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Warren W. Faulk Re: Multi-Jurisdictional Practice - Center for Professional Responsibility

April 14, 2001
Our File No. 99-0392

Michele M. Fox, Esquire
Camden County Bar Association

800 Hudson Square, Suite 103
Camden, NJ 08102

Re: Multi-Jurisdictional Practice

Dear Madame President:

The Camden County Bar Association ad hoc Committee on Multi-Jurisdictional Practice ("MJP") has reviewed the myriad issues raised by the ABA MJP Commission Report, with particular emphasis on the revisions to Model RPC 5.5 proposed by the ABA Ethics 2000 Commission. Set forth below are a discussion of these issues and the Committee’s recommendations to the Board.

At present, the regulations governing the unauthorized practice of law ("UPL") in New Jersey are set forth in RPC 5.5, which is identical to the ABA Model RPC 5.5. This Rule provides that "[a] lawyer shall not: (a) practice law in a jurisdiction where doing so violates the regulations the legal profession in that jurisdiction; or (b) assist a person who is not a member of the bar in the performance of activity that constitutes the unauthorized practice of law."

RPC 5.5 does not define what constitutes the practice of law "in a jurisdiction," and this leads to uncertainty as to whether or not particular activities will be deemed the unauthorized practice of law "in a jurisdiction" by an attorney not licensed by the jurisdiction.

For example, in Birbrower, Montalbano, Condon & Frank, P.C. v. Superior Court, 17 Cal. 4 th 119, 949 P.2d 1 (1998), cert. denied, 525 U.S. 920 (1998), the California Supreme Court ruled not only that a New York law firm’s representation of a California company in an arbitration held in California was the unauthorized practice of law In California, but found even work done in New York could constitute UPL in California if the lawyers were "virtually" in California via "modern technological means" such a "telephone, fax, [or] computer." The court also indicated that not all "virtual presence" would amount to UPL in the state, but declined to be more specific.

In Randa v. McCarney, 391 N.W. 2d 161 (N.D. 1986), the North Dakota Supreme Court denied a fee to a Minnesota lawyer who had been giving federal tax advice to a North Dakota business. The court permitted the lawyer to be paid for work he did in Minnesota, but not for any work while physically in North Dakota.

These two cases highlight the risks lawyers incur when performing work for a client whose activities extend beyond the lawyer’s home state. Meetings with clients or witnesses outside the lawyer’s licensing state, and even depositions or other discovery in a foreign state incident to litigation pending in the lawyer’s home state might expose the lawyer to a UPL violation or constitute a defense to a suit to collect legal fees. Lawyers employed by corporations and or government lawyers have special concerns, since they often travel to branch offices in states where they are not admitted or may even be permanently transferred to such a jurisdiction.

In an effort to deal with these uncertainties and the potential for non-uniform interpretation by state courts of what constitutes the practice of law within its jurisdiction, the ABA Ethics 2000 Commission has proposed substantial revisions to Model RPC  5.5 in the hope that all states will adopt the revised Rule as drafted. See Exhibit A attached.

The proposed addition of subsection (b) to Model RPC 5.5 provides that a non-admitted lawyer does not engage in the unauthorized practice of law in a jurisdiction when:

(1) the lawyer is authorized to appear before a tribunal in the jurisdiction by law or order of the tribunal or is preparing for a proceeding in which the lawyer reasonably expects to be so authorized;

(2) other than making appearances before a tribunal with authority to admit the lawyer to practice pro hac vice:

(i) a lawyer who is an employee of the client acts on the client’s behalf or, in connection with the client’s matters, on behalf of the client’s other employees or its commonly owned organizational affiliates;

(ii) the lawyer acts with respect to a matter that arises out of or is otherwise reasonably related to the lawyer’s practice on behalf of a client in a jurisdiction in which the lawyer is admitted to practice; or

(iii) the lawyer is associated in a particular matter with a lawyer admitted to practice in this jurisdiction .

Proposed subsection (b)(1) confirms that it is not the unauthorized practice of law for a non-admitted lawyer to appear before a court when the court has authorized the lawyer’s appearance through a pro hac vice order. This subsection also provides that it is not the unauthorized practice of law for a lawyer to perform activities in connection with the matter in anticipation of being granted pro hac vice admission by a court.

Subsection (b)(2)(i) provides a "safe harbor" for corporate attorneys by allowing any lawyer who is employed by a corporation or other entity to perform legal work for the employer in any jurisdiction without risk of UPL sanction. This subsection also allows the lawyer to perform work for affiliates and employees of the corporation but only in connection with corporate matters. Note that this subsection does not authorize a corporate lawyer to appear before a tribunal in any state where the lawyer is not admitted without pro hac vice admission.

Subsection (b)(2)(ii) provides a "safe harbor" for a lawyer to travel to another jurisdiction to perform legal work on behalf of a client without engaging in the unauthorized practice of law, so long as the work performed in the foreign jurisdiction arises out of or is reasonably related to the lawyer’s practice on behalf of the client in his or her admitted state. The Comments to this subsection indicate that it would permit "negotiations with private parties . . . [and] government officers or employees, appearance in administrative or rule making proceedings or before tribunals for which pro hac vice admissions are unavailable, and participation in alternative dispute resolution procedures." This subsection is a recognition that the complexity of certain matter may require a lawyer to travel to other jurisdictions to effectively represent the interests of the client.

Subsection (b)(2)(iii) is simply a restatement of what has historically been accepted as a proper method for avoiding the unauthorized practice of law, i.e., by associating with local counsel who is admitted to practice in the jurisdiction.

Our Committee has carefully considered the rationale underlying these proposed revisions to Model RPC 5.5 and the impact these revisions would have on the overall membership of the Camden County Bar Association, and has unanimously agreed that the proposed revisions are in the best interest of our membership and should be supported. It is the Committee’s view that the proposed revisions provide protection against an unauthorized practice of law charge for activities that are required today to properly, effectively and efficiently represent a client’s interests. We feel these proposed revisions to Model RPC 5.5 more clearly define what a lawyer can and cannot do when venturing across jurisdictional borders whether physically or "virtually," and for the most part simply ratify what is currently considered by most attorneys not to be the unauthorized practice of law.

Obviously, the Committee’s support of the proposed revisions to Model RPC 5.5 is contingent on this Model Rule being adopted by all jurisdictions in the United States, since it would not make sense for a State to provide the "safe harbors" envisioned by the Rule to out-of-state attorneys if its own attorneys were subject to sanction for performing the same activities in foreign jurisdictions.

The ABA MJP Commission Report also suggested a number of other ways to deal with the UPL issues that inevitably flow from the complexities of legal practice today. These ranged from maintaining the status quo to creating a federal or a national law license or allowing complete reciprocity between all jurisdictions. The Committee discussed and considered each of the MJP Commission’s suggestions, but concluded that the proposed revisions to Model RPC 5.5 provide sufficient "safe harbor" protections to attorneys who must venture into another jurisdiction on behalf f a client.

In sum, the Committee recommends that the Board support the revisions to Model RPC 5.5 proposed by the ABA Ethics 2000 Commission, and oppose any attempt to extend the authorization to practice law in a foreign jurisdiction beyond those activities specifically approved in this Model Rule.

In you need any clarification or have any questions regarding our report and recommendations, please do not hesitate to contact me.

For the Committee:

Warren W. Faulk, Chair

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