Don’t get me wrong. There is clearly something to be said for two ideas: clients could benefit from some expansion of the ability of lawyers to be able to perform services in jurisdictions outside those in which the lawyers are admitted; lawyers could benefit from the establishment of certain "safe harbors" that would permit lawyers to know when they are near a prohibited line. But if we are going to go down this road, we better be very careful, because there is a lot more at stake for our clients and our profession than the tone of the current discussion would suggest.
To listen to the proponents of MJP, one could easily conclude that this movement is just an assault on the third leg of our professional tripod by the forces of economics over ethics, the same people who have attacked professional independence by arguing the rule prohibiting the sharing of fees with nonlawyers serves no legitimate purpose and who have attacked client loyalty by arguing that the rules governing imputation – our core value with respect to client loyalty – is antiquated and should be jettisoned to permit firms to grow to their market efficient size. These MJP advocates assert that the entire idea of state based practice is an anachronism in a world in which commerce is not only interstate but international, that any lawyer admitted in any state ought to be free to swashbuckle into any state or venture overseas to practice "where e’er they choose," that statutes governing unauthorized practice of law as they apply to lawyers (and perhaps anyone else) ought to be repealed, that clients ought to have "freedom to choose" any lawyer anywhere to provide whatever services they need, and that, if we are not going to convert to national admission for the practice of law, then at least we ought to have national reciprocal rights of practice.
As one listens to the clarion call of free enterprise, assaulting professional regulation as if it were as unacceptable as the Commonwealth of Pennsylvania levying duties on goods shipped from New Jersey to Ohio on Interstate 80, one must ask whether, in fact, there are values, principles and protections that are at stake in this discussion.
I. Mastering the Law
First, we must ask whether there is anything to the notion of federalism and the concept that knowledge, experience and familiarity with a given state’s law has any meaning. That’s one premise behind the present system of state-based admission and practice: Each state has its own statutes, court system, regulations, rules of professional conduct. Admission to the bar of the state was a recognition that the lawyer had some level of mastery of that body of jurisprudence, a capability that would be enhanced as one practiced and gained experience.
That idea does not withstand strict scrutiny, at least in several respects. First, state-by-state admission, or at least the idea of the bar examination, has become something of a joke. Law students go to school for three years to become lawyers and then they spend six or eight weeks in a much-despised and maligned cram course the premise of which is that each candidate’s bathtub is filled with just enough knowledge to get the aspiring lawyer through a two or three day examination, at which point the BAR/BRI "knowledge" is instantly drained, not unlike the way we forget the number of our hotel room two days after we have checked out.
Second, the lawyering skills the law school graduate already possesses permits a lawyer newly admitted in Pennsylvania, without the assistance of a lawyer admitted in Kentucky, to do a pretty workmanlike job mastering the laws of the State of Kentucky to advise her Pennsylvania clients. Moreover that activity, which is quite regularly undertaken, is not thought to run afoul of UPL statutes or to be malpractice simply by virtue of the fact that Kentucky law is involved. This lawyer’s ability to handle this assignment has been enhanced by the fact that electronic on-line libraries make it possible to have a virtually complete set of Kentucky materials available for this Pennsylvania lawyer at a few clicks of a mouse.
Third, a lot of our law is national law – tax, securities, labor, ERISA, the list goes on almost forever – and therefore the only geographical based variations in these fields are those among circuits, not by state and, in order to practice competently in these areas, those circuit conflicts must be part of what the capable lawyer must consider in providing competent advice. Moreover, the similarities among state common law are quite high. True, there are thousands of variations, but the major concepts remain similar and, in any event, the issues that separate one jurisdiction from another are readily identifiable and easily comprehended.
This does not mean that there is not something to the level of expertise developed by an individual admitted in a given state who has practiced in that state for years. And these three observations do not ineluctably lead to the proposition that someone who has been practicing in Sacramento for twenty years should be allowed, without more, to move to Miami, hang out a shingle and continue the practice of law in that new state. But since all of us would admit there are many lawyers duly admitted in Pennsylvania who we would rather have represent us in California on a California matter than lawyers duly admitted in California, it is hard to justify our present system solely on the basis of knowledge of and experience with a given state’s law.
II. Lawyer Rules and Lawyer Discipline
Next, we must ask whether our present system brings clients any benefits in terms of lawyer standards and their enforcement. Here we are on much more fertile ground. Clients are entitled to know all lawyers with whom they deal are obliged to meet certain professional and ethical standards and that compliance with those standards is encouraged by effective disciplinary enforcement.
A recent experience will highlight why this is such an important issue. A company employed an in-house lawyer in Florida. In this case the lawyer was admitted in Illinois, Arkansas and Indiana, but he registered under Florida’s special provision governing full-time corporate counsel admitted in other jurisdictions.
The lawyer represented the company for a number of years, then decided to leave the client and go to work with the client’s prime competitor as in-house general counsel in New Jersey, the new client’s headquarters. When the former client protested that its former lawyer had a conflict of interest problem that barred the lawyer from representing the new client and also disqualified any lawyer in the general counsel’s office, the former counsel announced that he had been screened, thereby "solving" the problem. When the former lawyer was confronted with the fact that neither Florida nor New Jersey authorized involuntary screening as a solution to a conflict of interest problem, the former lawyer confidently responded that he could, nonetheless, be screened because Illinois, the state of his birth and the jurisdiction of his first admission to practice, permitted screening.
This real life situation highlights three problems. First, with lawyers racing around the country, whose rules are going to apply? While this in-house counsel’s argument that he was under Illinois rules of professional conduct seems laughable to this writer, it was made with a straight face and reflects the kind of fuzzy thinking that can be used to justify unprofessional conduct. Our rules are designed to protect clients and when clients reside in a particular state they should receive the protections of the rules that state’s Supreme Court or legislature has determined are appropriate. But many who would like to practice law nationally, like this in-house counsel, will resist the responsibility that goes with it to conform one’s conduct to the rules of the forum in which the services are being delivered or argue that even though the client is in Florida the lawyer’s conduct is acceptable because it conformed to the rules of the jurisdiction or the most favorable jurisdiction (if the lawyer is admitted in multiple jurisdictions) where the lawyer is admitted. Even the conscientious lawyer may find herself in a conflict between the rules of the state of the lawyer’s admission and the rules of the jurisdiction in which the services are being delivered.
This discussion brings us to the second problem raised by the same fact situation. With lawyers wily nily practicing anywhere they choose, will their conduct in a jurisdiction where they are not admitted ever rise to the level where their transgressions are likely to be addressed? We already know how disciplinary agencies are overworked, how they are forced now to set priorities for that conduct which they will discipline. Where will that line be drawn when the situation is one involving an out-of-state lawyer who came in for one transaction or occurrence and has now moved on. If the subject lawyer is also relying on the permission of the jurisdiction of her admission to justify the conduct, how likely is it this knotty problem – involving someone who is unlikely to be a repeat offender in the visited jurisdiction – will make it into the priority pile at the disciplinary agency? And as for discipline in the jurisdiction of admission, that too is unlikely because a) the client would have to initiate a complaint at a distant location and b) perhaps the conduct complained of, as with our in-house counsel, will be permissible there.
This discussion leads to the third issue that arises when one thinks of client protection and lawyer discipline for lawyers who practice everywhere. Like our in-house counsel who sought refuge in his Illinois bar membership to save himself from the stricter client protection rules of Florida and New Jersey, there will be a race to the bottom on our rules of professional conduct prompted by lawyers like our in-house counsel and others who wish to escape our more stringent rules of professional conduct.
Several examples quickly spring to mind. First, imagine one jurisdiction abandoning Rule 5.4’s protection of professional independence by permitting lawyers to share fees with non-lawyers. If the lawyers in that jurisdiction are then free to practice anywhere, two things will inevitably happen. Those lawyers will achieve economic prosperity that will be the envy of everyone else. Then everyone else will want to get admitted in this jurisdiction, to get the economic benefit of no Rule 5.4, and since they too can practice anywhere there will be no penalty for giving up, for example, one’s Pennsylvania Bar membership and taking up – to pick an example not at random – D.C. Bar membership.
As a second example, consider a jurisdiction that abandons imputation as a measure of lawyer loyalty. Suddenly the firms in that jurisdiction will have to turn down almost no new matters, their business will soar and lawyers in other jurisdictions will look longingly upon these "lucky" – albeit hardly ethical – lawyers and sign up to join that jurisdiction’s bar so that they can be freed of the shackles our profession’s commitment to client loyalty through our rule on imputation places on law firm growth.
Lest this market-driven view of the dive to the bottom be viewed as unrealistic or unlikely to occur simply recall with me a time when one could be admitted to the D.C. Bar so long as one was admitted anywhere. Suddenly the Commonwealth of Pennsylvania, with the then highest pass rate on the east coast, became the bar of choice so that today literally thousands are practicing in D.C. because they took advantage of that Pennsylvania high pass rate back then. 1
This approach may even go further. Some state or states may decide it wishes to become the Cayman Islands for the registration of lawyers. Just as Delaware’s hospitable climate has attracted thousands of corporations with no nexus to our First State, the District of Columbia or Texas may decide that there can be a booming business in providing "flags of convenience" to any lawyer who pays the required fee.
III. The Bar as an Institution
Finally, even assuming the conflict of laws and protection of client issues could be solved (which I very much doubt), the most important issue in my view remains unsolved and unsolvable. Lawyers are more than just the deliverers of legal services to clients. They are officers of the court, providers of pro bono services, dedicated to the improvement of the law and the backbone of bar associations that fill a vital role in American society in all of these areas.
The problem we face is best exemplified if we return to our very real in-house counsel I discussed above. First he practices in Florida without being admitted there. Then he moves to New Jersey where he again doesn’t get admitted because New Jersey has decided that lawyers employed by the client are not violating the New Jersey UPL statute so long as all legal services are provided to the employer. Is he a member of the bar in either location? No. Does he participate in mandatory CLE in Florida? No. Does he join any bar committees, provide any pro bono services, even participate in the annual roasting of judges? No.
Today there are literally thousands of lawyers, in-house counsel, in my home state, Pennsylvania and across the land who, without the permission of the Supreme Court of the state in which they are headquartered, are practicing full time without getting admitted. Our professional world is diminished by their absence. Our bar dues are higher by their absence. Our pro bono commitment involves more hours of dedicated time because of their absence. Our client security funds are less able to pay claims because of their absence. Our obligation to act as arbitrators in court-annexed arbitration is more frequent because of their absence.
These in-house lawyers want to be full-fledged lawyers and we, on the outside, want them to be treated as full-fledged lawyers. But their example demonstrates too clearly what happens when lawyers practice in a jurisdiction without getting admitted there. And, while the fact that this situation exists is no reason to tolerate the in-house counsels’ abandonment of their professional obligations for one more minute, their unfortunate conduct does provide us with the results of an important laboratory experiment which demonstrates how much worse the situation will be if we have lawyers who take no responsibility for their obligations to the bar because they are too busy being national lawyers, swooping in for big deals or big suits, with no more commitment to the places where they actually practice than the tourist passing through a town who only cares that the "light is on," that the food is good and that there is no more responsibility placed upon her with respect to local conditions than paying the room and board bill.
The snide and the cynical will join with the forces of free enterprise to extol the virtues of MJP, latching onto the notion that local bar admission is an anachronism in a world where business and their service providers who provide essential legal advice regularly cross national boundaries. Before their clarion call leads us all, like so many lemmings, over a deregulated cliff, let us not lose sight of the principles that (a) lawyer rules and lawyer discipline are important values that must be sustained and expanded, not abandoned and (b) lawyers play a key role as officers of the court that is jeopardized when their practice is untethered from a jurisdiction of admission.
1. There are so many Pennsylvania lawyers practicing solely in Washington that CLE providers have made a cottage industry out of providing programs that will meet the Pennsylvania requirements into the District.