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Executive Summary, Testimony of Daniel B. Magraw, Chair Section of International Law and Practice - Center for Professional Responsibility


Executive Summary, Testimony of Daniel B. Magraw, Chair

Section of International Law and Practice

February 1, 2001

Impact of Domestic Rules on Transnational Practice

        In August 1993, the House of Delegates of the American Bar Association approved a Model Rule for the Licensing of Legal Consultants (Model Rule). This action was motivated by a recognition, as stated in the Report of this Section, that the "explosive growth of international economic activity, and more particularly in the transnational flow of goods, services, labor and investment" resulted in the "need for more effective means of delivering legal services across national boundaries and for better means of integrating lawyers trained in different legal systems into the same law firms." The Report noted as well the complaint of foreign lawyers that "while American lawyers enjoyed broad rights of practice in their respective countries, the reverse is not true. Even after the decision of the United States Supreme Court in In re Griffiths [413 U. S. 717 (1973)], the only way in which a foreign lawyers could engage in the practice of law in the United States, even if limited to advice on the law of his or her own country, was, with certain limited exceptions, to attend an accredited American law school, sit for the bar examination and become a full member of the bar."

        The problems identified in 1993 exist in aggravated form in 2001. This Section, principally through its Transnational Legal Practice Committee, is engaged in a continuing effort to facilitate the ability of American lawyers to offer their services to both domestic and foreign clients outside the territory of the United States. In recent years, these efforts have concentrated on enabling U.S. lawyers to establish offices in Japan, India and other Asian nations, Latin American countries, the emerging democracies in Central and Eastern Europe and, in particular, France and other nations comprising the European Union. Time and again, we are confronted with the contention that we advocate freedom of access for American lawyers abroad that is far more comprehensive than that accorded foreign lawyers in the United States. American representatives in General Agreement on Trade in Services (GATS) negotiations will be presented with comparable arguments. The Commission is, of course, aware of these realities, but we call attention to them nonetheless by way of emphasizing the impact its recommendations will have on the transnational practice of American lawyers and law firms. However, we also know that, while rights of establishment are important to our clients (and lawyers), the delivery of legal services abroad is much greater through transit visits or through written or electronic advice from outside. As with the right to open offices, our trading partners ask what their nationals can expect here. Therefore, the domestic rules on multijurisdictional practice have a particularly important impact on the members of our Section.

Importance of the Model Rule

        The House of Delegates' 1993 resolution contained this language:  "The American Bar Association recommends that each State not presently having a rule for the licensing of legal consultants adopt such a rule conforming to the Model Rule and that those States and the District of Columbia having such rules conform them to the Model Rule." In spite of this recommendation, only twenty-three States and the District of Columbia have adopted any form of rule for the licensing of foreign legal consultants and many of those are less accommodating than the Model Rule. Several major commercial States have not enacted any rule.

        There is a growing impatience on the part of our foreign negotiating partners with this lackluster record, and there is an accelerating concern with the lack of a truly national American policy on this subject. The Model Rule sets forth a simple, easy-to-administer set of guidelines for permitting foreign lawyers to practice in this country while at the same time requiring them to adhere to local rules respecting "attorney-client privilege, work-product privilege and similar privileges" and subjecting them "to professional discipline in the same manner and to the same extent as members of the bar."

        We would accordingly urge the Commission, in its final report or recommendations, to call upon all States to adopt the Model Rule and to exhort the American Bar Association to devote sufficient time, personnel and resources to this effort to make this goal attainable.

Examinations of Foreign Lawyers

        Many foreign lawyers, for a variety of reasons, find the status of foreign legal consultant insufficient for their professional needs and wish to become full members of the bar. At the same time, experienced foreign practitioners consider the requirement of most States that they study in an accredited American law school as a condition of taking the standard bar examination burdensome and expensive as well as insulting. We believe that while it is probably necessary to require such lawyers to sit for and pass an examination before they are admitted to the bar, the examination need not be preceded by law school study or be as comprehensive as the examinations administered to law school graduates.

        In a further elaboration of these views which we will deliver to the Commission in due course, we will make a more detailed recommendation as to the persons who would be entitled to take this examination, the subject matter of the examination and comparable matters. We note here that the way has been shown by the Law Society of England and Wales which administers a Qualified Lawyers Transfer Test, "a conversion Test which enables lawyers qualified in certain countries outside England and Wales, as well as UK Barristers, to qualify as solicitors. In an increasingly competitive business world, lawyers with a dual qualification will be able to offer a more comprehensive service to clients." Of equal significance is the fact that the Law Society, through The College of Law, provides educational and training facilities for Test applicants.

        It is worth noting as well that American Institute of Certified Public Accountants (AICPA) has promulgated an International Uniform Certified Public Accountant Qualification Examination (IQEX) out of a recognition that in "today's global business environment, international reciprocity for professional accountants has become an increasing concern. International reciprocity simplifies cross-border practice and enhances the prestige of the accounting profession. Furthermore, today's accounting environment has been influenced greatly by international agreements such as the North American Free Trade Agreement and the GATS. While these agreements do not require signatory countries to enter into professional licensure reciprocity agreements, they do impose an obligation to work toward international reciprocity." Notwithstanding the differing regulatory and professional environments in which the accounting and legal professions operate, the considerations cited by the AICPA apply with equal force to our profession.

Other Matters

        The growth of the global economy and clients to serve it has increased the demand for legal services on a global scale. It is believed by the Section of International Law and Practice that the large demand for legal services provided by U.S. lawyers and their firms can only be met through liberalized market access regimes worldwide. U.S. lawyers have been at the forefront of developing styles of counseling, forms of agreement and the thoroughness of due diligence in both investigation and documentation that have become the world's standard. These commonly followed practices raise questions of the unauthorized practice of law under the current regulatory regime in the United States. It is the view of the Section of International Law and Practice, that in the modern world, in which the services of American lawyers are sought by clients around the globe, rules must be fashioned that enable lawyers to provide those services without concerns about the inappropriate imposition of barriers based on the geographic concept of the unauthorized practice of law. If U.S. lawyers are to obtain access to foreign markets in which they provide services, it is necessary for the U.S. market to permit similar access to foreign lawyers. The Model Rule provides the model criteria for liberalizing global access to the legal profession.

        This principle is key not only for establishment purposes but, perhaps even more importantly, for the much more common means of the provision of legal services of a transient nature ( i.e., by telephone, telecopy, e-mail or special meeting). The Section of International Law and Practice also urges the Commission to consider and support efforts, such as through the GATS, which would create appropriate procedures under which international lawyers could also be granted "transient professional visas" that would permit such lawyers to render advice of a transient nature in a country, and not subject these lawyers to charges of the unauthorized practice of law, or violation of labor laws or immigration rules.

        In considering an appropriate standard for the realities of multijurisdictional practice, the ABA can and should consider the development within the European Union (EU) of rules that are clearly more liberal with respect to the rights of lawyers from one Member State to engage in multijurisdictional practice throughout the EU than the current situation within the United States. This is true despite the EU's lack of common language and less consistency in legal traditions and court procedures between the Member States than exist among the states of the United States. In the EU, lawyers are able to carry on freely modern international legal practice. This is in sharp contrast to the limiting regulatory regime in the United States.

        With the Commission's leave, we will elaborate these and comparable considerations in our formal submission and testimony.

Respectfully submitted,

Daniel B. Magraw
Chair, Section of
International Law and Practice
of the American Bar