Multijurisdictional Practice Issues

An overview of the practical impact as seen by the American Corporate Counsel Association

The American Corporate Counsel Association (ACCA) is a national bar association for attorneys who are employed as in-house counsel in private sector organizations. ACCA boasts over 11,300 individual members, who work in almost 5,000 different corporations across the United States, Canada, Europe, and a number of other overseas jurisdictions.

Multijurisdictional Practice (MJP) has been a core issue for ACCA since our inception. All of our members have practices that cross jurisdictional lines; most confront the issues of bar admission, license to practice and the unauthorized practice of law on a regular basis. While many operate on the premise of "let sleeping dogs lie," they are sensitive to the fact that they may be operating in less than perfect compliance with the letter of the professional rules and licensure requirements of any number of states in which they are working. Additionally, those sleeping dogs may be waking: with the advent of Birbrower and similar issues raised in jurisdictions across the country, corporate counsel are no longer so sure that they can afford to ignore the issue. And there are many who simply will not accept that the best practice is to proceed as if the rules don't really exist: they find such a posture ethically repugnant.

Why is ACCA interested in this issue?

ACCA has long maintained that the unauthorized practice of law rules applicable to in-house lawyers (and other practitioners) make little sense in today's national, if not global, economy. The advent of telephonic, and now electronic communications, virtual offices, and portable desktops make 18th century legal concepts defining jurisdictional practice outdated and outrageous. Law practices merge and relocate to follow client and business needs; lawyers transition from one practice to another seamlessly, where before a lawyer might expect to work at the same firm from his graduation from law school until his retirement. The information explosion has combined forces with other issues such as MDPs to make clients and lawyers both question what exactly is the practice of law and what is the simple conveyance of good information which has a legal impact? The rules of admission must change to reflect the realities of our modern practice and the challenges we as lawyers face in defining our professional limits (and the rules of entry into our fiefdom). Further, since the existing admission rules are so outdated, they arguably do not even serve any of their initial purposes either (namely, the protection of legitimate client and state regulatory interests); if such is the case, we must look to shoring up those legitimate interests with rules that maintain our professionalism and protect societal interests.

The question of when a lawyer is involved in the unauthorized/unlicensed practice of law is ticklish, especially for in-house counsel. Given their broad responsibilities for advising the client or supervising outside counsel on the universe of legal issues that arise in the corporate context, many corporate counsel are hard pressed when asked to define the scope of their responsibilities. These corporate counsel are the last of the dying breed of generalists, advising clients on: their national (if not international) business practices; on issues of "local" and "federal" regulation; compliance tactics; transactions; litigation management; supervising outside counsel; the general internal management of day-to-day client legal work; and so on. Other corporate counsel are specialists in their field, and resent the idea that they need licensure in every state in order to provide the competency and expertise they hold out to clients on such subjects as intellectual property protection, employee management, or securities regulation. Unlike outside counsel who work in an office of a law firm and put an asterisk next to their name on the letterhead stating, "admitted in X, Y, and Z," in-house counsel work for a single client whose trans-jurisdictional identity is adopted by every employee of the company. Law firm guys work in the DC office of the ABC firm; corporate counsel work in the global entity which is Exxon/Mobil or Citicorp or The Coca Cola Company.

And so ACCA is involved in providing resources to members who are confused about the issue of MJP and what it means to their practice setting, as well as in providing advocacy leadership whenever this issue rears its head in the corporate in-house context in one jurisdiction or another. It is time, however, to coordinate our efforts with those who are similarly interested and to advocate for a proactive change. We cannot and will not be satisfied chasing behind this issue, state by state, with inconclusive and sometimes inconsistent results in each jurisdiction.

What is ACCA's position on MJP, and what is its historical involvement in this issue?

MJP (formerly labeled UPL, for the unauthorized practice of law) is one of the first issues ACCA approached when it was formed in 1982. Early efforts by ACCA leaders included: the filing of amicus briefs in cases in which corporate counsel were prosecuted or pilloried for their multijursdictional/unauthorized practices; testimony before State licensing agencies considering changes to the rules of admission for their jurisdiction; member education and advocacy efforts in the form of articles, speeches, and so on; and even testimony before Congress and the rule-making bodies of the ABA. ACCA regularly features ACCA Docket articles on the subject; we sponsor educational MCLE programs on this issue at national meetings; we provide "canned" programs on MJP for our local Chapters' use; we've developed a very popular InfoPAK and Virtual Library package of resources to answer member questions (including a state-by-state special admissions analysis), and we answer a very high number of member questions on this subject. Some of these resources are attached for your reference at the end of this summary.

Today's Advocacy Committee of ACCA's Board of Directors is still active on the MJP issue, filing comments, briefs and testimony on in a number of states where controversy over this issue has led to state bar action or review. Indeed, the Advocacy Committee has decided that this issue, along with the issue of Multidisciplinary Practice, will be the priority and focal points for our efforts in the coming year(s). We have retained Professor Stephen Gillers of New York University's Law School in order to help us develop and execute our vision more effectively in a national forum.


ACCA's current board-adopted policy on MJP

ACCA Policy Statement on Admission to Practice

Corporate counsel must be able to represent their clients in all aspects of corporate legal affairs, including the conduct of litigation, regardless of the jurisdiction in which the matter arises. Although the law recognizes the ability of a corporation to represent itself legally through a salaried employee, admission to practice requirements which vary from jurisdiction to jurisdiction nevertheless do impede the ability of corporate attorneys to represent their clients fully in those jurisdictions.

Uniform standards for admission to practice, administered by the various states, would result in the more efficient delivery of legal services to the corporation while recognizing the states' legitimate interest in regulating the bar. The American Corporate Counsel Association will work with federal, state and local bar authorities to seek uniform standards for attorney licensing. The association will pursue uniform standards in several areas including qualifications for admission (e.g., minimum years of practice in another jurisdiction, passage of bar and ethics examinations), residency requirements, and scope of practice (e.g., limitation on practice based on the attorney's employment status).

In pursuing this policy, ACCA will seek equal treatment for all attorneys. Recognizing that this process will be a lengthy one, in the interim the association may support rules or amendments to rules which result in the more efficient delivery of quality legal services to the corporate client, or which otherwise represent a significant improvement in existing admission to practice rules. If such rules or amendments result in other-than-equal treatment for all attorneys, board approval will be sought before any action on behalf of the association is taken.

In carrying out these activities, the association will use its best efforts to consult with any local ACCA chapter in the jurisdiction and with groups of private practitioners who also are concerned with admission to practice requirements of the jurisdiction.

(Adopted by ACCA's Board of Directors on May 13, 1986. Reaffirmed on March 4, 1994)

It is important to note that in several previous advocacy situations, ACCA has endorsed the adoption of admission rules that may not have met all of our stated goals as articulated above. In doing so, ACCA adopted a "lesser" standard on the theory that it was better for members to have ACCA endorse an alternative that provided some relief, than to allow a rule that would classify many in-house counsel operating in that state as unauthorized practitioners.

ACCA's Advocacy Committee will be working this year with Professor Gillers to develop a comprehensive, easily understood position that will offer us greater ease in consistently advocating a longer-term, larger solution than we are able to endorse currently by responding ad hoc to challenges as they arise. We view this Symposium as a unique opportunity to engage in conversation with our peers on this issue and use their knowledge and ideas to help us in the development of our position. We also hope to provide some very practical examples of how these issues impact practitioners and clients on a daily basis.

Consider what some ACCA members say about the subject:

Jim Pirretti, the Vice President of Legal Affairs for Ames Departments Stores, Inc., wrote the following:

What the state licensing agencies fail to consider is the nature of legal practice for in-house lawyers. Many in-house lawyers are specialists: employment-labor lawyers, bankruptcy, taxes, patent, copyright, etc. These fields of law have nothing to do with the concept of licensing attorneys for a particular state. In a prior job, for example, I handled numerous employment matters throughout the US. The issues dealt with federal - not state law. The concept of being licensed in each state becomes totally impractical in that setting.

Dan Hapke, a former ACCA Chairman, and now the General Counsel of Cordant Technologies, Inc. in Utah writes the following:

After being in practice for 19 years I took the California Bar Exam at the age of 47. WOW, what a humbling experience! I followed the advice of others who had gone before me (and who'd failed their first attempts) and took the Sundays review course on how to pass the essay questions. Each Sunday from Christmas 'til the end of February we would listen to tapes all morning and write graded practice questions all afternoon. Each Sunday I got back the previous weekend's questions as graded by the instructor--I managed to flunk about two out of three! The instructor kept telling me to " ...write like you're a law student..." whatever that means! Needless to say, this negative feedback eroded my confidence as I walked into the first day of the exam.

The Attorneys' exam was two days long. We were not required to sit for the Multistate, multiple choice test. Of the two days we did have to take, each morning consisted of three essay questions drawn from the 15 or so topics that could be tested on. The afternoons were devoted to a practical exercise like outlining the questioning in a deposition based on a set of facts and law provided. Unfortunately, these easy afternoons only counted for 40% of the overall grade. This meant each essay question was worth 10%. Moreover, the California Bar Examiners expected us to regurgitate a lot of black letter law in the hour allotted to each question.

The crowning blow was to open the exam books the second morning and see that we had a question on Community Property! I swear the collective groan that arose from the examinees boomed through the old San Diego Convention Center.

Somehow, incredibly, I passed the examination on my first and only try. Yes, there is a God and she is kind to overage corporate practitioners dumb enough to relocate!

Meanwhile, back at my day job, my relatively new boss (the president of the division) could not understand why I was taking the bar exam and resented my absences for studying. C'est la guerre.

My next opportunity for masochism came here in Utah. By this time I was 51 years old and had been practicing for over 23 years. There is only one bar review course and it met after work from 6 to 10 PM every weekday for about seven weeks. There I was munching on a Subway meatball sandwich each evening surrounded by children younger and less well behaved than my own!

The good news was that Utah is not a Community Property state. The bad news was they ask you to write answers to 12 questions drawn from 25 subject areas. The good news was that, for the Attorneys' exam, this all happened in just one day, so each question is allotted just 30 minutes. The bad new was that among the 25 subjects were such obscure areas as Conflict of Laws, Utah Constitutional Law, Bankruptcy and UCC Art. 9.

Somehow, I passed this one, too, on the first attempt.

My boss in Utah is the company CEO and he did not understand why I bothered.

In both California and Utah I deluded myself into thinking there would be some marginal benefit to the in-depth review of everything covered in law school. Each time I relearned the fact that the bar exam only tests short term memory and virtually everything crammed in is gone in a matter of weeks!

Angela DeSilva, Associate General Counsel of Duke Energy Corporation, states:

This issue is one of form over substance. I think it's a big problem if my client calls me for advice on employment issues and I'm left to decide if I should a.) tell the client he should contact outside counsel in every state in which we have employees since I'd be involved in the unauthorized practice of law if I advised him even though I know the answers to his questions; b.) tell the client the answer and risk prosecution, as well as the knowledge that if there's ever litigation over this issue in the future, my advice to my client will be discoverable because it can't be privileged if my status as counsel is as an unauthorized practitioner. I have to tell you, when my client hired me and when I passed the bar and began my work as a lawyer, we both presumed I was admitted and licensed and we were done thinking about these issues. Clients are more than puzzled by this issue; they're outraged by it. And frankly, so am I.

A general counsel for a technology company relates the following:

I am admitted to practice in New York. After working for some years in a big New York firm and then a New York company, I went to Illinois to work for my New York company for the next 5 years. I decided then that I wanted to join the Illinois bar, but found I could not waive into the Illinois bar after working there for the previous 5 years since I hadn't been working for the previous 5 years in my state of licensure. So I just let it go. I don't prefer it to be that way, but I do not think I practice law in such a way as to mandate my going through the extreme hassle of sitting for the Illinois bar exam.

Similarly, an anonymous submitter tells the following story:

The State of Virginia allows an experienced counsel from another jurisdiction to waive into the Virginia bar upon completion of a number of administrative tasks if they can show that they have been involved in practice of law in another U.S. jurisdiction for the past 5 years, and are in good standing. I have been an in-house counsel in a Virginia-based corporation for almost twenty years. I cannot waive in to the Virginia bar, I am told, because I have not been an active practitioner in another jurisdiction, only an unauthorized practitioner in Virginia. Is all of my previous advice to my client could be questioned and discovered since I am technically an outlaw under the rules of practice here? Of course, my colleague who has worked for my company for more than 10 years, but at our office in another state's jurisdiction, can now move to our office here in Virginia and waive into the bar, even though the work we've done together over the last several years is in all ways comparable and for the same client on the same matters. Such nonsense!

Tom Sager, the Associate General Counsel and Chief Litigation Team Leader for DuPont in Delaware questions:

MJP issues completely frustrate my ability to defend my company in multistate litigation, even if I hire counsel in each location to appear locally. I'm still advising my client on how to manage and direct these cases under multiple state and federal laws involving who knows how many jurisdictions.

Cathy Mack, the Vice President for Legal Affairs for Federal Realty Investment Trust (a development company that owns and manages shopping centers) believes:

State bars cannot be trusted to reform this issue: they are jealous fiefdoms that don't communicate well with each other or their members. And they seem completely unmoved by the ridiculously outdated nature of their rules on admission. The previous advice on this issue from the bars seemed to be 'shut up and keep moving and no one will notice the issue.' I'm watching too many states decide to prosecute these cases - in a random fashion - because an opposing counsel thought it might be a good litigation tactic and the state bar can't refuse to consider the issue if they've got the rule in place. So what's their advice to me now? I know that even if they decide to change their rules, it will not likely be done in cooperation or coordination with other state bars.

Indeed, several members noted their concern that UPL would become a modern day:

. . . guerilla warfare tactic in the hands of opposing counsel. After a while, a corporate client would have to be crazy to keep an in-house staff if it couldn't be licensed in every jurisdiction since litigators could file endless motions to remove the corporate counsel or depose the corporate counsel or discover the corporate counsel's advice, all premised on some connection between the case and a jurisdiction where that corporate counsel is not licensed.

Other general counsel voiced their concern that in addition to unauthorized practice issues, they are:

. . . very concerned about the malpractice liability that stems from continued practice in multiple jurisdictions in which in-house counsel are not authorized (even though competent) to practice their specialty.

Some ACCA members believe that given the difficulty of pushing every state to reform its rules overall, ACCA should adopt a lesser standard and advocate for states to adopt a corporate in-house license which would not be available to the bar as a whole. These members believe, as Steve Bennett, General Counsel of Cardinal Health, Inc., states:

We shouldn't worry about creating a single standard for all . . . we should rather focus on creating an in-house license since it will reassure states who are otherwise adverse to these reforms because they are worried about competition. While in-house counsel compete for business with outside counsel to some extent, I don't think local outside counsel are as worried about them as they are about folks from outside the jurisdiction setting up competing outside practices. And after all, that's really the only reason why the folks who sit on these state admission committees -- who are all outside counsel anyway -- cling to the old rules. No one believes that we're talking about diminishing client protection or frustrating the regulation of legitimate state needs when we're talking about changing the admission rules: the only real resistance is based on a desire to avoid easy competition at the outside bar.

Others believe that outside counsel see in-house counsel as the worst kind of competition:

Outside counsel would fight harder against a special exemption for in-house counsel than they would fight against a general leveling of the playing field to change admission standards for everyone.

There are also those who believe that ACCA should never break its pledge to always seek equal treatment for all lawyers -- in-house and outside -- especially by seeking special exemption to the admission rules:

The creation of a special admission status for corporate counsel might be turned against the in-house bar in the future, designating them as 'less than full members of the bar,' which is the kind of discrimination that ACCA was founded to fight in the first place. In-house counsel should not fight to create for themselves a special status as 'mini-lawyers.'

Eric Schaal, the Assistant General Counsel for USG in Chicago notes:

If there are department members of mine who are not members of the Illinois bar who are doing the same kind of work I am doing, for which I felt the need to get an Illinois license, am I committing a misdemeanor -aiding and abetting the unlicensed practice of law - by continuing my practice with them and by cooperating in the presentation of legal services to our joint client?

The attached article from Eric Schaal, which appeared in a recent issue of ACCA's journal, the ACCA Docket, garnered more personal responses and email that any other article in our recollection. The number of corresponding hits to our website for the information listed in the article as a resource to those interested in finding out more about the subject skyrocketed after this article was published, numbering in the thousands. The resource information which is most popular on our site - which is our graph showing the corporate admission rules for all 50 states -- is also attached to this summary.

In conclusion, I would note that several ACCA leaders were most impressed by the fact that in Europe, countries/peoples that have fought for thousands of years amongst themselves have unified through the EU to adopt a uniform standard of admission that will allow for lawyers in Spain to represent interests in Germany and so on. The overwhelming sentiment was:

If the EU can manage to do it between separate countries, by God, then so can we who are supposedly unified States which are all part of a single fabric and a uniform tradition.

What are the issues and arguments for consideration?

Clearly, in order to put forward a solution to this issue and succeed, we must decide:

1. What does it mean to practice law in any specific jurisdiction?

A. What is the practice of law (versus stuff that the unlicensed can do)

B. What does it mean to practice law in an electronic/virtual age, wherein you can be everywhere at once, and no where at any particular moment?

2. What is the legitimate interest of a licensing agency in regulating lawyers who work in today's world of practice, and how can that interest be served and reduced to rules that work?

3. How do we develop the best position that takes the details of this changes into account and actually outlines the necessary steps toward our goal? It's easy to favor cross-border practice, but how will we actually accomplish it?

4. What is the role of the national versus the state bars in resolving this issue? Will it be a competitive / hostile battle, or a challenging, yet cooperative exercise in moving forward together?

We submit without repeating here the remainder of the attached information which provides more detail on the positions we espouse and the issues which multijursidictional practices raises that the bar must resolve.

If you would like further information about ACCA's position on MJP or more information on any of the resources mentioned in this summary, please contact:

Susan Hackett
Senior Vice President and General Counsel
American Corporate Counsel Association
1025 Connecticut Avenue, NW, Suite 200
Washington, DC 20036
phone: 202/293-4103, ext. 318
fax: 202/293-4701


Copyright 2000 by the American Bar Association, Stein Center for Law and Ethics at Fordham University School of Law, Attorneys Liability Assurance Society and the American Corporate Counsel Association. All rights reserved.