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Responses of the American Corporate Counsel Association to Questions Posed by the ABA MJP Commission - Center for Professional Responsibility

To: The ABA MJP Commission

From: John McGuckin, Jr., Chairman of ACCA's Advocacy Committee On behalf of the American Corporate Counsel Association

Re: Responses of the American Corporate Counsel Association to Questions Posed by the ABA MJP Commission

Date: July 2001

This is an informal document intended to advise the Commission of ACCA's views on specific questions it has asked us to clarify ; this document is not intended to replace or amend our formal policies, as adopted by the ACCA Board. While we recognize that this is not a confidential paper, please do note that it was not drafted for public dissemination. Our intention is to provide our insight to the work of the Commissioners as they consider the development of corporate counsel-specific provisions in an ABA MJP Commission proposal. We therefore ask your indulgence in not circulating or posting it to the ABA MJP website or listservs without first consulting us.

The following are the informal questions posed to us by Diane Yu at our most recent Board Meeting in June. Please hold us (and not Diane) responsible if there is any disparity between what is addressed here and what you ideally wanted us to cover. Please feel free to address additional questions to us, or ask for clarification on any of the issues covered here. Thank you for the opportunity to help inform your proceedings.

1. What activities might be permitted under a corporate counsel/employed counsel safe harbor provision which ACCA might endorse?

ACCA believes that any proposed safe harbor provision for employed counsel should cover all activities which constitute the practice of law. The safe harbor should cover the practitioner, and not just elements of the protected counsel's practice. Ideally and logically, this would include all litigation and non-litigation legal services, counseling, negotiations, transactional representation, investigations, and so on. However, given the existence of other means by which in-house counsel who are not locally admitted can gain entrance to the courtroom (either by motion, pro hac vice, or through affiliation with local counsel), ACCA recognizes that litigation could be exempted from the safe harbor protections without severe impact on most in-house practitioners, so long as alternate dispute resolutions techniques (arbitration, mediation, etc.) and pre-litigation/settlement/outside counsel management issues are specifically covered by the safe harbor. These permissible pre- and settlement-type activities would include such outside-the-courtroom legal activities as fact-finding, interviews, legal audits, internal investigations, strategy meetings, selection and management of locally-admitted outside counsel and settlement negotiations.

2. What constitutes the official legal business of the company?

The "official legal business of the company" should include any legal services provided by the employee-attorney operating within the scope of employment. Strictly speaking, this would exclude from the safe harbor and prevent an employed lawyer from performing:

  • pro bono or volunteer legal services for non-profit entities and legal aid societies;
  • personal legal services for officers and employees of the company;
  • the conduct of business responsibilities unrelated to the legal function (to which privilege would not attach, for instance);
  • personal legal serviceswork for relatives and friends; and
  • moonlighting or providing any legal services for compensation to any entity other than the employercompany, its parents, subsidiaries and affiliates.

ACCA believes, however, than a strong policy argument must be made for enabling employed attorneys to provide pro bono legal services through (and under the supervision of) non-profit entities and legal aid providers in the state in which the attorney 's practice resides.

3. What kinds of pro bono and other local bar requirements might be imposed on in-house lawyers operating under the safe harbor?

ACCA believes that lawyers who move permanently to a jurisdiction in which they are operating under a safe harbor's protection should be full members of the bar and should comply with all requirements and responsibilities of bar members of the state. This includes submission to discipline, , pro bono requirements, MCLE, payment of dues, IOLTA fees, etc. On the other hand, if attorneys subject to the safe harbor are not allowed the full privileges of membership at the state bar, there is less justification for imposing on them the full burdens of bar membership.

When in-house lawyers are providing legal services to their employer in a state on a temporary or occasional basis (and who therefore fall under the provisions of the proposed safe harbor), they should be fully responsible for competent representation, and must abide by the local rules of practice, ethics, and responsibility. If an attorneythey violates the host state's rules or is sued for an infraction committed while engaged in cross-border practice, on the state's soil, they he/she should be subject to the jurisdiction of the host state's ethics or other regulatory agency. However, these "multijurisdictional" attorneys should not be subject to the host state's MCLE, pro bono and other non-disciplinary requirements, since there is no pretense made that such a practitioner is actually a member of that state's bar or a permanent resident in the state.

3. What would be the status of in-house lawyers operating under the safe harbor who wish to appear in local courts?

See our answer to the question, as articulated in Question #1above. ACCA sees no logical or policy reason to distinguish between litigation and non-litigation services by employed attorneys who reside or practice temporarily in a state. The underlying premise in any safe harbor must be that the exempted lawyer has demonstrated and will continue to demonstrate a basic level of competence in the practice of law and thus pose no threat to his/her client or the general public. If we presume that an attorney operating under a safe harbor is competent to practice law in the jurisdiction and also competent to learn the law of the locality which might be lacking from his/her background, then there is no reason to presume that such a lawyer is not capable of learning the rules of court and procedure applicable to local litigation.

However, ACCA recognizes that, politically, the litigation issue appears to raise greater concerns than other aspects of the safe harborour proposals under consideration. When necessary, and again, under the argument that small steps are necessary in the effort to encourage larger movement over time, we are willing to ACCA will support state safe harbors which exclude courtroom appearances from the safe harbor's protections by in-house counsel protected under their terms. See Question #1 for our concerns that such prohibitions not impinge upon an inhouse counsel's supervision of outside counsel litigators or pre-litigation work.

4. What is the difference between an employed inhouse corporate counsel, and an outside counsel who is titled "general counsel" for purposes of the extension of these safe harbor privileges?

Only those attorneys who are employees of a entity as opposed to independent contractors of that entity, should be covered by corporate counsel safe harbor provisions. An outside attorney who provides "general counsel" services to one or several entities should not be covered. If ACCA is to buy into safe harbors as an appropriate interim remedy to MJP reform, it is under the presumption that safe harbors are created as vehicles to exempt from normal licensing requirements those persons who do not have a high likelihood of impacting the public through their practice because they do not hold themselves out for retention. While ACCA advocates MJP reform that covers both inside and outside counsel and thus has no interest in insuring safe harbor protections only for in-house counsel, it seems illogical to us to limit MJP reform to safe harbors for corporate counsel and then open the definition of corporate counsel to include virtually any private practitioner who can add a "corporate" title to their business card while still able to conduct business on retention to others. It's better at that point to approach MJP reform outside of the rubric of a safe harbor.

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