SPECIAL COMMITTEE ON MULTI-JURISDICTIONAL PRACTICE
OF THE
NEW YORK STATE BAR ASSOCIATION
WRITTEN SUBMISSION
TO THE
ABA COMMISSION ON MULTIJURISDICTIONAL PRACTICE
(For March 21, 2002 Public Hearing)
We are pleased to have the opportunity to present our comments on the November 2001 Interim Report of the ABA Commission on Multijurisdictional Practice. These comments represent the views of a majority of the Special Committee on Multi-Jurisdictional Practice of the New York State Bar Association, and do not represent the views of the New York State Bar Association unless and until adopted by the Association's House of Delegates.
Without rejecting or accepting the so-called 'common sense' approach proposed by the American Corporate Counsel Association, among others, we have concentrated our attention on the Commission's 'safe harbor' approach as set forth in the November 2001 Interim Report. We note that whichever approach is used, 'the devil is in the details' so that whether the proposed changes in model rules meet the needs of clients and the bar in a period of evolving national law practice will at least to some extent depend on the specifics of the provisions in Rule 5.5 authorizing practice in host jurisdictions in which the lawyer is not admitted to practice.
We have the following comments with respect to the ABA Commission's proposed amendments to Rule 5.5:
1. We support the general safe harbor of 5.5(b) that authorizes MJP so long as 'the lawyer's services do not create an unreasonable risk to the interests of the lawyer's client, the public, or the courts'. However, we believe that the proposed safe harbors sought to be added to Rule 5.5 are in some respects too limited in scope, or are illusory. With respect to 5.5(b), we believe that unless the phrase 'on a temporary basis' is deleted or replaced with a less vague phrase, the proposed safe harbor will be of very limited utility to practitioners. As the Commission noted in its interim report, the concept of 'temporary' is hard to define. Do lawyers who rent office space in a host jurisdiction solely to handle a particular matter or client lose the benefit of 5.5(b)? Is the lawyer or law firm that has represented a client for a long time and expects to continue to represent that client indefinitely able to claim the benefit of the Rule 5.5(b) safe harbor even if the lawyer comes into the host jurisdiction for a single matter (assuming that the client neither resides nor has an office in the jurisdiction in which the lawyer is admitted to practice)? We believe that so long as the proscription in 5.5(e) against holding oneself out as being admitted to practice in the host jurisdiction is in place there is probably no need to limit 5.5(b) to 'on a temporary basis'. On the other hand, if it is deemed necessary to limit the applicability of 5.5(b) in order to preserve the continuation of the present state based admissions process, we believe that Section 5.5(b) should provide that it applies only if the lawyer is not permanently based in the host jurisdiction.
2. We believe that in any event the phrase 'on a temporary basis' should be eliminated from proposed Rule 5.5(c). If the conclusion that the performing of services which may be performed by a person who is not a lawyer (proposed Rule 5.5(c)(2)) is not the unauthorized practice of law, then why should the performing of those services in a host jurisdiction be limited to 'on a temporary basis'? It seems to us that the numbered subparagraphs in Rule 5.5(c) describe situations in which MJP should be unambiguously authorized. Limiting the authorization to the ambiguous 'on a temporary basis' is counterproductive. In addition, we believe that the limitation that the services must be within 5.5(b) should be deleted from 5.5(c) if the numbered subparagraphs of 5.5(c) are to provide a true safe harbor for the practitioner. If that limitation, and the 'on a temporary basis' phrase are deleted from 5.5(c), it may not be necessary to delete the latter phrase from 5.5(b).
3. We have several comments with respect to proposed Rule 5.5(c)(6). First, we believe that the phrase 'the law of a foreign nation' should be changed to "the law of a jurisdiction other than the United States or a state or other political subdivision of the United States". This would include foreign jurisdictions, such as the European Union, that are not foreign nations. Second, and of broader consequence, the area of expertise to which the safe harbor should apply should be broadened (either by addition to subparagraph (6) or perhaps by the addition of a separate paragraph (7?)) to include: (i) services that are governed primarily by "laws of the states of the United States that are uniform in nature"; and (ii) services that are "governed primarily by or relate to a commercial, financial, corporate or similar matter that is reasonably likely to have an effect on interstate commerce or in more than one state". In this regard we believe that the lawyer who is expert in such matters as secured financing, blue sky law, "poison pills" or particular sophisticated commercial transactions should be permitted to provide services on a national basis.
4. In line with our comments in paragraphs 1 and 2 above, we propose that a new subparagraph (f) be added to proposed Rule 5.5 to read as follows:
"A lawyer who is not admitted to practice in this jurisdiction may establish an office in this jurisdiction for the practice of law to the extent permitted by Rule 5.5(c) and (d) provided the lawyer registers as a lawyer with the appropriate state or local authority and does not represent or hold out to any person that the lawyer is admitted to practice in this jurisdiction".
Assuming the addition of this subparagraph (f), subparagraph (e) should be changed to read: "Except as authorized by paragraph (f) below, these rules or other law...."
We have the following comments with respect to the ABA Commission's proposed amendments to Rule 8.5:
5. We agree with the Commission's recommendation that Rule 8.5(a) be amended to provide that a lawyer is subject to the disciplinary authority of a jurisdiction in which the lawyer renders or offers to render legal services even though he or she is not licensed there. We also agree with the recommendation that Rule 8.5(b) be amended to prescribe choice of law principles for determining which jurisdiction's disciplinary rules should apply to the conduct of a lawyer who renders or offers to render legal services outside of the jurisdiction in which he or she is licensed to practice. In the case of conduct which is not in connection with a matter pending before a tribunal (in which case the rules of that tribunal would govern), the Commission proposes, and we agree, that the disciplinary rules of the jurisdiction in which the lawyer's conduct occurred be applied. However, we do not agree with the Commission's proposal that "if a predominant effect of the [lawyer's] conduct is in a different jurisdiction," the rules of that other jurisdiction should apply regardless of whether the lawyer is licensed there or has engaged in any conduct in that jurisdiction. This proposal potentially subjects a lawyer to discipline under the rules of a jurisdiction with which the lawyer has had no contact so long as "the predominant effect" of the conduct is felt there. A phrase such as "predominant effect" is imprecise at best, necessarily depends on after-the-fact analysis, and does not even bring with it the concept of "purposeful activity" long employed in the long-arm jurisdiction context. See, e.g., Hanson v. Denckla, 357 U.S. 235 (1958). As a result a lawyer could find his or her conduct being measured against the disciplinary rules of a jurisdiction far removed from where the lawyer acts and with which he or she has no direct contact.
6. On the other hand, we also do not agree with the Commission's proposal that a lawyer should not be subject to discipline at all under the rules of the jurisdiction in which the lawyer acts if his or her conduct conforms to the rules of "a jurisdiction in which the lawyer reasonably believes the predominant effect of the lawyer's conduct will occur." This proposal would allow a lawyer to avoid the application of the disciplinary standards of a jurisdiction in which he or she in fact renders or offers to render legal services so long as the lawyer reasonably believed the predominant effect of the conduct would be felt in some other jurisdiction, a jurisdiction which, perhaps, has rules of conduct more favorable to the lawyer. Just as a lawyer should not be subject to the disciplinary rules of a jurisdiction with which he or she has no contact, the lawyer should not be able to avoid application of the rules of a jurisdiction in which he or she in fact offers services.
7. A lawyer who takes advantage of rules permitting multijurisdictional practice should be subject to the disciplinary rules of the jurisdiction in which he or she acts. The lawyer should not expect otherwise. That is not to say, however, that the local disciplinary authorities themselves, as may be warranted by the circumstances of a particular matter, should not employ the choice of law analysis mandated by the rules of their own jurisdiction. But whether they do so and which principles they apply should be decided in accordance with the requirements of their own local laws. Accordingly, we recommend that the Commission's proposed amendment to Rule 8.5(b)(2) be limited to read in its entirety as follows:
"(b) Choice of Law. In any exercise of the disciplinary authority of this jurisdiction, the rules of professional conduct to be applied shall be as follows:
...
(2) for any other conduct, the rules of the jurisdiction in which the lawyer's conduct occurred.