WHERE YOU STAND DEPENDS ON WHERE YOU SIT:
ONE LITIGATOR’S VIEW OF
MULTIJURISDICTIONAL PRACTICE ISSUES
AND RELATED POLICY QUESTIONS
By Peter R. Jarvis *
This paper should be read together with the paper prepared by Tony Davis. The Davis paper does two things. It looks at multi-jurisdictional practice issues from the standpoint of a business or transactional lawyer and it makes the case, from a business or transactional lawyer’s perspective, for the substantial relaxation or elimination of jurisdictional boundaries within the United States.
This paper also does two things, but they are different. It looks at multi-jurisdictional practice issues from the standpoint of a litigator but it does not so much make the case for or against the present rules as it does outline the policy-related issues that should ideally be addressed before conclusions are reached.
The two basic points made in this memorandum are as follows:
- Although the availability of pro hac vice representation makes multi-jurisdictional issues easier for litigators in some ways, litigators and their clients still encounter difficulties with state-level practice limitations.
- There are a series of fundamental policy issues which need to be addressed in order for the profession to decide whether, and if so to what extent, the present regulatory structure of the legal profession needs to be modified.
The reader is cautioned that the purpose of this memorandum is to encourage discussion and not to present the scholarly "last word" on any issues.
- PRO HAC VICE ADMISSIONS AND THEIR LIMITATIONS
There was a time in the not too distant past in which a lawyer from County A of a state might need to associate a lawyer from County B in order to handle a case pending in County B of the same state. That is no longer true; a lawyer who is a member of a state bar may now try a case in any county of that state. 1
Although they are not uniform, all states now appear to recognize at least some circumstances in which lawyers admitted only in other states may be admitted pro hac vice to conduct litigation. There does not appear to be any indication in the legal literature or in sanctions or disciplinary case law that lawyers admitted pro hac vice are either more or less "trouble" for the courts before whom (or the parties for or against whom) they appear than local admittees.
A pro hac vice process is helpful in two ways. On the one hand, it allows the client to use a particular lawyer of the client’s choice even if the lawyer is not admitted locally. On the other, it creates a safe harbor for the lawyer who is admitted pro hac vice and who therefore need not be concerned about engaging in unauthorized practice in the same manner as multi- state business transaction lawyers. Nonetheless, this does not mean that the present system is ideal or even adequate from the point of view of courts, clients, litigators or the public interest.
At a minimum, the following actual or potential problems can be identified:
- In at least some jurisdictions, pro hac vice admission is discretionary. This can lead to unpredictable and potentially inappropriate results.
- Most if not all pro hac vice rules appear to require substantial good faith involvement of local counsel. There clearly are potential benefits to be gained from the involvement of local counsel in the sense that actual knowledge of and compliance with local rules and customs may be increased.
- Nevertheless, this must be balanced against the potential increased costs that a client may incur with two lawyers. Even though there can be a lot of variation from state to state in the interpretation of ostensibly uniform laws, there seem to be an increasing number of areas of litigation as well as business practice in which the law of the various states is sufficiently similar that national or regional level practices make more sense than practices that are artificially capped at the state bar level, especially but not exclusively for clients with national or international businesses.
- On the other hand, it sometimes seems that the requirement of substantial involvement of local counsel is honored as much in the breach as in the observance. The Bar ought not to have rules that it is not ready, willing and able to enforce and is not actually enforcing.
- Litigators sometimes have reason to assist in the handling of matters without needing to become involved as counsel of record. It would seem that the pro hac vice process does not reach such litigators. Compare Spivak v. Sachs, 16 N.Y.2d 163, 211 N.E.2d 329, 263 N.Y.S.2d 953 (1965) (California lawyer not entitled to be paid for behind scenes advice on New York or Connecticut divorce), with Fought & Co. v. Steel Eng'g and Erection, Inc., 87 Haw. 37, 951 P.2d 487 (Haw. 1998) (out-of-state corporate general counsel may be paid for behind scenes work on Hawaii litigation).
- Alternative dispute resolution in the form of private arbitration and mediation are now an important part of many litigators' careers and are only likely to increase in importance over time. Although California has adopted a temporary pro hac vice process for arbitrators in response to Birbrower, 2 few other states do. To the extent that states other than California could hold, as California did in Birbrower, that arbitration or mediation within their boundaries constitutes the practice of law within those states, litigators are just as much at risk as their business and transaction lawyer counterparts.
- It has happened that litigators in State A have sought to use the State A unauthorized practice rules to prohibit litigators from State B from taking a deposition in State A even though the underlying litigation is pending in State B. One can similarly imagine circumstances in which litigators from State A would be prohibited from defending third-party depositions in State A if not admitted in State B.
2. POLICY ISSUES
The balance of this memorandum identifies seven overlapping sets of policy or related issues that are pertinent to state-level limitation on legal practice. As a general matter, these issues are relevant to both litigation and business practices.
- Why Are We Here?
- Because state-level barriers to competition may do more harm to clients than good? If so, what kind(s)?
- Because state-level barriers to competition may do more harm to the public than good? If so, what kind(s)?
- Because it is illogical to rely in significant part on state-level exam-based bar admissions when so many law students study so little truly local law, when a number of states allow for automatic or quasi-automatic reciprocity and when most states depend in significant part on a multistate bar exam?
- Because we have to catch up with changing national or international economic forces ( e.g., international legal-accounting firms, the domestic growth of law-related businesses by nonlawyers, possible changes imposed as a result of treaty obligations)?
- Because changes in technology blur physical boundaries and make it easy to be present everywhere at once?
- Because the present patchwork system provides an unlevel playing field as between lawyers in different jurisdictions, as between more and less conscientious lawyers and as between lawyers and nonlawyers?
- Because the present patchwork system does not have adequate means to guard against unscrupulous interstate or international practitioners?
- Because problems are particularly acute when metropolitan areas spread out over more than one state?
- Because the present rules are unclear?
- Because the present rules are clear enough but we do not like them?
- For some other reason or reasons?
- What Are the Stated or Unstated Purposes Served, or Sought To Be Served, by State Level Practice Rules? Which, if Any, of These Purposes Reasonably Appear To Be Valid?
- Protection of the public against nonlawyers who pretend to be lawyers?
- Protection of the public against lawyers not familiar with local differences in the law?
- Protection of lawyers as a group vis a vis other potential providers of legal services ( e.g., independent paralegals, accountants, financial advisers)?
- Protection of state/local lawyers’ quasi-monopoly profits?
- Protection of the power to discipline at a reasonably local level?
- Some other purpose or purposes?
- How, if at all, should these purposes color the choice of rules?
- Is There a De Minimis Level of Contact with a Jurisdiction Which Ought To Be Permitted Without Any Requirement of In-State Licensure?
- Is there a de minimis level of work within the physical boundaries of a state that ought to be permitted before a state is or should be allowed to assert that its unauthorized practice rules apply?
- If so, what is that level, what factors should be considered and how should those factors relate to each other ( e.g., an in-state or out-of-state client, involvement of in-state counsel, whether the client contacted the lawyer or vice versa, whether the lawyer or firm has some form of recognized national or regional legal expertise in a particular practice area)?
- To what extent, if any, are factors such as these likely to prove capable of reasonable and consistent enforcement?
- Somewhat alternatively stated, when, if ever, is or should a purely virtual presence in a state be enough to subject a lawyer to sanctions or jurisdiction?
- What factors should be considered ( e.g., the number of clients or fees earned in a state, the efforts devoted to targeting clients from a particular state)?
- Should a Different Approach Be Taken for Matters Involving International or National Law Than for Litigation Involving State Law?
- What if the only law is international or national?
- What if both international/national and state law are involved?
- What if the state law is a part of a nationally adopted uniform act?
- To What Extent Must or Should Any Consideration of the Multi-Jurisdictional Practice Issues Be Made to Overlap with:
- The resolution of multi-disciplinary practice issues?
- The resolution of access to justice issues?
- The resolution of foreign licensed legal consultant issues?
- The approaches taken by other professions ( e.g., accountants, human relations consultants, engineers and doctors) to multistate practice issues?
- The approaches taken by these other professions to multi-disciplinary practice issues?
- Should at least one of the pertinent objectives be the development of a coherent and consistent policy approach across a number of these professions and issues? If so, what might that approach look like?
- If Some Sort of Attorney Licensing System Were To Be Adopted That Would Effectively Allow Nationwide Practices, How Should or Might That System Be Administered?
- Given, inter alia, the longstanding and essentially unchallenged role played by state supreme courts in lawyer discipline and bar admissions, is it reasonable (or desirable or even constitutional) to contemplate supplanting a system of essentially state-based regulation with a national or federal system?
- If the state system is to be used, what changes or improvements, if any, may need to be made?
- To what extent would primary jurisdiction, reciprocal admission or other standards have to be developed or modified? If so, how should or might they be modified?
- To what extent would choice of law rules have to be further developed or modified? If so, how should or might they be modified? Suppose, for example, that a California-based business law firm was hired to represent a New York-based corporation in the acquisition of the assets of a Mississippi-based corporation represented by a Florida-based law firm? Assuming that the rules are not all the same, whose rules govern communications with represented parties?
- To what extent, if any, would such a system necessarily require an end to local innovations designed to set higher or different standards of practice ( e.g., mandatory malpractice insurance requirements, the allowance of screening to avoid disqualification, local office requirements)? Alternatively, what criteria might be used to determine which local innovations or differences should be allowed and the extent to which they should be allowed?
- Alternatively, under what circumstances, if any, would it be either possible or appropriate to have different levels of admission or quasi-admission?
- E.g., the first matter in a given state in a given year is "free," the second one requires a short form application and payment of a $1,000 fee, etc.?
- To what extent, if any, should "affiliating" a local lawyer be allowed to "cure" any and all licensing problems and how can or should such a system be enforced in both litigation and non-litigation matters?
- Also alternatively, could we accomplish most of what we wish to accomplish by further broadening the availability of reciprocal admissions and setting a fairly clear threshold as to when such admission was required?
- If, in a particular case, reciprocal admission was available as an option but not pursued, a denial of fees might well be a proper result.
- Who Wins and Who Loses?
- To what extent can clients as a whole reasonably be expected to benefit from or be harmed by a relaxation of multistate practice limitations?
- Are there particular classes of clients who are or are not likely to benefit or be harmed?
- Is it possible to quantify the potential benefit or harm?
- To what extent can lawyers as a whole reasonably be expected to benefit from or be harmed by a relaxation of multistate practice limitations?
- Are there particular classes of lawyers who are or are not likely to benefit or be harmed?
- Is it possible to quantify the potential benefit or harm?
- To what extent will the public or the overall delivery of professional services by both lawyers and nonlawyers be advanced by the relaxation or element of state-level practice rules?
- How Sure Are We That There Really Is Something Broken That Needs To Be Fixed?
- How sure do we need to be before taking action and how do we get that sure?
- Does the answer depend at least in part on how nondisruptive or simple a "fix" we can find?
Copyright 2000 by the American Bar Association, Stein Center for Law and Ethics at Fordham University School of Law, Attorneys Liability Assurance Society and the American Corporate Counsel Association. All rights reserved.