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Commission On Multijurisdictional Practice San Diego Public Hearing Transcript - Center for Professional Responsibility




Saturday, February 17, 2001

9:00 A.M. – 12:00 P.M.

San Diego Convention Center



1. Wayne J. Positan, Chair - Opening Remarks 2

2. Simon M. Lorne – ABA Section of Business Law 2

3 Louis A. Mezzullo/– ABA Section of Real Property, Probate

David K.Y. Tang and Trust Law 17

4. Chief Justice Gerald W. Vandewalle – Council of the ABA Section on Legal Education and Admissions to the Bar 30

5. Sidney White Rhyne – Federal Communications Bar Association 43

6. Daniel B. Magraw, Jr./ - ABA Section of International Law and Practice

Robert E. Lutz, II 51

7. Lawrence J. Fox 66

8. Joseph L. Shea, Jr. – Louisiana State Bar Association 81

9. Jerome C. Hafter 91

10. Philip Matthew Stinson, Jr. – Center for Education Rights 100

11. Anthony Davis/ - Association of Professional Responsibility Lawyers 111

Robert Creamer

12. Barbara O. Bruckman – ABA Section of Antitrust Law 126


2 MR. POSITAN: We'd like to begin the

3 procedures at this time. I'd like to begin by welcoming

4 everyone to the convention on multi-jurisdictional

5 practice, continuing our public hearing this morning,

6 scheduled for 9:00 a.m. until noon, following up with more

7 proceedings from yesterday. I'm pleased to announce at

8 this point that the board of governors has endorsed the

9 extension of the commission for one year. And, therefore,

10 I think we probably have time to complete this important

11 project at the inputs that we've been seeking.

12 I will, as a matter of procedure, remind

13 everyone that the commission has, in fact, received all of

14 your submissions, unless some late arrivals this morning.

15 We've had an opportunity to look at them before we arrived

16 here so it's not necessary to read them into the record.

17 It will be, in fact, part of the record placed on the MJP

18 website. So when you do offer your remarks, certainly

19 summarize what you had to say in the papers, but we are

20 really more interested in other things that you may want to

21 add or engage in discussion with members of the commission.

22 I understand we have one substitution today,

23 also. The No. 1 slot at 10:30, Larry Shea is going to be

24 speaking on behalf of the Louisiana State Board Association

25 in lieu of Professor Deborah Rhode, who withdrew her

26 request to speak this morning.

27 First person is Simon Lorne, ABA Section of

28 Business Law.


1 MR. LORNE: Good morning. Thank you for the

2 opportunity to be here on behalf of the Section of Business

3 Law. I come here as chairman of the committee on

4 professional conduct, which is charged with reviewing

5 issues of this nature.

6 You have the statement of the section before

7 you. I won't repeat it here other than to say that this is

8 obviously a problem that has been before the profession for

9 a long time. I think I read an article in the Mission Law

10 Review 23 years ago addressing some of these issues before

11 the Kutak commission at that time was addressing the

12 problems, and they are very difficult problems. From the

13 section of business law's perspective, most of our members

14 have practices that invariably take them across state lines

15 and indeed across national borders, and yet we have and

16 respect a multi-jurisdictional regulatory basis of the

17 profession, if you will, with which we all have to deal in

18 finding a solution to the problems represented by that

19 council. It's difficult and the section appreciates very

20 much your efforts to get to a solution.

21 Rather than going on in terms of comments, I

22 think that the comments of the section are fairly clear and

23 they're in front of you. Let me entertain any questions

24 that you may have from the commission.

25 MR. EHRENHAFT: I have a question about your

26 endorsement of Ethics 2000 Safe Harbors, and in particular the one that is most prevalent among lawyers who have

28 extensive practice across the state lines and even national

1 boundaries. 4

2 Your last safe harbor would be that he or she

3 was acting in respect to a matter that arises out of

4 reasonably related to the lawyers practicing in the

5 jurisdiction where he or she is admitted, which is a --

6 seems to me to be a requirement of some kind of an existing

7 practice that wouldn't accommodate perhaps expansions of

8 practice people would be interested in doing. And I

9 wondered to the extent to which the business law would

10 support a notion that that safe harbor, instead of being

11 expressed in terms of an existing practice, would rather be

12 expressed in terms of what a lawyer is authorized to do in

13 their principal jurisdiction of admission. So that to the

14 extent that in my case the District of Columbia, I may

15 opine on Japanese law. So if I'm competent to do so, I can

16 opine on New York law if I'm competent to do so. And that

17 would then allow my practice, wherever it would be, not

18 inconsistent with the practice that I'm permitted to engage

19 in where I am admitted.

20 MR. LORNE: As usual, I've got the difficulty

21 of speaking on behalf of the section, and to some extent,

22 naturally, my responses are my own, although I think I

23 understand where the section business law is coming from in

24 responding to issues of that sort.

25 Seems to me it's -- if we try to put some kind

26 of constraints, it's difficult to determine exactly which

27 constraints or how to formulate the constraining

28 parameters. And I think the section's thought was that the


1 language we used in the statement is sufficiently elastic.

2 To permit considerable analysis in the direction that you

3 suggest, I think it's also true that the section would

4 endorse broader connections, if you will, than

5 those set forth in the statement.

6 MR. EHRENHAFT: If one of the problems defining

7 these so-called safe harbors is the problem of elasticity,

8 because what can define the parameters, what is your view

9 about taking the opposite approach and saying that

10 multi-jurisdictional practice will be permitted but for an

11 attempting to identify those things that you think would be

12 inappropriate and thereby concentrating on those aspects of

13 practice that -- that one could suggest are really contrary

14 to our traditions and what the needs are, which is kind of

15 the approach that the United States is taking in its

16 international negotiation with it's trading partners.

17 MR. LORNE: Correct. And I think that is an

18 approach that the section would be quite comfortable with,

19 if you will. I think it was more difficulty fitting within

20 the -- the holes available, if you will. But I think if

21 the commission and profession as a whole were prepared to

22 move in the other direction, I think the section would be

23 quite comfortable.

24 MR. EHRENHAFT: Do I understand your thrust to

25 be principally endorsement of safe harbors under concepts

26 2005.5 or is the section of business law taking a broader

27 position on multi-jurisdictional practice in terms of

28 things that go beyond the safe harbor?


1 MR. LORNE: The approach that we have taken to

2 date within the section is, as the statement suggests,

3 within the safe harbor approach of Ethics 2000. I was

4 suggesting that I think, if there were support behind a

5 broader approach, the section would be comfortable with

6 that broader approach.

7 MR. EHRENHAFT: At this juncture --

8 MR. LORNE: That is not -- pardon me.

9 MR. EHRENHAFT: At this juncture, that is not

10 limiting essentially to the safe harbor being a subject

11 that would be acceptable.

12 MR. LORNE: I think that is certainly the

13 approach we have taken to date.

14 MR. RAMIREZ: The position statement mentions,

15 and I think this was the discussion that the council, the

16 extension business law found itself in. Let's say somewhat

17 awkward position on the whole MJP issue because we have

18 Ethics 2000 pursuing a certain approach, and we have the MJ

19 commission proceeding on the same similar track, but

20 feeling a little bit part of what the house is dealing

21 with, rule 5.5.

22 And so what you see here, in essence, mirrors

23 our comments to the Ethics 2000 commission. When we favor,

24 we don't want them to shrink from the position they've

25 taken, but we'd like to expand it. And so since they

26 proceeded along safe harbor, a safe harbor approach, we

27 endorse their safe harbor approach and then ask for some

28 additional safe harbors. So it's a mix of saying we


Peterson & Associates Court Reporting, Inc.

1 support their safe -- the Ethics 2000 safe harbor approach,

2 we support it, but expand it somewhat covered by some of

3 the points in this position statement.

4 MR. POSITAN: One the things that's not

5 discussed, and let me know whether it's contemplated or

6 not, is at what point would anything such as mandatory CLE,

7 some type of registration, mandatory pro bono, the

8 responsibility kick in, if at all, either under our safe

9 harbors or under the expanded notion that --

10 MR. LORNE: I don't think those issues were

11 considered very much by the section of the council in

12 getting to where we are today. If I were to speculate, it

13 would be to the effect that those sorts of reasonable

14 effects, if you will, of doing business or practicing

15 beyond one's home jurisdiction would be acceptable.

16 MR. JENKINS: Mr. Lorne, most of the commentary

17 we've received yesterday and today has been receptive to

18 the idea of some expansion of across-the-border practice,

19 but one statement we received from a witness who will

20 testify later is negative.

21 And while he recognizes the need for some

22 change, he asserts, and I imagine that this must be said to

23 have done his share, that this entire effort is motivated

24 by economics, say, a free enterprise goal of lawyers that

25 he says is so unprofessional regulation. So what do we say

26 about the proposition or the criticism that this is simply

27 an effort by lawyers to enhance their own practices?

28 MR. LORNE: I would have thought if there were


Peterson & Associates Court Reporting, Inc.

1 criticism aimed in that direction, it would be toward

2 preservation of the status quo rather than expansion of the

3 ability to carry the practice along with one's client

4 across state lines. I would have thought the -- the normal

5 attacks one sees on unauthorized practice questions is that

6 it's the bar associations in a given state prohibiting

7 competition for the lawyers of that state.

8 I would have thought that the

9 economics-oriented attack, to the extent it exists, and I

10 would hope it doesn't have very much validity at all. I

11 would have thought it is driven much more toward the status

12 quo than toward expanding the ability of lawyers to move,

13 by and large, certainly speaking of my own practice, for

14 example, when I'm doing things in other states and I'm in a

15 law firm with offices in only one state. When I'm doing

16 things in other states, it's because my clients want me to

17 be involved in other states. It's not because I want to go

18 to another state and somehow increase my income or look to

19 that. I think it is, in fact, professionalism at its best.

20 MR. GILLERS: To the question about the extent

21 to which some of these other obligations are existing

22 professions with regard to pro bono work, CLE and so on,

23 did your council consider some kind of a system under which

24 a minimum activity within a state on a nonpermanent basis

25 would create obligation to that state, sort of like our tax

26 treaties? If you're in a state for over 180 days, then

27 you're going to have to pay taxes there. If you're up to

28 that, then you don't have to pay tax there. Could a


Peterson & Associates Court Reporting, Inc.

1 similar kind of a system work for lawyers?

2 MR. LORNE: I don't think that we considered

3 the imposition of those sorts of -- I don't want to say

4 restraints -- the imposition -- pardon.

5 MR. GILLERS: Obligations.

6 MR. LORNE: Obligations. Thank you. The

7 imposition of those sorts of obligations at the council.

8 However, I think imposition of reasonable obligations that

9 reflect the lawyers' and the bars' obligation to the public

10 would not be objectionable.

11 MR. GILLERS: We have -- we have another whole

12 year, so maybe you could sit --

13 MR. LORNE: That would be good, too.

14 MR. GILLERS: We'll have the opportunity for

15 statements on that issue because it's a very important one.

16 MR. LORNE: Certainly.

17 MR. GILLERS: And I don't think we really had

18 that issue developed.

19 MR. POSITAN: Any additional questions?

20 MR. GREEN: Mr. Lorne, the business law section

21 safe harbor that wasn't included in the proposed 5.5, it's

22 No. 5 on your list, which would be for work that would not

23 be unauthorized practice of law if performed by a

24 non-lawyer.

25 Could you tell us a little bit about what that

26 would include and what the rationale is for that proposal?

27 MR. LORNE: I think of that proposal as being

28 much more clarification than anything else. Seems to me


1 that all it is saying is if a non-lawyer in a given

2 jurisdiction could do whatever it is -- and one of the

3 problems that I think we all run into in thinking about

4 multi-jurisdictional practice questions is the vagaries

5 that surround the notion of practicing law.

6 One is there's some obvious cases when you're

7 standing in front of a judge in a courtroom, you're

8 practicing law, and whenever you're writing a will you are.

9 But when you move beyond that, as certainly the profession

10 has since the canons of ethics came in 100 years ago, we

11 are not quite sure anymore when you're still practicing and

12 when you're not.

13 When I was at the S.C.C. and we were

14 prohibiting people from practicing law before the S.C.C.,

15 we wrestle with the question, "What does it mean to be

16 practicing before the S.C.C."? I think all of this

17 suggests No. 5 -- Proposal No. 5 in the section

18 statement -- is simply to say that if a given activity

19 would be permissible for a non-lawyer, it shouldn't become

20 impermissible simply because it's performed by a lawyer who

21 is licensed in a different jurisdiction.

22 I don't think -- I think that is certainly a

23 useful sort of thing to have, but I think of it as much

24 more clarification than anything else.

25 MR. POSITAN: Let me give you an example.

26 Would I be able to go to all 50 states and counsel people

27 on how to run a sexual harassment investigation since I

28 have plenty compensation of people doing that from state 5


1 and other such entities?

2 MR. LORNE: My guess would be yes. That gets

3 into the question of again whether that's practicing law.

4 But it's not practicing law, the mere fact that you're

5 licensed to practice law in one jurisdiction shouldn't stop

6 you from doing it in other jurisdiction if everybody else

7 in the world can do it? Why should we exclude from that

8 activity only the people who happened to be licensed to

9 practice law?

10 MR. POSITAN: Some people say that the license

11 carries with it some kind of a special connotation in terms

12 of anything I do is practicing law even if somebody else

13 could do it that doesn't have a license.

14 MR. McDonnell: If I might follow up on that

15 with a similar question. Many administrative agencies

16 permit non-lawyers to appear on behalf of somebody at

17 various levels. Would that also, then, be encompassed in

18 this? There is usually -- in those cases there is no

19 admission procedure, and many of our competitors in state 5

20 do exactly that.

21 MR. LORNE: One of the problems you've got in

22 coming up with specific examples is the question of whether

23 those activities do, in fact, constitute the practice of

24 law and so would be permitted in the jurisdiction. And

25 less and less I'm believing that the big five doing it,

26 it's not practicing law. But that's a different question

27 entirely.

28 MR. McDonnell: I understand that, and I think


1 one of the things we are all struggling with is that if we

2 do come into a jurisdiction and we are licensed with

3 lawyers, and what we do would ordinarily be thought of as

4 practicing law as we do it, the fact that somebody else can

5 do it as well does raise some questions.

6 MR. LORNE: It does, and I think those are the

7 difficult questions of determining what it is that is the

8 practice of law.

9 MR. McDonnell: But the section's position on

10 this is not perhaps exactly as stated, then. So you might

11 draw the line where the practice of law as opposed to

12 something that everybody has done maybe it is not the

13 practice of law. In other words, I'm trying to understand

14 the position.

15 MR. LORNE: I think that the position is that

16 applying the test jurisdiction by jurisdiction, in a given

17 jurisdiction, the thing that you're doing is something

18 everybody else could do. You should not be precluded from

19 doing it simply because you're licensed in your home state.

20 MR. McDONNELL: Right. Even --

21 MR. POSITAN: I have a feeling disciplinary

22 counsel sitting next to you might disagree with you.

23 MR. GILLERS: Does the lawyer when he sends out

24 his bill for his services usually indicates professional

25 services. And it will indicate in greater than less detail

26 than services be performed. Have you ever in your

27 experience found lawyers differentiating in those

28 communications with their client? In this particular


1 session, we talked about my legal advice, and in this

2 particular session we talked about my financial planning

3 act or that this was my psychologists --

4 MR. LORNE: I don't think historically we've

5 certainly differentiated, and I haven't seen the

6 differentiations. I don't think that's responsive.

7 MR JENKINS: Mr. Lorne, picking up on the

8 chair's question, if doing a sexual harassment

9 investigation is not something for which jurisdiction

10 requires investigative to be a licensed member of the bar

11 so that someone from out of state who is a lawyer and is in

12 his home state would be able to do under your Exception 5

13 because a non-lawyer could do it, as I understand it,

14 wouldn't it then follow that there would be no

15 attorney-client privilege for the conversations between

16 that person who in the home state is acting as non-lawyer

17 and the persons with whom he's communicating who might be

18 considered the client?

19 MR. LORNE: That might well be the result.

20 That's a result we have today. You're hitting a sensitive

21 point, because I once had a court tell me I had no

22 privilege because I wasn't acting as a lawyer in a

23 particular matter.

24 MR. JENKINS: But Mr. Positan's point is that

25 there are some activities for which, when done by a lawyer,

26 will be deemed a lawyer's activities although a non-lawyer

27 can also do it. And the lawyer brings with his person the

28 protection of the privilege. But if you're going to shed


1 that status to enable you to do what the non-lawyer can do,

2 you don't have to give up the privileges.

3 MR. LORNE: I'm not sure I agree with your

4 premise. The District of Columbia court in the case I was

5 talking about decided that what I was doing was not a legal

6 activity even though I was a lawyer, so there was no

7 privilege protecting the discussions I'd had with my

8 client. We do that today, the courts say if what you're

9 doing is not practicing law, then the privilege does not

10 attach to it. Now, I would assume that on the fringes,

11 right now you have some confusion on those issues. The --

12 MR. POSITAN: On that client's position, I

13 often in many sexual harassment investigations, they're

14 going to tell me they don't necessarily want to come out.

15 MR. LORNE: That may very well be right. One

16 may need -- as we develop these sorts of notions, we may

17 need to increase the attention we give to clarifying for

18 the client the role of the privilege. I think that's a

19 real question you have today with investigations.

20 MR. POSITAN: Can't be a check off. You know,

21 my acting as an attorney, do you want -- in other words, if

22 you want me to act as an attorney and have the privilege,

23 whatever you tell me, check off here and we'll sign a

24 retainer agreement. Otherwise, you're going to sign

25 something that says I'm not acting as a lawyer in this

26 case. You're going to pay me, then your malpractice

27 carrier will get sued --

28 MR. LORNE: One could imagine procedures


1 evolving. They don't exist now because we don't have the

2 standards now.

3 MR. POSITAN: I have a serious problem with a

4 notion that somehow attorneys waive client's -- really, the

5 client privilege as to what we're doing at any particular

6 time that we're doing it, and then getting into some kind

7 of inadequate analytical process as to when we are acting

8 as an attorney when we are not. Turn that switch on and

9 off, it's a real --

10 MR. LORNE: I'm suggesting that exists today.

11 Whatever one does with the Item 5 proposal, that exists.

12 And I would suggest that the dividing line, if you will,

13 for the courts on the privilege question will not be

14 co-determined with a dividing line on the unauthorized

15 practice question.

16 MR. RAMIREZ: When would it be clearer in one

17 aspect -- one respect, perhaps more troubling to some from

18 another point of view if that Paragraph 5 had in the first

19 line, where it says, "Safe harbor for services," if it

20 said, "For services as a lawyer in the jurisdiction" so

21 that the safe harbor was designed to be a safe harbor to

22 permit a lawyer to render services as a lawyer in a

23 jurisdiction in which the very same services absent

24 privilege and confidentiality could be rendered by a

25 non-lawyer.

26 MR. POSITAN: I think I could do that.

27 MR. RAMIREZ: I mean, that would press your

28 issue.


1 MR. POSITAN: I think that's an important

2 distinction to draw in terms of end courts reserving what I

3 think extremely poor value.

4 MR. RAMIREZ: That may be something you want to

5 take back to when we meet in March.

6 MR. EHRENHAFT: Certainly I want to put lawyers

7 in a position where they have to worry about malpractice

8 coverage depending upon which switch they turn on that day.

9 I don't think any of us want to end up in that place.

10 MR. LORNE: No.

11 MR. POSITAN: I know we need to move along. Is

12 there one final question?

13 MS. NIRO: Actually, I had one, but I'm now in

14 the position of needing to speak to state bar leaders in

15 the other building. But perhaps I will leave my question.

16 And it was a follow-up to your suggestion that there were

17 state interests in protecting the economics of their

18 instate lawyers to those who would cross state lines with

19 their client in practice. And there are those who would

20 think that that is one of the protections that a state bar

21 organization provides to the lawyers of the state. And

22 there are supreme courts who feel very obligated to be the

23 gatekeepers of the practice of law in their state. And the

24 suggestion that those who have demonstrated their knowledge

25 of their state laws and satisfied the requirements of that

26 state's courts are properly practicing law within their

27 borders.

28 What do we say to those folks who hold those


1 values very strongly to the suggestion that we ought to be

2 able to go wherever our clients want?

3 MR. LORNE: I think the original question went

4 to the economic protectionism, if you will, and --

5 MS. NIRO: Dual.

6 MR. LORNE: -- and there are certainly other

7 interests at work that are important. And it seems to me

8 that that is the balance that the commission is trying to

9 find, and I hope you will ultimately find successfully.

10 MR. POSITAN: Thank you very much for your

11 comments, and hopefully the business law section stays very

12 much involved in this process as we move through it.

13 MR. LORNE: We will, Mr. Chairman. Thank you

14 very much for your time.

15 MR. POSITAN: Thank you.

16 Mr. Tang, on behalf of ABA Section of Real

17 Property and Probate and Trust Law.

18 MR. TANG: Good morning. Thank you very much

19 for this opportunity to appear before you. My name is

20 David Tang. I'm the chair elect of the Section of Real

21 Property and Probate and Trust Law. Our chair,

22 Lou Mezzullo, will be speaking in just a couple of minutes

23 here. Our section has 32,000 -- approximately 32,000

24 members, and primarily divided into two divisions on real

25 property and probate law.

26 There is a long historical connection as well

27 as some ongoing substantive overlap between our two

28 divisions. But on this issue, it wouldn't be


1 jurisdictional. And we are certainly in agreement and in

2 unity as to our position as a section.

3 I want to stress that our section is composed

4 of both sole and small firm practitioners, as well as

5 practitioners from the largest firms. Others in meetings

6 like this have often used real property lawyers and probate

7 and trust lawyers as the example of the utmost in localized

8 practice, or the most conservative when it comes to state

9 jurisdictional matters. We're here to inform the

10 commission that from the perspective of our section that is

11 not true.

12 Our section counsel has come out in

13 overwhelming support to change the existing rules. And

14 that includes not only the ethics rules, but also the state

15 statutes on unauthorized practice of law, to permit a

16 transitory presence in various -- in various states. Our

17 reasons for that are simply that our practice, in order to

18 reflect the reality of the marketplace and what we are

19 currently doing, would necessitate those changes in the

20 area of real estate. That has changed significantly in the

21 last couple of decades.

22 It has become regionalized, and in many cases

23 nationalized. If you think of just the various players and

24 the real estate market, the developers are national, by and

25 large. The lenders are certainly national these days.

26 That is national life insurance companies, pension plans,

27 the capital markets are no longer localized, are no longer

28 your community bank that make that loan. The users, that


1 is the tenants, are by and large national. The owners of

2 developed property, whether it's residential or industrial

3 or commercial, would also be national. The brokers on both

4 residential and commercial properties are national in

5 scope. And many of the vendors, including the title

6 insurance companies, are national in terms of what they do.

7 And they provide title insurance coverage across state

8 lines.

9 So our practitioners -- speaking on behalf of

10 the real property side, our practitioners would like to

11 move out of the shadows when we confer with clients across

12 state lines or -- and would like to comply with state rules

13 on what they can or cannot do. Our recommendations in

14 terms of changes that we would request are based on the

15 twin principles or twin values, if you will, of recognizing

16 client choice and recognizing competency, and that we don't

17 believe that a lawyer loses their competency simply because

18 they've crossed the state lines.

19 We also believe that as a part of that, that

20 certainly the lawyer who has a transitory presence in

21 another state, a state that they're not licensed in, would

22 be and should be willing to subject themselves to the

23 regulatory jurisdiction of the state in which they have

24 gone into, but that these are the principles that we looked

25 at in developing our recommendations. And I will now turn

26 it over to our chair to talk about those recommendations.

27 MR. MEZZULLO: Well, I understand that all of

28 you have already read our three specific proposals on Page


1 7 of our submission. So I would be glad to answer any

2 questions concerning those proposals. I also thought I

3 would give a little story about my own practice.

4 I was with a larger firm when I started, and

5 then left that firm to form a boutique. I should be

6 careful about using that word because if my clients found

7 that out, they wouldn't know what I was selling. But, at

8 any rate, a boutique firm (inaudible) administration, we

9 have three attorneys, eight people all together. I would

10 say over 50 percent of my practice involves clients from

11 outside the state of Virginia.

12 One example, I received a call from a lady who

13 was serving as executor of her mother's estate. She was in

14 Texas, the estate was in Mississippi. She was referred to

15 me by a law professor at the university in her hometown to

16 deal with an issue in the state tax return, qualified

17 family-owned business interest deduction, because the CPA

18 that was performing the -- that was preparing the return

19 wasn't familiar with it. The attorney that was handling

20 the estate wasn't familiar with it.

21 So I got involved in that respect to that

22 particular issue. But then another issue came up involving

23 whether Mississippi recognized the qualified family-owned

24 business interest deduction. In that situation, I called

25 an attorney in Mississippi that was familiar with

26 Mississippi's state tax.

27 So we have at least three states here involved

28 in a probate practice that I have in Virginia. And I can


1 give many, many examples of that situation or of situations

2 where I'm representing clients that are in other states.

3 And one thing that I do, if I'm preparing documents for

4 a client that lives in another state, it's with the

5 understanding that those documents will be reviewed by a

6 competent attorney in that other state. Otherwise, I will

7 not take the engagement.

8 I do that for two reasons. Number one, I think

9 that that protects me from the unauthorized practice of

10 law, but I think also makes sure that I'm not absolutely

11 liable absolutely for anything that may be wrong with

12 respect to those documents. But people in our division of

13 the section have practices that are similar to mine. That

14 is that they practice across the country, particularly in

15 the estate planning area where you're dealing with federal

16 and state tax so long as we still have it.

17 MR. POSITAN: To follow up to Professor Green

18 (inaudible) to the speaker. Your Recommendation No. 3 says

19 that you would propose expanding 5.5 to complete services

20 (inaudible) a lawyer in good standing admitted practice

21 rendered in that jurisdiction by a non-lawyer. Do you have

22 any examples of the type of service that your section is

23 talking about here?

24 MR. MEZZULLO: Well, for example, it's clear

25 the CPAs can prepare tax returns. I also prepare tax

26 returns, basically state, and give tax returns, sometimes

27 fiduciary tax returns. When I'm preparing those returns,

28 there may be issues that are legal in nature or they may be


1 issues that are just purely tax preparation that a CPA or

2 even someone who's not a CPA could perform.

3 So that would be one example. But I will say

4 that I would agree with the traditional language, that is

5 suggested by Mr. McCallum concerning making it clear that

6 you're still performing legal services in that situation

7 for all of the reasons that were already expressed.

8 MR. McCALLUM: Let me ask you this. You have

9 indicated that in No. 2 that the last part of that meeting

10 the lawyer is not based permanently in the jurisdiction.

11 Have you come to any conclusion as to how much activity

12 should be allowed before you reach the level of permanency?

13 In other words, a series of ad hoc transactions

14 that happens to occur, or do you have a situation like

15 Kansas City, Mississippi where basically every day services

16 are performed in each jurisdiction by lawyers who are not

17 licensed in those jurisdictions?

18 MR. MEZZULLO: I don't think we got into that

19 issue in that great debate. But I would say that I think

20 that, first of all, a lawyer should be subject to the

21 disciplinary rules wherever he is practicing, even though

22 he's not admitted in that particular state. I think that

23 after a certain amount of activity in a particular state,

24 then that lawyer should have to follow the formalities that

25 a lawyer that's admitted to practice in that state has to

26 follow.

27 Now, how much activity will warrant that type

28 of obligation. I don't think we have reached that quite


1 yet. But I think there should be a point where the lawyer

2 has more than just a passing obligation with respect to the

3 rules in that particular state. Again, I think that any

4 state that I'm practicing -- that I'm advising my client

5 in, I should be subject to those rules.

6 MR. POSITAN: You followed up with my earlier

7 question to the other -- to the section business law, as

8 well. Mr. Tang, you're free to come back to the podium,

9 help your partner out here.

10 But at what point, if any, does obligation --

11 does an obligation kick in such as mandatory CLE, mandatory

12 pro bono and client's security protection funds and those

13 kind of things? Have you thought about that?

14 MR. MEZZULLO: Well, we haven't. But as I

15 already indicated, I think that if I'm performing legal

16 services on a regular basis in Maryland, I think I need to

17 be subject to more obligations than just upon performing

18 service on every other year or something along those lines.

19 But we are, again, as I was answering the question earlier,

20 I can comment subject to all of those rules that we have

21 discussed that in any detail.

22 MR. TANG: I think those are the type of rules

23 that we need to be established in the same way that the

24 concept of permanent establishment for under tax treaties

25 have been worked out for over a long period of time.

26 Certainly, making phone calls in to another

27 state and providing legal advice may not subject you to

28 those types of requirements, but if you are regularly


1 crossing the border to advise a client in another state,

2 that, obviously, is a different matter. I think the two

3 ends of the spectrum are clear, phone calls being one end

4 of the spectrum. And if you actually establish a physical

5 presence, an office or even a temporary office of some

6 kind, that certainly anchors the other side of the

7 spectrum. Then where in the middle you would draw those

8 lines as to when some of the other requirements would kick

9 in.

10 The legal obligations would be from the state

11 that you're licensed in, presumably, and the malpractice

12 type of insurance would be regulated from the place where

13 you have the license. But the -- the risks and the

14 jurisdictional aspects that you subject yourself to when

15 you go into another state would simply be there. And the

16 responsibility would be there in providing quality service.

17 MR. POSITAN: Why should it be limited to

18 mandatory CLE in a jurisdiction that you're admitted?

19 If your practice, let's say -- let's pick a

20 number -- 20 percent of your practice. Let's assume you're

21 in Maryland, and for one reason or another, 20 percent of

22 your practice somehow throws you into the adjoining state

23 of Delaware. And I don't know whether Delaware has a

24 mandatory CLE or not, but let's assume okay, in fact, they

25 do. Why should you have to go take some CLE in Delaware if

26 you're doing 20 percent of your practice there? If the

27 attorneys in Delaware have to do it, and the reason,

28 presumably, that they've done it is the supreme court of


1 Delaware decided that it's a good thing for attorney

2 competency that you take continuing legal education

3 courses, which means that it is a test of competency.

4 MR. TANG: Well, if the principle is

5 competency, several observations.

6 It's ironic, Mr. Chairman, that you would pick

7 Delaware. Because clearly for transactional and business

8 lawyers, I'm sure there are, if not formal opinions, many

9 law firms across the nation have had -- been asked to

10 advise on Delaware corporate law simply because of so many

11 different corporations. And if the lawyer is competent to

12 advise on corporate law in many ways, as I believe you

13 heard testimony yesterday, isn't it more competent for a

14 business lawyer in another state to know what the issues

15 are and to know where the traps are than for someone who

16 does not practice business law in Delaware that would have

17 to advise on business law issues in Delaware? So if the

18 issue is competency --

19 MR. POSITAN: Let's talk about Delaware

20 business law. And let's say that Delaware conducts every

21 year for all of the business lawyers who want to deal in

22 Delaware where a mandatory CLE program that says you have

23 to take this course every year because we changed the law

24 that year so often and we want to make sure that everybody

25 knows what's going on. Why should you be subjected to

26 having to take that course?

27 MR. TANG: I'm not suggesting that we would not

28 be subject to it if that's the quid pro quo for allowing


1 transitory presence. My only point is if the issue is

2 competency, the lawyer certainly is subject to any of the

3 liabilities that would come up if there was not competency

4 exhibited in the advice that was being provided. And in

5 many ways the person providing business law about a

6 Delaware matter, I would submit, would be competent to take

7 those risks versus someone who does not practice business

8 law based and licensed in Delaware.

9 MR. POSITAN: I'm assuming that the superior

10 court of Delaware didn't decide to do that because they

11 wanted to figure liability. They wanted to make sure

12 people who were advising on Delaware law knew what they

13 were talking about.

14 MR. EHRENHAFT: Then isn't the answer,

15 Mr. Tang, that if a competency question were ever to arise,

16 one would examine that competency. And whether taking a

17 particular CLE course is evidence of that competency may be

18 a fact that might be considered. But it wouldn't

19 necessarily be just positive since somebody could be quite

20 competent without having -- not to say a jurisdiction may

21 not require CLE courses as a way of -- of assisting

22 competency. But it's not a test of competency if everybody

23 takes a course or not. It's not a defense that I took the

24 course and therefore I did what I did and could be an after

25 the fact examination of the existence of competency.

26 MR. TANG: I thank you. I think as I indicated

27 before, we wouldn't object to having any of the members of

28 our section who may want to practice real property or


1 estate planning in another state be required to take a

2 mandatory CLE course in the other state. I just wonder

3 whether that necessarily is the limits test for competency.

4 MR. POSITAN: Not necessarily. If you take the

5 logical end, basically you put in a position that says no

6 mandatory CLE is really necessary because it's really just

7 a thing to assist you and therefore should be mandatory.

8 MR. RAMIREZ: When could I suggest this whole

9 issue of CLE is obviously from the discussion in your

10 comments. I had this perhaps naive impression that most

11 states did not mandate CLE be taken in a state were

12 permitted to be taken in national programs. In fact, I --

13 it's my -- my impression from the A.B.A. relied for years

14 CLE from all over the United States.

15 I think the whole question of whether a state

16 might want to advantage law schools or CLE bodies within

17 the state by mandating their CLE be conducted in state,

18 that's a whole separate issue. But the fact is that most

19 states permit that CLE be taken in a variety of locations.

20 I -- I ask you, you gentlemen, what if this

21 commission were to conclude as a matter simply of policy in

22 the interest of the profession that it would be -- it would

23 be an advantage in requiring any lawyer who on a regularly

24 recurring basis is in the jurisdiction outside his or her

25 home jurisdiction to meet the minimal CLE requirements in

26 that jurisdiction. That is, if it's greater than the home

27 jurisdiction, they'll have to come up to that level.

28 We might conclude -- we haven't debated this,


1 but we could well conclude that the worst thing that can

2 happen is that we would improve the level of CLE around

3 the United States for lawyers. And we might conclude that

4 wouldn't be such a bad thing anyway.

5 MR. TANG: Not at all.

6 MR. McDONNELL: If I might ask a slightly

7 different question. I note that the section hasn't exactly

8 addressed any regulatory mechanisms or enforcement

9 mechanisms or mechanics. Have you given any thought to

10 that? For example, how would a state know that an

11 out-of-state lawyer was in there 20 percent of the time?

12 Does the section have any feelings about things like

13 registration or filings or whatever?

14 MR. TANG: The short answer is no. I don't

15 think the section has had the opportunity to drill down

16 that far to really think about how the enforcement would

17 work. Our focus has been on the fact that under our

18 current system where this is already occurring, that is,

19 lawyers crossing state lines, that there is no way for

20 current state bars to regulate or enforce that situation or

21 perhaps even to claim jurisdiction, whereas like having a

22 rule that says that if you are going to have some type of

23 transitory presence in another state, that that

24 automatically subjects you to the jurisdiction of that

25 state, that you at least establish a baseline that we don't

26 currently have.

27 MR. McDONNELL: Okay.

28 MR. POSITAN: To follow up on your


1 international tax treaties, essentially, the United States

2 or other countries adopted a rule that for better or worse,

3 we're going to draw a bright line because a bright line is

4 better than uncertainty. And, therefore, if someone is in

5 a jurisdiction for only 180 days, they're not going become

6 a taxpayer. Stay there 184 days, they become a taxpayer.

7 It's just a rule of means.

8 Does your concept to think of a similar kind of

9 rule of convenience would be inappropriate one for this

10 issue as well, that people know if they're spending more

11 than X number and maybe it's in threshold terms of value

12 rather than in time. Time is not the only criteria. It

13 might be value in transaction, something like that. These

14 kind of bright lines would facilitate what we are talking

15 about. Can you support that?

16 MR. MEZZULLO: Well, in today's situation,

17 probably something like that would be supportable, but I

18 would like to see the day when we would have minimum

19 standards across the country so we wouldn't have 51

20 different rules and regulations that we would have to

21 satisfy.

22 I realize that that's 10 or 20 years in the

23 future, but I think that the country as a whole, the law

24 profession as a whole should be able to come up with what

25 they think should be minimal standards as far as CLE and

26 pro bono and so forth. Propose an alternative regardless

27 of what state they practiced in, the only thing that you

28 would have to worry about is if you're going into another


1 state to practice.

2 For example, myself, if I'm drawing a will up

3 for someone that lives in Maryland, I better have another

4 Maryland lawyer read that will, or I better go to CLE put

5 on by Maryland attorneys about Maryland's state trust law.

6 And that's how I would like to see the law

7 eventually develop, rather than having 51 different rules.

8 And I think that in that situation, I think if rules would

9 be enforced much more evenly rather than what we have

10 today, which is probably the only time that the rules are

11 enforced, is in a suit for recovery of fees.

12 MR. POSITAN: We need to move the calendar here

13 along. I thank you both for your remarks. Once again, we

14 hope that you stay involved in the process and think about

15 some of the questions that we've raised and give us input

16 back so that we can think about it, too.

17 Chief Justice Gerald Vandewalle, who is here

18 speaking on behalf of the council of the A.B.A. Section on

19 Legal Education and Commission of the Bar.

20 JUSTICE VANDEWALLE: Good morning,

21 Mr. Chair. Thank you. It's a pleasure to be here. I am

22 Gerry Vandewalle. I'm a Chief Justice in North Dakota,

23 President of the Chief Justices. But for my purposes

24 today, I am appearing as the Chair-elect of the Council

25 Section on Legal Education and Commission of the Bar. And

26 I appreciate the opportunity to appear. I tell the lawyers

27 that appear before me, I ask the lawyers not to read their

28 briefs to me. And I will extend to you the same courtesy.


1 I will not read my prepared written remarks to you.

2 MR. POSITAN: I've waited all my life for this

3 opportunity.

4 JUSTICE VANDEWALLE: It's been 23 years,

5 Mr. Chairman, since I've been on this side, so I sat and

6 listened this morning. I'll try to get back in shape.

7 I have -- we have outlined some things for you.

8 The section has not yet taken a position on the specific

9 issues that the former chair outlined in her November 2000

10 memo. But what we have done is identified for you some

11 certain broad considerations that we believe are essential

12 to the resolution of the issues, tough issues with which we

13 are wrestling. We've also outlined for a little bit the

14 history of the section of legal education.

15 And I believe it's important to recognize that

16 the section is the oldest section in the American Bar

17 Association. Started with a committee back in 1878, and

18 that committee took the position very early that the law

19 school diploma is essential to qualification for the admit

20 to the bar, that law school curriculum should consist of

21 vigorous, three-year course of study. One of the section's

22 central functions, then, is the accreditation of law

23 schools. And I would note that the section appeared on the

24 very first list of accrediting agencies approved by the

25 Department of Education.

26 In November, the advisory committee to the

27 department recommended the section be renewed for another

28 five-year term. And in January, I'm happy to report that


1 the Department of Education did renew the council's

2 accreditation standing for another five years. We've

3 outlined for you also, I think, the roles of the

4 accreditation standards of the section. And those goals

5 are listed for you. There are six of them. I'm not going

6 to read them to you, but those goals then form our position

7 under the consideration that we believe this commission

8 must look at in formulating its response to the issue of

9 multi-jurisdictional practice.

10 And they are a national system of accreditation

11 of law schools that states to assure that all law schools

12 prepare new members of the profession for the practice of

13 law in accordance with those issues. And that whatever

14 position the commission ultimately adopts on the subject of

15 multi-jurisdictional practice should be consistent with the

16 council safeguarding these interests by continuing to apply

17 these accreditation standards in a vigorous manner.

18 Secondly, that the standards for admissions to

19 practice should be designed and enforced in a manner that

20 will protect consumers of legal services.

21 Thirdly, and this gets to what you were just

22 discussing with the former people that were testifying, the

23 standards and procedures should protect those jurisdictions

24 that are chosen to adopt them for continuing legal

25 education.

26 And finally, that appropriate criteria proceed

27 and enforcement mechanism for disciplining attorneys who

28 violate standards of professional conduct should remain in


1 place.

2 Our concern is that some of the proposals

3 before you on multi-jurisdictional practice would have the

4 unintended, and I emphasize "unintended," consequence of

5 undermining the clarity of the accreditation vice chair and

6 disciplinary standards. And we urge that you not do that.

7 We urge that you recognize those considerations and

8 whatever solutions you form to the multi-jurisdictional

9 practice issues. Our section stands ready to assist you in

10 whatever manner we can in formulating those proposals.

11 Mr. Chairman, that completes my statement.

12 I've tried to catch you up. I'm happy to answer any

13 questions.

14 MR. RAMIREZ: I have one, Justice Vandewalle.


16 MR. RAMIREZ: In the middle of your second

17 bullet point, there's a statement, "If this commission were

18 to recommend the adoption of system national license, that

19 system will be guard against the dilution of additional

20 standards." Would it be fair to say that that pause or

21 that statement ought to really mean each of the bullet

22 points? That is, if there were to be a system of national

23 license, you'd also want to have discipline?


25 MR. RAMIREZ: Have standards -- I assumed it

26 was implicit that that would apply.


28 MR. RAMIREZ: If a national license system,


1 which obviously is one of all ten that we are looking at,

2 were to be considered, do you think it should touch all of

3 those points?

4 JUSTICE VANDEWALLE: I certainly do. May I

5 switch hats very quickly and say that I'm not recommending

6 the system national licensure.

7 MR. POSITAN: How would you balance a system of

8 safe harbor such as those contemplated by 5.5 with

9 mandatory CLE along the lines of discussion from last week?

10 JUSTICE VANDEWALLE: Well, I've looked very

11 closely at my colleagues' committee, Chief Justice Norm

12 Bases for 5.5 and 8.5 safe harbor issues and the Ethics

13 2000. I'm not sure I have zeroed in, Mr. Chairman, exactly

14 on the CLE programs because they are so varied. And

15 it's -- there's no doubt that you've wrestled with this at

16 all your meetings, that we have 50 different jurisdictions

17 that have decided yesterday. I'm not sure I was aware of

18 it, but I sat in a meeting in which I was told

19 that (inaudible) supreme court is not enforcing.

20 I would suggest that you are going to have to

21 be a magician and the commissions have to be magicians and

22 draft some kind of a proposal that will enable those states

23 to at least satisfy their -- what they require in the line

24 of CLE requirement. I do agree -- I think most states that

25 have those CLE requirements permit you to take courses from

26 other states in other jurisdictions and qualify for the

27 CLE.

28 So I'm not so sure that that's a big problem


1 necessarily, the fact that you take your CLE requirements

2 in some other jurisdiction.

3 MR. POSITAN: Just so would be approved by the

4 state --

5 JUSTICE VANDEWALLE: Yes, I agree they do.

6 MR. POSITAN: You had to take a physical exam.

7 MR. EHRENHAFT: Mr. Chief Justice, you have

8 talked about the importance of the accredited law school

9 graduations, requirement for admission to the bar.

10 Yesterday we heard from the president of the

11 California bar. The California bar representatives now may

12 be 20 percent of all American lawyers. They have advisedly

13 not decided to include that as a requirement to the

14 admission to the bar. We have no evidence that California

15 lawyers are any less qualified by the fact that they do not

16 have that requirement.

17 And we have received information that, for

18 example, in England there's no requirement that people

19 seeking to became solicitors have any particular degree of

20 education not accredited not even to law school. They're

21 permitted to take the examination. And if they pass the

22 examination and do certain other things, they are qualified

23 as solicitors.

24 So we have a variety of situations where there

25 appear to be pretty qualified bars with no greater

26 incidents of malpractice on which we are aware because of

27 lack of accredited law school graduation. How is it that

28 we can be so confident that this is a necessary requirement


1 for admission to the bar?

2 JUSTICE VANDEWALLE: Well, you've asked several

3 questions, Mr. Ehrenhaft.

4 Let me start with California. I was not here

5 yesterday, so it's very difficult to respond. They do not

6 require A.B.A. accreditation, but they have their own

7 accreditation. And there are many states such as my own

8 that cannot afford that type of a system. We have a

9 proliferation laws. Some of them now, at least under the

10 antitrust agreement, are for-profit law schools.

11 I -- I assume you don't suggest that any of

12 those graduates of law schools be freely admitted to come

13 in at any stage of the game.

14 MR. EHRENHAFT: Just talking about whether one

15 could require -- I'm not arguing about the requiring an

16 examination for entry. But the question is whether one

17 needs to demonstrate that graduation as a criteria for a

18 lawyer, because we heard from people also saying they

19 couldn't be admitted on a reciprocity basis because of this

20 issue because of accredited law school.

21 JUSTICE VANDEWALLE: If you start with the

22 assumption, which I do not, that an examination is the all

23 and end all of a compensate for a lawyer, then you would be

24 correct. I do not agree with that. I think the education

25 is much more significant than the examination.

26 MR. POSITAN: Do you then say that if you don't

27 graduate from an accredited law school, that you should not

28 be able to engage in multi-jurisdictional practice beyond


1 the state?

2 JUSTICE VANDEWALLE: There are many states

3 that -- well, there's a difference, Mr. Chairman. Engaged

4 what? In a given case or be admitted to the bar of that

5 state?

6 MR. POSITAN: Well, let's assume that you are

7 a resident of California. You've graduated from a

8 non-accredited law school, not an A.B.A. accredited law

9 school. You've been admitted to the California bar. 25

10 percent of those people who passed the bar exam on the

11 first occasion, now you're going to engage in

12 multi-jurisdictional practice in five other states. Should

13 you be able to do it?

14 JUSTICE VANDEWALLE: In some of those states,

15 you would not be able to do it.

16 MR. POSITAN: The question is "should you."

17 JUSTICE VANDEWALLE: No. Let me give you an

18 example because I think it's a weak link. Let me give you

19 an example, and I've gotten my hat off as a section chair

20 elect, and my chief justice hat on. When I came to the

21 bench in North Dakota, I -- I looked at our list of people

22 that were coming in for admission to practice. We had all

23 these people that I never heard of, and in North Dakota you

24 know everyone. And I said, "Where are all these people

25 coming from?"

26 And they said, Well, they are some people going

27 into the military, and all they need is to be admitted in

28 some state, then they can -- they get in the military. And


1 so they looked at what they thought was the weakest link

2 and they thought North Dakota was the easiest part to take

3 the bar in North Dakota, get admitted, and you're home

4 scott free.

5 Seems to me that the same issue that got

6 passed, look at the weakest link in any of the 50 states

7 and say if we can get admitted there, then we can practice

8 anyplace else. It's the weak-link type of situation.

9 MR. McCALLUM: What I'm trying to wrestle with

10 is the reality here. We are in this close state. There's

11 several hundred thousand lawyers here. As the California

12 bar leaders told us yesterday, they feel very good about

13 their own competence. And you have a proposal for some

14 sort of national policy dealing with these issues.

15 How do we deal with the issue of the fact that

16 many of those several hundred thousand lawyers here had

17 never gone to an accredited law school? That it's already

18 too late for them to go to or have gone to an accredited

19 law school? How would you deal with that? How would you

20 organize that?

21 JUSTICE VANDEWALLE: I don't have an answer for

22 all those questions. I'm not sure I'm totally

23 understanding the issue of if you say if they're going to

24 be a multi-jurisdictional practice. And it gets back to

25 the issue of safe harbor. It seems to me there's a

26 difference between saying there are certain safe harbors

27 that you can use when you practice and saying that you are

28 freely -- you are free to practice anyplace you want at any


1 time as long as you're admitted in any jurisdictions

2 someplace, and those are two -- two extremes.

3 MR. DIMOND: Did you mean that the California

4 lawyer would be able to come in to your home state on a

5 temporary basis or out basis and do whatever services they

6 can perform for their client, from California that needs

7 service in North Carolina or North Dakota, as long as it's

8 sporadic, they can do it but not personally.

9 JUSTICE VANDEWALLE: It concerns me, but I must

10 tell you that under our rules, they can do that. And I

11 expect that's probably true of a lot of rules, they can

12 come in on -- for those isolated incidences.

13 MS. GARVEY: Mr. Chief Justice, one of the

14 things that we have been looking at is not simply the

15 sporadic -- that I think has engaged our attention this

16 morning, but also the question of easier, perhaps,

17 admission reciprocity, whatever that these people pass from

18 something that is a safe harbor, an occasional and perhaps

19 they're on what might be the find is a more regular basis,

20 and I think maybe that's where the issue that we're sort of

21 going around this to come to -- come to bear.

22 And I know that the last section looked at that

23 in that context. In other words, they're basically is an

24 issue of admission, but then there is the issue of where an

25 attorney has been practicing for a period of years and his

26 or her practice begins to bring that attorney into more

27 regular contact with another state. Are there criteria

28 that we need to look at or is this something we should


1 investigate a little bit more, since I am from the state of

2 California, but I did graduate from an accredited law

3 school.

4 JUSTICE VANDEWALLE: Well, we have not been direct in

5 response to your question. We have not looked at that

6 specific issue. I -- I would point out that the position

7 of the American Bar Association, the recommendation, and to

8 my knowledge, it's not been revised and is still there, is

9 that all law schools and all applicants for the bar should

10 be a graduate of an A.B.A. accredited law school.

11 California doesn't do it, but that is the recommendation of

12 the A.B.A. Indeed if all the states had that requirement,

13 it would not be an issue. It would not be an issue. So,

14 you know, we were not totally consistent. On the one hand,

15 the A.B.A. is saying every graduate, every applicant should

16 be a graduate of an A.B.A. law school. Yet we are sitting

17 here trying to figure out how we can allow people to

18 practice across the state lines and multi-jurisdictional

19 practice that are not graduates of an accredited law school

20 because all of the states don't follow.

21 MR. RAMIREZ: Do you happen to know how many

22 states permit admission for graduates from non-accredited

23 law schools?

24 JUSTICE VANDEWALLE: There are several. I have

25 some colleagues here that may be able to give me that

26 answer.

27 Do you have any idea?

28 MS. MOESER: I think about as many as two.


1 It's more common experience (inaudible) bar associations to

2 realize that there is included increasing to waive their

3 requirement. So in terms of are many states permitting

4 graduate under-accredited law schools to sit for the bar

5 exam, the answer is yes.

6 What some jurisdictions are doing, in order to

7 accommodate the discussion you're having today with the

8 chief justice will permit me (inaudible) elsewhere take the

9 position that they will not admit graduate non-accredited

10 schools on motion (inaudible) allow that passage of time

11 requirement satisfy the competency side in lieu of

12 practicing law school and therefore permit the -- the

13 moving lawyer to sit for the bar exam after his five years

14 of practice.

15 JUSTICE VANDEWALLE: I assume the commission members are

16 all familiar with their purpose as the executive director

17 of the National Conference of Bar Examiners. The other

18 people that are here today may not know it.

19 MR. EHRENHAFT: Do you have any view on the

20 possible application to this issue of a standard that we

21 all have with regard to driver's licenses? That person

22 takes a driver's license which may in one state require all

23 kinds of tests and road tests and other kinds of things.

24 And when that person moves to another jurisdiction, they

25 can simply use that driver's license.

26 If they become a resident there, then they have

27 to retake an exam, may not automatically be given a

28 driver's license. And it may be that more people will be


1 put at risk by inexperienced drivers and inexperienced

2 lawyers.

3 JUSTICE VANDEWALLE: I don't think that's

4 universally true. And I should tell you that I deal

5 regularly with some people in my state that insist that

6 they don't need a driver's license and that only after

7 they've had an accident should they -- should their driving

8 privilege be revoked? And so it's -- you know, do we let

9 everyone practice law until something happens and then say,

10 "Oh, you're not competent"? After the fact, we'll decide

11 that you're not competent. So, you know, there is a

12 relationship between the driver's issue and some of the

13 questions that have been asked this morning.

14 MR. EHRENHAFT: Has your section looked at the

15 considered feasibility of national licensure or a national

16 bar exam?

17 JUSTICE VANDEWALLE: We have not. As I said in

18 the opening remarks, we have not dealt with any of the

19 specific issues on that. We recognize that they're there.

20 Whether or not there's a national exam, or whether it's a

21 local exam or admission process, we've just asked that you

22 recognize the law school accreditation issue in any of

23 those -- in any level. I should tell you, I -- and my

24 colleagues may be upset. I suppose if you're looking at a

25 national exam, my state would be an example if one could go

26 there. We use all the products. This is our first year

27 national conference bar exam.

28 MR. GARVEY: So is it used entirely multi-state?


1 Is that your standard for admission?


3 MR. EHRENHAFT: Just one last question. Farm

4 lawyers, what do you do about farm lawyers who obviously

5 have not been able to go to an A.B.A. accredited law

6 school?

JUSTICE VANDEWALLE: Well, as the section through a bar

8 admissions long ago, several years ago, came up with the

9 consult with legal consultant proposal that we thought up

10 along the way in satisfying some of that. Unfortunately

11 not a lot. Many of the states have not adopted that. Now,

12 I don't know if there is a cry for it in those states or

13 not. I cannot answer that. Some of the states, such as

14 New York, did allow that, and it seems to me that that may

15 be an answer. It's not an answer, and I understand the

16 issue of our lawyers going over to France and asking about

17 being admitted and being told, If you want to be admitted,

18 you have to write your bar exam in French in order to be

19 admitted because you don't allow French lawyers to be

20 admitted in the United States. I understand those issues.

21 But I don't necessarily agree that should drive the total

22 admission policy in the United States.

23 MR. POSITAN: Any further questions?

24 Chief Justice, we thank you for your appearance,

25 and we'll reserve this issue.


27 MR. POSITAN: We'll have one more speaker

28 before we take a break. Sidney White Rhyne, Federal


1 Communications Bar Association.

2 MR. RHYNE: Thank you, Mr. Chair. I appear for

3 the Federal Communications Bar Association, the FCBA, in lieu

4 of Henry Rivera, whose name appears on the statement our

5 association submitted that you have before you. Mr. Rivera,

6 in addition to being our A.B.A. delegate, is an active Catholic

layman in Washington, D.C., and he was asked by the archbishop

of the Washington diocese to accompany him to Rome for his

investiture as a Cardinal. So, I think you can see that there

are some engagements that trump even the A.B.A.

I will attempt only to summarize Mr. Rivera's

statement within the five minutes allotted for our

presentation, and of course will be available to answer any

14 questions you may have.

15 The FCBA is an organization of lawyers with a

16 specialty practice primarily rooted in federal law and with

17 a nationwide and indeed an international client base. The types

18 of services our lawyers render and the types of clients

19 that they represent are described in Mr. Rivera's written

20 statement.

21 Communications attorneys more often than not

22 have their offices in, and are admitted to the bar in,

23 jurisdictions other than those in which their clients are

24 located. For instance, I have been representing

25 communications clients for over 40 years and have never had

26 one in Washington, D.C. where my office is located because

27 that is a seat of the Federal Communications Commission.

Clients frequently require the services of their


1 communications attorneys in the jurisdictions where the

2 clients are located and in other jurisdictions where they

3 have business dealings. Our members have a strong interest

4 in seeing that their clients are able to receive services

5 of the lawyers they have chosen to provide the expertise

6 they need in the places where they need to have those

7 services provided.

8 We have suggested that the A.B.A. follow the

9 lead of the American Law Institute in its Restatement of

10 Law Governing Lawyers published just this past September

11 after years of deliberative analysis begun in 1986, and

12 numerous drafts that generated extraordinary interest and

13 debate. The Restatement dealt with multijurisdictional

14 practice by saying that an attorney may provide services in

15 either of three instances.

16 First, of course, in a jurisdiction where the

17 attorney is admitted to practice. Second, it permits lawyers

18 to render services in another jurisdiction in where in accordance

with the rules for admission to practice before a tribunal of

that jurisdiction before which the lawyer is appearing. And

21 third, it says a lawyer may provide services "at a place within a

22 jurisdiction in which the lawyer is not admitted to the extent

23 the lawyer's activities in the matter arise out of or are

24 otherwise reasonably related to" the lawyer's practice in

25 either of the first two instances. We urge that this Commission

26 follow that sensible approach in its report.

We have also endorsed the changes in Rules 5.5 and

8.5 of the Model Rules of Professional Conduct proposed by the


A.B.A. Ethics 2000 Commission, with one suggested revision in

2 Rule 5.5.

3 Our suggestion is to protect lawyers such as our

4 members whose services in jurisdictions where they're not

5 admitted arise out of their primary representation in matters

6 of federal law. Even that change would not be necessary if the

words "on behalf of a client" were simply deleted from the

proposed safe harbor in Rule 5.5 for extra-jurisdictional

services. That safe harbor permits such services, and I

quote, "with respect to a matter that arises out of or is

11 otherwise reasonably related to the lawyer's practice on

12 behalf of a client in a jurisdiction in which the lawyer is

13 admitted to practice." The Commentary indicates that the

14 intention was that the services be related to the lawyer's

15 practice in a jurisdiction where admitted, not that they

16 necessarily be on behalf of a client in that jurisdiction.

Deleting the language "on behalf of a client" would make it clear

that the clause "in a jurisdiction in which the lawyer is

admitted" modifies the word "practice" rather than the word

which now immediately precedes that clause, which is the word


22 MR. POSITAN: If you add the word "any" to that

23 phrase, are you contemplating adding a non-existing client

24 that you might be soliciting in that jurisdiction for

25 purposes of practicing federal law?

MR. RHYNE: I -- I have to admit my view on this

is colored by the fact that I go back to the days when lawyers

presented themselves for service rather than soliciting


1 clients. My view is colored by that. I had a great deal of

2 difficulty yesterday with the question of lawyers who want to

3 solicit clients from outside their jurisdictions, when the young

4 lawyer from California made his presentation based on the fact

that he wanted lawyers to be more able to solicit on the


I -- I suppose that if the courts tell us we must

8 permit solicitation and if the Rules of Professional Conduct

9 permit that, the standard should be the same. I have to say

10 that I am less sympathetic with lawyers who seek clients than

11 with lawyers who seek to serve their clients. You'll notice that

12 our presentation is in terms of furthering the ability of

14 clients to choose the lawyers they think can best serve them

15 rather than furthering the interests of lawyers attempting --

16 MR. POSITAN: That contemplates that you are

17 referring to an existing client, right?

18 MR. RHYNE: Yes, or -- or clients who know of

19 your reputation as being able to provide the kind of

20 services they require, come to you and ask you to do that.

22 MR. Ehrenhaft: That's a very difficult standard

23 to apply, isn't it? Who knows how a particular client

24 learns about a lawyer's reputation? The fact that you

25 publish articles, and that you do other kinds of things that

26 may be disseminated in another jurisdiction, could be

regarded as solicitation or as simply as a contribution to the

28 profession. You're making suggestions that





1 just happen to hit the client's fancy and he then calls you.

I mean, I think to try and I mean, among the

3 reasons for saying that you can't stop the lawyer advertising is

4 that it's very difficult to draw some of these lines between what

6 we regard as a very appropriate activity for lawyers directed

7 at others who share their views in other states, if you will,

8 and actually going and calling on that other person initially.

9 MR. RHYNE: There is no bright line. And there

10 was none before the rules changed.

11 MR. POSITAN: This is really from yesterday where

12 we really have three models. We have the model of an existing

13 client who would like to retain the lawyer to something in a

state where the lawyer is not admitted. And we have model B,

15 which is the "I got called because I'm the world's expert on

16 agriculture." Even though I don't have the existing client

17 relationship with that person, I might go to that

18 jurisdiction because they think I'm the greatest labor

19 lawyer that ever lived. And C is the third one, which is

20 "I'm free to go solicit those people who don't know about me

21 yet, but I can tell them that I'm the greatest labor lawyer

22 that ever lived."

23 MR. RHYNE: I suppose, if the rules permit

24 solicitation of clients then, in the interest of permitting

25 clients to acquire legal expertise from lawyers they deem best

26 suited to serve them, we must also permit clients to do that

if they are attracted by a solicitation from a particular lawyer.




1 MR. EHRENHAFT: I have a question about the ALI

2 Restatement, because I had this discussion with Jeff Hazard

3 as Reporter for that Restatement. He pointed out quite

4 clearly that the ALI is restating the

5 law, that it's not a model rule like the A.B.A. is

6 adopting. Its Restatement was therefore intended to

7 be a reflection of the present U.S. standards. And to

8 the extent that our Commission is looking at that, I'm not

9 sure that we are similarly constrained.

10 I think that our mission might be if this is

11 the present situation as the Restatement perhaps indicates, or

12 the best distillation or best rule today, may it

13 nevertheless not be expanded further or be modified in some

14 way in order to achieve another goal. So the Restatement,

15 I think you have to remember what that word "restatement"

16 means. It isn't to model the way the Ethics Rules are. So,

18 therefore, we might not give it that same kind of binding

19 effect.

20 MR. RHYNE: I -- I agree that you are not

21 constrained by what law now is. I have the greatest respect

22 for Geoffrey Hazard, who teaches at my law school, and whose

reputation of course is, well evident. But the Restatement of

Law Regarding Lawyers footnotes Birbrower in its rule on

multijurisdictional practice and recognizes that its rule is

inconsistent with what is stated in that decision.

28 I'd like to go just briefly in termination to




1 the proposed new Rule 8.5, which we have no problem.

2 We have no problem having lawyers made subject to the

3 disciplinary authority of the jurisdiction in which they

4 render services, even though not a member of the bar of that

5 jurisdiction. We also think that the Ethics 2000

6 Commission dealt fairly with possible conflicts between the rules

7 in different states by protecting lawyers who, in such instances,

8 follow the rules of a jurisdiction where they reasonably believe

9 the "predominant" effect of their conduct will occur.

10 MR. POSITAN: Is it fair to say that your

11 section sees a disconnection between state and federal law?

12 In other words, if you practice in an area that's very much

13 exclusively federal law, that boundaries should be less strict

14 than if you practice in state law?

15 MR. RHYNE: Our association, which is affiliate

16 of the A.B.A., recognizes that questions of federal law and

17 state law are frequently intertwined. And when our members

18 go to a state in which they do not have an office, to represent

19 their client such as in a closing on the sale of a broadcast

20 station, they recognize that those transactions involve

21 both federal and state law. Every such transaction has an

22 overlay of federal regulation. Also, it has elements of

23 state law.

24 We consider it to be our professional

25 obligation to assess whether in this particular instance it

26 is necessary to bring in a state -- a member of the

27 local bar.

28 If, for instance, the station studio is owned


1 and a real estate transfer will take place, I invariably

2 recommend that a local real estate practitioner be brought

3 in. If there are questions of local zoning compliance, we

4 will always recommend that. Our clients don't always take

5 our advice. A small broadcaster may well feel that he has

6 enough contacts down at city hall to resolve these

7 questions for himself so he's going to save that money.

8 But he knows he's been advised as to what we think is in

9 his best interest.

10 It is, I submit, one of the primary obligations

11 of a lawyer to use his or her judgment in assessing what

12 other representation and advice the client needs, and to

13 make the recommendation to the client.

14 MR. POSITAN: Any further questions? Why don't

15 we take a five or ten-minute break.

16 (A recess was taken.)

17 MR. POSITAN: Next speakers will be

18 Daniel Magraw and Robert Lutz, Section of International Law

19 Practice.

20 MR. MAGRAW: Thank you very much, Mr. Chairman.

21 I'll summarize our comments and then I'll be happy to

22 engage in any kind of dialogue you'd like.

23 As you already mentioned, Bob Lutz, who's our

24 chair elect is here and will also be available to answer

25 questions. I'd like to begin with an overview. You've

26 heard a lot of this before, I think, but I think it's

27 important for us to weigh in, as well. The first people

28 interest in the values that are served by regulating and


1 watching over the legal system remain constant over the

2 year, but the environment in which that occurs is changing

3 dramatically.

4 The size and geographical scope of the

5 corporate client has changed immensely. The ability to

6 communicate through telecommunications has changed so that

7 there's much greater ease of counseling over long

8 distances. The globalization is obviously occurring on

9 trade and investment, meaning there's an increase for

10 demand in international legal expertise, increased

11 difficulty to separate international and national, and

12 probably also national and local -- the federal and local,

13 and increase competition.

14 The expectations of clients have changed. They

15 want efficiency. They don't want to have to change lawyers

16 every time there's a new political boundary encountered,

17 and the basis of the legal profession on the part of the

18 public have also evolved. That's not clear that there's a

19 (inaudible) of political trust that we can draw on when we

20 are dealing with these issues.

21 The result of this is that the licensing system

22 is an artifact and it's out of touch with the reality that

23 we are dealing with. This has important impacts on the

24 tradition of legal services. There are artifices in legal

25 opinions where lawyers who will say, Well, assuming that

26 the law of California or the law of Bahrain is the same

27 laws of New York, similar artifacts like that define those

28 opinions. There's a greater use of electronic


1 communications instead of face to face when, in fact, face

2 to face might make more sense. There's hypocrisy.

3 Obviously, and I think consequential decrease

4 in the effectiveness of the legal profession because we are

5 often thought of as I am, more in private practice in the

6 posture of counseling our clients to obey the law and we

7 are not obeying those rules if they know that undercuts our

8 credibility.

9 MR. POSITAN: Let me cut to the chase in terms

10 of the international law question.

11 In your discussion, you talk about the model

12 role concerning foreign legal consultant. If all 50 states

13 adopted that rule, would it not solve the problem?

14 MR. MAGRAW: Well, there are a number of

15 problems that I was just alluding to, and I was going to

16 turn to that almost immediately, so I will do that now

17 because of the time limit.

18 One of the issues that we face that as --

19 really as an association is trying to facilitate the -- the

20 abilities of U.S. lawyers to practice abroad -- and this as

21 an aside, the rules that you're looking at affect

22 international lawyers, both in terms of their practice

23 domestically and their practice abroad. And I'm going to

24 focus primarily on the latter and foreign consults rule

25 relate primarily to that.

26 One thing we encountered in trying to do that,

27 when we go to a foreign country and try to say, "Well, U.S.

28 lawyers should be able to establish an office or should be


1 allowed to come in and do transient kind of practice" is

2 their response. And I know you've heard this from other

3 speakers that "Well, you don't allow that in the States"

4 and so that was the main genesis of the 1993 house of

5 delegates resolution on the model rule.

6 And if all the states and the District of

7 Columbia did adopt that and at present we only have 23

8 states, but the districts that have adopted it, if all of

9 the states adopted it, we think that would be a long way

10 towards that. And the dissention international law

11 practice is actively engaged in trying to promote that.

12 We --

13 MR. POSITAN: How would that affect you

14 practicing, let's say, in Spain? We had the gentleman here

15 from Spain yesterday who discussed the European to some

16 extent. To the extent that you want to add anything to

17 that, I don't want to say everything he said is absolutely

18 verbatim, so feel free to comment on that. But let's

19 assume this commission recommended that all states adopt

20 foreign legal consultant model rule. What would that mean

21 to you going to Spain and being able to do the same kinds

22 of things in Spain? Would that happen?

23 MR. MAGRAW: Well, first we'd hope not only

24 that the commission would recommend the adoption by all of

25 the states, but also that the A.B.A. commits the necessary

26 sources to achieve that. But let's assume that all states

27 did do that. That would help across the board. I'm not

28 familiar with the specific situation in Spain, and I don't


1 know the testimony of the gentleman yesterday.

2 MR. POSITAN: Just using that as an example.

3 France, England, wherever --

4 MR. MAGRAW: The general situation is that we

5 are better off if we can say that your lawyers can come and

6 practice at least your own local, your own foreign,

7 whatever that local law is, Spanish law in the U.S. We are

8 better off being able to argue that we should have access,

9 and you can understand why that is. Because --

10 MR. POSITAN: They may still say no at that

11 point?

12 MR. MAGRAW: They can still say no. And there

13 are efforts underway and in the general agreement on trade

14 and services, too. I believe there's already, in fact, an

15 obligation to work towards reciprocity on professional

16 services generally, not just legal services.

17 MR. POSITAN: If we in our little area of the

18 world on legal services ended up with a situation where we

19 adopted everybody, as New Jersey has, New York has, the

20 foreign legal consultants rule, I don't think there's any

21 huge administrative cost, at least attached to the A.B.A.

22 in that regard. Would we not be in a position under GATT

23 to say to the European union countries "Why don't do you

24 this, too, and then we'll have the kind of free exchange at

25 least on those parameter terms that's contemplated under

26 GATT"?

27 MR. MAGRAW: Well, we would. Whether we'd be

28 able to demand is a different question, but we certainly


1 are in a better position diplomatically to be able to make

2 that argument. Of course, it's not only the -- in the EEO,

3 but also in the Third World many, many, many -- all

4 countries that are.

5 MR. EHRENHAFT: Dan, I think that you indicated

6 at the outset of your testimony that the foreign legal

7 consultant rule was an important part of this, but it is

8 related exclusively to the permanent establishment of

9 lawyers opening offices in another jurisdiction and their

10 qualification to do that. And as we know, from the few

11 empirical studies that have been made, there are probably

12 not more than a thousand or two thousand U.S. lawyers who

13 are, in fact, stationed overseas. And not to denigrate at

14 all the importance of the profession, I think you're

15 absolutely right about what we're talking about.

16 But the foreign legal consultant rule does not

17 address what has been the principal focus of our discussion

18 here, which is the transitory provision of services, which

19 involves a much greater number of American lawyers going

20 abroad performing services in other countries in violation

21 of immigration laws and labor codes. When we go into

22 another country and perform services paid there and foreign

23 lawyers coming here similarly risk violating our

24 immigration laws and our labor laws by being engaged in

25 those transitory services, even though as we heard from the

26 gentleman about Canada/U.S. trade, the immigration people

27 really don't care much, turning a blind eye to the fact

28 that Canadian lawyers come to the United States and


1 practice, you know, consult here, and no one asks them, Are

2 you, in fact, going to perform services to pay which they

3 under their visas they otherwise should be permitted to do.

4 But I think the transitory service rule, which

5 is the main focus of, I think, so far of our discussion, is

6 not addressed by that foreign --

7 MR. MAGRAW: There are a number of different

8 legal aspects. Maybe I -- I misinterpreted Wayne's

9 question too narrowly, but Alan had a question, too. I

10 don't know how you want to do this, Wayne.

11 MR. DIMOND: Let me ask my question because

12 Wayne asked you what if you can't permit a foreign

13 government from saying no to allowing a reciprocal foreign

14 consultants situation in that country. What I was curious

15 about was how hopeful would it be if they said yes, in

16 fact, you were then given the right to have a permanent

17 location in these various other jurisdictions.

18 And then the -- the issue came up with the

19 transitory services. So we are starting with the concept

20 of full-time services and then backing off from there,

21 transitory. I was wondering what if they said yes? Does

22 that solve your problem?

23 MR. MAGRAW: Yeah, it's important to step back

24 here and look at the whole range of ways of providing the

25 service. I think you're right to do that.

26 Does it help to have the model rule adopted by

27 all 50 states? Clearly it would. Would it help to allow

28 foreign lawyers to actually be allowed to have licenses in


1 this country without going to an American law school and

2 taking exactly the same bar exam? That would help, too.

3 All these things would help. And -- but the result in the

4 foreign country would also depend on their rules.

5 They say well, you can be established here.

6 But if they said, for example, you couldn't come in and

7 without permanent office, that would not be very helpful.

8 So one has to be very careful in terms of looking at these

9 different things.

10 I would point one to project that we started an

11 international law section that deals with precisely the

12 problems that Peter was raising. And that is that it is

13 not uncommon for U.S. lawyers, when they go into Canada, to

14 be detained at the border. And you know, you don't even

15 need a passport, let alone a visa, to go to Canada. But it

16 is not uncommon for our lawyers to be taken into a room and

17 questioned for several hours about why they are going to

18 Canada.

19 So we started to -- tried our project on the

20 Canadian bar to look at those issues to try to figure out

21 is there a way to resolve that within the NAFTA of the

22 countries, but this is a multi-layered issue. And the model

23 rule, although it's very important, it does not solve all

24 of those questions.

25 Did I respond to your question enough?

26 MR. DIMOND: Almost, and certainly in part.

27 What I'm wondering about is how helpful on the scale of all

28 possibilities would it be to have this kind of uniform


1 adoption in the United States of the provision in each

2 state. How helpful would that be in terms of solving the

3 overall kind of problem that you're dealing with, or is that

4 just a small piece of it, really not significant to you?

5 MR. MAGRAW: I think it's a very significant

6 part of the issue. And if I might move for a second only

7 away from the practice of broad issue to the fact

8 domestically those rules also are important in this

9 context. You know, there's many international lawyers that

10 I know in D.C. that have virtually no D.C. clients. Their

11 clients are either foreign companies or they're U.S.

12 companies with international issues. And, for example, if

13 they do due diligence, if they negotiate, if they do many

14 of the things that you U.S. lawyers probably are the best

15 in the world at, and where our practices became

16 international standard or due diligence, for example.

17 The risk that I'm now talking about, the D.C.

18 lawyers raise these questions about unauthorized practice.

19 That's also true of the foreign legal consultants. If they

20 get involved in those sorts of things, they have the same

21 issues in this country. So how you deal with the domestic

22 context is also important for those foreign lawyers when

23 they think about coming in. And the context for us and --

24 you know, I speak as a trading in part, when we talked to

25 these other countries, if we have a system that doesn't

26 make sense, it's very hard for us to say well, you know you

27 have to have a system that makes sense.

28 And this is an important part to the foreign


1 legal consultant rule but it's not alone enough to solve

2 the problem.

3 MR. POSITAN: What can present a more coming

4 state interest than to control the activities of foreign

5 lawyers in this country? And things that may affect our

6 citizens when you get into the question of poor value such

7 as privilege imputation, being an officer of the court,

8 conducting yourself with our system of justice. So why do

9 we go beyond the foreign legal consultants rule in allowing

10 those kinds of activities on a broad nature when I think if

11 you want to protect the legal system, protect our citizens,

12 I can't think of an area more compelling.

13 MR. MAGRAW: I'm not sure I'm arguing against

14 that. It seems to be that can be looked at in terms of

15 whether we have -- I don't know if it matters if there are

16 state rules or national rules, but if we have rules about

17 confidentiality or go right down the line that you

18 mentioned, whether they're state or federal, then you'd

19 want to have the foreign lawyers subject to those. And we

20 are certainly not arguing anything different from that.

21 I think that's separate than whether they're a

22 foreign lawyer as authorized to actually practice, and

23 that's what we are focusing on.

24 MR. POSITAN: 78.5 doesn't mean much in that

25 scenario; does it?

26 MR. MAGRAW: You have to elaborate.

27 MR. POSITAN: Well, discipline system. If a

28 foreign lawyer comes over here on a transaction, does


1 something that we consider untoward and it's an ad hoc

2 situation or a very federal kind of representation, does

3 something horrible cost somebody a couple million dollars

4 and goes back to France, how are we going to appease that?

5 MR. MAGRAW: That's a very good question. It's

6 not one that we've addressed here. I would say that we

7 raise that kind of question if the context of

8 Martha Barnett's and Bob Sarntino's organization conference

9 on Tuesday. It seems to us that one of the kinds of

10 questions, the areas of questions that that organization

11 could look at are whether we want harmonized rules of

12 confidentiality. What are the conflicts of law rules about

13 ethics?

14 If we go to France and do we something or vice

15 versa, your hypothetical, which set of rules apply? Then

16 how can those be enforced? In the future, I think we need

17 a system that makes sense. On all those questions that you

18 mentioned, it doesn't really say much about the model rule.

19 But those are very important questions and they're ones

20 that should be addressed. Those have to be --

21 MR. POSITAN: Treaties seem to me right

22 MR. MAGRAW: Those have to be addressed on --

23 well, I suppose in theory they could be addressed on a

24 state-by-state basis, but the reason we have a constitution

25 is because the -- you know, the Article of Confederation

26 primarily didn't work under our national constitution. So

27 that almost by definition has to be a federal -- a national

28 interaction with other countries. And I think very


1 important as I say because of organization we are going to

2 have to have that.

3 MR. POSITAN: What would happen in a situation,

4 for example, when the foreign lawyers were MJP such as

5 Landwell from England, we say you can't have -- were going

6 to now permit them to come in and practice on a temporary

7 basis. We won't let them practice or you can't do that

8 here anyway, at least so far as that may be the District of

9 Columbia.

10 MR. MAGRAW: Well, actually, the point at which

11 you cut me off, that was going to be my next point. Is the

12 shift of lawyers who are coming from partly because of

13 the -- of the disarray in terms of these rules. So when we

14 think about those questions, it has to be in great. I

15 think you've heard this before. We were struck by how the

16 MJP issue or set of issues is interrelated to M.D.P. to

17 Ethics 2000 to the kind of immigration questions we are

18 addressing in this new initiative we have with the Canadian

19 and Mexican bars.

20 You have a very daunting challenge in terms of

21 trying to integrate all these questions. And I'm not sure

22 where you're drawing the lines of your group jurisdiction,

23 but those are all relevant questions.

24 MR. DIAMOND: Let me ask this. Is it your view

25 in these problems international basis would ultimately be

26 solved in these either bilateral trade negotiations or the

27 GATT kind of negotiations where they're actually going to,

28 in effect, assume each of the countries that are


1 participants?

2 MR. MAGRAW: There are a couple of ways it

3 could be resolved. One is to leave it in chaos, which

4 seems to not be a very good result.

5 The second is to have bilateral or regional

6 arrangement, and you could have NAFTA, for example.

7 And the third is a legal system, the global --

8 any of those international arrangements could -- could

9 occur at different levels.

10 You could have a kind of a soft obligations to

11 try to find reciprocity, which is eventually where we are

12 now or you could have much harder kinds of rules, and this

13 is something I think that the association has to be very

14 careful about, is the protection agency is -- we try to be

15 very careful about that because the trade rules in that

16 area are very specific.

17 They say you can't regulate to protect health,

18 safety and the environment except in certain ways. That is

19 your regulations in the United States or any country that's

20 a party to these agreements has to satisfy certain

21 criteria. We don't have that on services yet, but that

22 could happen. It's something that -- I'm not sure it's

23 within the scope of your permission, per se, but it's

24 something that as an association we have to watch very

25 carefully in the upcoming negotiations, essentially

26 something we need to be thinking about.

27 MR. DIAMOND: One more are professional

28 services. One of the subjects that are going to be


1 discussed in the upcoming rounds of NAFTA and GATT

2 negotiation.

3 MR. MAGRAW: Well, to tell you the truth, I'm

4 not entirely sure. Maybe Bob or Peter may know this. In

5 Seattle, we tried to have them be part of the agenda and

6 you remember what happened in Seattle. It was not as happy

7 outcome as we hoped, but I'm not exactly sure what's coming

8 up now.

9 Peter or Bob, do you --

10 MR. EHRENHAFT: Next round of negotiations

11 begins in March of this year, and the United States has

12 already tabled a proposal on legal services, professional

13 services very much a part of the negotiation. I think that

14 the most important aspects of those proposals in the United

15 States on professional services that whatever rules we have

16 that any country adopt be transparent and understandable.

17 And secondly, that they be -- they satisfy a

18 rule of necessity, they be no more onerous for achieving an

19 objectively appropriate goal than necessary. And that's

20 the big stumbling block on exclusionary types of rules that

21 look as though they are protecting vested economic

22 interests without having an objectionably defensible goal.

23 And that's, I guess, one of the problems about rules such

24 as we're talking about.

25 MR. POSITAN: One final thought. Is it worth

26 looking at the foreign legal consultant model rule and

27 perhaps modifying that in some ways, which may create some

28 safe harbors, or perhaps bring into it's coverage some of


1 the kinds of things you're talking about that may allow for

2 us some lesser regulatory presence, but still permit some

3 kind of registration which might protect the public

4 interest?

5 MR. MAGRAW: It might be worth doing that. I

6 don't know how easy that would be since we've already got

7 23 states plus the district who has adopted them.

8 MR. POSITAN: New Jersey, for example, about a

9 week ago took a look at it and, in fact, the board of

10 trustees made some recommendations to modify it in some

11 ways to bring into play some other things beyond the

12 original scope.

13 And my understanding in sitting on that board

14 was that there was some effort, I forget by whom at this

15 point, to perhaps take that path.

16 MR. MAGRAW: Well, we'd certainly be willing to

17 look at that as I would imagine other parts.

18 MR. POSITAN: Provided those things

19 John Holtaway might have those things and might communicate

20 and get a copy of what New Jersey looked at a week ago.

21 MR. MAGRAW: Why don't we do that and then get

22 back to the commission.

23 MR. POSITAN: We appreciate your continued

24 support as we wrestle with this issue.

25 MR. MAGRAW: If I could mention a couple other

26 things. The European union has a system that is much more

27 liberal than ours in terms of lawyers wanting to practice

28 in other jurisdictions. And that's in spite of the fact


1 that they have a much less commonality in the basic legal

2 systems between -- among those countries, and they have no

3 common language. Whereas in the U.S. at least so far we

4 have.

5 MR. POSITAN: Well, I gather you have to learn

6 the language if you want to get waived into another country.

7 MR. MAGRAW: I don't believe that's a --

8 MR. POSITAN: I heard that yesterday.

9 MR. MAGRAW: -- requirement, but then in our

10 country that wouldn't necessarily be a problem, I think.

11 So --

12 MR. POSITAN: Not presently, anyway.

13 MR. MAGRAW: Very good. Any other questions

14 that I can --

15 MR. POSITAN: I think we need to move on. But

16 again, we appreciate your continued involvement in moving

17 along the way here.

18 MR. MAGRAW: Thank you very much. Good luck in

19 this.

20 MR. POSITAN: Next, we -- Judge Bufford from

21 the L.A. County Bar Association has indicated that he's

22 withdrawing based upon his extensive dialogue with the

23 state of Georgia yesterday. So I know Larry Fox has

24 indicated that he has a time problem, so I'm going to move

25 Larry up a time spot.

26 MR. FOX: Judge Bufford's statement is on its

27 way.

28 Thank you. It's a pleasure to be here and to


1 address this distinguished panel on what is a truly naughty

2 issue. And I come to you with having thought about this a

3 little bit, but much more convinced that the only thing I

4 can help you with, if anything at all, is to raise some

5 concerns I've got. In the process of doing this, I plan to

6 insult -- and therefore get fired from my law firm --

7 almost every in-house counsel in America, most of business

8 law section, as well. I apologize for that.

9 I looked at this problem and -- and the first

10 thing that occurred to me was that we as a profession are

11 enormously cynical about the admission process to the bar.

12 We look at the bar exam and we all laugh about it. We

13 consider it a joke. Nobody says that very often, but

14 that's what we do. We go to law school for three years and

15 then spend six weeks getting just the knowledge you need to

16 pass some bar exam, and then we are admitted in a

17 jurisdiction. And that in itself breeds a certain

18 skepticism, maybe cynicism, maybe willingness to say, "Well

19 bar admission isn't all that important."

20 Because after all, I think everybody here would

21 agree that there is some lawyer in New York that we would

22 hire to go into California to represent us who is better

23 than some lawyer in California, even though that lawyer in

24 California took the California bar and passed it. And so

25 given that fact, we sort of -- all of us look at this in

26 kind of an odd way.

27 Notwithstanding that, or having said that, I

28 still think that there are some enormously important


1 problems and issues and values that we've got to worry

2 about. And all of this was highlighted for me in a real

3 case that took place recently in Miami, which I described in

4 my written remark, but I'll repeat just quickly here.

5 A lawyer admitted in three different states,

6 including Illinois but not Florida, had been practicing in

7 Florida's in-house counsel without getting admitted in

8 Florida under the provision in Florida that permitted him to

9 do so. And he left the client for whom he was working full

10 time and went to work in New Jersey under the New Jersey

11 provision that permitted him to come into New Jersey as an

12 in-house counsel and spend full time representing the client

13 there without getting admitted in New Jersey.

14 The problem was he left one competitor in a

15 two-competitor business and go on with the second

16 competitor. And there were lots of issues of conflict of

17 interest. And so when this was raised by the company in

18 Florida, this lawyer quickly took shelter in the Illinois

19 rules which he claimed to apply to him since that was the

20 first state that he had ever been admitted and it was the

21 place of his birth and just by the way Illinois permits

22 screening, whereas New Jersey and Florida do not.

23 That highlighted for me a number of problems.

24 If we permit people to go around the country and practice

25 law in other jurisdictions without getting admitted there

26 or otherwise getting permission to practice there and

27 therefore not subjecting themselves to the disciplinary

28 process in that jurisdiction, are we going to end up with a


1 system of chaos, repeating the process of this particular

2 case.

3 Then I thought to myself, "Well, if we really

4 go down the road of permitting people not admitted in

5 Illinois to practice wherever they want, aren't we going to

6 get to sort of a race to the bottom in which lawyers may

7 pick the jurisdiction that's most helpful to them," and if

8 one jurisdiction, for example, were to -- just pick an

9 example -- abolish imputation, maybe it would be in the

10 economic self-interest of lawyers to go get admitted in

11 that jurisdiction, then practice wherever they want and

12 say, "Wait a minute. I'm practicing pursuant to my

13 authority in Illinois, and Illinois doesn't permit --

14 doesn't require imputation anymore. They also -- we don't

15 need screening anymore, and therefore it's okay."

16 And then the next thing that struck me was,

17 "Well, wait a minute. We could do this on the M.D.P.

18 issue. And we could end up with Michigan passing an M.D.P.

19 rule, and then all the law firms in America who wanted to

20 be M.D.P.s could organize in Michigan," and we could end

21 up with the Delaware for corporations, Michigan would be

22 for lawyers.

23 And then there was the other question if

24 whether accreditation of law school was going to have any

25 meaning anymore here in California. Lawyers who graduate

26 from unaccredited law schools are free to practice here in

27 California, but if we give them rights to practice

28 everywhere, why not have any -- will we ever have any


1 standards at all?

2 So it's a mess. I admit it's a mess, but I

3 worried about it. But then I worried about what I thought

4 was actually a much more important problem. I thought

5 about this in-house counsel in Florida who was practicing

6 pursuant to their permission who went to New Jersey and

7 practicing pursuant to their permission. And I thought to

8 myself is this person really a member of the bar? He

9 claimed Illinois, but he's not participating as a lawyer in

10 the institution of the bar in the jurisdiction in which he

11 is practicing. And that to me is very troubling.

12 It seems to me that the bar has an obligation

13 to provide competent service to our clients, but it also

14 has maybe an equally important obligation to provide the

15 institution of the bar. And all it does, client security

16 funds, fee disputes, improvement of the law, putting on CLE

17 programs and so on and so on. And what do we do if nobody

18 has a commitment to the state in which they're practicing

19 or an obligation to the State in which they're practicing?

20 And I thought to myself in-house counsel really

21 does want to be full-fledged lawyers, but if they're going

22 to be full-fledged lawyers that anybody else is going to

23 practice outside of their jurisdiction under some kind of

24 permission, we've got to figure out some way of maintaining

25 the institution of the bar. And maintaining the commitment

26 of those lawyers, even if it's involuntary commitment, to

27 do the things we all know they have to do. Pro bono

28 service, client protection funds and so on. And so it


1 seemed to me we've got a lot more at stake institutionally

2 as a bar than seemed to have been recognized in lots of

3 what I have read.

4 I have two other comments. One, I worry very

5 much about the standard reasonably related to practice in

6 jurisdictions where admitted, which has been suggested as a

7 way of providing a safe harbor for lawyers to go into

8 another jurisdiction. I cannot imagine a lawyer worth his

9 or her salt who cannot come up with an argument why

10 anything they do is not reasonably related to practice in a

11 jurisdiction where admitted. It also occurred to me that

12 three jurisdictions at least would get a really big leg

13 up. New York, the District of Columbia and Delaware.

14 And in each case, you could see that any

15 lawyer, even a lawyer in Pennsylvania couldn't figure this

16 one out, or a lawyer in Illinois couldn't figure this out.

17 There clearly was no lawyer in New York, DC or Delaware who

18 would be able to say that whatever they were doing in

19 Wyoming or Nebraska or wherever was reasonably related to

20 practice, practice in a jurisdiction where admitted and

21 that we need a standard that's considerably tighter than

22 that, if we are going to say that we, in fact, have a

23 standard at all.

24 Last, I read with great dismay the business law

25 proposal, the business law section proposal. And in

26 particular, I draw the commission's attention to the

27 proposal that says that it's perfectly okay for a lawyer to

28 go anywhere else to practice law anywhere else so long as


1 the activity the lawyer is undertaking is an activity that

2 could also be undertaken by a non-lawyer. In this

3 provision, I say members of the commission is the death of

4 our profession. I didn't think I was going to raise such

5 an alarm until I saw that proposal.

6 There are many things that lawyers do that

7 non-lawyers do. But when lawyers do it, it is the practice

8 of law. And if we tear down that rule and suggest that

9 when a lawyer is doing what a real estate broker can do or

10 what an investment advisor can do or what an audit

11 accounting firm can do, it's okay to go wherever you want

12 to go without regard to bar membership, without regard to

13 the rules that will apply.

14 We have walked into a black hole. And so I

15 urge you -- I do not know whether you will seriously

16 consider this proposal, but I urge you to stay away from

17 it.

18 Finally, as chair of the A.B.A. death penalty

19 project on a point of personal privilege, I think it's

20 perfectly okay for any lawyer in America to go into any

21 other state if they agree to take a death penalty case.

22 I'm happy to answer any questions.

23 MS. GARVEY: Well, I'll take a chance.

24 MR. JENKINS: Larry, try to speak up.

25 MS. GARVEY: Larry, I have a question.

26 MR. FOX: I was speaking to the back of the

27 room, you see. So I have to make sure I --

28 MS. GARVEY: Yeah, but you're in the last row,


1 Larry.

2 Sort of turning to what we could, should or ought

3 to might do. And I think you've touched on a point we've

4 heard for the last couple of days sometimes specifically

5 referred to sometimes sort of tangentially. Can we come up

6 with anything meaningful without a hard look and in an

7 effort to get to harmonize some of these differing state

8 standards that really affect our practice and our

9 profession? In other words, you've suggested a race to the

10 bottom. Is there a possibility of a push to the top?

11 MR. FOX: Well, I don't think it's realistic to

12 imagine that the states are going to ever give up the

13 opportunity to set the standards for lawyers admitted in

14 their jurisdictions until that right is negotiated away in a

15 NAFTA treaty.

16 MS. GARVEY: Well, I'm not --

17 MR. FOX: So therefore I think that we will

18 always have variations because people will come down on

19 different sides as we've seen on questions, for example,

20 like confidentiality. Or screening of lateral-moving

21 lawyers. And I find it hard -- I mean, I wish that we

22 could have that obviously out of respect -- decades working

23 in the A.B.A. Figured in the hopes that the model rules

24 would be adopted everywhere, but I just think the chances

25 of that are so slim.

26 MR. McDONNELL: Well, what I was curious about,

27 we've had a lot of discussion, for example, if you go in on

28 something other than say a temporary basis. And I want to


1 come back a little bit to that, then I'll let others speak

2 for a while. Where there's a question of potential

3 admission, maybe that's a little bit easier, because if you

4 clearly get admitted, you know, you're going to have to

5 conform. And the fact of the matter is if you're in that

6 jurisdiction, you have to follow that jurisdiction's rules.

7 But there are sort of adjunct rules like MCLE.

8 Some states say 25 hours. Some states say 35 hours. Some

9 states have categories and so on. And what I'm thinking

10 about in those areas which are perhaps less sensitive than

11 basic conflicts, imputation, confidentiality and so on, I

12 think there is a core agreement on a lot, but not on all.

13 On that sort of thing, pro bono and so forth, could you see

14 a move toward harmonization there?

15 MR. FOX: It would be splendid. But taking

16 MCLE as an example, I understand that it's going to be over

17 10,000 lawyers' dead bodies that will have MCLE in the

18 District of Columbia, for example. I think that would be

19 fabulous.

20 MR. McDONNELL: You know, that might not be a

21 bad solution. Because that's, I think --

22 MR. FOX: I mean, you know, having a minimum

23 standard for mandatory CLE for all lawyers in America is a

24 fabulous goal.

25 MS. GARVEY: Or at least some compatible

26 standard of some sort, but --

27 MR. FOX: You know, I suppose I'm not thinking.

28 If you could use as an incentive for the notion that you


1 could have the right to practice elsewhere, that you had to

2 fulfill some national minimum standard, then, you know,

3 that would be a quid pro quo. That might give the

4 insensitive to our D.C. lawyers, for example, who certainly

5 want to swash-buckle around everywhere and do.

6 MS. GARVEY: Can I just ask one last question?

7 And that is, one of the distinctions that we've been

8 looking at is a distinction between temporary presence in

9 which we all wander around doing various kinds of things

10 and more permanent presence that might just be a regular

11 course of visiting.

12 If we move back to the area of just temporary

13 safe harbors, do you have any trouble with trying to at

14 least work out safe harbors where people could occasionally

15 go in on some basis? I know you've criticized some of the

16 language, some of these proposals. But it's early time

17 yet. I don't think anybody has begun to focus.

18 Specifically, do you have any trouble with the concept of

19 safe harbors?

20 MR. FOX: No, I don't. It's the devils in the

21 detail, the ability to craft something that really provides

22 for the opportunity for somebody who needs to be in Iowa

23 for some period of time to do what has to be done in Iowa

24 without saying the person can always be in Iowa, even

25 though they're there, admitted in New York.

26 MS. GARVEY: Yeah, because it's difficult for

27 transactional lawyers where they don't have a tribunal,

28 where they can go appear and get -- get blessed as it were


1 on a temporary basis and people keep track of them, so --

2 MR. FOX: Well, people keep track of them and

3 they also in almost all jurisdictions have a requirement

4 that they associate with a local lawyer in that process. I

5 mean, it's not just getting the permission, it's the fact

6 that somebody else stands up and says, "I'm going to take

7 responsibility for what's happening here." That's a very

8 important aspect of it.

9 It's not sort of we couldn't create equivalent

10 by just having a board transaction. All lawyers could come

11 forward and say now I want permission to do this

12 transaction in California.

13 MR. POSITAN: Should a national lawyer be

14 allowed to do that?

15 MR. FOX: Well, the equivalent would be to come

16 forward like the litigator does and says -- and is

17 sponsored by a local lawyer who says, I will be local

18 counsel. I'm going to make sure that Fox remembers that in

19 New Jersey, certain requirements are there for local rules,

20 whatever they may be.

21 MR. EHRENHAFT: Isn't that a tremendous tax

22 being placed upon clients that may have problems in 16

23 jurisdictions, the real estate people were talking,

24 developers and so on that have a national practice know

25 well what is really required for these things and to have a

26 requirement of local associations in effect, a tax on

27 clients that they don't want and which they regard as

28 simply a superfluous situation.


1 I was struck by the horrible example that you

2 gave of the in-house lawyer moving from one place to

3 the other. I'm worried about making rules based on single

4 hard facts. You know, the old story about hard facts and

5 making bad law. The -- the situations of abuse, the

6 situation of fraud, the situations of undue advantage and

7 so on from which public needs protection. I'm not denying

8 that these are important problems.

9 I want to suggest to you, though, that a

10 million lawyers in America by and large are honorable

11 people. Our presumption should be that they know that they

12 have an obligation to their clients and will obey those

13 kinds of obligations and that what we ought to be thinking

14 about or what minimal rules as we are doing internationally

15 in our negotiations with our trade partners, what minimal

16 rules are sufficient to adequately protect the public

17 against the -- the situations of abuse and so on.

18 And if one has that rule when there is a

19 situation of abuse and so on, there is an adequate

20 administration available to address that, either at the

21 point of private lawsuits and/or an administrative agency

22 that looks at the problem cases but doesn't impose

23 tremendous standards that imposes an additional cost and

24 difficulty on people who are practicing what appears to be

25 competent and appropriate service to the public.

26 MR. FOX: I hear you. And all you're saying is

27 you've got a poster child that's sort of the opposite of my

28 poster child. And the truth is our profession reflects all


1 of them.

2 And the problem is, and I have spoken strongly

3 on this topic, I don't believe we should have two sets of

4 rules, one for the so-called sophisticated client and

5 another one for the unsophisticated client. And I don't

6 think the rules ought to be enforceable as to all lawyers.

7 So if I could figure out a way of making sure

8 that the rules are enforced and figure out a way of making

9 sure that that person is subject to the rules of the

10 jurisdiction in which they are now practicing, and you can

11 have that all happen without the hiring of the local

12 counsel, I think that's okay.

13 But my sense is that as you draw the rule, the

14 rule will swallow whatever requirements we presently have

15 for lawyers to be admitted in a jurisdiction and not

16 practice out of that jurisdiction. And that's my concern,

17 is when you start putting words on the paper, you're not

18 going to be able to draft it.

19 MR. EHRENHAFT: Other countries seem to have

20 dealt with this, and other professionals seem to have dealt

21 with this. And therefore, we ought to perhaps take a leave

22 from some of their experience.

23 MR. FOX: Other countries don't care about some

24 of the core values that we care about, and they certainly

25 don't care about them as much as we care about them. And

26 other professions are not lawyers. And so I worry about

27 that, that's a dumping damn too. That's a race to the

28 bottom. I want us to have our standards and figure out a


1 way of enforcing them consistent with the ability of every

2 client to get good service.

3 But looking at other countries and how they

4 view lawyers is not an inspiring event for me. We spent a

5 lot of time in the NDP discussion about that and we are not

6 sort of feeling lofty when we look at some of the standards

7 that lawyers are asked to abide by in other countries.

8 MR. EHRENHAFT: Professor Fox, whether it was

9 so --

10 MR. FOX: You know.

11 MR. POSITAN: Once a general, always a general.

12 MR. FOX: Ten minutes of fame.

13 MR. EHRENHAFT: You can help us much more than

14 you have. That's my headline. And here's what I mean by

15 that. You focused on the storm clouds. You haven't

16 focused on the legitimacy of the need. I think that the

17 problems you've identified are legitimate problems:

18 Discipline, CLE, et cetera. I think they can be addressed.

19 To take your example of the New Jersey lawyer,

20 the Illinois lawyer in New Jersey. Seems to me that's a

21 non-starter. The man is in New Jersey. He's practicing

22 for a corporation under the New Jersey in-house counsel

23 statute, and I understand your story. It seems to me the

24 New Jersey court says, "Hey, buddy, we don't care that

25 you're a member of the Illinois bar. You're here under a

26 New Jersey statute. We don't recognize screening. You

27 can't do it."

28 I mean, it seems to me that the state has


1 recourse to protect its residents and companies. But I

2 want to -- I want to turn, in a way, from this storm cloud

3 to the needs. And I think that we can benefit a lot, if --

4 not right now because it would not be possible right now --

5 could help us identify the legitimate safe harbors. Now,

6 you might conclude, although I don't think you would, that

7 even the legitimate safe harbors, even where you could see

8 a legitimate interest on behalf of the client population

9 for some greater flexibility in rules, nonetheless create

10 too great a risk of harm from those storm clouds that you

11 see.

12 I don't think you'll come to that conclusion.

13 And obviously there's a balancing that has to go on,

14 right.

15 So one has to say well, how strong is the need

16 on one hand and on the other hand how great is the danger.

17 You owe us a memo. And you have 30 days to produce it. We

18 are going to grade it. That memo has to go beyond the

19 rhetoric in your talk in your paper because you get carried

20 away by the rhetoric. And you have a whole lot of

21 experience, maybe more than any other single person on this

22 stuff, to provide us with your wisdom on the legitimate

23 safe harbor, possibilities and how to protect against the

24 excess you, I think, too cynically predicted.

25 MR. FOX: Can I have 45?

26 MR. EHRENHAFT: Take 60.

27 MR. FOX: I have had a few experiences like

28 this. You never get lulled into a false sense of security


1 because some judge is complimenting you and only gives you

2 30 days to submit. But I will do that, I either take the

3 challenge and I am not -- I am not far from it and

4 ultimately opposed to safe harbors. I am deeply concerned

5 about this notion that when we develop the safe harbors, we

6 cannot either enforce them or write them in a way that will

7 be sufficiently stringent, but maybe I'm wrong.

8 MR. EHRENHAFT: Well, try.

9 MR. POSITAN: No good deed goes unpunished.

10 MR. FOX: Thank you.

11 MR. POSITAN: Next we have another time problem

12 due to our great interest in this subject, so I'm going to

13 exceed the request that Jerome Hafter to go if Larry Shea

14 doesn't mind.

15 MR. SHEA: I’ve got a flight to catch.

16 MR. POSITAN: That's a good reason.

17 Larry Shea who's got the flight to catch. All right.

18 You're the man.

19 MR. SHEA: Good morning. My name is

20 Larry Shea, and I'm the chairman of the Louisiana state bar

21 association committee on multi-jurisdictional practice. We

22 have provided a preliminary report to you on behalf of that

23 committee, and I'd like to make some comments.

24 As a matter of brief background, our committee

25 was formed at the request of this commission by our state

26 bar president, Phelps Gay, in the fall. And although we

27 have only existed since the fall, the members of our

28 committee are not novices at many of the issues involved.


1 We have members with extensive knowledge in the admissions

2 and licensing process, the disciplinary system and the

3 state bar standing committee on the unauthorized practice

4 of law.

5 Our members bring a varied experience to the

6 table. We have single practitioners and members from large

7 firms, small towns, big cities, law professors and in-house

8 counsel on our committee. From these diverse perspectives,

9 our committee has made certain preliminary findings and

10 reached consensus on several issues which I have been

11 commissioned to report to you.

12 Louisiana has an unauthorized practice of law

13 statute that has been in effect, essentially, in the same

14 form for over 50 years. It basically prohibits the

15 practice of law within the state of Louisiana by any person

16 not licensed in the state. The exception is found in the

17 form of pro hoc visa, appearances which are proprietary in

18 nature and require association of local counsel. We do

19 have provisions for reciprocity, but we have no

20 arrangements for reciprocity with any other states.

21 Louisiana's unauthorized practice of law

22 statute is enforced. It has always been enforced against

23 those not licensed at all. It has been enforced against

24 suspended and disbarred lawyers, both criminally and for

25 disciplinary purposes. And more recently it has been

26 utilized to deny pro hoc status to persons licensed outside

27 of the state who either reside in Louisiana or have gone

28 beyond temporary appearances.


1 Further, we further understand that some

2 referrals have been made to home states by our office of

3 disciplinary counsel for the unauthorized practice of law

4 in Louisiana. We have not yet completed our review of that,

5 and we can't say how many referrals have been made or what

6 the outcome has been.

7 With the foregoing said, we know that attorneys

8 licensed in the state and other states regularly and in

9 some instances systematically come into the state of

10 Louisiana both physically and virtually to take that

11 position, to engage in arbitrations and mediations, to

12 prepare for litigation in anticipation of pro hoc status,

13 to negotiate and conduct transactional matters, and to

14 generally advise counsel and represent clients.

15 For the most part, we don't know where they

16 are, when they came, when they left, or how often they have

17 been in the state of Louisiana. We do know, however, that

18 the Louisiana unauthorized practice of law statute can be

19 reasonably interpreted to prohibit and therefore may be

20 critical of that conduct.

21 Our committee believes that change is required.

22 The Louisiana statute on unauthorized practice of law

23 should be revised to address the issues raised by

24 increasingly global and mobile society. It is not good

25 enough to have a statute that says one thing and a practice

26 that does another. If Birbrower taught us nothing else, it

27 taught us that.

28 Our committee favors a rule that provides for


1 the temporary practice of law in Louisiana by persons

2 admitted in other states on a reciprocal basis. This

3 extends to litigation, alternative dispute resolution, and

4 transactional work. We are still grappling with many of

5 the issues that have been raised over the last two days,

6 including the thorny question of what is temporary. We

7 don't have an answer or a proposal at this time.

8 Our committee also favors a rule that provides

9 for the special circumstances of in-house counsel. We

10 preliminarily support a registration process, but we are

11 still evaluating the need for other requirements such as

12 mandatory continuing legal education and pro bono

13 obligations.

14 As a consequence, I have no specific proposal

15 on that, other than to say as to all of these matters which

16 we favor, whoever practices law in Louisiana should be

17 subject to Louisiana's disciplinary rules and to

18 Louisiana's disciplinary system.

19 My principal charge in coming before you today

20 is to weigh in early and strongly against any national

21 licensing process, national motion admission or the adoption

22 of state rules that would entitle a lawyer admitted in any

23 state to basically engage in the practice of law in any

24 other state.

25 Our primary objective as lawyers and as a bar

26 association are to protect the interests of the public.

27 That includes not only the clients but also others affected

28 by the practice of law and to foster and protect the


1 administration of justice. We accomplished this in no

2 small part by seeking to insure the suitability and

3 competency of those practicing law and by effectively

4 disciplining those who have abused the practice.

5 To this end, the Louisiana Supreme Court and

6 the lawyers of the state of Louisiana have made great

7 strides over the last decade. Louisiana has fully

8 implemented the American Bar Association model disciplinary

9 system which effectively allows for the enforcement of

10 rules of professional conduct.

11 I've heard a lot about resources over the last

12 two days. Well, from your rural member of Louisiana, I can

13 tell you that our system is funded entirely by the

14 Louisiana bar members. And we do fund it. And it is

15 effective, and it is administered through the voluntary

16 work of the bar association members.

17 In addition, the Louisiana Supreme Court has

18 recently adopted more strenuous admissions and licensing

19 standards, which provides for extensive background checks

20 before allowing a person to sit for the Louisiana bar exam.

21 The Louisiana public law schools have taken great efforts

22 in the last few years to reduce the size of their classes

23 so as to produce more competent practitioners.

24 Also, the Louisiana Supreme Court is currently

25 studying the possibility of implementing mandatory

26 apprenticeship or mentoring requirements before allowing

27 someone to practice law. Moreover, Louisiana is a civil

28 law state with laws based upon the Napoleonic Code.


1 Now, I have heard much about bar exams at this

2 conference, but I suspect that one of the highest failure

3 rates is of those not trained in civil law who take the

4 Louisiana bar. In short, Louisiana takes its

5 responsibility in protecting the interest of the public

6 very seriously. We are hesitant to advocate or relinquish

7 that responsibility.

8 In this regard, I have heard very interesting

9 and enlightening comments at this conference concerning

10 highly sophisticated practices, exceptional attorneys,

11 national clients and the rights of sophisticated clients to

12 select the attorney of their choice or the best attorney

13 for them. We do not disagree with this goal -- lofty goal

14 in principle. But we believe that the sophisticated client

15 is generally not the client who needs our protection.

16 Our efforts at assuring suitability and

17 competence of those who practice law and ensuring

18 compliance with the rules of professional conduct are

19 primarily directed toward the protection of the

20 unsuspecting and the unsophisticated users of legal

21 services. In that regard, I can only agree with many of

22 Mr. Fox's statements, with the comments of Chief Justice

23 Vandewalle, and I want to quote to you and adopt what

24 Mr. Kallgren of the senior lawyer division cautioned

25 yesterday.

26 I believe I have the quote right. "Don't do

27 anything to accommodate mobility that would be

28 counterproductive to the purpose of the rules." We believe


1 that any rules developed concerning multi-jurisdictional

2 practice must be formulated with that principle in mind.

3 I appreciate the effort that this commission is

4 undertaking. And we recognize the difficulty of this

5 commission's task. The Louisiana committee on

6 multi-jurisdictional practice will continue its evaluation

7 and study of these issues and hopes to provide additional

8 input to the commission. If the commission should require

9 any further efforts or assistance on our part, please do

10 not hesitate to let us know. Thank you for allowing me to

11 speak today.

12 MR. GILLERS: I actually have an assignment for

13 you, as well. You mentioned that you're aware that

14 out-of-state lawyers are in fact violating this state's UPL

15 statute, coming into this state virtually or physically.

16 And you advocate loosening that statute to some extent.

17 Do you have any idea to what extent that's

18 happening in the reverse, to what extent the Louisiana

19 lawyers are doing in neighboring states or elsewhere in the

20 country? Do you know what out-of-state lawyers are doing

21 in Louisiana?

22 MR. SHEA: I can only speak now for myself and

23 in my experience. I'm also the vice-chairman of the

24 Louisiana attorney disciplinary board, and I head up their

25 adjudicative panel. And we have enforced in Louisiana

26 against Louisiana lawyers disciplined for the unauthorized

27 practice of law in other states when those matters have

28 been referred to us. So we have done that. I don't know


1 what other states do to the attorneys that we refer back.

2 MR. GILLERS: Well, I was thinking more broadly,

3 as you continue your work, it might be worth while for you

4 to know -- it would certainly help us to know the extent to

5 which a loosening of the traditional restrictions on cross

6 point of practice would help Louisiana lawyers in their own

7 cross-border work or legitimize what they're doing anyway.

8 MR. SHEA: I don't mean to suggest that our

9 committee does not agree that there should be some

10 loosening. We certainly don't believe that the statute

11 should remain in place as written, and we do believe that

12 there should be means by which with appropriate regulation,

13 attorneys from other states should be allowed to practice

14 in Louisiana on a temporary basis. And Louisiana attorneys

15 should be allowed to practice elsewhere on a temporary

16 basis. So we certainly agree that that should be allowed.

17 MR. GILLERS: Do you plan to do a survey of your

18 membership?

19 MR. SHEA: Yes, we plan to do a survey of the

20 membership. And we will develop some suggestions. We have

21 committees, sub committees working on those currently, so

22 we will develop some suggestions and take all this

23 information back to try to provide at least some input for

24 you all. I know that it's a tough job. It's a very

25 difficult question.

26 MS. NIRO: I'd like to assure you that we

27 welcome anything that you can send our way by way of

28 drafted language or proposals. Because, indeed, what I


1 just said to the bar leaders at the National Conference of

2 Bar Presidents ought to be part of the record of this

3 proceeding. And that is, I believe it's fair to describe

4 this commission's commitment to writing a report that

5 represents the American lawyers rather than something that

6 the commission creates and then sends it out to the

7 American lawyers and say how do you like it.

8 So whatever you can do to assist us in creating

9 a report that is acceptable with the value that you so

10 articulately describe, we will be very appreciative and let

11 that wording go forward that for all of you who represent

12 other states that the process, that we are hoping to

13 maintain is that the information for this report comes from

14 you to us, not from us to you. So be assured that every

15 state's values and voice needs to be incorporated in that

16 statement. I guess that wasn't a question, and I

17 apologize.

18 MR. SHEA: I'd like to respond to Ms. Niro.

19 I've heard you make comments before questioning and asking

20 questions also, Ms. Niro, about -- concerning whether or

21 not the word's getting out about this. And I would like to

22 address that for just a second.

23 It is my impression that a vast number of the

24 bar do not engage in multi-jurisdictional practice. They

25 practice in their localities and in the areas immediately

26 surrounding those localities. And they never go into

27 another state to practice law at all, and don't even think

28 about it.


1 Now, for those people the message is probably

2 not out. But then the message is one that is of not great

3 concern to them and their practices. But I believe that

4 there has been a heightened awareness of this situation

5 brought on due in great part to this commission's work thus

6 far on the part of those attorneys who are affected by

7 these issues.

8 And I think when you look at it to see and you

9 ask the group, you have to first find out does this group

10 come in contact with that situation. I think those people

11 have a heightened awareness, and I think the commission has

12 done a good job of getting that word out.

13 MR. DIAMOND: I tend to agree with an awful lot

14 of what you said today, and I think you articulated a lot

15 of core values that are shared by the lawyers throughout

16 the country. I don't agree, though, the vast majority of

17 lawyers even in Louisiana are not engaged in

18 multi-jurisdictional practice because the more I hear that

19 discussed, the more I realize that I and everybody I know

20 is engaged in one form or another of multi-jurisdictional

21 practice. However, you were going to go back and do some

22 study on this.

23 You indicated that you would be in favor of a

24 temporary, without defining what that word meant, license

25 without talking necessarily about a formally issued

26 license, safe harbor that would allow what goes on now to

27 be viewed as appropriate behavior. And we would like

28 specifically to hear from Louisiana on that. And I don't


1 know -- I agree with what Cheryl said, and that is your

2 views are important to us and we are formulating our views

3 hopefully to reflect concessions of you.

4 MR. POSITAN: If we could be a resource in any

5 way to you at any point in time, the website is going to

6 have all of this information on it. It's going to have all

7 this testimony on it, so that you can perhaps read the

8 transcript. If there's any way or any basis at any point

9 in time you can use some additional information, you just

10 want to have a dialogue, by all means, we encourage people

11 to do that. So thank you for taking time to come here this

12 morning, knowing you have to leave and everything else.

13 MR. SHEA: The commission has been an

14 incredible resource thus far, and we will take a lot of

15 information from this hopefully and from the website. So

16 it has been very valuable information.

17 MR. POSITAN: Look forward to continuing to work

18 with you.

19 MR. SHEA: Thank you all very much for your

20 time.

21 MR. POSITAN: Next, Jerome Hafter.

22 MR. HAFTER: I appreciate the opportunity to

23 talk to the commission today. Mostly as my colleagues from

24 Louisiana somewhat practices just across the county line

25 from Louisiana, I'm admonished. And I'll be extremely

26 careful to refer all matters to Louisiana to some of my

27 partners who are admitted, but I think that really reflects

28 the fact that was emphasized at the end that virtually all


1 attorneys today have multi-jurisdictional aspects of their

2 practice, and that this commission is addressing an issue

3 that is an immediate concern to a high percentage of

4 attorneys throughout the nation.

5 My primary interest in coming before the

6 commission comes from not the transient practice, although

7 I have some views on that subject, but truly

8 multi-jurisdictional admission practices. And I put in the

9 prepared log some of my experience in that area. But I

10 come to the commission as someone who serves for 21 years

11 as chairman of the State Board of Bar Admissions in the

12 state of Mississippi, and I also serve as chairman of the

13 National Conference of Bar Admissions and presently on the

14 council. But my views here today don't reflect any of

15 those organizations, although maybe they have been educated

16 a little bit and I've had experience.

17 Historically, this is an issue that has been

18 before the American Bar Association for a number of years.

19 And in the late 1970's and early 1980's, the young lawyers

20 division arising from their concerns at that time about the

21 need of some greater mobility, particularly for younger

22 lawyers, proposed a rule on multi-jurisdictional admission,

23 which is in substantial part similar to the rule that I

24 believe Erica Moeser and others have talked about here,

25 which is now coming from the current bar admissions

26 commission of committee of the section on legal education,

27 admission of the bar.

28 And I want to urge this commission to use its


1 influence in that area. Because there are really parallel

2 tracks between transient admission or transient practice

3 and full admission. And I believe particularly someone

4 serves for a long time in the area of our admissions, that

5 formal admission to practice when an attorney is going to

6 have considerable contact with the jurisdiction is a

7 preferable course to transient route. They're not mutually

8 exclusive and they both need to exist.

9 But where the attorney is regularly -- and

10 regularly is a term of art -- but on a significant basis to

11 be involved in the law and the practice in a jurisdiction,

12 that the rule should encourage, make possible, and make

13 permanent that admission. And reasonable rules on

14 multi-jurisdictional admission, and maybe there should be a

15 slightly difference between multi-jurisdictional admission

16 and multi-jurisdictional practice, is a good thing to

17 encourage.

18 And the American Bar Association and this

19 commission have a real role in looking at that because there

20 is an advantage nationally in having a model rule or an

21 encouraged rule with reasonable standards that preserves

22 state admission but ensures that a maximum number of

23 practitioners who are going to engage on a daily regular

24 basis to seek out and become full-fledged members of the

25 bar in the jurisdictions where that's going to occur.

26 And one of the discouraging aspects of this is

27 that states over the last 25 years have probably not moved

28 toward lowering the barriers.


1 The article, and I -- I said a lot about this,

2 about an article that I provided you. I went back to read

3 it -- getting ready to read it. I sent it in without

4 reading it, but I went back to reread it and virtually

5 everything that was said in that article is as true today

6 as when it was written maybe 17 years ago. And the

7 preamble which I took from a lengthy quote, from

8 Chesterfield Smith, is absolutely as applicable today as it

9 was a quarter of a century ago, yet the movement in those

10 areas had over that period of time toward improvements in

11 the flexibility of multi-jurisdictional practice have

12 really not gone very far forward in those 25 years, and in

13 some ways have actually gone a little bit backward, which

14 I'll talk about in just a moment.

15 But the uniformity of a rule would have a lot

16 of benefit. States that have rules, and my own state has a

17 rule that allows reciprocal admission, but reciprocal

18 admission only where there is mutuality between the states.

19 And that rule alone discourages flexibility in having

20 attorneys seek full admission, which I think is a standard

21 that should be encouraged, to become fully subject to the

22 rules, to the discipline of the state where they're going

23 to practice.

24 That rule, and that's only one of many

25 idiosyncratic rules of the state -- including my own. I'm

26 very cognizant that I'm -- I'm getting considerate area

27 in that I literally administer such a rule -- result in

28 lengthy discussions of whether this state or that state


1 actually has mutuality and therefore we can reciprocate

2 with another state. The end result often being the -- I

3 believe the encouragement of people to practice in the

4 state without being admitted, infringing probably upon

5 rules of transient practice. It denies the state the

6 ability to really have control over those attorneys in a

7 meaningful way.

8 I appreciate my colleague from Louisiana trying

9 to describe how states can control practice in other

10 states. But in many ways I think that's all from whistling

11 into the wind about the effectiveness of those controls. In

12 a way, if attorneys are fully admitted in those

13 jurisdictions where they're going to practice for a

14 substantial amount of time were in for much more control of

15 those states.

16 MR. POSITAN: Are you advocating something

17 that's akin to full reciprocity, or are you advocating

18 something like the Alberta protocol which sets some formula

19 in terms of when you have to go for a full permanent

20 licensure as opposed to something that can be less than

21 say six months before you have to register? Maybe you

22 accomplish the aims of what we've discussed, legitimate

23 state interest being the continued viability of a bar

24 association as being an important component to the legal

25 process, or are you saying it's just total reciprocity, and

26 there is halfway gate-keeping registration-type vehicle?

27 MR. HAFTER: Well, that intermediate step.

28 I -- I believe that -- that the first step, which is a


1 transient practice rule, is a reasonable one for the

2 unusual or infrequent need to appear or practice in a

3 state. And lots of people have talked about it.

4 MR. POSITAN: I'm really possibly --

5 MR. HAFTER: Then you --

6 MR. POSITAN: You have --

7 MR. HAFTER: -- you have --

8 MR. POSITAN: You have temporary where you

9 don't have to do anything, the middle ground where you're

10 doing it fairly regularly, but not regularly, and then the

11 part where you're doing it regularly, you're permanent,

12 you've hung a shingle up there, so you could do everything

13 I ought to be able to do.

14 MR. HAFTER: I've got to say on the

15 intermediate part, I haven't really considered that. I

16 have participated, for example, in a view of federal court

17 practice where, for example, a number of federal courts

18 have a rule where attorneys have recently arrived in the

19 state can be admitted for a temporary period. I won't stay

20 transient, but a temporary period before they get fully

21 admitted in the state.

22 I think something like that is not an

23 unreasonable alternative, but it should be relatively

24 brief, not more than six months or a year, followed from

25 the person who is going to regularly practice in that

26 jurisdiction, have a permanent office in the jurisdiction,

27 and relocate to that jurisdiction. Those might be slightly

28 different standards, needs to progress pretty rapidly into


1 a fully admitted, fully registered status which attorney is

2 complying with disciplinary rules, complying with CLE rules

3 and being a participating member of the bar of that state

4 even though he or she may be a participating member of the

5 bar of potentially several other states.

6 So I guess I answered your question. A

7 transitional period may be satisfactory, but it ought to be

8 relatively limited and should be opened indefinite.

9 The rule which I understand you probably have

10 before you in one form or another, the proposed model rule

11 from the bar admissions committee, is very similar to the

12 rule which the young lawyers division and many other

13 sections and divisions of the bar approved in the early

14 '80s but was defeated on the floor of the house of

15 delegates.

16 It was largely defeated on the floor of house

17 of delegates from the strong opposition of a few

18 jurisdictions which have traditionally opposed admissions

19 by motion entirely. And I'm told the states' rights view

20 of that.

21 I personally feel that those states probably

22 will not -- and that includes, for example, California, New

23 Jersey, Florida -- probably will not immediately change

24 their practices regardless of what happens in the majority

25 of states, but it would be a good thing, a positive

26 development if the A.B.A. went on record with a model rule.

27 Obviously not mandatory on any state, but which would

28 encourage the large majority of states which have some


1 volume of reciprocal admission, either full admission on

2 motion or full or admission through a limited attorney's

3 exam to adopt rules that do not have idiosyncratic

4 requirements in them and would facilitate that admission.

5 The rule that the admissions committee is gone

6 forward here on the rule that was proposed some years ago

7 by the young lawyers division and endorsed by many other

8 organizations at that time, those rules are quite similar.

9 It's very small differences. For example, the number of

10 years of practice.

11 I personally think three years out of a

12 five-year requirement as opposed to five years out of

13 seven, but a uniform rule which clears attorneys who have a

14 minimal educational experience, which may or may not

15 include the graduation from an A.B.A. approved law school,

16 but I don't necessarily think that's necessary.

17 And if that would bring states like California

18 and Indiana strong believers in non-approved law schools

19 alone, I'm not sure that's essential, but as involved

20 definition of practice of law so it would be inclusive of

21 law profession or people practicing with federal government

22 agencies and others against whom these rules have been

23 passed used to discriminate. Requires some minimal showing

24 of passing of ethics exams, if those things if adopted in a

25 model rule would have a positive impact on states.

26 Now, the one area that is a concern that I

27 haven't really addressed or talked about, and it's been the

28 biggest movement backward, has been the adoption of hurdles


1 to replace residence. Prior to the New York decision and

2 the Gordon case, I think in 1979, and then the Supreme

3 Court decision in Piper, there were five of the

4 well-received requirements of full admission that were

5 essentially universal.

6 So I think probably about the District of

7 Columbia was almost always (inaudible), that was greatly

8 turned around, and then by some subsequent Supreme Court

9 decision in the Freedman case with Virginia, which

10 eliminated residency as a requirement for full admission

11 through motion, and right now I think those decisions are

12 very well taken. Not in -- probably the settle-all in the

13 country, but the reaction to that subtly throughout the

14 country since Piper and Ester reciprocal admission since

15 Freedman has been to create rose bulbs to make it more

16 difficult to be obtained for all multi-jurisdictional

17 admission.

18 Those include, for example, mandatory

19 maintenance of offices within the admitting jurisdiction,

20 which has been the most popular one of those reactions.

21 Creation of separate attorney examinations that only beyond

22 examinations on local practice or retention of those. And

23 I think a clear statement from the A.B.A. against the speed

24 bump type approach to reciprocal admission by not including

25 them in a rule which is ad hoc, is a sensible one and

26 avoids what has been really a cutback in availability of

27 reciprocal admission to attorneys who are not mobile

28 attorneys, that is moving to the jurisdiction to establish


1 his or her permanent full-time office, but simply wants to

2 have a practice where that attorney is able to practice on

3 a relatively extensive basis, regular basis in a number

4 jurisdictions where his or her services are desired by

5 clients.

6 And I would encourage an adoption of a model

7 rule, encouragement, a model rule, on a reciprocal

8 admission. Well, there be no inclusion of a statement, for

9 example, if the state may adopt requirements of an office

10 or other indications of permanent ongoing presence as part

11 of those rules or actually inform the state that those are

12 not part of a model rule.

13 MR. POSITAN: I think we have your statement in

14 general, so I don't want to be repeating --

15 MR. HAFTER: Okay, is there --

16 MR. POSITAN: Yeah, we are running a little bit

17 late. We have three more speakers, be sensitive to time.

18 Are there any questions? Thank you very much.

19 MR. HAFTER: Thank you.

20 MR. POSITAN: Philip Stinson, Center for

21 Education Rights.

22 MR. STINSON: Good morning, Mr. Chairman,

23 distinguished members of the commission. I too will try to

24 stay out of Louisiana, although I find at times I've been

25 successful at that, having been there a few times for

26 pre-trial work preparing for civil rights cases in the

27 eastern district of Pennsylvania.

28 Larry Fox suggested that he try not to offend


1 anyone here this morning. I too will try to do the same

2 thing, although I find that I'm not quite often able to do

3 that, having gotten myself in a good bit of trouble when I

4 suggested to the commission on multidisciplinary practice

5 and comparing and contrasting the ethical provisions of a

6 variety of licensed professional that attorneys are the

7 only ones not having been barred from having sexual

8 relations with clients. I note that the model rules --

9 MR. POSITAN: We don't offend easily.

10 MR. STINSON: I note that the model rules have

11 been changed to propose that attorneys will be barred

12 from having sexual relations with current clients, although

13 the comment goes to great lengths in the newly proposed

14 model rule to note that that is a personal prohibition and

15 the attorney would not be prohibited, for example, from

16 having sex with their law partner's clients, and their law

17 partner would not be prohibited from having sex with their

18 clients. But I do urge the commission to --

19 MR. POSITAN: That's not what Mr. Fox was

20 talking about when he was discussing screening.

21 MR. STINSON: I don't think so. I do note that

22 the circumstance stays away from multi-jurisdictional and

23 sexual relations issues.

24 I'm here today in a dual capacity, both as a

25 principal in a private law firm in the Philadelphia area,

26 extension law associates, and also as president and general

27 counsel of the Center for Education Rights, which is a

28 nonprofit public interest advocacy groups, based primarily


1 in the Philadelphia area but also had presence here in

2 Southern California, and I'm also the executive director of

3 the Chester Special Education Law Clinic, which provides

4 legal representation to low-income parents of children with

5 special needs in the Chester Upland School District and

6 Delaware county, Pennsylvania, which is a pro bono project

7 of my law firm. A multidisciplinary pro bono project, I

8 might add.

9 I also serve as editor of Special Ed,

10 which is a multi-disciplinary resource for parents with

11 children with special needs, which includes attorneys,

12 psychologists, physicians, teachers, school administrators

13 and others seeking information relating to special

14 education law.

15 Now, my law firm maintains offices in

16 Pennsylvania and Delaware. We are often

17 asked to represent parents or children with disabilities

18 across the country. Most of the work that we do is

19 pursuant to a variety of federal statutes, including the

20 Individuals for Disabilities Education Act, the IDEA

21 section 504 of the Rehabilitation Act 1973 and the

22 Americans with Disabilities Act.

23 Now, under the IDEA, parents may bring an

24 action against a public education agency when their child

25 has been denied a free appropriate public education.

26 Process starts across the country with expulsion of

27 administrative remedies, through special education due

28 process here before imperial hearing officer either at the


1 local level or the state level, depending on whether the

2 state has elected a one-tier or a two-tier system of

3 administrative review under the IDEA.

4 Each week I hear from parents with children

5 with special needs who have real disputes with local and

6 state agencies across the country regarding the provision

7 of a free, appropriate public education for their child and

8 who are unable to locate an attorney to represent them in

9 the special education due process. In one recent case in

10 the matter of Errans, a non-attorney advocate argued

11 unsuccessfully before the Delaware supreme court that they

12 should be able to represent parents of children with

13 special needs at administrative due process hearings

14 because parents were unable to procure representation by

15 any Delaware lawyer familiar with special education

16 litigation and because of IDEA allowed for non-attorneys

17 with knowledge of special education law to advise parents

18 at due process hearings.

19 In Delaware, pro hoc representation is only

20 allowed in court proceedings or is allowed in court

21 proceedings, as well as in administrative hearings, but on

22 limited circumstances with joint representation by local

23 and state counsel. Delaware does not have reciprocal bar

24 admission in any other state. And remember the Delaware

25 bar sat for and passed the full Delaware bar examination.

26 Until my firm established an office in

27 Wilmington in 1999, there were no attorneys in private

28 practice in the state of Delaware who regularly represented


1 parents of children with special ed disputes with local

2 school districts. We too have had difficulty in finding a

3 Delaware lawyer with an interest in joining our firm as a

4 parent attorney. Now, currently --

5 MR. POSITAN: Are you having difficulty finding

6 a Delaware attorney who can possibly (inaudible)?

7 MR. STINSON: Not at all. And there's a good

8 reason for that. Because there's a whole industry of

9 lawyers to do just that for law firms across the country in

10 the corporate environment. Everybody has a shingle hung

11 all over Delaware for that purpose.

12 MR. POSITAN: How much of a strain is that

13 where Peter calls it a tax on the system? Is it something

14 that's cost prohibitive?

15 MR. STINSON: Well, it is in that we represent

16 parents of children with disabilities who are already

17 pushed to the limits in terms of their financial resources.

18 So what the fact is today that we have to charge larger

19 fees than we would in other jurisdictions to the parents up

20 front, even though there's an entitlement to the prevailing

21 party.

22 MR. POSITAN: How much?

23 MR. STINSON: $4,000, typically.

24 MR. POSITAN: Is that a flat fee or is that

25 based upon work?

26 MR. STINSON: We charge minimum fees and

27 charge --

28 MR. POSITAN: I'm talking about the pro hoc


1 response for the attorney --

2 MR. STINSON: About $4,000.

3 MR. POSITAN: Is that linked to how much work

4 they do?

5 MR. STINSON: Yes. Typically, that's been our

6 experience.

7 MR. GILLERS: Can I ask you, because we have --

8 I've read your statement. Would the problem that you

9 describe in that statement be solved if there were easy pro

10 hoc at the admin stage? Is that a solution?

11 MR. STINSON: I think in Delaware, the first

12 jurisdiction, I thought that they actually had pro hoc

13 provision in the code dealing with administrative

14 procedures. Most states that I dealt with do not have that

15 allowed for. And the three cases that I discussed in my

16 statement, which I know the members have had an opportunity

17 to read, they don't address the issue of whether there was

18 any attempt to pro hoc in those three cases. Two of the

19 cases held that the attorneys were not allowed to

20 represent -- there was an unauthorized practice of law.

21 The other case was a New Hampshire case, went the other

22 way. But they didn't deal with that underlying issue. In

23 fact, none of those cases was it an issue at all with the

24 parents that the attorney was not licensed in that

25 jurisdiction until they won the case and sought to recover

26 attorneys fees. But, yes, I think that that -- in fact,

27 that's one of my four recommendations of my --

28 MR. EHRENHAFT: Let me ask you, is -- insofar


1 as the lawyer who is willing to come into a state to do

2 this work, will not be able to get paid should he or she

3 win, because the state will assert some improper activity

4 by the lawyer, and therefore the lawyer has no incentive to

5 take it on. Wouldn't the ability to get pro hoc BJ

6 admission at the administrative stage if it were readily

7 available and bestowed, totally solve that problem?

8 MR. STINSON: Absolutely 100 percent so.

9 Because damage is not an issue of unauthorized practice.

10 And two of the three states, California and Indiana, found

11 that was the exact problem, although the cases don't

12 discuss the issue of whether there have been any effort of

13 pro hoc. And I haven't looked, but tend to believe there

14 is no way to pro hoc in those states in that type of

15 situation.

16 MR. EHRENHAFT: Do states with these

17 administrative apparatus allow non-attorneys to advocate

18 for the parent before the agency?

19 MR. STINSON: Not in Delaware. And I'm told in

20 the Arrons case, that there's been a chilling effect in

21 many places, including here in Southern California, by

22 non-attorney advocates who are concerned that they're going

23 to be charged with the unauthorized practice of law as a

24 result of the Aaron's case. So some states allow it

25 specifically by state law, that they allow a representation

26 in these state-level due process here under these federal

27 laws to have non-attorney advocates representing parents.

28 MR. GILLERS: Do specific situation, client


1 base you identify in the area of expertise, is quite

2 compelling and it certainly calls out for remuneration in

3 some way, but look at your recommendation. It is seems to

4 me that No. 1 on your Page 6 solves your problem. No. 2,

5 Page 4 may be appropriate or may not or may be appropriate

6 in some modified way, but that really goes beyond. They

7 really go beyond the problem that the compelling dramatic

8 problem that the client base you identify faces. They

9 don't need 2, 3 and 4.

10 MR. STINSON: That's why I put No. 1 first. I

11 would absolutely agree with that.

12 MR. POSITAN: Seems to me No. 1 comes with some

13 kind of proviso of even for relaxation or greater

14 relaxation if there is a situation where there's a field of

15 expertise where there's compelling need, such as the one

16 you identify. There maybe others, examples of that.

17 There's a shortage of lawyers who are capable of handling

18 matters in any jurisdiction, so you may have a relaxed

19 standard.

20 It's also been my experience in an

21 administrative forum when you have pro hoc BJ, typically

22 ALJ's are far less demanding in terms of involvement of

23 local attorneys than courts typically are.

24 MR. STINSON: The other issue I wanted to

25 address for the commission briefly is the issue of

26 proliferation of internet base resources as it relates to

27 multi-jurisdictional practice issues. We maintain a

28 website,, as a joint venture between


1 our for-profit law firm and non-profit center for

2 education rights.

3 In the past year, we've logged visitors to our

4 website from all 50 states and the District of Columbia.

5 Our list serve newsletter has people registered from 46

6 states currently and I've given you a sample in our written

7 statement that I presented to you all before today of the

8 traffic from last month to our website, which included over

9 40,000 hits, over 9,000 page-view impressions, over 5300

10 visitor sessions and 2600 and some new visitors.

11 Also, I wanted to point out to you the number

12 of resources that people are taking advantage of. Now, we

13 know that people download amazing number of documents from

14 our website. To me, never dawned on me that that would be

15 an interest. For example, in January, 363 people

16 downloaded copies of the federal statute of the IDEA. 340

17 people downloaded copies of the Nikelan regulations for

18 school-aged children under the IDEA. 328 people downloaded

19 copies of the disciplinary provisions under the federal

20 statutes and so on and so on. Awful lot of people --

21 MR. POSITAN: Do you think you're soliciting

22 when you're doing that?

23 MR. STINSON: What?

24 MR. POSITAN: Do you think you're soliciting

25 business when you're doing that?

26 MR. STINSON: No. I'm trying to just make a

27 point, there's a company out there called (inaudible)

28 publications, a subscription base service, and I'm just


1 trying to give it away for free. I don't think that in and

2 of itself is solicitation. There's actually effort to

3 provide resources for free because as I went around talking

4 to people and seemed to me that people can't find these

5 resources readily available.

6 MR. POSITAN: Let's play devil's advocate.

7 Does any part of your presentation into that say if you

8 have a problem, call Phil?

9 MR. STINSON: Actually, there's disclosure that

10 says you should obtain independent legal counsel. Of

11 course, you can click onto my law firm's website if you

12 choose to do so. There is a link to my law firm. There's

13 links to other people's law firms --

14 MR. POSITAN: It's not good or bad. I'm just

15 asking what you're doing.

16 MR. STINSON: Yeah.

17 MR. POSITAN: I won't say it's bad on the

18 record.

19 MR. STINSON: Also, on every keynote that we

20 send back we have boilerplate language about this does not

21 constitute -- unless you have signed a retainer agreement

22 and have paid a fee, this does not constitute the

23 establishment of an attorney/client relationship.

24 But people do take advantage of these

25 resources. And I also gave you samples of about 12

26 countries that people visited our website from in January.

27 A large number of states we can identify. About 20 states

28 in January we noted people came to us from. We also know


1 that U.S. government, various state agencies rely heavily

2 on our website. We have a lot of inquiry from Jag officers

3 and Navy facilities.

4 MR. POSITAN: That's what you're driving at

5 when you just talked about No. 4, which is promote the

6 development of model rules of professional conduct relating

7 to Internet-based activities. That is what you're seeking

8 is some guidance as to whether what you're doing is

9 appropriate or not appropriate because you have some

10 concerns?

11 MR. STINSON: Well, I don't know that I have

12 concerns as much as I want to bring forth my comments

13 because I tend to find that a lot of these hearings, for

14 example, at the M.D.P. issues, everybody wanted to talk

15 about account, but experience was different than that. We

16 wanted to have a multidisciplinary practice in a different

17 nature. And I'm not as concerned about it from a

18 disciplinary standpoint as much as I am if I want to engage

19 the dialogue to let you know what small practitioners and

20 small law firms are doing and how we're crossing state

21 lines, whether we need to or not.

22 In fact, there's no way to put a wall up to

23 make people coming to my website to be just from coming

24 wet. I suppose we could if we registered people and

25 limited it that way, but that would simply be looking

26 intrusive.

27 MR. POSITAN: Well, your example certainly

28 illustrates different than the practice what people are


1 doing, and those are some interesting questions as to where

2 you draw those lines. It's not so easy to develop or find.

3 MR. STINSON: Thanks for your time.

4 MR. POSITAN: Thank you. Next, I believe, is

5 Anthony Davis and Robert Creamer, Association Of

6 Professional Responsibility lawyers.

7 (Pause in the proceedings.)

8 MR. POSITAN: Tony?

9 MR. DAVIS: Thank you, Mr. Chairman, members of

10 the commission. And if I may be allowed a brief possible

11 moment, Bruce, who will know better than anybody how

12 important a moment this is to me, finally presenting a

13 concrete proposal on this subject. I should say that I

14 regret that Bob Creamer is not here to share the podium

15 with me. He was unable to come to San Diego. I will

16 endeavor to carry on alone.

17 I appear before you today as a member of the

18 board and secretary of the Association of Professional

19 Responsibility Lawyers and president. Several members of

20 the board are around the room, as well. We appreciate this

21 opportunity to be heard.

22 We have given you a proposal. That is the

23 position of the board at this time. And we have developed

24 it with a number of -- of specific principles in our minds.

25 We wanted to present you a concrete proposal. That was as

26 best we could make it, one that met two criteria.

27 First, that it is designed to be a model that

28 fits all of the different situations that you are


1 confronted with. We will principally be thinking of three

2 different kinds of multi-jurisdictional practices that you

3 have heard a lot about, the litigator in the pre-litigation

4 mode before pro hoc admission, the corporate counsel moving

5 around the country in two senses, both moving to a state

6 where an employer is headquartered where he or she is not

7 admitted and, secondly, that person practice for that

8 entity around the country, and thirdly, the transactional

9 lawyer crossing state lines every day, if not every hour,

10 in a way that we've heard. So that was the first aim in

11 creating the proposal.

12 Then the second thing in our minds in coming to

13 you at this meeting, even though your agreement has been

14 extended, is that we felt it very important to present you

15 a concrete model against which to test the ideas that you

16 are -- the issues that you are being presented by all of

17 the other speakers and by all of the other input that

18 you're getting. And we felt it very important at this

19 juncture for you to start having a model to look at and to

20 test the issues. With that mind, let me briefly describe

21 what our proposal is, and then we'll be glad to enter into

22 any discussion or questions that you have.

23 We suggest a two-tier model for resolving

24 multi-jurisdiction practice issues. The first tier is the

25 temporary presence issue. And we have taken as the base

26 for our proposal on that two different provisions that we

27 find and we tried to mold them together. And they are,

28 first of all, the Michigan rule, Michigan UPL rule, which


1 says it is not UPL while an attorney is temporarily in this

2 state, although not admitted here as engaged in a

3 particular matter. And the restatement model, which uses

4 the language or particular matters to the extent such

5 matters arise out of otherwise reasonable related to

6 lawyer's practice in such other state.

7 And our purpose is to recognize the reality

8 that you've heard again and again that Mr. Diamond said

9 earlier, that all of us engage in multi-jurisdictional

10 practice, almost all of us in one way or another all the

11 time. And this kind of temporary presence ought not hit

12 the radar screen of UPL at all.

13 MR. GILLERS: Anthony, could I just ask about

14 that? Because you have these at this juncture?

15 MR. DAVIS: Yes.

16 MR. GILLERS: So do I understand that to be

17 that if you have one matter at a time sequentially

18 consecutively, say you are within the first category, and

19 if you have two or more matters concurrently, you have to

20 satisfy the additional requirements?

21 MR. DAVIS: That is how we drafted it. But

22 again, we understand that you are going to play with words

23 a lot as your commission -- time goes on. But our theory

24 was that if you're in a state at any one time with one

25 another, the law does not recognize little tiny, you know,

26 single instances as worthy of recognition of regulation at

27 all. But where you end up -- this is our proposal. Where

28 you end up is what that minimal line is, you will decide.


1 MR. GILLERS: Are you saying that Larry worried

2 about the phrase reasonably related --

3 MR. DAVIS: What I say is that it's a valid

4 issue to raise, but I like the idea that -- I don't

5 remember if it was Larry. If you were an expert in a

6 particular field wherever you are, in effect, is where your

7 practice is, your area is, what your area of specialty is,

8 what you should be able to cross a state line to do. I

9 think it was Larry this morning, the lawyer called from

10 Illinois to Ohio because they didn't want to bring nine

11 people to Illinois.

12 MR. GILLERS: That was me in the other forum.

13 MR. DAVIS: That was you. But I encompass that

14 within my definition, but maybe you want to change the

15 wording. And I certainly defer to your draftsmanship if

16 you like to play with drafting later on. But the -- I

17 think the principle that we are espousing is temporary

18 presence. We did -- we deliberately do not define it,

19 therefore I don't speak for the organization where I say my

20 definition of temporary presence is basically something

21 less than hanging out a shingle. But other people may

22 define it differently.

23 MR. POSITAN: Picking up on Steve's question,

24 the concept of an expert. The greatest if there ever was

25 in that field and certainly top guns, if you will, okay,

26 but that encompassed in your definition of reasonably

27 related to lawyers practice. I mean, that -- Larry Fox

28 said that's as broad as you can get. I can say well, my


1 partner happens to be the expert in this, well, that's

2 reasonable because we are all together, and it's my firm

3 and I'm then able to do anything that I can conceivably

4 think of.

5 MR. DAVIS: Well, again, what I want to stress

6 is what we were trying to do was to couple together two

7 provisions, both of which we think have value, the Michigan

8 statute and the restatement wording. If you decide that

9 neither of those quite meets the bill after you've heard

10 all of the evidence you're going to hear, you will

11 undoubtedly play with it, but we wanted to present you with

12 something that was not novel, that already exists in two

13 forms as a basis for your work. That's the first part of

14 our proposal.

15 MR. GILLERS: Except by creating, by -- by

16 joining these two categories, you may clear what is not

17 clear in the Michigan statute. That is that matter in the

18 first category means a single matter at a time. I'm not

19 sure that one would read the Michigan statute to interpret

20 the matter to be a single matter at a time. So in a way

21 you may be narrowing the statute by --

22 MR. DAVIS: I don't think we wanted to narrow

23 it, so it affects how you read it. I hope you'll enlarge

24 it.

25 MR. POSITAN: In other words, you're not tying

26 it to an existing client. You're contemplating a broad

27 range, free from where you can go and do anything you want

28 without having a --


1 MR. DAVIS: If you do it once, we'll worry about

2 it.

3 MR. POSITAN: Second aspect of it. In other

4 words, you don't have the federal or temporary, then the

5 Alberta model, if you will, and then the permanent

6 practice.

7 MR. DAVIS: Well, our second tier is different,

8 so I'll come to it. But certainly our first level assumes

9 no physical ongoing presence, maybe a night or two at a

10 hotel, but not a significant presence. Then our second

11 tier is a registration model. It has been called -- this

12 is the construct and it is a shortened version of an

13 article that Bob Prima wrote, and he called it the green

14 card model. I'm not sure that -- we don't use that

15 language if you mentioned it maybe once. Some people I

16 think don't like the use --


18 MR. DAVIS: Exactly. Some people don't like

19 that handle, if you will, that label, but the -- what we

20 called it is the registration model. And our view of this

21 is any kind of presence that is greater than temporary,

22 however states choose to define temporary, and it might --

23 even is intended to include hanging out a shingle, whether

24 over a short or a long term.

25 What we are saying is if a lawyer is licensed

26 in any state and is in good standing in that state of

27 admission, and has practiced there for a period of -- we

28 arbitrarily selected three years, the states should


1 adopt -- and to use Steven's language in another context --

2 a compact, allowing such lawyers to register as lawyers

3 admitted in the other state in the host state, in the state

4 of non-admission, and subject to certain very explicit

5 conditions should be allowed to practice as lawyers in the

6 host state based upon that registration.

7 And the conditions are the ones that you've

8 heard in other contexts. One, submission to the

9 jurisdiction of the state for purposes of disciplinary

10 enforcement. And that is clearly the key and most

11 important one. We have others that you'll see in the paper

12 that include a statement that the lawyer has read and is

13 familiar with the ethics code in that state.

14 And we've suggested that there are some

15 additional possible conditions that states might want to

16 impose. For instance, some limitations on areas of practice

17 that we don't necessarily recommend them, but we recognize

18 that this might form a part of a registration model.

19 MR. POSITAN: You say it's not necessary to

20 discuss safe harbors because you are that you don't even

21 worry about them.

22 MR. DAVIS: That's exactly right. And other

23 possible conditions of registration might be like the

24 article, a minimum amount of the existence of at all times

25 a certificate of lawyers professional liability insurance.

26 And the essence of the proposal is that this would be an

27 annual and an ongoing registration process.

28 I forgot one important condition. That the


1 lawyer be specifically required to hold himself or herself

2 out only as a lawyer admitted in the state of licensure.

3 MR. GILLERS: To biological clients only.

4 MR. DAVIS: We suggested biological clients.

5 Again, we understand you may tinker.

6 But what we are wanting to give you is a model

7 which, as I go back to the beginning, is available to deal

8 with all of the different iterations of

9 multi-jurisdictional practice of which you have heard.

10 MR. GILLERS: So let me ask about -- about this

11 last one because what you've done is created a reciprocity

12 vehicle, in effect, for qualified, not full admission.

13 MR. DAVIS: Yes.

14 MR. GILLERS: Because there will be certain

15 things the lawyer may not do.

16 MR. DAVIS: Yes.

17 MR. GILLERS: I have two reactions. First of

18 all, why not go the extra mile and propose a reciprocity

19 rule for full admission as part of this compact and -- well,

20 that's my first question.

21 MR. DAVIS: Our judgment laws -- and you may

22 differ because you will hear more evidence than we heard or

23 had available to us when we made the report. Our judgment

24 laws that this was the most politically feasible model.

25 MR. GILLERS: But you see --

26 MR. DAVIS: That I think that goes one step

27 beyond what many states will agree to.

28 MR. GILLERS: But I'm thinking just the


1 opposite. I'm thinking that the politically -- the

2 suggestion that an entirely new category of license be

3 created is going to be difficult to institute, at least

4 psychologically. There's going to be a resistance to that.

5 MR. DAVIS: One of the suggestions that we gave

6 to the states in our model, that this is a

7 revenue-generating device, that for those who are afraid,

8 though we don't believe it will happen, that their

9 discipline systems are going to be swamped with complaints

10 against these registered lawyers, they should be entitled

11 to regular -- to levy a reasonable fee.

12 MR. GILLERS: Well, I guess what I'm saying is

13 that since, you know, whatever this committee may

14 recommend, is going to push the boundary of what exists

15 now, at least the jury, not de facto; right? Isn't it

16 better not to create a unicorn -- not to create a new

17 animal, but to stay with -- with concepts as familiar as

18 possible?

19 MR. DAVIS: Well, to be honest with you, we

20 didn't come to that conclusion. We thought that something

21 short of either on the one hand the most radical proposal,

22 something along the lines of the active proposal, the one

23 license for life approach, although some of our members

24 argued that vociferously before we came to this census, we

25 thought it was probably beyond what states would agree to.

26 But you will have a better ability to assess that.

27 MR. GILLERS: You're very optimistic.

28 MR. DAVIS: Well, at least I'm trying.


1 MR. McCALLUM: Could I follow up on Steve's

2 point that made the first question for you, that you don't

3 have to answer right now, or maybe somewhere for the

4 question of observation. You talk a lot about the

5 (inaudible).

6 MR. DAVIS: Yes. Multiple states to buy into

7 it one time --

8 MR. McCALLUM: My point being the same result

9 would be reached through federal statute, through state

10 statute --

11 MR. DAVIS: Yes.

12 MR. McCALLUM: -- to judges, agree to have some

13 sort of collective rule making, this is just -- this isn't

14 really at the core of your proposal. This is much about

15 our state compact, I don't think.

16 MR. DAVIS: Indeed, what we are saying is

17 different states will have to enact in different

18 situations. Some will enact by rule making, some will

19 enact it by statute, some will enact it by, as you say, by

20 a true treaty.

21 MR. McCALLUM: Because thought of getting 50

22 states to sign a simple contract is going to be very

23 difficult.

24 MR. DAVIS: But I go back --

25 MR. McCALLUM: But let me --

26 MR. DAVIS: Initially was six states.

27 MR. McCALLUM: I know.

28 MR. DAVIS: We'd be thrilled if six states


1 bought into this.

2 MR. McCALLUM: A concern I have, and I'd be

3 interested in whether you made this and what your reaction

4 was to this concern. If looking at what -- what one might

5 want to do with these lawyers who are in a state even --

6 even scale from occasional to permanent presence, there are

7 a variety of things, you can do nothing, just come in

8 without anything. That's your temporary presence rule?

9 MR. DAVIS: Right.

10 MR. McCALLUM: You could have a notification

11 procedure rather than registration procedure. You could

12 have registration or you could have admission. I mean,

13 there's a spectrum of choices. Let me finish this.

14 Did you consider whether there might be two

15 categories of temporary presence, what you might call stoic

16 (phonetic), which I think is what your temporary rule

17 covers, and regular and recurring temporary presence like

18 for instance, the Kansas City, Kansas lawyer who is on a

19 recurring basis in Kansas City, Mississippi. It's not

20 episodic. There's no physical presence in the state, and

21 is that possibly different from what you might call a

22 virtual presence which itself might be different from a

23 true physical presence, the opening of an office, and

24 should they be treated somehow -- is it arguably they'll be

25 treated differently?

26 MR. DAVIS: Let me take that in stages. Let's

27 take the border states situation, where you're only going

28 to ever have one physical office on one side of the


1 Mississippi River, but where you regularly do business on

2 the other side. Our registration proposal is specifically

3 designed to be inclusive of that situation. You don't have

4 to go hang a shingle out in order to get registered.

5 MR. McCALLUM: So once I'm registered, I can hang

6 a shingle out?

7 MR. DAVIS: But then you can if you choose to.

8 MR. McCALLUM: And you're saying that they're

9 really not out to be a middle ground.

10 MR. DAVIS: I think they're the same.

11 MR. McCALLUM: Full right to open an office

12 or --

13 MR. DAVIS: I they're the same. I think the

14 second way to look at it was this, our view was it would be

15 up to the lawyers' individual sensitivities and the degree

16 of enforcement by the host's state, whether they felt they

17 could slide in repeatedly under the temporary presence or

18 whether to -- wait a minute, I'm sufficiently obvious on

19 the radar, I'm sufficiently often doing business over

20 there, I guess I'd better pay my 500 bucks and get

21 registered.

22 MR. POSITAN: Well, maybe I like our model as

23 reported, my three-part model was for existing clients you

24 can do this, but you're not hanging your shingle out in the

25 foreign state and holding yourself as being a personal

26 resident there, but you can come in and do your, you know,

27 somewhat recurring-business situation, you're picking up

28 the freight that I've been concerned about with mandatory


1 CLE or mandatory pro bono or --

2 MR. DAVIS: The states can put those mandatory

3 CLE things as tag-ons if they want. In order to be

4 registered here, you have -- next year you better show us

5 you've complied with the extra six hours that we require

6 over your home state. You can take that on. We don't want

7 more conditions. But in answering your first point, our

8 view I think very strongly philosophically, is this is

9 designed as a way to eliminate restrictions on trade to put

10 it absolutely bluntly and we would not want this. I think

11 I speak for the board. We would not want this as a limit

12 on where the clients come from, and we have not designed it

13 to allow that.

14 MR. POSITAN: (Inaudible), which is all demand

15 we do this, but now we are not talking about your client

16 anymore. We're talking about new clients.

17 MR. DAVIS: Well, I don't -- I disagree. I

18 take it back to what Steve said before, about the Ohio

19 company calling the expert in Illinois. I mean, I don't

20 think he should have to turn this down. But when it's

21 apparent to him it's not just one week to go and visit nine

22 people, but he's regularly having to go back every month

23 for a few days, at some point he's going to say I think

24 I'll pay my $500 so I don't get into a fight with the

25 regulatory authorities in Ohio, even though I'm not going

26 to hang out a shingle.

27 MR. POSITAN: I could buy into the case of the

28 expert.


1 MR. DAVIS: I don't know how you differentiate.

2 MR. POSITAN: I think differentiate in a lot of

3 ways because there's lot of people who are experts and

4 they're going over there without experience at all. They

5 maybe just passed the bar in California, in an unaccredited

6 law school, now they're going everywhere they want and

7 they're coming in and letting their solicitations out and

8 saying here we are in Missouri.

9 MR. DAVIS: Well, but Missouri lawyers can do

10 it in California and we put in that three-year practice

11 requirement hopefully to get rid of unaccredited law school

12 problem admission to practice and status in good standing.

13 And we also put in a requirement that just like pro hoc

14 sponsorship within the local bar so that there is some

15 access between you and the local bar before you get

16 admitted. But I think we very strongly would not agree

17 with a limitation related to where the client is.

18 MR. POSITAN: You see the bus signs on the sides

19 of buses. In 20 days say call us, we are the personal

20 injury people.

21 MR. DAVIS: Such as the mine, place that one --

22 MR. POSITAN: They truly -- you when you start

23 worrying about client secure funds.

24 MR. DAVIS: But we put in discipline, if you

25 want to add -- we put in malpractice insurance as a

26 requirement. And that $500 can be -- you know, some of

27 that can go into the client's fund. That's not a problem.

28 We don't think that's an improper protection.


1 MR. EHRENHAFT: Further justification, you

2 can't let the perfect even be the good.

3 MR. DAVIS: Exactly. That is a note on which

4 you are absolutely --

5 MR. POSITAN: Good for the bad?

6 MR. GREEN: I understand your April's position

7 is that the three years of practice or some number of years

8 should satisfy Chief Justice Vandewalle's concern about --

9 MR. DAVIS: It didn't.

10 MR. GREEN: His concern was graduation from

11 unaccredited law schools. But I don't know if you were

12 here, I think you may have been here for Larry Shea from

13 the Louisiana bar.

14 MR. DAVIS: Yes.

15 MR. GREEN: His testimony -- concern was

16 essentially that even if you assume -- even if you practice

17 3 years, 5 years, 150 years, that doesn't make you

18 adequately familiar with Louisiana law to practice in

19 Louisiana. I'm wondering what April's answer is to that.

20 MR. DAVIS: I must confess. I apologize to all

21 those from Louisiana. We didn't talk about Louisiana in

22 our drafting of our rule. I suppose we would accept that

23 Louisiana has all of the states enacted in its version of

24 this compact, whatever we call it -- might want to add an

25 additional requirement.

26 In addition, I have the certification, I have

27 read the ethics code in Louisiana. I have taken a course

28 on civil law. They could do that. That would not be an


1 unreasonable additional restriction to protect Louisiana

2 residents. I don't think the same is true in other states.

3 MR. POSITAN: Thank you very much. Any

4 further questions?

5 We look forward to your continued input and

6 views on --

7 MR. DAVIS: Steven isn't here to give us

8 another challenge, but we will be in touch.

9 MR. POSITAN: And our last speaker today,

10 Barbara Bruckman, ABA Section of Antitrust law. Thank you

11 for your patience.

12 THE REPORTER: Can we take a break?

13 MR. POSITAN: We need a break.

14 (A recess was taken.)

15 MS. BRUCKMAN: I appreciate the opportunity

16 and the patience of this commission. I know it's late,

17 and you're very kind to hear the -- to listen to my brief

18 remarks.

19 I am Barbara Bruckman. I represent the ABA

20 Section of Antitrust Law, and I am pleased to present the

21 preliminary views of the section on multi-jurisdictional

22 practice based on written comments that were provided to

23 you earlier. The antitrust section comprises nearly 9,000

24 lawyers and includes private practitioners, in-house

25 counsel, government enforcers, scholars and judges with an

26 interest in antitrust and consumer protection law and

27 policy.

28 But importantly for these purposes, our section


1 represents buyers and sellers of these services. And we

2 urge the commission as a general principle to promote

3 measures that facilitate multi-jurisdictional practice, to

4 enhance competition among providers of legal services, and

5 to afford consumers and clients the greatest freedom to

6 choose from whom they will obtain legal services.

7 It is certainly true that these measures should

8 be consistent with preserving legitimate state interests to

9 protect the public from incompetent legal representation

10 and unethical lawyer conduct. But these limitations by any

11 state should be narrowly tailored to achieve those

12 objectives and least restrictive of competition.

13 Antitrust and consumer protection practice is

14 unquestionably national in scope. It deals primarily with

15 federal laws and state laws that have become increasingly

16 common. Transactions are generally multi-state and

17 international in scope. Counseling typically involves a

18 review of business plans and strategies, similar in scope.

19 State enforcement agencies generally coordinate their

20 investigations and follow on legal actions that are also

21 multi-state in scope. And clients today select lawyers from

22 a broad range of experienced counsel to represent them in

23 these matters.

24 The commission's memorandum sent out a number

25 of proposals to reduce (inaudible). Given the prospective

26 and the practice of the antitrust section, we are going to

27 comment narrowly on two aspects of that memorandum.

28 First, we urge at a minimum that clients be


1 allowed to continue to choose any lawyer licensed in any

2 state to provide advice and in connection with federal

3 international and litigate state law.

4 MR. EHRENHAFT: Can I just ask on that whether

5 you would include foreign lawyers in that, if you're

6 talking about international transactions?

7 MS. BRUCKMAN: Our comments are limited to

8 domestic issues because of the shortness of time, but we

9 support all efforts by the commission and the American Bar

10 Association to work with other countries' bar

11 organizations, of other countries to facilitate reciprocal

12 arrangements from multi-jurisdictional practice across

13 national borders. And we would help it to the extent of

14 the commission that issues peculiar to international

15 practice both American lawyers going across and foreign

16 lawyers come together.

17 This country could be articulated and we would

18 be delighted and honored to respond to those. To do

19 otherwise, to prevent clients from retaining lawyers of

20 their choosing would interfere with the established

21 attorney/client relationship from around the country.

22 State UPL laws that are designed to protect the

23 public from incompetent lawyers are not undermined by

24 permitting clients to select competent lawyers licensed in

25 any state to handle their matters, even when that might

26 entail that lawyer being present in a jurisdiction in which

27 he or she is not admitted. Clients should not be forced to

28 select counsel based on geography rather than experience.


1 We also urge the commission to support

2 measures that allow in-house counsel admitted in any state

3 to practice law on behalf of their clients anywhere in the

4 country. In that situation, as you well know, sole client

5 is the corporation and in a position to judge the

6 competence and fitness of its lawyers.

7 As an adjunct to both proposals, the antitrust

8 section on model rule 8.5A which would permit jurisdiction

9 if the lawyer is providing legal services to be subject to

10 discipline. The section also favors the approach of the

11 restatement which, as you know, is not limited as to a

12 distinction between matters involving federal and state

13 law. We do not support expanding activities which would be

14 subject to pro hoc vice admission, like pre-filing

15 investigations, taking depositions in a jurisdiction where

16 the matter is not prepping and the lawyer is not licensed,

17 because we think these raise privilege issues and create

18 unnecessary burdens on the courts and on the clients and on

19 the lawyers. I should point out --

20 MR. POSITAN: Are you saying those activities,

21 then, are outside the scope of what's permissible?

22 MS. BRUCKMAN: That should be handled in terms

23 of allowing if you have -- if you are considering filing a

24 lawsuit in state A and you retain a lawyer from state B

25 because of reputation, experience, so forth. That lawyer

26 comes into state A to confer with a client, to review

27 industry records, that -- that lawyer should not be

28 required to appear before a local state court and seek the


1 blessing of the state to engage in those activities.

2 MR. GILLERS: But I understood the pre pro hoc

3 application safe harbor not to require an early pro hoc

4 application.

5 MS. BRUCKMAN: That's right. And we would

6 support that. There was a suggestion in the memorandum in

7 terms of brainstorm for proposals, whether there ought to

8 be an extension of the pro hoc BJ requirement to cover

9 those situations where you would actually make an

10 appearance, and if that were considered, we would be

11 opposed.

12 MR. GILLERS: Well, would you be opposed if the

13 safe harbor said that if you go into a host state to

14 investigate the possibility of bringing an action in the

15 host state where you have the reasonable expectation of

16 being able to gain pro hoc BJ admission, should that action

17 be filed then in the preliminary time before you make that

18 application? If you ever do, you are protected for the

19 work you do in that other state.

20 MS. BRUCKMAN: See --

21 MR McCALLUM: What if you go into the whole

22 state, but when you go in, the action will never be brought

23 before jurisdiction or otherwise in the whole state that

24 similarly where the facts are, should you be permitted to,

25 as well, even though you're never going to file a BJ

26 application in the whole state?

27 MS. BRUCKMAN: I think in that situation the

28 client would be requesting advice on a -- on a pattern of


1 conduct. Whether or not they want their lawsuit filed,

2 that if the client reaches out for an experienced counsel

3 that is in licensing, in good standing, if they go to

4 another state to get -- to get the facts, talk to

5 witnesses, talk to their parties, that ought to be

6 protected.

7 I should point out that listening to the

8 testimony that you had this morning, that one issue that

9 was not addressed by our section and I think is very

10 important is when temporary becomes regular practice and

11 where that line is. Our section -- the comments that you

12 have -- have been beded by our session and approved by our

13 council, but we did not address where the appropriate line

14 should be that has been the subject of much discussion this

15 morning, about whether it's one matter, whether it's one

16 matter followed by another matter, whether it's two matters

17 together, whether or not there should be a middle tier, and

18 at what point do you require full admission.

19 I think those are important issues, and we

20 would be delighted to look for your further input on that

21 plenty of time to do that.

22 Thank you for your time.

23 MR. POSITAN: Thank you. Okay. At this point,

24 we are adjourned. The commission will reconvene for its

25 regular business meeting at 2 o'clock.

26 (Meeting adjourned at 12:45 p.m.)


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