Volume 18, Number 8
Rising to the Challenge?
The Profession Considers Multijurisdictional Practice
By Florencio (Larry) Ramirez
Do you remember the original episodes of Star Trek? "Beam me up, Scotty," Captain Kirk would say into his tricorder, and on a spaceship a million light years away, Chief Engineer Scott would press a button and Kirk would be transported to the Enterprise in an instant. Or what about Star Wars? Remember when Luke Skywalker could conjure up Obi-Wan Kenobi's image for guidance or advice? Science fiction you say? Never happen? Well, think again.
Technology has changed society and the practice of law to such an extent that lawyers admitted one or two generations in the past would not recognize Lady Justice if she came up and slapped them in the face. Gone are the days of IBM Selectric typewriters. Remember Mag cards? Those magnetic cards that secretaries could use to store their work? I do, and I've only been practicing law for 24 years. Remember those massive libraries with thousands of heavy, leather-bound volumes, and how your law school or firm was judged by the size of its library?
Today, society moves with the speed of light. Laptop computers, PDAs, cell phones, e-mail, and text messaging devices are so commonplace that they have become necessities, not luxuries. Today, we can carry an entire law library on a few CDs. We can communicate with people on the other side of the world at the click of a "Send" button. We can utilize a webcam and see the people we're talking to on our computer!
Technology has made today's lawyer much more mobile and certainly more accessible. The days when lawyers were restricted in their practices by geographic or national boundaries are also long gone. With the widespread use of videoconferencing, a lawyer may be able to appear in court or in a meeting with clients thousands of miles away without leaving the comfort of his or her own office. Certainly, web pages and websites have changed the ways in which clients can learn of a particular lawyer's expertise.
In light of the changes technology is producing, the ethical rules that all lawyers practice under must also be revisited, particularly those involving the unauthorized practice of law (UPL). As one commentator recently noted:
Birbrower: Could It Happen to You?
In 1986, the New York firm of Birbrower, Montalbano, Condon & Frank went to work for Kamal Sandhu and his firm, ESQ Business Services, Inc. The company assigned its lawyers to review an agreement with Tandem Computers for software development and marketing. Not long after, the Sandhu family organized a second corporation with the same name in California. Kamal's brother, Iqbal, headed the West Coast firm. In 1991, Iqbal's California company consulted Birbrower about the Tandem contract. The next year, the two ESQ firms jointly hired Birbrower to resolve a dispute with Tandem. The clients told the New York lawyers to investigate and prosecute ESQ's claims. To do so, Birbrower lawyers visited California several times. They talked with Tandem representatives, interviewed prospective arbitrators, and worked on a settlement. The New York firm, however, didn't associate with a California lawyer. In February 1993, the Birbrower firm initiated a claim by filing with the San Francisco office of the American Arbitration Association.
The two ESQ firms and Tandem settled their differences before a hearing. Birbrower originally agreed to a one-third contingent fee. Before settlement, the law firm and the two ESQs amended their agreement to provide a fixed fee of more than $1 million. Then, in April 1994, the two ESQs sued the Birbrower firm for malpractice. The New York lawyers, in turn, sued for their fees. The ESQ people said Birbrower wasn't entitled to its fee because, as a New York firm operating in California, it was not authorized to practice law. California's Business and Professions Code says in § 6125: "No person shall practice law in California unless that person is an active member of the State Bar." The trial court and the state's court of appeals looked at the New York lawyers and their California activities and threw out the attorneys' claims.
Birbrower then appealed the decision to the California Supreme Court.2 The justices decided:
The court acknowledged tension "between interjurisdictional practice and the need to have a state-regulated bar." The justices said: "Demands of business and the mobility of our society pose distinct problems in the regulation of the practice of law by the states." The justices encouraged the legal profession "to discourage regulation that unreasonably imposes territorial limitations upon the right of a lawyer to handle the legal affairs of his client, or upon the opportunity of the client to obtain the services of a lawyer of his choice." The California court clearly identified the problem. It then threw out Birbrower's contract claim for its fee.
The Birbrower decision sent shock waves through the legal profession. What does it mean? Does local counsel have to be hired in every case in order for out-of-state lawyers to collect their fees? Because many UPL statutes are criminal in nature, will lawyers be prosecuted criminally for practicing in a state in which they are not licensed? What about in-house counsel or transactional lawyers or lawyers with a transnational practice? Is pro hac vice admission required in every case, even those not involving litigation?
ABA Commission Studies MJP
These questions raised in the aftermath of Birbrower led then-ABA President Martha Barnett to create the Commission on the Multijurisdictional Practice of Law (MJP Commission) in October 2000. The MJP Commission was created:
In light of this statement, certain issues implicit in the work of the MJP Commission have been identified, such as protection of the public and clients, the interests of lawyers and clients, what conduct is "forbidden," and how changes will be effected.
The MJP Commission has attempted to collect data from various sources, including private practitioners, consumers, in-house counsel, transactional and transnational lawyers, international lawyers, and lawyers involved in disciplinary enforcement and disciplinary counsel. Hearings have been conducted in San Diego, Dallas, Miami, Atlanta, Kansas City, New York, and Chicago, and position papers and written comments have been gathered from various sources including the Association of Professional Responsibility Lawyers and the American Corporate Counsel Association.
Also, the MJP Commission has studied various rules, including the existing Model Rules of Professional Responsibility, the Restatement of the Law Governing Lawyers, various UPL statutes, and rules governing bar admission, admission by motion, pro hac vice admission, and in-house counsel. For a more detailed examination of these materials, visit the MJP Commission's website at www.abanet.org/ cpr/mjp-home.html.
Ethics 2000 Comes into Play
Probably the most significant body of work to the MJP Commission has been the work of the Commission on the Evaluation of the Rules of Professional Conduct or "Ethics 2000." That commission is charged with: (1) conducting a comprehensive study and evaluation of the ethical and professionalism precepts of the legal profession; (2) examining and evaluating the ABA Model Rules of Professional Conduct and the rules governing professional conduct in the state and federal jurisdictions; (3) conducting original research, surveys, and hearings; and (4) formulating recommendations for action. Of particular importance to the MJP Commission is the work of Ethics 2000 on Model Rules of Professional Conduct 5.5 and 8.5 (see "Proposed changes to the Model Rules").
We Must Be Ready
During the hearings conducted by the MJP Commission, one central theme seems to have come to the forefront-namely, that some change in the Model Rules is necessary to reflect the current practice of law. I know of many lawyers who travel frequently to other states for matters that are related to litigation on behalf of clients, such as taking a deposition, retaining experts, or investigation. Not one of these lawyers has ever given much thought to the possibility that these activities might constitute the unauthorized practice of law. I know that personally, even having served as chair of the Disciplinary Board of New Mexico, I never gave these activities much thought. My horizons have been greatly expanded through my service on the MJP Commission, as has my realization that the issue of multijurisdictional practice is extremely complex. As a solo practitioner and a "techno geek," I have also come to the realization that future advances in technology will cause this issue to become even more complex. Will state borders really exist? Will we continue to have a body of law for each state or will we simply have one body of law for the entire nation? Is national licensure the answer, as some would suggest?
One thing is clear: Many of the technologies of Star Wars and Star Trek are no longer a fiction. "Virtual reality" is no longer something we can only dream about. As a profession, we must be ready for technological changes. We must be flexible enough as a profession to adapt our lives and the rules that govern our profession or we will not survive the changes that are certain to occur. Will you be ready, or like many lawyers, do you think this is just another issue that does not affect you?
The MJP Commission is scheduled to issue a preliminary report to the House of Delegates by the end of 2001. We will then take comments on the preliminary report. A final report will be issued in 2002 in time for consideration by the House in August at the 2002 ABA Annual Meeting in Washington, D.C. You have two choices: Ignore this issue or embrace it in an attempt to understand how it may affect you. It is my sincere hope that this article will cause you to choose the latter option.
Proposed Changes to the Model Rules
1. Martin Paskind, "Lawyers Lagging Behind in Economic World" Albuquerque J., May 25, 1998.
2. Birbrower, Montalbano, Condon & Frank, P.C. v. Superior Court, 17 Cal. 4th 119, 70 Cal. Rptr. 2d 304, 949 P.2d 1, cert. denied., 525 U.S. 290, 119 S.Ct. 291, 142 L.Ed. 2d 226 (1998).
Florencio (Larry) Ramirez is a small firm practitioner in Las Cruces, New Mexico. He is a former chair of the ABA General Practice, Solo and Small Firm Division and a member of the ABA Commission on Multijurisdictional Practice.