Inventory of Selected Issues on Multijurisdictional Practice (MJP)
Introduction
The Commission has heard many helpful opinions on the issues that it has been charged to address. The following inventory is intended to organize some, but not all, of the themes surrounding these issues, with the goal of focusing and advancing the discussion. It is not intended as a complete list of themes, nor does it address what, if any, solutions are appropriate in response to issues raised.
MJP issues may arise, in essence, when lawyers admitted in one jurisdiction (or, generically, "state") provide (or seek to provide) legal services in a jurisdiction where they are not admitted. The legal services may be performed (or sought to be performed) for a client in the other jurisdiction, for a client in the lawyer’s home state, or for a client in a third jurisdiction, as discussed below.
Interests implicated by MJP issues include the following:
a. Protection of the public and clients
Any recommendations to revise professional responsibility or court rules ("rules") or UPL or other statutes ("statutes") to allow a lawyer admitted in one state ("home state") to perform legal services in a state in which she is not a member of the bar ("host state") must fully recognize the host state’s interests in protecting its residents generally, its legal institutions, and clients the lawyer may serve in the host state.
i. Competence. The host state has an interest in insuring that lawyers who counsel its residents are competent. States have several vehicles for testing and maintaining the competence of lawyers admitted to their bars, including bar examinations, requirements that bar applicants graduate from an accredited law school, and CLE obligations. A state may also rely on Model Rule 1.1 and similar rules, which require competence. Lack of competence can sometimes lead to a client’s financial loss and a claim against the incompetent lawyer. By recognizing such claims, states encourage competence in the first instance and provide for remedy in the event its absence causes loss. At least one state mandates malpractice insurance for bar members. Of course, a lawyer’s activities in a host state will sometimes serve clients in another state, in which case the host state’s interest in the lawyer’s competence on behalf of residential clients does not arise.
ii. Disciplinary interest. The host state has an interest in the discipline of a lawyer for misconduct within its borders and for misconduct from outside its borders where the misconduct is aimed at its residents or justice system. The disciplinary interest may require that the lawyer’s home state accord the host state’s discipline (including sanction) preclusive effect - perhaps full faith and credit and subject to the traditional limitations on full faith and credit. These include lack of jurisdiction and fraud. Should they include public policy? Or is that too big a "loophole?" A promise of full faith and credit may be part of the consideration for an interstate agreement that extends the lawyer’s right of temporary practice in the host state.
iii. Character interest. To be admitted lawyers generally have to satisfy a character inquiry. Even in pro hac vice admission, courts inquire whether the lawyer is admitted in good standing and authorized to practice in another jurisdiction. The host state may limit its authorization to such persons (i.e., it may exclude persons under suspension or on inactive status). In effect, the host state "piggybacks" on the home state’s character judgment. Should any authority for practice in a host state be further conditioned - e.g., on a requirement that the lawyer not have been disciplined within a designated period of time?
iv. Administration of justice. A state has a legitimate interest in maintaining an active and vibrant local bar because the bar is part of the machinery of justice, lawyers may be utilized to serve on court committees, and lawyers may be an important source of expertise (usually voluntary) for various governmental and charitable functions. As legal business moves out of state, to lawyers who live and work out of state -- and the best business may be the first target -- the economic vitality of the local bar may be weakened. This may be of special concern to smaller states that border major ones and to rural states with smaller lawyer populations. Modern marketing methods, including Internet Web sites and 800 numbers, make it easier to attract host state business, as discussed below. Furthermore, a local bar may be seen as a kind of community with unwritten but understood expectations of how its members will behave. A state may have an interest in maintaining cognizance of and respect for these unwritten codes because they make the justice system work more efficiently and with greater predictability.
v. Funds for client protection. Many jurisdictions have funds to compensate clients in whole or in part for losses suffered as a result of the misconduct of their lawyers. When a lawyer’s work brings her into multiple jurisdictions and the lawyer acts in a way that will entitle a client to compensation from such a fund, will the home state’s fund respond even if the client is injured in, or is from, the host state? In addressing the issues here, a jurisdiction’s interest in protecting its client protection fund must be recognized.
vi. Fee arbitration. Many jurisdictions provide for mandatory or voluntary fee arbitration, in the event of a fee dispute, at the election of the client or the client and the lawyer. When a lawyer admitted in State A renders legal services in State B, whose fee arbitration forum and rules will be used in the event of a fee dispute?
vii. Counsel of choice. Both states and individuals have an interest, when commensurate with other interests, in protecting the interest of residents of a state in having access to counsel of choice, when that counsel is qualified to handle a client’s problem although a member of the bar of another jurisdiction.
viii. Professionalism. States have an interest in encouraging professionalism on the part of lawyers admitted to their bars or serving their residents. Professionalism includes some of the interests described above plus, inter alia, the avoidance of overcommercialization and a commitment to provide pro bono services.
b. The interests of lawyers and clients
Testimony and the literature or the work of other past and present ABA groups (and other groups) have presented the following possible "safe harbors" when lawyers do work in a host state. Are these "safe harbors" correct? How should they be defined?
i. Pro hac vice admission. This avenue broadly exists and we have heard no reason to recommend restricting it. However, we might ask whether limitations in some courts (on frequency, for example) should be eliminated. We might also address the need in some states for local counsel. Should we try to propose a "model" pro hac vice rule?
ii. Work prior to expected pro hac vice admission. If the expectation is reasonable, though the application may never occur for extraneous reasons, should the work be protected?
iii. Work in one host state prior to an anticipated, or in connection with an already pending, lawsuit either in the lawyer’s home state or a different host state where pro hac vice admission is expected. This would seem a modest extension of ii above. For example, a lawyer admitted in New York wishes to conduct an investigation in Illinois in connection with an impending action in Florida, where the lawyer reasonably expects to gain pro hac vice admission.
iv. Work as an in-house or employed lawyer. There is support in testimony for the proposition that when a lawyer works for an employer-client or one of its employees, whether in the state in which the lawyer is admitted, in the state in which the lawyer is based, or while traveling to other states, the lawyer’s work should be authorized. An exception to this authorization may arise when the work is in connection with a pending court matter because then the lawyer has the availability of pro hac vice admission and should be required to seek it as any other out of state lawyer would have to do.
v. Work in affiliation with an admitted host state lawyer. If an affiliated host state lawyer participates substantially in the work in the host state, including acceptance of responsibility on the application of the host state’s law, then some may conclude that the out-of-state lawyer’s work in the host state should be protected even if it is not protected under one of the other categories (though it may be).
vi. Work that a nonlawyer could legally perform in the host state. If a nonlawyer from the lawyer’s home state is free to perform the work at issue, because it is not work restricted to lawyers only, should the out-of-state lawyer be protected if he or she performs such work (and only such work) in the host state? If so, will the lawyer still be able to characterize the work as legal work for other purposes - e.g., privileges? Will the lawyer be subject to professional discipline for the work?
vii. Work performed in the host state in connection with the representation of a client from the home state. In this category we assume that the lawyer already has a client from his or her home state practice whose work requires the lawyer to enter the host state. This category should be distinguished from the two situations next discussed. It is in the difference between this category and the following situations that we may find some difficulty.
viii. A lawyer is approached in the home state by a prospective client from the host state, to which he or she then travels; or
ix. A lawyer instigates this business by marketing to prospective clients in the host state, to which he or she then travels.
Issues surrounding the broader and deeper "harbors" described in viii and (especially) ix are directly linked to legal advertising and solicitation, including on the Internet.
If the lawyer is a passive recipient of an inquiry (as in viii) from a possible host state client (e.g., a leading IP lawyer), the perceived threat to the host state’s interests may be seen as reduced for several reasons. First, the client was the catalyst. It chose to go out of state. Second, the kind of client who will go out of state is likely to be sophisticated. Third, the kind of matter for which a sophisticated client will choose to go out of state for a lawyer is likely to be highly specialized. In fact, clients in a host state do this sort of thing now, when looking for trial or appellate lawyers who can then be admitted in the host state pro hac vice.
But what if (as in ix) the lawyer encourages the client interest? Lawyers can do that in many ways. A lawyer who lives on the border between two states may, through an Internet Web site and other marketing devices, broadly target potential host state clients for routine services. Or a lawyer who is interested in building a national practice in a field offering high volume (e.g., debtor’s rights, immigration, DWI) or which is highly specialized (e.g., white collar criminal defense, securities fraud) may target clients nationwide with a Web site, an 800 number, and traditional advertising.
Should there be a "safe harbor" for a lawyer’s practice in a host state where the lawyer is not the passive recipient of a resident’s inquiry (as in viii) but has instigated the business in the manner described in ix? A lawyer who blankets a host state with advertising or other forms of marketing, while never entering it unless retained (and perhaps not even then), may be viewed by some as present "in" the host state as fully as if he or she were physically there.
c. Forbidden conduct
There seems to have been some sentiment in the testimony so far that the following conduct should be affirmatively forbidden.
i. Establishing an office in a state if the lawyer is not admitted to the bar of that state or otherwise entitled to establish an office incident to a safe harbor, including those listed above.
ii. Inaccurately holding oneself out, expressly or by implication (e.g., by omission of letterhead disclaimers), as a lawyer in a state in which the person is not admitted.
iii. Advising on the law of a state in which a person is not admitted while "in" that state except as incidental to home state practice or incident to a safe harbor, including those listed above.
d. Lawyers admitted in other nations advising clients in the U.S.
Aside from the status "foreign legal consultant," for whom there is already ABA policy, what, if any, safe harbors should there be for lawyers whose home state is a foreign nation? Or to put it another way, for each safe harbor that is advocated for U.S. lawyers, should the term "home state" be defined to include admission to the bar of a foreign nation?
e. How will any changes be effected?
Whatever changes may occur as a result of this work, an ancillary question is the form in which those changes become part of governing law or rules. Within a state, of course, professional conduct rules can be amended, as can statutes and court rules. But in so far as jurisdictions wish to condition their acceptance of the presence of out-of-state lawyers on reciprocal treatment of their lawyers in other jurisdictions, a compact or protocol (as in Canada) might be appropriate. Once such an arrangement is in place, other jurisdictions may then choose to join it by accepting its terms.
A separate issue is whether, once a jurisdiction chooses to recognize particular conduct by out-of-state lawyers as permissible, it would be appropriate to create a category of admission (e.g., "registration") to identify lawyers who satisfy its requirements and are thereby authorized to engage in some specified range of practice short of what is allowed for lawyers who are members of the state’s bar. Or can the same objectives be fully achieved without creating a new category? Is there any advantage or disadvantage to doing so?
f. How should the Commission express itself?
How should the Commission issue its recommendations? It may only be in a report with reasons. Or we may also propose "model" language for rules and statutes and for a protocol or compact.
April 12, 2001
Copyright 2001 by the American Bar Association. All rights reserved. Opinions expressed herein are not to be deemed the views of the American Bar Association unless and until adopted by the Association.