REPORT BY THE AD HOC COMMITTEE ON MULTI-JURISDICTIONAL PRACTICE
Approved by Executive Committee of the New York County
Lawyers Association at its regular meeting
on January 29, 2001 as an Association Report
The growing complexity of business and personal affairs subject to legal regulation and of legal practice itself, the accompanying specialization by many practitioners, and the mobility and ease of communication now available to lawyers and their clients gave rise a few years ago to concerns within the profession about the emergence of multi-disciplinary practices and the need for their regulation. That matter appears, in principle at least, to have been resolved for the immediate future by the American Bar Association's discharge of its Commission on Multi-Disciplinary Practice and by the New York State Bar Association's path-breaking adoption, as an alternative to the Commission's proposals, of suggested revisions to the New York Lawyers Code of Professional Responsibility premised on the "MacCrate Report." The same considerations also have given rise, however, to concern about another matter that affects legal practice, that currently is being addressed with vigor by the ABA and that warrants the attention of local and State bar associations.
This is the matter of multi-jurisdictional practice. At present the New York Judiciary Law generally prohibits the practice of law, broadly defined, in this State by persons not admitted to practice here. Analogous laws prevail in all, or virtually all, of the other states. At the same time, the New York Lawyers Code of Professional Responsibility, the ABA's Model Rules and the ethical and disciplinary rules in force in most, if not all, states, bar a lawyer, as the New York Code puts it, from "aid[ing] a non-lawyer in the unauthorized practice of law" and from "practic[ing] law in a jurisdiction where to do so would be in violation of regulations of the profession in that jurisdiction." Disciplinary Rule ("DR") 3-101, 22 NYCRR § 1200.16.
How do these norms square with common practices of lawyers with which we all are familiar and in which many of us, one suspects, have engaged? What is one to think of a lawyer admitted to practice in New York who occasionally goes elsewhere, or of the lawyer admitted in another State who, from time to time, comes to New York to take a deposition, interview a witness, inspect documents, negotiate a contract or a case settlement, help prepare a client's federal tax return, appear before or make submissions to a federal regulatory agency or an arbitrator, assist a client in preparing for an investigation or advise an existing client about many other matters?
Arguably, cross-border activity of this kind, over a broad range undefined by any discernible "bright lines," is illegal and/or contrary to prevailing codes of legal ethics. In some instances, such conduct may be sustained by the participation, with the visitor, of "local" counsel. But, in many others, if the lawyer acts without local assistance and thinks about the issue at all, no justification is apparent beyond that provided by the maxim de minimis non curat lex. As these activities continue to grow in volume, the bar has come to recognize that such a maxim is a thin reed on which to rely.
While few, if any, lawyers have gone to jail or been disbarred for occasional cross-border activities of the kind described above, the norms can bite and, from time to time, have done so. A lawyer's disregard of them, and action contrary to them, can provide a critical element in disputes over fees or actions for malpractice. It can lead to disallowance of pleadings or other filings, to a lawyer's exclusion from a case or pending matter, and so on. More important, perhaps, are the inhibitions and costs the rules impose on clients who have "problems," often near-xerographic copies of the same one, in several states. They may hesitate to concentrate responsibility for them in an experienced lawyer for fear that he or she cannot effectively "travel."
The principal justification usually given for tight restraints on who may practice law, and the tight "localizing" restrictions that typically go with them, is the desire to protect clients and the public from unwitting exposure to untrained or minimally qualified counsel. There also is present subliminally, one suspects, an element of guild protectionism. New York lawyers are familiar with this second element as they ponder the exclusionary bias that prevails in the rules of New Jersey and some other states, but it is not without force in New York, as well.
The ABA and many other professional groupings have come to think, and we agree, that such rigid jurisdictional compartmentalization is unnecessary to protect the public and, indeed, is hurtful to clients and to the profession. It limits access to attorneys whose services the client wants by reason of their experience or familiarity with the client's needs or their relevant expertise in the predominant legal issues affecting those needs.
The question is what should be done about this state of affairs.
THE ABA's EXTENSIVE AND EVOLVING ADDRESS TO THE MATTER
OF MULTI-JURISDICTIONAL PRACTICE
It was with this question in mind that the ABA formed a Commission on Multi-Jurisdictional Practice ("the MJP Commission") and, through the ABA Center for Professional Responsibility, held a Symposium on the Multi-Jurisdictional Practice of Law at the Fordham Law School on March 2000. (The Report of the Symposium by Professor Bruce A. Green of Fordham and other MJP materials are available at the ABA's MJP website at http://www.abanet.org/mjp-home.html.) Another ABA Commission, the Commission on Evaluation of the Rules of Professional Conduct, as part of its review of all of the Model Rules looking towards a possible general overhaul of the ABA's code of legal ethics early in the new century, already had begun (and continues) to consider the subject of multi-jurisdictional practice in its discussion of amendments to the Model Rules, chiefly in this insurance, Rule 5.5 (Unauthorized Practice of Law). The MJP Commission is, however, concurrently taking an extensive and in-depth look at the specific problems encountered by clients and their lawyers under the current regulatory process and possible resolutions of the problems. The Commission apparently expects to include in its recommendations to the ABA House of Delegates, anticipated to issue in late spring, proposals for immediate revision of Model Rules 5.5 and 8.5.
The Commissions concerned with multi-disciplinary practice already have produced and released drafts proposals for the revision of these two Rules, and the MJP group has indicated that it will issue a preliminary draft report in March 2001. By late May 2001, it expects to complete a report with recommendations for consideration by the ABA's House of Delegates at its annual meeting in Chicago in August of this year.
As a follow-on to the Symposium held at Fordham, the MJP Commission anticipates holding public hearings around the country, including one in New York City at a date still to be fixed, and most importantly, at the ABA Midyear Meeting in San Diego on February 17 and 18. Although interested committees of the ABA have requested that the life of the MJP Commission be extended beyond its original one-year term in view of the scope, complexity and importance of its work, no changes in the short time frame have yet been made. The ABA's president appears to be a proponent of early action.
Harriet Miers, Esq., the Chair of the MJP Commission, has asked State and local bar associations to give the MJP Commission their views and recommendations on the multi-jurisdictional practice of law.
In response, our Committee has examined the current system of attorney regulation in New York as well as nationally. Our Committee has concluded, as the ABA Commission has, that the regulatory systems for the bar now in force in this country, which tend to compartmentalize the practice of law into a series of rigid State-wide boxes, are not well suited to the dynamics of modern law practices. Reform is needed.
Professor Green, the Reporter of the MJP Symposium at Fordham, summarized several broad goals of reform of the existing regulatory regime as follows:
"First, there is a need to promote greater uniformity in how states address the work of out-of state lawyers. Second, there is a need for greater clarity, so that lawyers have more guidance about what they may or may not do in relation to a state where they are not licensed. Third, restrictions on out-of-state lawyers should be liberalized so as to serve the relevant state regulatory interests in a manner that is not simply exclusionary and that, recognizing the changing nature of clients' legal needs, accommodates the legitimate interest of clients in retaining counsel of choice and in obtaining effective and economical legal assistance."
Our Committee agrees with these goals. In examining the many proposals as to how to address the problem, we have concluded that the most measured and useful approach to the problem at this time is to provide in the Model Rules and the comparable State statutes and codes appropriate safe harbors for certain interstate activity by lawyers that now is put in question by the current rigid state-by-state compartmentalization of attorneys' professional endeavors.
Accordingly, we generally support the amendment of Model Rules 5.5 and 8.5 along the lines of the current proposals for those Rules before the ABA Commissions (while mindful that further revisions of these proposals for amendments are possible). In this report the Committee comments on the proposed amendments to the Model Rules, including some suggestions for modest adjustments of their detail. We also indicate the changes in the New York Judiciary Law and the New York Lawyers Code of Professional Responsibility that, in our view, would be needed to give effect to policies of the Rules' amendments in this State.
Our Committee also is generally supportive of efforts to promote uniformity among the regulatory systems of the states. Our Committee does not, however, believe that uniformity should be achieved by abandoning the State-based regulatory system and by instituting a nation-wide system of registration of lawyers (as has been suggested by some) for a number of reasons. First, the problems posed by multi-jurisdictional practice are not so acute as to require the drastic remedy for the "federalization" of the regulation of lawyers. Second, to preserve a self-regulatory system for the profession, there would need to be an effective national regulatory mechanism. Such does not now exist and would, in our view, be difficult to effectively implement. Third, the price for national uniformity could well be an overall lowering of standards of admissions and practice to the lowest common denominator among the states -- a race to the bottom.
THE CURRENT PROPOSALS FOR AMENDMENTS
TO THE ABA's MODEL RULES
The question of how to deal with the multi-jurisdictional practice of law in the era of a global economy has focused attention on two of the ABA's current Model Rules of Professional Conduct, Rule 5.5 (Unauthorized Practice of Law) and Rule 8.5 (Disciplinary Authority; Choice of Law). The counterparts in the New York Lawyers Code of Professional Responsibility are DR 1-105 and DR 3-101, 22 NYCRR §§ 1200.5, .16. The Code's policies in this regard are sustained, amplified and enforced by various provisions of the N.Y. Judiciary Law's Article 15 concerning "attorneys and counselors."
We regard the proposed drafts of revisions to the ABA's Model Rules as an encouraging address to the problems of multi-jurisdictional practice, and we believe that the adoption of such rules by the ABA, preferably with some adjustments of detail discussed herein, should be supported by NYCLA. The ABA proposals also are, by and large, appropriate models for comparable revisions to New York's Code and to its Judiciary Law.
To that end, we set forth below the relatively few concerns we have with the current drafts of Model Rules 5.5 and 8.5. Proposed textual amendments to the relevant provisions of the New York Code and Judiciary Law needed to implement in this State the policies and positions of the proposed Model Rules follow in a separate section of this report.
Copies of the drafts, which now are before the MJP Commission, and which will be the focus of the proceedings in San Diego in mid-February, are attached (along with Reporter's Observations and Comment) as Annex A and Annex B. (In these texts, underscoring and lining-through indicates changes from earlier drafts of amendment, not from the existing Model Rules.) For reasons that will be readily apparent upon reading paragraph (b)(1) of draft Rule 5.5, we also attach as Annex C , "Proposals to Modify New York Court Rules Concerning the Engagement of Local Counsel and the Pro Hac Vice Admission of Attorneys" (herein called the "NY Litigation Counsel Selection Proposal"), a recent report of a committee of the Association of the Bar of the City of New York.
- Draft Model Rule 5.5
Paragraph (a), in almost verbatim language to that in DR 3-101(b), forbids a lawyer who is admitted to practice in a home jurisdiction from practicing in another jurisdiction in violation of the other jurisdiction's regulations. It leaves to paragraph (b) the provision of "safe harbors" where it sets forth activities that the out-of-state lawyer may perform without engaging in unauthorized practice.
Paragraph (b)(1) permits court appearance by out-of-state lawyers when authorized by law or order of the tribunal "or is preparing for a proceeding" in the expectation of being so authorized. It is the practice in New York and common practice elsewhere to address unauthorized practice by statute (which ethics rules do not override). The paragraph speaks to appearances before a "tribunal" (which is not there defined, although by use of the word "proceeding," it perhaps includes, by implication, arbitral panels). New York's Code of Professional Responsibility addresses this problem more clearly. The Code includes, in a section headed "Definitions" (22 NYCRR § 1200.1) that precedes Canon I, a broad definition of "tribunal" that extends to "all courts, arbitrators and other adjudicatory bodies." Notably, the use of "adjudicatory bodies" clearly sweeps in at least "adjudicatory proceedings" before regulatory agencies.
Comment  appended to the proposed revisions of Model Rule 5.5 suggests that administrative proceedings are meant to be covered by paragraph (b)(1) of the draft Rule, and so is conduct such as "discovery" in anticipation of a proceeding. Nevertheless, we would prefer to see "tribunal" defined consistently with New York's definition, except, perhaps, in the circumstances addressed in the three paragraphs immediately following.
The term "jurisdiction" is nowhere defined in Model Rule 5.5, no doubt because it is generally understood that a State which admits a lawyer to practice is a jurisdiction. But what does "jurisdiction" mean for purposes of Rule 5.5(a) and (b) in the context of admission to practice before a federal regulatory agency whose jurisdiction is national in scope? Postulate a matter pending before such a federal agency (which presumably is a "tribunal") sitting in the District of Columbia in which the lawyer finds it necessary or desirable to take deposition testimony from persons in several states in which the lawyer is not admitted to practice.
Does paragraph (b)(1) reach this situation, or is the lawyer, who does so, violating "the regulation of the legal profession" in each of those states so that the lawyer has engaged in unauthorized practice?
The lawyer may be, and thereby would be, "saved" from such "violation" by another safe harbor provided by paragraph 5.5(b)(2)(ii), discussed below, which legitimates conduct deemed "reasonably related" to a pending matter in a jurisdiction where the attorney may practice. But (b)(2) may not so apply, given that each of its safe harbors is tied to "other than making appearances before a tribunal with authority to admit the lawyer to practice pro hac vice" and given, further, that, in our hypothetical, the lawyer already is admitted and does not need recourse to a motion for permission to practice before the agency. If this posited situation and others like it that can be easily visualized have somehow fallen between the cracks, some further revision of the proposed Rule 5.5 would be in order. If, on the other hand, it does not present a "catch 22," a comment should be appended to Rule 5.5 so as to eliminate thereby the concern these observations suggest.
Paragraph (b)(2) of the proposed Model Rule 5.5 recognizes three additional safe harbors for circumstances "other than making appearances before a tribunal." Clause (i) protects in-house lawyers acting on behalf of their employer, the employer being presumed to understand the level of its employees' training and experience, and so not in need of additional protection against what might otherwise be unauthorized practice. Query, whether a partner is an "employee" of the law firm of which he or she is a partner, and whether working on behalf of a regular client or an affiliate of the client in the firm's office in another State or country constitutes acting on behalf of the "employer" firm. Further clarification should be provided, notwithstanding that the safe harbor of clause (ii) might be construed as applicable because such conduct would arguably be "reasonably related" to the lawyer's practice in a jurisdiction of admission.
Clause (ii) presumably was drafted with transactional lawyers uppermost in mind. It also purports to protect conduct outside the lawyer's home jurisdiction if the matter "arises out of or is otherwise reasonably related to the lawyer's practice on behalf of client in a jurisdiction in which the lawyer is admitted to practice." Comment  offers helpful examples of "reasonably related" conduct, most notably for the transactional lawyer, "negotiations with private parties" and government officers or employees, and, for the litigator, "participation in alternative dispute-resolution procedures." Clause (ii) might also be read to provide relief for certain pre-filing activities of litigators unless the introductory words "other than making appearances before a tribunal" are intended to encompass (and hence block out) acts in anticipation of a proceeding. Some clarification on this point in the accompanying "Comments" would help.
Clause (iii) of paragraph b(2) simply formalizes a customary long-standing acknowledgment of the protection afforded by association with a "local" lawyer, but, as comment  underscores, the local lawyer's involvement must be more than pro forma.
We have reflected on the unembroidered directness of clause 2(ii). We considered whether it would be useful to restrict this safe harbor by adding a test of experience with, or depth of knowledge of, the applicable laws of a jurisdiction in which the lawyer is not admitted to practice, perhaps along the lines of the qualifications tests proposed by the New York Litigation Counsel Selection Proposal. We concluded that here "less is more." Model Rule 1.1 (and New York's DR 6-101, 22 NYCRR § 1200.30) each require lawyers to provide competent representation and to decline engagements where they cannot. Nothing in those Rules limits the test of competency to the laws of any one State. Hence clause 2(ii) needs no further elaboration.
A lawyer who elects to deal with laws of other jurisdictions is on notice that doing so poses risks should the requisite test of competency not be met. We are comfortable with clause (ii)'s safe harbor as written. Be warned, however, it will be of no avail to the out-of-state lawyer when he or she returns to the State in which he or she is admitted to practice, if that home state has not made the conduct in the foreign State acceptable by adopting the approach embodied in clause (b)(2)(ii).
We also would encourage the inclusion in Rule 5.5(b)(2) of two additional safe harbors. One would permit a lawyer to advise a client on matters of federal or international law without reference to state boundaries, provided only that the lawyer has the requisite competence to do so. Why should an acknowledged authority on, say, the constitutional law of this country, European Union law, or federal tax or intellectual property law be prevented from advising anyone on matters such as these if they are within the lawyer's expertise by reason of fear that such advice may be attacked as (or, worse yet, found to be) improper conduct?
Another additional safe harbor worthy of consideration would countenance, as the New Jersey Supreme Court did in reversing a ruling of New Jersey's Committee on Unauthorized Practice, retention of out-of-state counsel when the public interest would be disserved by not permitting such conduct. That case related to the participation by out-of-state lawyers with expertise, apparently unavailable in New Jersey, in the complex and novel financial structuring required for the issuance of certain State and municipal bonds by New Jersey issuers. In re Opinion 33 of Comm. On Unauthorized Practice of Law, 160 N.J. 63, 478 A.2d 478 (1999). Special circumstances should justify relaxing restraints when not doing so serves no purpose other than protectionism for the local bar at the expense of the public interest and the client's need for specialized expert advice and counsel perceived not to be available within the home State.
- Draft Model Rule 8.5
Draft Rule 8.5, as currently proposed, would extend the disciplinary authority of the adopting State beyond its traditional application to conduct of lawyers admitted in that State to reach those not there licensed "if the lawyer renders or offers to render any legal services in this jurisdiction" (emphasis added). As a result, the Draft Rule points out, the lawyer "may be subject to the disciplinary authority of both this jurisdiction and another jurisdiction for the same conduct."
The currently proffered Comment to this provision explains that it "is for the protection of the citizens of this jurisdiction." This strikes us as a dubious rationalization. If protection of home-state citizenry is the objective, why, to use what admittedly is an extreme transactional example, should the rule even in theory expose to discipline in Massachusetts a New York lawyer who, in the course of representing a New York corporation in negotiating a contract governed by New York law, travels to Boston for a negotiating session with counsel for the counter-party (admitted in Massachusetts) who is ensconced, at the time, in a California-headquartered law firm's Boston office? On those concededly stacked hypothetical facts, the protection would (primarily, if not exclusively) extend, not to the New York lawyer's client, but to the Massachusetts bar.
To be fair, in our example the second prong of the draft rule (clause (b)(2) on choice-of-law) would not apply Massachusetts rules (where the conduct occurred), but rather, New York's standards "if [as here] the predominant effect" of the conduct was in a different jurisdiction, i.e., New York. Nor would the lawyer be subject to discipline if the "conduct conforms to the rule of a jurisdiction [New York in the hypothetical] in which the lawyer reasonably believes "the predominant effect will occur." Still, the New York rules would be invoked by the Massachusetts disciplinary authority; and New York would retain the additional right to pile on, albeit comments  and  indicate that only one set of rules (rather than two inconsistent rules) should be applied by the several jurisdictions.
The possibility of "two bites of the apple" by the disciplinary authorities of more than one State seems to us acceptable on the theory that the second disciplinary body would act only if the facts were sufficiently egregious to justify its doing so.
It is submitted that if protection of the client is the goal (as it should be), the words "any legal services" standing alone even allowing for the mitigating language in clause (b)(2) and the accompanying comments should not be the measure for invoking section (a)'s disciplinary authority. There is a risk that what the "offending" lawyer subjectively, but in good faith, "reasonably believes" may not square with the disciplinary authority's view of the reasonableness of the lawyer's belief. To snare an out-of-state lawyer for services rendered in a State in which he or she is not admitted to practice, it should be required that the services in issue were rendered on behalf of a client deserving of that State's protection one residing in that State or having a substantial presence there. If the mere "offer" to render services is the alleged wrongful behavior, it should not be read to catch a discrete offer to help an existing client, as unlikely as it might be for that kind of conduct to give rise to an offense subject to discipline; rather, "offer" should be pointedly directed only to the general advertising of services to whomsoever might choose to take the bait.
Proposed Model Rule 8.5(b)(1) relates to litigation. It is, in our opinion, not controversial and should be adopted as written.
AMENDMENTS TO NEW YORK STATUTES AND
DISCIPLINARY RULES TO IMPLEMENT
THE POLICIES OF THE PROPOSED MODEL RULES
As explained in the preceding sections of this report, this committee supports, and believes NYCLA should endorse, notwithstanding our critique of detail, the approach to the problems of multi-jurisdictional practice being taken in the drafts of the proposed Model Rules now before the ABA Commission. To make the concepts and standards of those proposed rules applicable in New York would require (a) some modifications (generally in line with the proposals for modification of the ABA Model Rules) of the Disciplinary Rules of the New York Code of Professional Responsibility, as promulgated by the Appellate Divisions, and (b) significant revision of the provisions of the N.Y. Judiciary Law as they relate to "attorneys and counselors."
In this section of the report, we offer suggestions as to how the concepts and standards of the current texts of the proposed Model Rules before the ABA Commission might be incorporated into the relevant provisions of the Disciplinary Rules and of the Judiciary Law. In so doing, we draw on the current language of the proposed Model Rules, language which we have urged to be changed to some degree. Those texts are, of course, subject to further amendment in the additional proceedings contemplated before the ABA's Commission and its House of Delegates. If such changes are made and they are adjustments of detail, rather than substance, the language included in any adopted model rule presumably could be substituted, as appropriate, into our suggested texts for New York. If, on the other hand, the ABA bodies make before their adoption substantial modifications in the proposed Model Rules (going far beyond our criticisms), or if the ABA promulgates no Model Rules on this subject at all, a new and full review of the matters now under consideration would be in order.
I. Disciplinary Rules
- DR 3-101
DR 3-101 (22 NYCRR § 1200.16) deals with the unauthorized practice of law and covers much of the same grounds as ABA Model Rule 5.5, which has been proposed for amendment. DR 3-101 presently prohibits a lawyer subject to New York's Disciplinary Rules from "aid[ing] a non-lawyer in the unauthorized practice of law" and from "practic[ing] law in a jurisdiction where to do so would be in violation of regulations of the profession in that jurisdiction."
The Rule could appropriately be modified to read as follows: 1
"(a) A lawyer shall not aid a non-lawyer in the unauthorized practice of law.
"(b) A lawyer shall not practice law in a jurisdiction where to do so would be in violation of regulations of the profession in that jurisdiction.
" (c) A lawyer admitted to practice and in good standing in another state, but not in this state, does not engage in the unauthorized practice of law in this state when:
(1) the lawyer is authorized to appear before a tribunal in this state by law or order of court or the tribunal; or
(2) other than making appearances before a tribunal, with authority to admit the lawyer to practice pro hac vice:
(i) a lawyer who is an employee of the client acts on the client's behalf or, in connection with the client's matters, on behalf of the client's other employees or its commonly owned organizational affiliates; or
(ii) the lawyer acts with respect to matter that arises out of or is otherwise reasonably related to the lawyer's practice in a jurisdiction in which the lawyer is admitted to practice; or
(iii) the lawyer is associated in a particular matter with a lawyer admitted to practice in this state.
" (d) A lawyer admitted to practice in another state and providing legal services or representations in this state or to persons in this state under the authority of paragraph (c) of this Rule is subject to, and shall comply with, the Disciplinary Rules of this state with respect to all such activity."
The present definitional provisions of the Code (22 NYCRR § 1200.1) define "state" as including the District of Columbia, the Commonwealth of Puerto Rico and "other Federal territories and possessions," and "tribunal" as including "all courts, arbitrators and adjudicatory bodies."
Our proposed formulation of DR 3-101, it should be noted, would accord lawyers admitted in other states the limited rights indicated to provide legal services in New York. It would not, however, relieve New York lawyers undertaking tasks elsewhere of the strictures of the Rule's paragraph (b) except to the extent that another jurisdiction, presumably by adopting local rules or standards comparable to the ABA's proposals, allows the lawyer's out-of-state conduct.
The question of reciprocity among jurisdictions as to rules and laws intended to facilitate multi-jurisdictional practice is problematic. We are inclined to agree with the ABA groups working on these matters that general acceptance of the concepts of the proposed rules and standards is more likely to be obtained, more quickly, if states where they are supported, particularly large and commercially significant ones such as New York, set an example by adopting them, rather than by trying to link their availability in the home forum to possibly variant norms enunciated elsewhere. In addition, a standard in New York that is keyed to the actions of other states and jurisdictions would be difficult to administer and enforce.
The proposed new paragraph (d) of DR 3-101 limits the exemptions from practice restrictions granted by paragraph (c) to lawyers admitted in other American jurisdictions. All of the "states," as defined, have legal professions more-or-less comparable to the one in New York, and they share, to a considerable extent, common traditions and a common jurisprudence. With experience, it may be appropriate, at a later date, to consider extending similar exemptions to some or all foreign lawyers wishing to act in New York, but such a step would, we think, be premature at this time and unsupported by adequate study. 2
A further definitional problem worth noting is posed by the use of "tribunal" in paragraph (c) of the proposed rule. "Tribunal" is a defined term in the New York Code and refers to "courts, arbitrators and adjudicatory bodies" (22 NYCRR § 1200.1(f)). Both the federal Administrative Procedure Act and the N.Y. State Administrative Procedure Act draw clear distinctions between, on the one hand, "agency adjudications," and, on the other, "rule making" (sometimes on a record and on the condition of a "hearing" or "full hearing") and "licensing."
The processes involved in the latter and, as well, legislative hearings and inquiries are occasions when entities doing business in this State, and even entities based here, might wish, at times, to avail themselves of the specialized expertise and experience of a lawyer from another State. While a flexible reading of Section 1200.1(f) might suffice to bring such limited representations within the reach of proposed DR 3-101(c), this is not altogether clear. If and when the task of considering changes in the Disciplinary Rules is taken up by the New York State Bar Association and the courts, this matter should be considered.
- DR 1-105
DR 1-105 (22 NYCRR § 1200.5-a) covers substantially the same ground as ABA Model Rule 8.5, which is proposed for amendment. The Appellate Division adopted DR 1-105 in 1999 to, it was said, reduce confusion concerning jurisdictional issues and choice-of-law rules in disciplinary proceedings involving lawyers admitted to practice in this State. It provides that a lawyer "admitted to practice in this state is subject to the disciplinary authority of this state, regardless of where the lawyer's conduct occurs." The Rule goes on to recognize that some lawyers admitted in New York are admitted elsewhere, as well, and that they may, as a result, be subject to professional conduct rules and discipline in New York and elsewhere "for the same conduct." 3 It then lays out standards to be used by disciplinary bodies of New York in determining what jurisdiction's rules of professional conduct (essentially, those of the "jurisdiction of predominant effect") should be used in assessing that conduct.
If lawyers admitted in other states, but not in New York, were to exercise the authority to "practice" in New York that is proposed in the suggested amendment to DR 3-101, discussed above, they should, it seems to us, also be subject to the disciplinary rules and jurisdiction of New York with respect to their activities within or having effects within this State (although the addition of a comment or Ethical Consideration dealing with the hypothetical cases canvassed in our discussion of the comparable ABA Model Rule would be helpful).
The broad policy could be achieved, we think, by amending DR 1-105 to read as follows:
"(a) A lawyer admitted to practice in this state is subject to the disciplinary authority of this state, regardless of where the lawyer's conduct occurs. A lawyer not admitted to practice in this state is also subject to the disciplinary authority of this state if the lawyer offers to render legal services in this state to other than an existing or former client, or renders any legal services in this state. A lawyer may be subject to the disciplinary authority of both this state and another jurisdiction where the lawyer is admitted for the same conduct.
"(b) In any exercise of the disciplinary authority of this state, the rules of professional conduct to be applied shall be as follows:
(1) For conduct in connection with a
proceeding in a court before which a lawyer has been admitted to practice (either generally or for purposes of that proceeding)], matter pending before a tribunal
matter pending before a tribunal the rules [
to be applied shall be the rules] of the jurisdiction in which the [
tribunal sits, unless rules of the [
tribunal provide otherwise; and
(2) For any other conduct, the rules of the jurisdiction in which the lawyer's conduct occurred, or, if the predominant effect of the conduct is in a different jurisdiction, the rules of that jurisdiction shall be applied to the conduct. A lawyer is not subject to discipline if the lawyer's conduct conforms to the rules of a jurisdiction in which the lawyer reasonably believes the predominant effect of the lawyer's conduct will occur.
If the lawyer is licensed to practice only in this state, the rules to be applied shall be the rules of this state, and
If the lawyer is licensed to practice in this state and another jurisdiction, the rules to be applied shall be the rules of the admitting jurisdiction in which the lawyer principally practices; provided, however, that if particular conduct clearly has its predominant effect in this state or another jurisdiction in which the lawyer is licensed to practice, the rules of that jurisdiction in which the predominant effect occurs shall be applied to that conduct.
II. JUDICIARY LAW
- The Existing Constraints
Article 15 of the Judiciary Law, which pertains to "attorneys and counselors," contains a number of provisions that limit the licit practice of law in this State to persons duly admitted to practice here. These will require amendment if the concepts of the ABA's proposed Model Rules are to be implemented in New York.
Judiciary Law § 476-a authorizes the Attorney General of New York and, under certain circumstances, bar associations organized and existing in this State to maintain actions for injunctive relief (Judiciary Law § 476-b) against "any person, partnership, corporation, or association, and any employee, agent, director, or officer thereof who commits any act or engages in any conduct prohibited by law as constituting the unlawful practice of the law."
The section also defines "'unlawful practice of law' as used in this article [ i.e., Article 15]" as "includ[ing], but [as] not limited to,
"(a) any act prohibited by penal law sections two hundred seventy, two hundred seventy-a, two hundred seventy-e, two hundred seventy-one, two hundred seventy-five, two hundred seventy-five-a, two hundred seventy-six, two hundred eighty or fourteen hundred fifty-two,[ 4] or
"(b) any other act forbidden by law to be done by any person not regularly licensed and admitted to practice law in this state, or
"(c) any act punishable by the supreme court as a criminal contempt of court under section seven hundred fifty-B of this chapter." 5
Judiciary Law § 478 provides that
"It shall be unlawful for any natural person to practice or appear as an attorney-at-law or as an attorney and counselor-at-law for a person other than himself in a court of record in this state or in any court in the city of New York, or to furnish attorneys or counsel or an attorney and counsel to render legal services, or to hold himself out to the public as being entitled to practice law as aforesaid, or in any other manner, or to assume to be an attorney or counselor-at-law, or to assume, use, or advertise the title of lawyer, or attorney and counselor-at-law, or attorney-at-law or counselor-at-law, or attorney, or counselor, or attorney and counselor, or equivalent terms in any language, in such manner as to convey the impression that he is a legal practitioner of law or in any manner to advertise that he either alone or together with any other persons or person has, owns, conducts or maintains a law office or law and collection office, or office of any kind for the practice of law, without having first been duly and regularly licensed and admitted to practice law in the courts of record of this state, and without having taken the constitutional oath and without having subscribed and taken the oath or affirmation required by section four hundred sixty-eight of the judiciary law and filed the same in the office of the clerk of the court of appeals as required by said section. Provided, however, that nothing in this section shall be held to apply [to certain limited activities of officers of incorporated non-profit societies for the prevention of cruelty to animals and to certain activities of law school students and unadmitted recent law school graduates participating, under supervision, in judicially approved legal aid programs or judicially approved programs conducted by public agencies or officers ]."
The three exempting provisos, which are summarized in the bracketed clauses at the end of the above quotation, are numbered sequentially in the statute.
Judiciary Law § 484 currently specifies that:
"No natural person shall ask or receive, directly or indirectly, compensation for appearing for a person other than himself as attorney in any court or before any magistrate, or for preparing deeds, mortgages, assignments, discharges, leases or any other instruments affecting real estate, wills, codicils, or any other instrument affecting the disposition of property after death, or decedents' estates, or pleadings of any kind in any action brought before any court of record in this state, or make it a business to practice for another as an attorney in any court or before any magistrate unless he has been regularly admitted to practice, as an attorney or counselor, in the courts of record in the state; but nothing in this section shall apply [in terms similar to Section 478, supra, to certain activities of officials of societies for the prevention of cruelty to animals and of law school students and unadmitted recent graduates of law schools ]."
Again, the statute numbers sequentially and spells out in considerable detail the three exempting provisions.
Violations of Sections 478, 484 (and, as well, of Sections 479 through 483) are classified as misdemeanors by Judiciary Law § 485.
The other sections of the Judiciary Law incorporated into Section 476-a's definition of "unauthorized practice" deal with such matters as the solicitation of business on behalf of an attorney, signage purporting to identify an attorney's office, champerty and fee-sharing by non-attorneys and attorneys "whether practicing in this state or elsewhere." Of particular importance here is Section 495, which bars, generally, the practice of law by corporations and voluntary associations (other than legal personal service corporations organized under or doing business in New York pursuant to the N.Y. Business Corporation Law).
Subdivisions 1 and 3 of Section 495 provide:
"1. No corporation or voluntary association shall (a) practice or appear as an attorney-at-law for any person in any court in this state or before any judicial body, nor
(b) make it a business to practice as an attorney-at-law, for any person, in any of said courts, nor
(c) hold itself out to the public as being entitled to practice law, or to render legal services or advice, nor
(d) furnish attorneys or counsel, nor
(e) render legal services of any kind in actions or proceedings of any nature or in any other way or manner, nor
(f) assume in any other manner to be entitled to practice law, nor
(g) assume, use or advertise the title of lawyer or attorney, attorney-at-law, or equivalent terms in any language in such manner as to convey the impression that it is entitled to practice law or to furnish legal advice, services or counsel, nor
(h) advertise that either alone or together with or by or through any person whether or not a duly and regularly admitted attorney-at-law, it has, owns, conducts or maintains a law office or an office for the practice of law, or for furnishing legal advice, services or counsel.
* * *
"3. No voluntary association or corporation shall ask or receive directly or indirectly, compensation for preparing deeds, mortgages, assignments, discharges, leases, or any other instruments affecting real estate, wills, codicils, or any other instruments affecting disposition of property after death or decedents' estates, or pleadings of any kind in actions or proceedings of any nature. Any association or corporation violating the provisions of this subdivision is guilty of a misdemeanor."
There are exceptions and exemptions in other subdivisions of the section for professional service corporations of lawyers organized under or doing business in New York pursuant to the Business Corporation Law; for the employment by a corporation or voluntary association of counsel "in its own immediate affairs or in any litigation to which it is or may be a party"; for real property title insurers; for the provision by corporations and associations of clerical and professional services to a lawyer's practice so long as the lawyer "maintain[s] full and direct responsibility to his clients" for the service received; for entities "offer[ing] prepaid legal services"; and for "organizations which have as their primary purpose the furnishing of legal services to indigent persons."
Also in point is Judiciary Law § 470, which requires, as a condition of practice in New York by a person admitted here, that the lawyer reside in New York or maintain an office in New York and "reside in an adjoining state." 6 The judicial decisions interpreting this section indicate that a quite modest office will suffice. A recent decision upheld the constitutionality of this statute against an admitted lawyer who could not meet even this standard. Lichtenstein v. Emerson, 171 Misc. 2d 933, 656 N.Y.S.2d 180 (Sup. Ct. N.Y. Co. 1997), aff'd, 251 A.D.2d 64, 674 N.Y.S.2d 298 (1st Dep't 1998). The required local presence was thought by the court to facilitate the service of papers and to make the attorney more amenable to taxation premised on the provision of legal services in this State.
- Proposals for Revision of the Judiciary Law
The implementation in New York of the concepts of the proposed amendments of the ABA's Model Rules would seem to require revision of Judiciary Law §§ 478 and 484, which, singly and collectively, limit law practice in this State to those admitted to the bar here.
Each of these sections currently includes at the end of its prohibitory language three numbered provisos which, in similar terms, exempt from the statutory bar certain activities of officials of societies for the prevention of cruelty to animals and certain supervised activities of law school students and recent unadmitted law school graduates.
Each of these sections could be appropriately amended by adding a fourth proviso or exemption covering the in-state activities of out-of-state lawyers that the proposed Model Rules of the ABA seek to make licit. This proviso could be couched either in terms of a reference to DR 3-101 as we propose its amendment or by incorporating into the statutes the operative language of the proposed DR 3-101.
A statutory reference to and adoption therein of a specified Disciplinary Rule might facilitate, at a later time, an expansion or extension of the exemption by judicial action amending the Rule without further reference to the Legislature. On the other hand, such an approach might raise questions about a standardless delegation of legislative power; 7 would perhaps raise fears of a judicial "blank check"; and could introduce uncertainties as to the application of the many other sections of the Judiciary Law that bear on the practice of law and that contain norms New York still would wish to apply to out-of-state lawyers engaging in limited representations in this State.
We believe that the better course would be for the bar to seek legislative amendment of Judiciary Law §§ 478 and 484. Appropriate amendment would, we think, involve renumbering, in the case of each section, its existing language as subdivision 1 and by adding to each additional subdivisions reading as follows:
" 2. The provisions of subdivision 1 shall not apply to a lawyer admitted to practice and in good standing in another state, but not in this state, when:
(A) the lawyer is authorized to appear before a tribunal in this state by law or order of court or the tribunal; or
(B) other than making appearances before a tribunal with the authority to admit the lawyer to practice pro hac vice,
(i) a lawyer who is an employee of the client acts on the client's behalf or, in connection with the client's matters, on behalf of the client's other employees or its commonly owned organizational affiliates; or
(ii) the lawyer acts with respect to matter that arises out of or is otherwise reasonably related to the lawyer's practice in a jurisdiction in which the lawyer is admitted to practice; or
(iii) the lawyer is associated in a particular matter with a lawyer admitted to practice in this state.
" 3. A lawyer admitted to practice in another state and providing legal services or representations in this state or to persons in this state under the authority of subdivision 2 of this section is subject to, and shall comply with, the Professive Disciplinary Rules of this state relating to the practice of law with respect to all such activity.
" 4. As used in these subdivisions 2 and 3 of this section, 'state' means a state of the Union, the District of Columbia, the Commonwealth of Puerto Rico, and other federal territories and possessions.
" 5. As used in subdivision 2 of this section, 'tribunal' includes all courts, arbitrators and adjudicatory bodies. A tribunal shall be deemed 'available' when it would have jurisdiction to hear a complaint, if timely brought."
The definitions proposed for subsections 4 and 5 are taken from the definitional provisions of the New York Code of Professional Responsibility (22 NYCRR § 1200.1). In New York Criminal and Civil Courts Bar Ass'n v. Jacoby, 61 N.Y.2d 130, 472 N.Y.S.2d 890 (1984), the Court held, on the facts presented, that a multi-state legal partnership may maintain an office and conduct a practice in New York (under a name, if it wishes, that does not include the name of any New York admittee, past or present) if there is present in New York to supervise the work a fully responsible, profit-sharing partner(s) who is admitted here and the work is done by lawyers admitted in New York. The proposed amendments of Sections 478 and 484 would not relax this requirement except as they permitted a firm's out-of-state lawyers to make appearances here to the extent authorized for other lawyers admitted elsewhere.
Amendments of Sections 478 and 484 in the fashion proposed should remove the threat of prosecution of the indicated activity under Section 476-a (the Attorney General) under Section 485 (misdemeanor), or under Judiciary Law § 750, subd. B (the criminal contempt power of the Supreme Court). On the other hand, they would not displace for such attorneys the Judiciary Law's restrictions on solicitation, ambulance-chasing, champerty, and other unethical practices, which apply to this State's bar admittees when they practice in New York and which should apply, as well, to the sanctioned occasional appearances in this State of attorneys admitted elsewhere.
Judiciary Law § 470 should, we think, be amended to permit lawyers admitted in New York but not residing in New York and not maintaining an office here and residing in an "adjoining state" to "practice" in New York to the same extent as lawyers admitted in other states. This could be accomplished by revising Section 470 as follows:
"A person, regularly admitted to practice as an attorney or counsellor, in the courts of record of this state, [
who maintains an office for the transaction of law business [is] within this state, may practice as such attorney or counsellor, although he resides in an adjoining state.
A person, regularly admitted as an attorney or counsellor in the courts of record of this state who does not reside in this state or an adjoining state or who resides in an adjoining state but does not maintain an office for the transaction of law business in this state, may engage in the provision of legal services in this state to the extent authorized for attorneys admitted to practice in other states by section four hundred seventy-eight of this chapter."
Section 470, as currently written, has been applied occasionally to invalidate ad hoc activities of members of the New York bar who have neither an office nor a residence here. E.g., Cheshire Academy v. Lee, 112 Misc. 2d 1076, 448 N.Y.S.2d 112 (Sup. Ct. N.Y. Co. 1982) (attempt by a New York bar admittee residing in Connecticut to enforce a modest Connecticut judgment in New York). The possibilities of abuse seem slight, and New York admittees with no current full-time connection with this State should have the same opportunities to function here as attorneys admitted in other jurisdictions.
Section 495, the "corporate practice" provision, already makes exceptions for the activities of professional legal services corporations, whether incorporated in New York or another State, and the section does not appear to require modification at this time except to indicate expressly that an employed in-house lawyer's work on a corporation's "immediate affairs," presently exempted from Section 495 by subdivision 5, also includes, as our suggested revision of DR 3-101 does, work "in connection with the corporation's affairs" on behalf of the corporation's employees or commonly owned corporate affiliates. A provision of the Business Corporation Law's Article 15-A, governing the doing of business in this State by foreign professional service corporations would, however, require modification to implement the policies of the ABA's proposed Model Rules.
BCL § 1533 should, we suggest, be amended to read as follows:
"No officer, director, shareholder or employee of a foreign professional services corporation shall practice his or her profession in this state unless the individual is duly licensed to practice such profession in this state[
in the case of a foreign professional services corporation engaged in the practice of law, an officer, director, shareholder or employee who is admitted to the practice of law and in good standing in another state shall not be barred by this section from conducting in this state the activities that such lawyers so admitted are authorized to carry on in this state by sections four hundred seventy-eight and four hundred eighty-four of the judiciary law."
The process initiated and being carried forward by the ABA seems to us to address the issues of multi-jurisdictional practice in a way that is appropriate and constructive in the conditions of the present time. We believe NYCLA should indicate to the ABA's MJP Commission its support for its current approach while tendering to that body's forthcoming San Diego meeting such comments of detail as it deems appropriate.
If new Model Rules finally emerge from the ABA process in substantially the form of the current draft proposals, they would provide a useful guide to the revision of the Judiciary Law and the Disciplinary Rules of the New York Code of Professional Responsibility that would be necessary to make the policies of these Models Rules effective in this State and for New York lawyers.
Sonia E. Miller
H. Richard Schumacher
Ad Hoc Committee on
January 5, 2001
1 Proposed new material here, and in other proposals setting forth texts suggested for adoption in New York, is underlined. Material proposed for deletion from existing texts is bracketed and lined-through.
2 The comment to the proposed amendments to the ABA's Model Rules indicate they are not intended to
apply to transnational matters. In New York, under the authority of Judiciary Law § 53, the Rules of the New York Court of Appeals currently provide for the admission without bar examination of experience lawyers admitted to practice "in another country whose jurisprudence is based upon principles of the English common law" (22 NYCRR § 520.10); for the pro hac vice appearance before New York courts of record of "members in good standing of the bar...of a foreign country" (22 NYCRR Part 521). The permissible activities of a legal consultant, who must maintain an office in this State, also are spelled out in Part 521 rules. In accord with Judiciary Law § 53, they are considerably more limited than those allowable to a member of the New York bar. Notably, a foreign legal consultant my not offer advice on New York State or federal law except upon the advice of a person "duly qualified and entitled...to render professional legal advice in this state on that law." The Court's Rules do, however, contemplate the foreign legal consultant's possible pro hac vice participation in litigation in New York courts.
3 New York often imposes "reciprocal discipline" upon a New York admittee who has been sanctioned for a bar violation in another State where the attorney also is admitted. E.g., Matter of Lillard, 255 A.D.2d 88, 689 N.Y.S.2d in 474 (1st Dep't 1999) (lawyer admitted in New York and Maryland, site of his practice, censured in Maryland for misconduct there; comparable censure imposed in New York).
4 The sections of the Penal Law referred to in Section 476-a, which was last amended in 1965, have since been repealed. Their subbject matter now is covered by Judiciary Law §§ 478, 479, 483, 484, 489, 490, 491 and 495 and N.Y. General Business Law § 337.
The GBL section pertains to and characterizes as a misdemeanor certain advertising to procure a divorce or the annulment or dissolution of a marriage or to offer to act "as an attorney or counsel" in those andsome other closely related domestic relations matters. The section seems, at least in some applications, constitutionally dubious. It is not, however, relevant to our present concerns, and we do not consider it further.
5 There is no Judiciary Law § 750-B. The reference presumably intended is to Judiciary Law § 750, subd. B which authorizes the Supreme Court to punish for criminal contempt "any person who unlawfully practices or assumes to practice law." The Court may act on its motion or upon application of the Attorney General or of "any bar association incorporated under the laws of this state."
Judiciary Law § 476-a also grants the Attorney General broad fact-gathering power to "conduct an investigation of any complaint of unlawful practice of law."
6 This refers, it would seem, to New Jersey, Pennsylvania, Vermont, Massachusetts and Connecticut and, perhaps, to Rhode Island, which shares a boundary with New York at sea in the area between eastern Long Island and Block Island.
7 See Packer Collegiate Institute v. University of the State of New York, 298 N.Y. 184, 191, 81 N.E.2d 80 (1948). The Court of Appeals has observed that "the provisions of the Code of Professional Responsibility are not entitled in all instances to be accorded the status of statute or case law." New York criminal and Civil Courts Bar Ass'n v. Jacoby, 61 N.Y.2d 130, 135-36, 472 N.Y.S.2d 890, 893 (1984); accord, Matter of Weinstock, 40 N.Y.2d 1, 386 N.Y.S.2d 1 (1976).