May 20, 2019 Top Story

Out-of-State Practice Upheld Against UPL Challenge

Professional conduct rules may need an update to accommodate evolving technology

By James A. Sweeney

A lawyer relocated to one of her firm’s out-of-state offices is not prohibited from practicing on matters pending in her former state while her application to practice in the new state is pending and when the arrangement in her new office is “temporary.”

Current ethical rules prohibiting out-of-state legal practice may violate the right to engage in one’s chosen profession

Current ethical rules prohibiting out-of-state legal practice may violate the right to engage in one’s chosen profession

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Moreover, current ethical rules prohibiting out-of-state legal practice may violate constitutional provisions protecting the right to engage in one’s chosen profession. ABA Section of Litigation leaders suggest that technological advances expanding the ability of lawyers to work remotely across jurisdictional boundaries may warrant a new look at current rules prohibiting out-of-state practice.

Current Ethical Rules Prohibit Out-of-State Legal Practice

In In re Application of Jones, the Supreme Court of Ohio considered an application for membership by a Kentucky lawyer who had been temporarily practicing in Ohio. The lawyer’s firm had recently merged with another firm with an office in Cincinnati, and she temporarily relocated to that office for personal reasons. When the lawyer subsequently applied to the Ohio Bar for membership, its Board of Commissioners on Character and Fitness investigated, and ultimately opposed, her admission based on her previous unauthorized practice of law in Ohio.

Rule 5.5(b)(1) of both the ABA Model Rules of Professional Conduct and the Ohio Rules of Professional Conduct prohibit lawyers not admitted to practice in a jurisdiction from establishing an office or other systematic and continuous presence in that jurisdiction for the practice of law. But Rule 5.5(c) allows a lawyer licensed in another jurisdiction to provide services in a jurisdiction on a temporary basis under certain conditions.

The majority in Jones construed Rule 5.5(c)’s temporary basis exception to mean “limited in time” and found that the lawyer’s pendency of a bar application was for a defined, limited period of time, which met the exception. Three justices joined in a concurring opinion that because the lawyer established an office in Ohio with an intent to permanently locate there, her practice was not “temporary” within the meaning of the exception and would therefore constitute the unauthorized practice of law.

Barring Out-of-State Lawyers Constitutionally Questionable

The concurrence also expressed the view that applying Rule 5.5 in this manner interfered with the constitutional right to pursue one’s chosen profession free from arbitrary and unreasonable government restraints. Applying a rational basis review, the concurrence opined that Ohio did not have a legitimate interest in regulating an attorney who does not practice in Ohio courts, does not provide legal services to clients in Ohio, and does not hold herself out as a lawyer to the Ohio public.

Section of Litigation leaders recognize the tension in Ohio seeking to regulate lawyers who do not work on any matters in that state. “I cannot see any reason why a state would have any interest in regulating an attorney if the attorney was not providing legal services in that state,” says John M. Barkett, Miami FL, cochair of the Section’s Ethics & Professionalism Committee.

The focus of the lawyer’s practice, not the location where he or she offices, should guide the application of ethical rules. “There simply is no Ohio state interest in prohibiting a lawyer licensed in Kentucky from exclusively working on Kentucky legal matters while the lawyer happens to be situated in Ohio,” says Robert E. Poundstone IV, Montgomery, AL, cochair of the Section’s Ethics & Professionalism Committee.

Evolving Technology Demands Evolving Rules

Even if Jones is correct under the current Rule 5.5, that rule may not appropriately account for current technologies. “Where technology is implicated and has made society more mobile, we should be willing to revisit rules to ensure that the rules are in accord with the underlying purpose of the rule,” suggests Barkett.

For some, Rule 5.5 may be already out of date. “Although the rule finding that one is engaged in the unauthorized practice of law and subject to legal sanction simply because one has established an office or a systematic and continuous presence of law in the state may have made sense when a lawyer who worked in a state was almost always practicing law in that state, that is not the case today with the advent of the internet and electronic communication,” opines Poundstone. “Many lawyers today do a substantial amount of legal work from their home, especially since working out of a home office allows the lawyer to more efficiently, effectively, and timely provide legal services to clients,” he notes.

Firms with multistate offices can take actions to manage the risk of charges of unauthorized practice of law. “It might be helpful to consult with the state bar counsel's office to see if they have an opinion on how to effectively structure the situation,” recommends Poundstone. “The law firm might also ask the relocating lawyer to still maintain regular office hours in the office the lawyer is leaving if it is not inconvenient. Otherwise, the safest course would be to ask the lawyer to obtain the license in the new state before establishing an office there,” he adds.


James A. Sweeney is a contributing editor for Litigation News.

Hashtags: #MultiJurisdictional, #RemotePracticeofLaw, #UPL

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