think that you two have already touched on in e-mails,
2 which is the privileges/immunities clause in the
3 Constitution and the right of people to offer their
4 services in an economic environment of our country.
5 I'm not sure that no matter how powerful
6 those border lawyers may be or however much they believe
7 that they're threatened by this competition from another
8 state, that under our constitutional system that it's
9 appropriate for a state validly to prevent someone from
10 doing something if you can't demonstrate any harm, other
11 than that it's competition to someone within the state.
12 If you can't show that as there's a
13 detriment to the public or there's another important
14 state interest that would allow this kind of
15 interference, it seems to me that you can't have that
16 kind of regulation. And there's a Second Circuit case
17 that discusses that at some length, Judge Friendly
18 opinions on.
19 It's worth remembering that we're not
20 talking about states as though they are free to erect
21 whatever barriers they want to protect the local
22 residents from competition from other states.
23 MR. SMITH: I think Professor Gillers
24 makes a valid point. I mean, it's all well and good for
25 this Commission to come up with the perfect solution.
1 But if the perfect solution is not going to be adopted
2 by the Supreme Court and by the legislatures of the
3 states, we've wasted our time.
4 And whether you like it or not, these
5 lawyers in these border communities are a significant
6 lobby, and we might as well recognize that.
7 MR. PERA: As a practical matter, from a
8 political point of view, you're not going to get the
9 folks that Wayne and Susan went to talk to last week to
10 adopt this unless there is some level of consensus among
11 the practitioners in that state.
12 MR. SMITH: And there is another basic
13 point here that I think we need to bear in mind. The
14 reason lawyer discipline works in this country is
15 because, in the main, lawyers feel that they are subject
16 to a legitimate system.
17 If they ever feel that the system is not
18 legitimate, then I don't care how many lawyers you gave
19 me, I just drown. Now, what we can't -- we cannot do
20 something with this Commission that makes these people
21 feel that we're just trying to, quote, cram something
22 down their throats, closed quotes, because it will
23 damage not only the ability of our suggestions to be
24 adopted, but it will have a ripple effect over the rest
25 of the regulatory process.
1 MR. McCALLUM: Well, it's a good point.
2 And, obviously, nothing we ever do is going to please
3 100 percent of the lawyers everyplace. But you do have
4 to at least listen to and pay attention to the
5 legitimate concerns of all the constituencies.
6 But I have a view -- and I'm interested
7 in your reaction to this -- that if I could really get
8 through the instinctive reaction of the litigators in
9 Georgia, let's say a lawyer in Dalton, who is a little
10 worried about Chattanooga practitioners, whatever, and
11 tell them, say, look, fellas, here is what we're going
12 to have to do: We're going to go to bat for you and try
13 to keep those Chattanooga lawyers from coming down here
14 and getting your litigation business, but in order to be
15 consistent, what we're going to have to do is, you all
16 can't go in Tennessee anymore and take depositions in
17 preparation for a case; you can't do any investigations
18 out of state. You've got to quit that right now.
19 I think they all would say, hey, wait a
20 minute. We do that all the time, and that's the way we
21 practice litigation. And the only ones that won't
22 squeal will be the really big firms that have got
23 offices in both states. They won't get hurt. They've
24 got lawyers in each state. The firms that have offices
25 in Atlanta and Birmingham and Nashville and so on,
1 they're not going to worry about it. They have resident
2 practioners in every one of those states. No problem.
3 The guys that get hurt will be the small
4 practitioners in Dalton who don't have an office
5 anywhere except Dalton.
6 MR. RAMIREZ: Well, you know, I practice
7 in a border city, and I think that I would have a lot
8 more heartburn about somebody from Texas coming into
9 New Mexico to solicit New Mexico clients than a Texas
10 lawyer coming in and handling a case for his client that
11 I'm never going to get, anyway, you know. I think that
12 would be a much more significant problem.
13 MR. McCALLUM: You mean the issue of
14 solicitation, as opposed to serving a client?
15 MR. RAMIREZ: Right. And I think a lot
16 of these issues, they get to be turf wars and turf
17 battles. You know, the Georgia lawyers want to protect
18 their turf; they don't want their clients to be
19 solicited or taken away by Tennessee lawyers who may
20 have more expertise in that particular area.
21 Criminal practice in my area, there are
22 not enough criminal law practitioners in my community to
23 handle the workload, the significant drug trafficking,
24 illegal aliens, you know, all kinds of problems. And so
25 we get a lot of guys coming up from El Paso to practice
1 criminal law. And they do it either pro hac vice or
2 they do it -- they associate with some lawyer in my
3 jurisdiction who doesn't practice criminal law just so
4 that they can handle that case.
5 MR. SMITH: Well, I don't think the fact
6 that it's a turf battle should be dispositive.
7 MR. RAMIREZ: No, I don't either.
8 MR. SMITH: But I think we need to be
9 sensitive to the fact that there is real concern in that
10 area and try to address it. And if we're -- if we're
11 going to try to come up with a solution that's going to
12 make everybody happy, we are wasting our time.
13 MR. POSITAN: I think we also have to be
14 careful -- and you bring up a valid point, I think,
15 about the concern or the discipline. And this is
16 something, again, I -- you fellas weren't here before
17 when I talked about the chief justices the other day
18 saying, as we gave our presentations at our conference,
19 that don't underestimate how strongly we feel about the
20 disciplinary process.
21 I think we have to be careful not to, in
22 effect, deregulate the profession to the point of
23 eroding standards of discipline so that what you end up
24 with in the end is a diluted standard of
25 professionalism, that while it may open boundaries and
1 it may almost get back to the question of MDPs as
2 opposed to MJPs, that when you lose sight of what the --
3 in fact, MDPs -- core values of the profession are, and
4 you get a breakdown in respect for the system that we
5 all have because we think it does work, in terms of at
6 least giving us a framework of guidance which we operate
7 under, I think to say that that framework needs to be
8 updated is clearly our mandate, and I think probably
9 most of us agree that needs to happen.
10 I think we have to be careful as to how
11 far we go, because I'm concerned in the end, from a
12 philosophical viewpoint, that our profession is so
13 important to a lot of other aspects of our society in
14 terms of independence, justice and some of the greater
15 values, I think, that we all stand for, that if we
16 dilute too much and we open the practice to the point of
17 saying, well, you know, we're really worried about turf;
18 it's not only turf we're worried about; it's also the
19 respect for the parameters of the disciplinary system,
20 the system of justice, and the relationship that we have
21 with the judges and as officers of the court, I think
22 are also important as societal values that also come
23 into play here somewhere along the line by way of
25 So I know Peter has strong feelings about
1 opening an Internet and e-mail and international
2 practice, which I'm sensitive to, but I'm also concerned
3 about where that takes us with some of the things I'm
4 talking about, because as my old professor of American
5 Government 101, Murray Levin, said the first day of
6 class, and he repeated every time we started -- he said,
7 there's one thing I want you to remember from this
8 class. The most profound thing about America is that
9 America is not Europe. America is still not Europe, and
10 it won't be Europe for a long time to come.
11 I know that doesn't go with your
12 practice, but it does go down to these border towns on
13 the Mississippi River and the Delaware River and all the
14 other ones. That's why I -- and I'm concerned about
15 that overall philosophical framework that we have to
16 deal with.
17 MR. EHRENHAFT: But let me suggest that I
18 think we're talking by one another about that. Because
19 I think that if one looks at what are the core values --
20 if we look again at the diagram that is supposed to
21 conform to our approach, the real core values are
22 assuring clients the right to select counsel, the
23 right -- the assurance that there is professionalism and
24 competency in the delivery of legal services, and that
25 there be mechanisms available to those who are
1 disappointed or cheated or inadequately served to assure
2 that those people are not allowed to continue to offer
3 their services.
4 It is not a core value that any person
5 who calls himself a lawyer may continue to practice that
6 profession, because there are other guys who are equally
7 able to service that same client from another place or
8 in the same town. We do not have a guild system that
9 allows only so many people to offer their services
10 because of where they are, who their parents were or
11 anything else.
12 We should have a system that anyone who
13 is competent to serve should be able to offer their
14 services. And we have to have a system that catches and
15 disposes of and prevents malpractice and cheating and
16 things like that.
17 But the notion that a guy who lives on
18 the river has a right to be protected against the guy
19 who lives across the river is not a core value of our
20 system, not part of our system. And those who want to
21 defend that, I don't think have an objective basis for
22 doing so.
23 MR. PERA: But the flip side of that is,
24 there is no core value that says that I ought not to
25 have to take the Florida Bar if I'm going move to
1 Florida. So I mean, all this is nice, but --
2 MR. McCALLUM: Did you say if you're
3 going to move to Florida?
4 MR. PERA: That's what I said. You can
5 overstate each case.
6 MR. GILLERS: Peter, and Charles perhaps,
7 Bill made a point, maybe at the last live meeting,
8 in-person meeting, as follows -- and correct me if I'm
10 But he said that one of the attributes of
11 any opening of the system has to be that the transient
12 lawyer who comes into another jurisdiction to serve the
13 residents of that other jurisdiction in which he's not
14 admitted must be amenable to not only malpractice, but
15 also to discipline.
16 Because there are some wrongs that don't
17 lend themselves to malpractice. There may be no injury,
18 but they're egregious and they have to be disciplined.
19 And the point Bill made is a practical
20 point, but I think it's a very real point, and that is
21 that the disciplinary systems in the United States are
22 so overworked and underfunded that if he has to worry
23 about disciplining influxes of lawyers from other states
24 who are now permitted and therefore will be encouraged
25 to come in and represent Georgians, he won't be able to
1 do it. The system will break down. How do we answer
2 that question?
3 MR. EHRENHAFT: By reallocating the
4 resources that we have. If you scrap some of the stuff
5 at the entry level, which doesn't serve an appropriate
6 purpose, and allocate all of those resources to the
7 other end, go after the people who are misusing the
8 system, you probably would have enough resources to do
10 MR. SMITH: All right. Wait a minute.
11 Wait a minute. You could talk about giving the
12 disciplinary process more resources until you're blue in
13 the face. We got what we got. We ain't going to get no
14 more. I mean, that's the way it is. We've got to do
15 what we're going to within the resources that we have
16 right now. That's it.
17 MR. RAMIREZ: Well, doesn't it then
18 become a question of priorities? Is it more important
19 to prosecute that guy who comes into your state and does
20 a good job for his client, but doesn't have a license,
21 or the guy who's in your state stealing money out of his
22 trust account?
23 MR. SMITH: Of course it's the latter.
24 And that's the point that I want to make.
25 The problem we have right now, and we're
1 seeing it more and more, is this influx of nonadmitted
2 lawyers is placing the admitted lawyers in a situation
3 where the playing field is no longer level, because the
4 admitted lawyers have to be concerned with the rules
5 promulgated by the Supreme Court of Georgia, because
6 there is an effective method to enforce those rules as
7 regards admitted lawyers.
8 That is not the case with lawyers who are
9 not admitted and come into the jurisdiction. They are
10 either subject to sort of a lesser standard or perhaps
11 no standards at all, because this Tennessee lawyer is
12 only going to comply with the Georgia rules if Lance
13 Bracey is willing to prosecute him if he doesn't.
14 MR. PERA: He's got even Tennessee
15 lawyers worrying about him.
16 MR. SMITH: Well, if I had a
17 Tennessee lawyer -- well, let's don't use Tennessee;
18 let's use Washington State.
19 Let's say a Washington State lawyer comes
20 in, violates our rules. Let's say I have the authority
21 to prosecute that lawyer, and I prosecute the lawyer,
22 and I get a ruling from my court that says, this lawyer
23 ought to be suspended for three years.
24 And I send it up to Washington State, and
25 Washington State says, well, now, wait a minute. Wait a
1 minute. You know, this happened in Georgia, in the
2 Georgia court. We're going to have to look at this
3 thing. And they putz around with it, and finally the
4 fellow gets a reprimand.
5 And I'm thinking, my God, look at what I
6 spent on this. I hauled the witnesses from hell to
7 breakfast and I spent all this time prosecuting this
8 case, and what happened? He got a slap on the wrist.
9 And while I was doing all this, there were all these
10 other people out there that were creating problems.
11 MR. GILLERS: But, Bill, I understood
12 your point to be stronger, and that is that even if
13 Washington pledged to visit reciprocal discipline and
14 suspend for three years, you don't have the resources to
15 worry about that, it -- that additional population of
16 out-of-state lawyers who may misbehave toward Georgia
17 clients, even if you were assured that whatever the
18 Georgia court ordered by way of sanction would be
19 imposed by their home state. There's a resource problem
20 in Georgia.
21 MR. SMITH: That's probably reflective of
22 most of the jurisdictions.
23 MR. GREEN: Can I say, Steve, I'm not
24 sure I understand that point. Because let's suppose you
25 have a finite number of Georgia clients with legal
1 matters. Let's suppose you have 10,000, and today
2 they're represented by Georgia lawyers.
3 If tomorrow they're represented by a mix
4 of Georgia lawyers and out-of-state lawyers, it's the
5 same number of legal matters; it's the same number of
6 malfeasance, and resources that would otherwise have
7 been used to go after Georgia lawyers who committed
8 ethical violations could now go after out-of-state
10 It may be that the pool of lawyers is
11 greater, but the pool of misconduct shouldn't
12 necessarily be any greater if we assume that lawyers are
13 as relatively good or bad from -- you know, in every
15 MR. SMITH: I think the problem of
16 resources would adjust itself if the lawyer who comes
17 into Georgia from out of state knows from the get-go
18 that that lawyer is going to be subject to discipline if
19 the rules are violated, because he or she knows in
20 advance that the home state is going to enforce it.
21 And I think that has a certain braking mechanism on the
22 violation, to begin with.
23 In the absence of that, you have people
24 coming into the jurisdiction that are not worried about
25 ultimate discipline.
1 MR. EHRENHAFT: To build on what Bruce
2 just said, I think that, by and large, we believe that
3 the profession of the law is being conducted by -- in
4 the United States by people who are honorable and who
5 are obeying the law and who are attempting to obey the
6 law and provide appropriate services to their clients.
7 I don't think that we should pervert our
8 entire system for the sake of going after the few people
9 who are violating those professional responsibilities.
10 And as we have heard here, what our questionnaires
11 respond to and what I have heard mostly is that the
12 reality of the system today is that most lawyers are
13 engaged in what is on the books an unauthorized practice
14 of law, and it is unseemly and inappropriate for the
15 legal profession to have rules for itself that it
16 doesn't honor itself.
17 We shouldn't have rules that we can't
18 honor, when half of our practice is telling other people
19 how they're supposed to obey the law. We have to have
20 rules that in fact are reasonable for the -- our
21 profession. And obviously catching the bad guys is a
22 part of that, but that's a small part of it.
23 That can't be the whole reason why we
24 have regulation of lawyers, to catch the few people who
25 are crooks. That's not what the purpose of regulation
1 of the profession ought to be about.
2 MR. RAMIREZ: But I think that -- you
3 know, going back to this issue of the opposition and
4 getting people to buy into the work of this Commission,
5 I think if we can convince all lawyers that the rules
6 are the same for everybody, that you're going to
7 eliminate a lot of that.
8 MR. SMITH: Absolutely.
9 MR. RAMIREZ: And I think -- you know,
10 when I was chair of the Supreme Court Board of New
11 Mexico, we had a case where a lawyer admitted into New
12 Mexico -- and there were other issues, because this guy
13 was in government service. Well, he committed -- he
14 committed --
15 MR. SMITH: The Jennings case?
16 MR. RAMIREZ: We went 'round and 'round
17 with that case for years.
18 But he committed an ethical violation, a
19 complaint was filed by the judge in that case, and he
20 was practicing in D.C., not in New Mexico. Well, it was
21 referred to the Supreme Court of New Mexico for
22 disciplinary action because the guy -- because D.C. is
23 saying, well, he's not admitted here; we can't touch
24 him. We can't do anything about it. So here we go.
25 We've got to go and investigate that complaint, and
1 bring charges against him, and prosecute this guy in the
2 state of New Mexico for something that didn't have
3 anything to do with -- but if D.C. -- if there was a
4 uniform rule or something, D.C. could have prosecuted
5 him, then I think, in my mind, that would have been more
7 MR. SMITH: If the Georgia lawyer goes
8 to Washington State and violates the rules, and the
9 Washington State Bar Council sends the matter to me, in
10 order for me to prosecute it, everything I need to
11 prosecute that case is in Washington State.
12 MR. RAMIREZ: Exactly.
13 MR. SMITH: I don't have the resources --
14 MR. RAMIREZ: Exactly.
15 MR. SMITH: -- to bring all of those
16 people back to Georgia in order to prosecute that case.
17 MR. RAMIREZ: But if the Washington
18 lawyers knew that this guy comes from Georgia, he's
19 going to practice law in my state, he's subject to the
20 same rules that I'm subject to, then I think they're
21 going to have less heartburn over whatever you decide to
23 MR. GREEN: What has been the experience
24 with pro hac vice admission? Because we've had lawyers
25 for years practicing in courts in states where they're
1 not licensed. Do we know whether the disciplinary
2 process breaks down in those cases?
3 MR. RAMIREZ: My experience has been that
4 that's handled at the trial level. If there's a
5 problem, it's handled more in the form of a sanction by
6 the judge than it is by referral to the disciplinary
8 MR. POSITAN: We have a guy barred from
9 practice in New Jersey because of things he did in a
10 prior case.
11 Don't forget also, when you have pro hac
12 vice, that the admitting attorney who is sponsoring that
13 person is also subject to discipline. For example, in
14 New Jersey, I mean, I have to certify, among other
15 things, that I'm going to review all the pleadings, I'm
16 going to make sure that everything that is filed is in
17 conformity with New Jersey practice and
18 responsibilities, ethical responsibilities. So I'm on
19 the line at the same time. So I think you have a
20 control there that doesn't exist in any other area.
21 MR. PERA: Of course, that's not true in
22 many states. We heard earlier, there are some states.
23 That's not necessarily the case. So that level of
24 control by local counsel is not present.
25 Of course, you have something similar
1 going on in the federal courts, where you don't need a
2 local lawyer. You simply come in a pro hac vice motion,
3 period, and you're on your own.
4 MR. POSITAN: Our federal court is still
5 pretty much consistent with what I just said.
6 MR. McCALLUM: I have a couple of things
7 that I'm not -- I don't understand as well as I would
8 like to. They're separate, but related.
9 The first is that we seem to be saying,
10 as I understand it, that because it's so hard to go
11 track that out-of-state lawyer down to discipline them
12 when they have misbehaved -- and I take it most of these
13 proceedings come up because of a grievance or some kind
14 of filing by somebody. It's not a monitoring system;
15 it's a reporting --
16 MR. SMITH: It's reactive.
17 MR. McCALLUM: It's a reactive system.
18 And if the answer to that is to have a
19 boundary restriction, they can't come in and do it. If
20 they can't come into the state, then they won't -- then
21 we can catch them.
22 But what I don't understand is, isn't it
23 just as hard to catch them for violating the boundary
24 restriction when they back go to their other state?
25 I don't see the difference in the
1 difficulty of enforcement of a boundary restriction and
2 a disciplinary violation.
3 And, in fact, I would think the
4 enforcement of the boundary restriction rule would be
5 maybe tougher and, as you say, less likely for anybody
6 to want to get excited about doing much of that. So
7 that's just a thing that I don't understand very well.
8 And, secondly, in my state, we've had a
9 statute for many years which permits any lawyer admitted
10 in any other state -- it doesn't make a difference
11 whether he went to an ABA-accredited law school or
12 not -- to enter the state temporarily and render
13 services in connection with a specific matter, and
14 that's not the unauthorized practice of law.
15 And I had always thought -- you can tell
16 me I'm wrong, Bill -- that we had a reasonably good
17 disciplinary framework in Michigan, and I never heard
18 anybody say, we've got a big problem with these
19 out-of-state lawyers that are coming in under the
21 So what I don't understand, is there a
22 big problem with this, or is this just another way of
23 masking what really is going on here, which is, we want
24 to keep competition down? That's what I'm asking.
25 MR. SMITH: Well, I think any kind of a
1 boundary restriction is doomed to failure, anyway. I
2 don't think that's the answer. Because the reason the
3 system works is because somebody is harmed and they can
4 come and make a complaint. Nobody gets exercised about
5 somebody that comes across the border; we're probably
6 never going to know about it.
7 I don't know whether -- I don't know that
8 we can say that in every single case where somebody not
9 admitted comes across the border, the public is
10 ill-served. I don't know that we can say that.
11 But it seems to me that the solution
12 would to be create a way to level the playing field when
13 these people do come across the border. Now, if you
14 change the boundary rules, then you are going to see an
15 increase --
16 MR. GILLERS: Then, what?
17 MR. SMITH: You are going to see an
18 increase in disciplinary violations simply because
19 you're going to have more people who are more openly
20 coming into the jurisdiction.
21 MR. McCALLUM: Do you really think that's
22 true? Do you really think there is going to be a change
23 in the level of activity that the lawyers in a lot of
24 firms are now doing across states?
25 MR. SMITH: We're seeing it now just by
1 virtue of the advent of the Internet.
2 MR. McCALLUM: The Internet has really
3 changed that; that's for sure.
4 MR. SMITH: That's having a --
5 MR. McCALLUM: Big impact.
6 MR. SMITH: That impact, by itself, is
7 enough to justify the discussion.
8 MR. McCALLUM: Absolutely.
9 MR. RAMIREZ: You know, that raises
10 interesting issues. I appeared on a couple of programs
11 with Justice Enoch from the Texas Supreme Court.
12 And in Texas, they had a unique situation
13 with Nolo Press, where Nolo Press was marketing stuff on
14 the Internet.
15 And maybe, Bill, you're in a better
16 position to explain what happened than I am.
17 MR. MELTON: No, I'm sorry, I'm not. Go
19 MR. SMITH: With Nolo Press?
20 MS. NEEDHAM: It was Nolo Press, then
22 MR. RAMIREZ: Nolo Press, then Quicken.
23 But what they were doing was marketing the stuff on the
24 Internet, and I guess there was a ruling that it was the
25 unauthorized practice of law. And then the legislature
1 went in and said, no, it's not, and changed the rule.
2 The same thing, too, I think, with the
3 Arthur Andersen cases. You know, they were -- Arthur
4 Andersen was prosecuted for the unauthorized practice of
5 law related to the MDP issue. But eventually those two
6 cases were both dismissed. I guess the Texas
7 Disciplinary Council, whatever, didn't have the
8 resources to truly combat the case.
9 MS. NEEDHAM: Well, it wasn't continued
10 to be prosecuted. It wasn't officially joined and
11 dismissed; it was just abandoned, which is, you know,
13 MR. RAMIREZ: Yeah.
14 MS. NEEDHAM: You're right. You're
15 right. It didn't go down the road.
16 MR. RAMIREZ: But the same reason,
17 because you can't fight, you know, Goliath with
18 marshmallows, and that's exactly what happened.
19 MR. SMITH: You know, I think the bar has
20 two main constituencies, unified bars, anyway. The
21 first one is the Supreme Court and the second one is the
22 state legislature. Those are the two bodies that can
23 hurt you.
24 MR. RAMIREZ: I was going to comment on
25 Charles' two points he was making here. I think with
1 regard to the first point about, you know, is there
2 really a problem, if you look at the total number of UPL
3 prosecutions across the 50 states, there's probably a
4 handful that occur every year, maybe. And I think there
5 are a number of reasons for that.
6 But I think, a lot of times with counsel
7 coming in from out of state, it's a question of who's
8 complaining. If it's the court that's complaining,
9 yeah, you're going to see a prosecution. But if it's
10 the client that's got the problem, I think the client
11 has a different way of dealing with it by just firing
12 the attorney.
13 MR. SMITH: Now, when you say there's not
14 a problem, you can't --
15 MR. RAMIREZ: No, I'm not saying there's
16 not a problem. I'm just saying --
17 MR. SMITH: Let me tell you what happened
18 in Tennessee with the Chattanooga Bar, because that
19 experience chilled a lot of us.
20 The Chattanooga Bar decided to bring UPL
21 enforcement proceedings, and they got hit with an
22 antitrust action. And I remember talking to the people
23 with the Chattanooga Bar right after it was filed, and
24 there was a lot of -- this was really funny and ho, ho,
25 ho, it will be gone tomorrow.
1 Well, six, eight months later, nobody was
2 laughing, because it had gotten past the stage where the
3 motion to dismiss didn't work, and it looked like they
4 were going to have to go to an evidentiary hearing.
5 Now, evidentiary hearings in antitrust
6 cases are way on down the line and a lot of big bucks.
7 Now, that case finally resolved itself, mainly because
8 the plaintiff didn't have the resources either to carry
9 the case forward, and it finally went away.
10 But a lot of us in the bar council office
11 of the various jurisdictions are aware of that
12 Chattanooga experience, and we have to tell our boards,
13 understand that if we bring this action, you may get hit
14 with an antitrust claim. And it's not going to be a
15 motion to dismiss; we're going to have to take it to an
16 evidentiary hearing. And, sure, we'll win the
17 evidentiary hearing, but that's way on down the line,
18 and you'll be defending this case for the next four or
19 five years, and anytime you do any kind of business,
20 you've got to disclose it. That's had a very chilling
22 So I think one of the reasons you haven't
23 seen a lot of UPL prosecutions is because of systemic
24 problems, not because the violations haven't been there.
25 MR. RAMIREZ: No, I'm not saying the
1 violations aren't occurring; I'm just saying that the
2 violations are dealt with in other ways other than the
3 filing of a UPL complaint.
4 MR. McCALLUM: For clarity of
5 understanding, you're talking about UPL actions against
7 MR. RAMIREZ: Against lawyers.
8 MR. McCALLUM: Not UPL actions generally,
9 but against lawyers?
10 MR. SMITH: This was a nonlawyer.
11 MR. McCALLUM: I don't think they have --
12 MR. PERA: I think we need to pay
13 attention to the dynamic here. I mean, we've got a
14 situation where we're becoming more and more conscious
15 of the fact that lawyer behavior -- and it's been
16 accepted for a while -- is getting -- is at odds with
17 the law, and then we have extremely powerful forces out
18 there driving the behavior, forces that are changing and
20 One of them is Internet. Frankly, in my
21 view, it's the least powerful of the forces. Other
22 forces that are out there, I mean, the same forces that
23 mean that no matter where you go in this country, you
24 seem the same, you know, places that sell electronics
25 and grocery stores and electronics stores, those are the
1 same forces that are causing law firms to need to bid
2 for larger and larger blocks of services, and so that's
3 why firms are getting more regional, even if that means
4 adding an office in one other state or adding an office
5 in 10 other states.
6 It also means that companies' clients, if
7 they've got offices in 20 states, they need a labor
8 lawyer, then they're looking for somebody who will do
9 work in 20 states. Those are very powerful forces, and
10 there are reasons why law firms are doing all this, this
11 merging, even at a very local level, and it is -- you
12 know, those are the kind of forces that are driving
13 lawyers to continue this behavior.
14 On the other hand, you've got these other
15 forces contending against them that -- you know, whether
16 you want to call them protectionist or turf or whatever
17 you might call them, and put a negative pejorative on
18 them, it's competition. It's life. You know, it's
19 lawyers who see the fact that they used to have in their
20 10-lawyer firm a labor lawyer who did work for two or
21 three local companies, but now there's a regional labor
22 firm that's doing all that today, and by the way, it's
23 across the state line.
24 So, I mean, it seems to me that all these
25 forces are pushing us to have to do something. Now, how
1 much we can do I think is -- I think is problematic. I
2 think it's not possible, for reasons that have been
3 expressed, to do -- to solve all these problems, but it
4 seems to me this group has got to address -- pick the
5 low-hanging fruit, or whatever you want to call it,
6 because, otherwise, there are going to be some other
8 There are going to be more bar
9 complaints. There are going to be some private
10 prosecutions in the states that permit UPL prosecutions
11 by private lawyers. There are going to be -- the State
12 of Tennessee has the ability -- the State Attorney
13 General now has the authority to prosecute UPL out of
14 their Consumer Affairs Division. You're going to see
15 more and more activity in this regard.
16 MR. GILLERS: I think that protectionism
17 is probably part of it, but I don't think it should mask
18 what I think are legitimate state interests.
19 MR. PERA: Right.
20 MR. GILLERS: And which we'll hear plenty
21 of and you'll hear plenty of with the Ethics 2000
23 One is discipline. And I think what we
24 have achieved here today is, at least based on Bill's
25 experience, is that if you can level the playing field
1 and that out-of-state lawyer knows that the Georgia
2 sanction will almost certainly be the Washington
3 sanction, barring the usual exceptions to full faith and
4 credit, maybe that's the answer to discipline.
5 Another is that the character of
6 inquiries that attend formal admission, whatever the
7 other requirements may or may not be for someone who is
8 moving into a state, don't get done for the transient
9 lawyer. And the answer to that might be, well, so long
10 as that lawyer's in good standing in his or her own
11 state, we're relying on the other state's review of the
12 character. We can talk more about that.
13 And a third, which we haven't talked
14 about at all, is competence. Because if this lawyer is
15 going to be allowed to render advice on anything,
16 including matters of particularly local law, real estate
17 law, probate law, state securities regulations -- a
18 state has a legitimate interest in competence, and it's
19 no answer to say, well, there's always a malpractice
20 action and there's always the opportunity, if there is
21 malpractice, to get jurisdiction in that host state,
22 because states have an interest in avoiding the
23 malpractice and not forcing that remedy on the client.
24 We have to talk about competence in terms
25 of the scope of the work that the transient lawyer will
1 be allowed to do in the host state.
2 And the final issue, which we haven't
3 talked about -- and I just red-flag it now -- is the
4 following. Let's take New Jersey, sandwiched between
5 Philadelphia and New York City. And I think the reason
6 New Jersey doesn't have a reciprocity rule is because of
7 its geographic location. That has to be a real concern.
8 A totally laissez-faire system, one might
9 predict, will weaken the cohesiveness and the economic
10 strength of the State Bar as work moves to the border
11 states. Given solicitation and marketing devices, that
12 will only be encouraged.
13 So is there a legitimate state interest
14 in maintaining a strong local bar? New Hampshire is in
15 the same position, next to Massachusetts and Boston and
16 other states -- maybe New Mexico is another -- that may
17 fear that their local bars will be weakened.
18 It's from the State Bar that states draw
19 a lot of expertise and resources, local political
20 activity, service on various community and board of
21 education bodies, et cetera. So do we have to worry
22 about that, about the possibility of that kind of
23 debilitating effect, if it becomes a national
24 laissez-faire system? Is that a legitimate state
1 MR. EHRENHAFT: I have two responses to
2 Steve's comments.
3 One is that the first issue, with regard
4 to making sure that the lawyers are competent, the
5 states today have no way of monitoring current in-state
6 practitioners to determine their competence. And if one
7 is really concerned about that, then it seems to me that
8 one can't have a higher degree of regulation with regard
9 to people who claim that same competence just because
10 they live across the river.
11 And the clients, who are the ones who
12 ought to decide on who they want to represent them, have
13 a greater interest in being assured that they can select
14 whoever they want for what they believe is the kind of
15 advice that they want, and their needs and -- I believe
16 they have a greater interest than the profession has an
17 obligation to serve than protecting against possible
18 people from other states on the level of competence.
19 We don't have a requalification system;
20 we don't have a monitoring system today. And so,
21 therefore, whether the people come from out of state or
22 in state is not a viable distinction, in my mind.
23 Secondly, the argument about the
24 viable -- you know, you sound like a steelworker saying
25 as to why we have to protect the steel industry against
1 foreign imports. We have to have a vibrant steel
2 industry. Why? Because we need a vibrant steel
3 industry, without being concerned about consumers of
4 steel who may think it would be better to get cheaper
5 steel from somewhere else.
6 There is no inherent reason why, if the
7 local bar can't survive in a competitive society, why it
8 needs protection. It will be a difficult issue in the
9 House of Delegates of the ABA; I have no doubt about
11 And, therefore, if we want to achieve
12 something, maybe we have to trim our sails. But in
13 thinking about, on an abstract basis, what we can do,
14 what we should propose, I just don't see that we should
15 start from the proposition that people -- that the
16 practitioner deserves protection from competition.
17 And when you say that you're confident
18 that the bar is going to prevail in an evidentiary
19 hearing on an antitrust case, I'm not sure that they
20 can. The ABA lost a couple of antitrust -- or consented
21 to some antitrust decrees because they couldn't --
22 MR. SMITH: What I was talking about was
23 the State Bar of Georgia, and I was representing them,
24 and there's no doubt that I would win.
25 MR. EHRENHAFT: I see. Right.
1 MR. McCALLUM: I wish we could use you
2 on admissions out of state.
3 MR. POSITAN: On competency, there are a
4 variety of states that have determined that there is a
5 continuing competency requirement, which is mandatory
6 CLE. I think Pennsylvania requires it; New York
7 requires it. And I have to -- my biannual registration,
8 as I did several weeks ago, I had to document the
9 competency levels that they have demanded, ethics and
11 I have an associate who, in the last two
12 months, I probably spent 3 or $4,000 on certain courses
13 that he had to go take to make sure that he maintained
14 his Pennsylvania license.
15 In those states, how do you tell the
16 person who had to do all of that, that we -- there was a
17 judgment made by the Supreme Courts in those states that
18 that was something that they were going to require you
19 to do for you to retain your license.
20 So you had to go take your six credits of
21 ethics courses every year. That is a continuing
22 competency question. That could -- let me finish.
23 And in that situation, how do you then
24 say, since we, the Supreme Court of Pennsylvania, have
25 decided that you have to have that to practice here, and
1 we in New York say, you have to take 21 credits every
2 two years, why should somebody who hasn't done that --
3 what determination -- I mean, how could they say, if you
4 want to be admitted in New York, you have to do it, but
5 if you want to come here and practice, you can practice
7 That -- maybe that means that the
8 competency requirement that they're putting in is no
9 longer valid, if we were to adopt that law.
10 Secondly, I mean, I sit on the State Bar
11 of New Jersey, the Board of Trustees, and I can tell you
12 at least 10 things that we've probably decided in the
13 last three years of my tenure which I think were very
14 important issues, whereas if the State Bar didn't exist
15 and or didn't have the strength -- and I think Steve
16 brings up a very valid point, not that it's a monopoly,
17 not that it's protectionist, but I think you add
18 something to the mix in terms of the interaction that
19 goes on constantly with the Supreme Court in our state,
20 the various committees that we serve on, whether it be
21 model jury instructions, UPL, PRC and so on, that if
22 that body of people wasn't there who had a stake in that
23 state and that particular relationship with that Supreme
24 Court -- we comment on legislation constantly. Every
25 meeting, we spend probably two hours on whatever is
1 pending in the legislature, taking stands that some
2 people don't like sometimes.
3 But it's very interesting that the
4 involvement of out-of-state attorneys is nonexistent.
5 Even the ones that have the offices from New York,
6 Philadelphia, they don't usually participate.
7 I mean, there are exceptions. It's not a
8 blanket thing. It's not because somebody told them they
9 couldn't participate. But county bar associations send
10 their representatives; they're delegates at large.
11 And I agree with Steve. I'm not saying
12 that this is a be-all/end-all. But there is a
13 legitimate concern, I think, and it's happening in
14 New Jersey because of this competition right now.
15 And I'm not disagreeing with a lot of the
16 concepts. We're not as far apart as it would seem.
17 That's not really where I'm at. But I think it is a
18 legitimate concern as to not evaporating that body of --
19 of expertise of -- you know, of analysis that exists,
20 that I think does serve the public.
21 And I'm not talking about serving it
22 professionally; I'm talking about serving the public
23 that we serve, because these issues really do affect how
24 justice is administered.
25 I agree that that is a concern. I don't
1 know that you wrap your arms around it and say, well, I
2 can find it in this little box here, because you can't,
3 necessarily. But I think it's a very valid point.
4 MR. GREEN: Is it clear, Wayne, just to
5 take the New Jersey example that Steve gives, that
6 it's -- all the work is going to be New Jersey clients
7 going to New York lawyers? I mean, one advantage that
8 New Jersey lawyers have is they charge less because the
9 cost of living is less.
10 And I don't personally think it's a
11 foregone conclusion that it's going to be
12 disadvantageous to New Jersey lawyers and New Hampshire
13 lawyers if you have more liberal multistate practice.
14 I spoke recently to a New York City
15 lawyer in a firm that also has a firm in -- or an office
16 in an area that's much less expensive, and they
17 outsource a lot of their work to the lawyers in the
18 out-of-Manhattan office because the office costs less
19 and the salaries are less and so forth.
20 So I -- you know, I know that lawyers,
21 ironically, have a fear of the unknown, even though,
22 historically, we have done so much to help our clients
23 deal with, you know, progress and the future. And I
24 sort of wonder whether the concern of lawyers in places
25 like New Jersey and New Hampshire might be an
1 instinctive reaction, but perhaps an overstated one.
2 MR. POSITAN: No, I think it's something
3 that I could comment on over 27 years of practice, which
4 has changed, and I've seen the change. There used to be
5 a lot of referrals from New York firms to New Jersey.
6 That's essentially dried up.
7 I mean, most of the national referrals
8 now are from Georgia and Texas and places that you know
9 people from from your various efforts and expertise.
10 But when you look at what flows back
11 across the river on either side, de minimis. And, I
12 mean, I do work in both of those states, but I can tell
13 you, on any kind of an overall scale, I venture to say
14 if it's more than 90 to 10 percent, I would be
16 And there's another part of that. I
17 mean, insurance carriers, which has taken over a lot of
18 the employment litigation business, for example,
19 in-house counsel are basically going to do a big CYA.
20 It's always easier for in-house counsel
21 to say, I'm going to go with this big regional/national
22 firm, because if they lose, I'm not going to have my
23 tail on the line. Instead of going to Positan because,
24 well, you know, he may be -- big reputation in his area,
25 but, you know, I'm a lot more comfortable with this big
1 labor/employment firm over here that has 500 attorneys,
2 instead of his 30.
3 You know, that happens. And I win some
4 of those beauty contests, but you lose some of them
5 because you never get called because there's just, you
6 know, a better way for them to deal.
7 So I think, from a business standpoint,
8 it's a real problem, and I think it's a realistic
9 recognition of what goes on in terms of what the legal
10 business has become today. And that doesn't mean you
11 don't have to adapt to change, but I can tell you that
12 it doesn't work that way that much, and that's based
13 upon hard, practical experience, and I'm not just
14 speaking for myself. I have seen the phenomenon occur
15 over the last 25 years.
16 MR. SMITH: I think Professor Gillers has
17 an excellent point, because if we get to the point in
18 this country where all the barriers are down and you
19 don't have to live in the state or practice in the
20 state, and you don't have to be a member of the bar of
21 the state to practice there, I'm going to tell my board
22 that they need to cut their dues in half, they need to
23 lower the admission requirements to just about a nil,
24 they need to get rid of mandatory CLE, and all of a
25 sudden their membership is going to quadruple, and
1 they're going to have more money than they know what to
2 do with, because all of these lawyers from these other
3 states are going to drop their membership and come join
4 the Georgia Bar.
5 MS. NEEDHAM: The race-to-the-bottom
7 MR. SMITH: Yeah. I mean, I think that's
8 a terrible disincentive to the meritorious regulatory
9 efforts that the bars have.
10 MS. GRAY: Bill, I don't understand,
11 though. All we're talking about is having the Supreme
12 Court look at a way to facilitate the delivery of legal
13 services, I mean, within their jurisdiction. And if
14 that means not constricting the bar, if that means
15 enhancing the bar, expanding the bar, enlarging the bar,
16 that's really what you're doing.
17 I mean, if you're letting other lawyers
18 who have been licensed and certified to be capable of
19 delivering legal services to come into the territorial
20 jurisdiction in Georgia, certify with the court, I
21 assume pay money for the privilege of doing that so that
22 their conduct can be monitored, so the regulatory system
23 can come into place, I mean I feel that the court really
24 is providing an enhanced service to the citizens of that
25 particular jurisdiction. So I don't think it has to
1 have a negative spin.
2 And to respond to Wayne, I mean,
3 obviously, Wayne, you're not competing with regional
4 firms for business now; you probably have some concerns
5 about legitimately how far can you go. But maybe once
6 the barriers are out, then you are permitted to, you
7 know, advertise regionally, I mean you may find that the
8 flow to you in New Jersey with more favorable rates
9 are -- I mean, it might end up being something that
10 would really facilitate your practice and not constrict
11 it due to competition.
12 Again, it's the unknown, but I think that
13 there are different ways of looking at this phenomenon
14 to make the -- if in fact it's something that ultimately
15 we think should be facilitated in an organized,
16 responsible fashion, then I think we have to package it
17 in a way that the courts feel they are doing a service
18 first and foremost to the public and not to the economic
19 interest of lawyers, and I think that's --
20 MR. PERA: I'm suggesting that you go --
21 that you go an Ethics 2000 route, that you do a pro hac
22 vice standardization, that you can see if you can do
23 something on motion practice, as far as moving -- you
24 know, whatever you call it, a motion practice to waive
25 it to a state, that you look at reciprocal discipline,
1 and make that more effective, and that you don't go to
2 the radical break-down-all-the-barriers proposals that
3 will cause thermonuclear meltdown.
4 MR. POSITAN: Brian, you're from Texas.
5 You haven't had much of an opportunity to get involved
6 in terms of any questions that you might have. We're
7 kind of coming to the end of our time here, and just
8 before we did that, if you have any particular inputs,
9 questions or things that you would like to put out on
10 the table, just in terms of either helping you to go
11 back to your bar and engage in further discussion
12 analysis, along these lines, that we'd be happy to hear
13 whatever you have to say on that before we start closing
14 the proceeding here.
15 MR. MELTON: Thank you, Wayne. It is a
16 very interesting discussion. Your learning curve is
17 very high.
18 I don't think there have been any surveys
19 among Texas lawyers on MJP issues. I know there hasn't
20 been in the North Texas area.
21 But, by analogy, I know, because I was
22 cochair of the MDP task force here, we rang the bells in
23 all the metropolitan bars in Texas, and for the first
24 time anyone can remember, Houston, Dallas, Austin,
25 El Paso and Fort Worth metropolitan bars are all jointly
1 resolved that we do not support MDP, although we had
2 numerous symposiums and many, many intelligent,
3 thoughtful lawyers from all across the spectrum who were
4 very vigorously in favor of MDPs.
5 So we started thinking, well, what are
6 the logical outcomes of that discussion? We came up
7 with first, client interests are paramount; and, second,
8 any change is more likely to take place in the Texas
9 legislature than through the State Bar or through
10 anything coming from the ABA.
11 So when we look at MJP issues, I don't
12 know that many Dallas lawyers perceive it as a real
13 problem that should be -- come up that should generate a
14 global solution.
15 It's definitely something that people are
16 raising their eyebrows about, problems of crossing state
17 lines, and especially you mentioned the Internet issues.
18 So I can see that at some point, it's going to percolate
19 to a major issue, a major problem.
20 But right now, most of more members are
21 still thinking that market forces protect the clients in
22 most interests. If you think that you're competent
23 enough to handle a problem across state lines, you're
24 usually going to get local counsel there, or you're in a
25 firm large enough that you got help in that area, so
1 it's not perceived as a huge problem.
2 But we are very interested in the trends,
3 and I know our State Bar and American Bar reps from this
4 area are very interested in future conferences and go to
5 all those. So they want to know exactly what this
6 Commission is thinking and might come up with to study
7 that issue. So I commend what you're doing.
8 MR. POSITAN: Well, you've heard our
9 unified response to that. I'm being facetious, for the
11 Well, it's 5:00. Does anybody else -- I
12 know -- if you haven't had an opportunity to speak or
13 something, you might want to say a few things, we
14 welcome that, of course. But otherwise, we'll probably
15 try to move towards closing.
16 MS. NEEDHAM: Actually, I would be
17 delighted to say a couple of things, and I'll keep it
19 It seems to me fairly clear that at least
20 the Michigan example of transient practice being, you
21 know, clearly delineated as legitimate, approved, no
22 problem, perhaps with the registration or a, here's my
23 bar number, the place I'm at -- I'm saying, as a caveat,
24 that would be okay, I think, in deference to some places
25 that want to have a little more control.
1 But, you know, you should be able to take
2 your work home, take your work on vacation, respond to
3 e-mails and client requests and things wherever you're
4 located, especially in places like D.C., where people
5 live in Virginia and Maryland.
6 You know, it's a little frightening to
7 think it's -- you know, you can take your work home if
8 you happen to have a townhouse in a certain location,
9 but you can't when you go across the river.
10 MR. POSITAN: The practice of law on my
12 MS. NEEDHAM: I think we're kind of
13 dancing around, but no one's really addressed one of the
14 real black-hole problems with this area, which is that
15 the definition of the practice of law is just so murky
16 and so differentiated from place to place, and it's
17 impossible to get any consensus. I'm certainly not
18 suggesting that the Commission attempt to do that,
19 because it's -- it's a --
20 MR. POSITAN: We all agree, we don't want
21 to go there.
22 MS. NEEDHAM: Right. But the problem is,
23 if you're not going to define the actions which are for
24 sure okay or not, then you're left with less adequate
25 ways to get at the issue, and I think client choice is
1 an important interest, and, you know, especially because
2 we respect conflicts of interest, to the extent of
3 imputing conflicts of interest, if there are only five
4 or 10 excellent practitioners in a certain -- health
5 law, for example, or some subspecialty, why shouldn't
6 the client be able to get a more competent attorney in
7 that specialty, even if they happen to be in
8 Tennessee -- not to cast aspersions on Tennessee.
9 But the point is that you should be able
10 to get the most competent counsel. And if that's the
11 concern, then it seems to me that that is a legitimate,
12 you know, basic value.
13 And part of the problem, as we've looked
14 at the bar examination process as a proxy for competency
15 in the particular area in which you're doing legal work,
16 and the bar examining does have a basic -- you know, the
17 person can read and write English, at least, and, you
18 know, there is a certain -- even no matter how low the
19 race to the bottom goes, there is something being tested
20 in all 50 state exams, but it's not nuanced enough to
21 really focus in on the ability to deliver a particular
22 kind of work to a particular kind of client.
23 That's essentially self-policing. You
24 know, the lawyers become competent and, you know,
25 restrict their practice to an area that they're
1 confident they can do well.
2 Let me just say also that I think it's
3 essential to delineate between the attorney and
4 nonattorney. I don't go quite so far as Deborah Rhode
5 or some of the members of the Commission in saying that
6 there should be no variance.
7 But it does seem to me that someone who
8 at least has met some state's competency and moral
9 character requirements, I would rather have that person
10 free to do things than someone who has met no state's
12 And let me just say, if you're
13 interested, I could circulate a couple of articles I've
14 written. One in particular talks about the local rules
15 that various federal courts have adopted, and they
16 really are -- they create a current pastiche that I'm
17 sure you're aware of, but nobody has come up with any
18 problems as a result.
19 And so, in a sense, we've had a
20 laboratory; we've had empirical data that can be
21 developed in Michigan and in the federal courts
22 practice, and there has been no, you know, outcry
23 because people were doing things which were off the
24 charts, you know, the work that the lawyers coming in
25 under the local rules of federal courts or occasional
1 practice in Michigan has been fine, and in-house counsel
2 have been allowed to practice in almost 15 states, and
3 there's been no issue there either in terms of
4 competence or ability.
5 I think this is a very valuable
6 enterprise, and it's -- the problem is you're focusing
7 on different aspects of the world, and to keep them all
8 in place at the same time is impossible. So I commend
9 the Commission for attempting such a difficult process.
10 MR. POSITAN: One chief made an
11 interesting comment to me the other day. He said that
12 he was out with a bunch of law students in some program
13 he participates in, and had lunch with about seven or
14 eight of them, and was upset because they were asking
15 him as part of the process what he thought the easiest
16 state for admission was, because they were kind of -- a
17 couple of them were gravitating to where they might have
18 the best chance to be admitted.
19 MR. PERA: Georgia's got plenty of work.
20 MR. POSITAN: He said he found that
22 Let me ask you a question, Bill, apropos
23 of Charles' model in Michigan and what we just said:
24 Would you feel better about your concept of discipline
25 if you had a gatekeeper of some type or a Michigan kind
1 of a check-in system or something? You don't have it?
2 MR. McCALLUM: We don't have a check-in
3 system. Michigan does not have a check-in system.
4 MR. POSITAN: But if you had some kind of
5 a check-in system, where whoever was coming in would
6 file something or register or -- or register and say
7 that, well, I've read the ethics rules in Georgia or
8 something like that, in other words, some kind of a
9 process where there was a registration saying, I agree
10 that if I do something wrong here, there's going to be a
11 disciplinary proceeding which is going to be reported
12 back to where I belong, would that make you feel better
13 about that concern about discipline?
14 MR. SMITH: No, no, no. Because if I
15 have to depend on the disciplinary prosecutor in the
16 home jurisdiction to prosecute for the violation, the
17 chances of the prosecution taking place are going to be
18 dependent upon distance and resources, rather than the
19 egregious nature of the violation.
20 MR. POSITAN: What if there was a compact
21 between states that said that they would give full faith
22 and credit to what you did in Georgia?
23 MR. SMITH: I'd like that.
24 MR. PERA: Would Georgia have any problem
25 doing the same, do you think?
1 MR. SMITH: Historically, we have not had
2 a problem with that. I don't know of -- we don't get
3 too many reciprocal discipline complaints, but I'm not
4 aware of any that we haven't treated seriously and
5 imposed the same penalty that the forwarding
6 jurisdiction would impose, so I don't think it would be
7 a problem with us.
8 MS. GRAY: I mean, generally, there's a
9 presumption that the discipline that has been
10 recommended and imposed show cause why it should not
11 equally be imposed in the other jurisdiction.
12 But under a revised scheme, Bill, I mean,
13 certainly you can find a lawyer that -- you know, we'll
14 say the lawyer that's registered with you --
15 MR. SMITH: Wait a minute. Wait a
16 minute. If you introduce fines as a penalty in the
17 disciplinary process, you have changed my process from a
18 civil process to a criminal process.
19 MS. GRAY: Well, many jurisdictions do
21 MR. SMITH: And we can't -- well, you
22 know, I -- we don't have the resources to run a criminal
24 MR. POSITAN: At this point, I think
25 we're going to adjourn the proceedings, because we're a
1 little bit over our stay. And I really want to thank,
2 on behalf of the Commission, everybody who came here to
3 assist us in this effort and give us inputs and get some
4 further information.
5 We would encourage you to stay in touch
6 with us. Anytime we can be a resource to you in terms
7 of any questions that come up from your various bar
8 constituencies or other attorneys who may be involved in
9 the question process, please feel free to give any of us
10 a call or visit the Web site or, you know, ask for some
11 further information, and we would encourage you to stay
12 involved, give us some more thoughts as you get better
13 inputs, you know, wherever your people are in this study
14 process, because we really do want to get the maximum
15 input possible.
16 Once again, I thank you. I thank the
17 reporter today for keeping up with all of this.
18 And as far as the Commission goes, we
19 will reconvene tomorrow at 10 a.m. for our business
21 (Proceedings concluded at 5:07 p.m.)