AMERICAN BAR ASSOCIATION
COMMISSION ON MULTIJURISDICTIONAL PRACTICE
SAN DIEGO PUBLIC HEARING
Saturday, February 17, 2001
9:00 A.M. – 12:00 P.M.
San Diego Convention Center
SAN DIEGO, CALIFORNIA
CONTENTS
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
11SAN DIEGO, CALIFORNIA, SATURDAY, FEBRUARY 17, 2001
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.
3
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
5
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?
6
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
7
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
8
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
9
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
10
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
11
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
12
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
13
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
14
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
15
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.
16
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
17
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
18
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
19
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
20
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
21
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
22
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
23
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
24
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
25
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
26
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
27
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,
28
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
29
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
30
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.
31
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
32
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
33
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.
15 JUSTICE VANDEWALLE: Yes.
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?
24 JUSTICE VANDEWALLE: Yes.
25 MR. RAMIREZ: Have standards -- I assumed it
26 was implicit that that would apply.
27 JUSTICE VANDEWALLE: It is.
28 MR. RAMIREZ: If a national license system,
34
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
35
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
36
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
37
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
38
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
39
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
40
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.
41
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
42
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?
43
1 Is that your standard for admission?
2 JUSTICE VANDEWALLE: It is.
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.
26 JUSTICE VANDEWALLE: Thank you.
27 MR. POSITAN: We'll have one more speaker
28 before we take a break. Sidney White Rhyne, Federal
44
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
45
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
46
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
"client."
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
47
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
Internet.
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
48
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.
49
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
50
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
51
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
52
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
53
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
54
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
55
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
56
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
57
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
58
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
59
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
60
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
61
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
62
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
63
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
64
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
65
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
66
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
67
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
68
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
69
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
70
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
71
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
72
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,
73
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
74
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
75
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
76
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.
77
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
78
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
79
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
80
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
81
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.
82
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.
83
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
84
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
85
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.
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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
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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
88
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
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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.
90
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
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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
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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
93
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.
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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
95
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
96
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
97
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
98
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
99
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
100
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
101
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
102
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 law.net,
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
103
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
104
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
105
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
106
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
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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, SpecialEd.net, as a joint venture between
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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
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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
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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
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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
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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
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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.
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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
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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 --
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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 --
17 MR. POSITAN: The INS.
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
117
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
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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
119
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.
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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
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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
122
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
123
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.
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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.
125
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
126
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
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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
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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.
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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
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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
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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.)
27
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