May 01, 2021 Feature

Lawyers Working Remotely—Navigating ABA Formal Opinion 495

By James Geoffrey Durham

The COVID-19 pandemic has resulted in many lawyers working remotely, typically at home but also in other away-from-office locations. On December 16, 2020, the ABA Standing Committee on Ethics and Professional Responsibility issued Formal Opinion 495. In the Introduction, Opinion 495 acknowledged not only that lawyers are being “forced” to practice remotely (apparently because of the pandemic) but that lawyers have “chosen” to work remotely (apparently not necessarily in response to the pandemic). Opinion 495, then, addresses all lawyer remote work, not only remote work during and because of the pandemic.

The exceptions contained in MR 5.5(c) are all hinged on temporary practice

The exceptions contained in MR 5.5(c) are all hinged on temporary practice

(Source: Getty Images)

The purpose of this article is to offer some guidance to transactional lawyers, helping them to work remotely in a way that does not subject them to the risk of defending their actions in disciplinary matters or civil cases. It’s not necessarily an easy path to navigate, but a quick review of the Model Rules and Comments, followed by a review of Opinion 495, will provide guidance and some practical application.

Three Lawyers Working Remotely: A Hypothetical

To apply Opinion 495 to real-life situations, consider a hypothetical involving three lawyers in a Cincinnati law firm, Monica, Alejandro, and George. Monica is a senior partner in the firm’s real estate department, Alejandro is of counsel in the firm’s real estate department, and George is an estate planning associate in the firm’s trusts and estates department. All are licensed and in good standing in Ohio, and none is licensed in any other state. Monica lives in an Ohio suburb of Cincinnati and owns a vacation home in Florida. Alejandro lives in downtown Cincinnati and spends two months every summer with his parents in Colorado. George lives in Covington, Kentucky, across the Ohio River from Cincinnati.

Monica, Alejandro, and George, along with the other lawyers in their respective departments, have clients from throughout the Cincinnati metropolitan area, which includes parts of three states, Ohio, Kentucky, and Indiana. Monica, Alejandro, and George serve their clients regardless of which state law applies and, like most lawyers in their firm, regularly work evenings and weekends from home. When their work involves matters in Kentucky, Indiana, or other states, each uses local counsel whenever it is the best practice in completing a transaction or when local law requires it.

In March 2020, their law firm closed its offices, and all attorneys and support staff were directed to work from home. Monica went to her Florida house, intending to wait out the pandemic while working remotely. Alejandro decamped to his parents’ home in Colorado, and George hunkered down in his home in Kentucky. All three continued to meet with clients virtually, draft documents, and move transactions to close, using local counsel in the same manner they had used them when working from their offices in Cincinnati.

What ethical issues might Monica, Alejandro, George, and their law firm face under this hypothetical?

ABA Model Rule 5.5

MR 5.5 covers two related issues: the unauthorized practice of law, by both lawyers and nonlawyers; and multijurisdictional practice, which applies to lawyers licensed in one state but whose work may involve the law of, or take them to, states where they are not licensed.

As to the unauthorized practice of law, MR 5.5(a) provides that: “[a] lawyer shall not practice law in a jurisdiction in violation of the regulation of the legal profession in that jurisdiction, or assist another in doing so” unless authorized by the rules or law to do so. MR 5.5(b) prohibits lawyers not licensed in a jurisdiction from opening offices or having another “systematic and continuous presence” in the jurisdiction and from representing that they are licensed in the jurisdiction.

As to multijurisdictional practice involving transactional lawyers, MR 5.5(c) allows lawyers in good standing in another US jurisdiction to “provide legal services on a temporary basis in this jurisdiction” in matters if they associate local counsel (MR 5.5(c)(1)) or if the matters “arise out of or are reasonably related to the lawyer’s practice in a jurisdiction in which the lawyer is admitted to practice” (MR 5.5(c)(4)).

Is the remote work done by Monica, Alejandro, and George “reasonably related to” their practices in Ohio, as required by MR 5.5(c)(4)? The answer seems straightforward because all are doing precisely the same kind of work they would be doing if they were at their desks in their Cincinnati offices, representing both Ohio and non-Ohio clients in matters involving Ohio law and the law of other states. The key issue, as MR 5.5(c)(4) has been interpreted to present, is whether their remote work is being done on “a temporary basis,” because the exceptions contained in MR 5.5(c) are all hinged on temporary practice. MR 5.5 Comment [6] seeks to assist (spoiler alert: you’re not going to like what you’re about to read):

There is no single test to determine whether a lawyer’s services are provided on a “temporary basis” in this jurisdiction, and may therefore be permissible under paragraph (c). Services may be “temporary” even though the lawyer provides services in this jurisdiction on a recurring basis, or for an extended period of time, as when the lawyer is representing a client in a single lengthy negotiation or litigation.

There is a fair amount of literature on the subject of temporary practice, and many states have their own comments or ethics opinions on what constitutes a temporary practice, but, for purposes of our discussion, let’s consider the position taken in Opinion 495.

An Overview of Opinion 495

Opinion 495’s opening sentence succinctly summarizes the opinion’s ultimate conclusion:

Lawyers may remotely practice the law of the jurisdictions in which they are licensed while physically present in a jurisdiction in which they are not admitted if the local jurisdiction has not determined that the conduct is the unlicensed or unauthorized practice of law and if they do not hold themselves out as being licensed to practice in the local jurisdiction, do not advertise or otherwise hold out as having an office in the local jurisdiction, and do not provide or offer to provide legal services in the local jurisdiction.

Opinion 495 considers the remote practice of law as including the law of any jurisdiction (state of admission, other states, or federal) that would be permissible under MR 5.5(c). It states that having local contact information on websites, letterheads, business cards, advertising, “or the like” would constitute a local office or presence.

Our focus, then, is not on the broad statement on what law may be practiced (Opinion 495 says “the law of the licensing jurisdiction and other law as permitted by ABA Model Rule 5.5(c) or (d)”), nor on the statement as to what constitutes a local office or presence, but rather on what constitutes permissible presence. Opinion 495 asserts in the Conclusion:

The purpose of Model Rule 5.5 is to protect the public from unlicensed and unqualified practitioners of law. That purpose is not served by prohibiting a lawyer from practicing the law of a jurisdiction in which the lawyer is licensed, for clients with matters in that jurisdiction, if the lawyer is for all intents and purposes invisible as a lawyer to a local jurisdiction where the lawyer is physically located, but not licensed. [italics in original]

This conclusion must be read in conjunction with the full opinion: “the law of a jurisdiction in which the lawyer is licensed” means whatever law the lawyer is authorized to utilize in practice in the licensed jurisdiction; and “clients with matters in that jurisdiction” means clients the lawyer is permitted to serve in the licensed jurisdiction.

Opinion 495 thus offers a view of what constitutes “temporary” practice that focuses not on whether the lawyer is physically present in a state where the lawyer is not licensed to practice but rather on whether the lawyer is “invisible as a lawyer” in the local market. Nothing in the language of MR 5.5(c) or the Comments has taken this position previously.

Thoughts on Opinion 495

Opinion 495 is an expansive view of MR 5.5’s regulation of the remote practice of law. MR 5.5 reflects the traditional view that each state has an interest in regulating the practice of law physically carried out within that state. This concept harkens back to the 19th-century vision of a sole practitioner lawyer with a few books as resources and unique knowledge of local matters, a circumstance where it was difficult for out-of-state lawyers to easily ascertain needed information. The American practice of law progressed from the isolated sole practitioner many decades ago, and Opinion 495 recognizes the reality that lawyers throughout the world have easy access to information, both legal and general, providing the basis for them to represent clients competently on myriad legal issues throughout the world. Monica, Alejandro, and George can use their electronic devices to easily research the law of every state and obtain cutting-edge information that will allow them to proficiently, and competently, represent clients in matters throughout the country. Whether they do so from their offices in Cincinnati, or from anywhere else in the world, is largely irrelevant.

The issue with Opinion 495 is that it plainly states what remote practice lawyers can and cannot engage in under MR 5.5, but it does so by bending a rule enacted in its current form in 2002 that has not been changed to reflect either the modern practice of law or the effect of the COVID-19 pandemic. Opinion 495 is not the equivalent of a state bar’s ethics advisory opinion that can be relied upon by all lawyers in that state. Although lawyers in states without relevant rules or opinions might in good faith rely on Opinion 495, they may still be challenged regarding their remote practice of law. They will have Opinion 495 only as a basis for arguing a position rather than being able to rely on it as a settled rule.

Three Lawyers Working Remotely—Resolving the Hypothetical

Let’s go back to the hypothetical involving Monica, Alejandro, and George.

Pre-COVID-19 Pandemic

As a starting point, Monica, Alejandro, and George were working at home on evenings and weekends before the pandemic. For Monica and Alejandro, there is no issue about working from home because their homes and offices are in Ohio, the state in which they’re licensed.

But for George, it may not be that easy. George is licensed in Ohio, and his office is in Ohio, but George lives in Kentucky. When he works from home he is practicing law while physically located in Kentucky. Before the pandemic, likely no one would have questioned his doing so. But what if George is working on an estate plan for a Kentucky client, a client that came to his Cincinnati firm’s trusts and estates department and was assigned to George by one of the partners? Would Kentucky hold that George is engaging in the unauthorized practice of law?

There is no clear answer. Kentucky SCR 3.130(5.5)(c)(3) is very close to MR 5.5(c)(4), allowing provision “on a temporary basis” of legal services that “arise out of, or are reasonably related to, the representation of the lawyer’s client in the jurisdiction in which the lawyer is admitted.” Although the work George is doing is related to his practice with his law firm in Ohio, when he works at night or on weekends from his Kentucky home the underlying issue still is whether this meets the definition of a “temporary” practice. Would it matter if George works from home only one day a month? What if every week he works from home on four weeknights and on Saturday for five hours?

Transactional lawyers have routinely worked remotely and have seldom been concerned whether they were physically sitting at their home desks if the work they were doing is identical to the work they would be doing if they were sitting at their office desks. Is this assumption valid? There is no definition of the word “temporary” in MR 5.5, but from the context of the Rule and its Comments, a reasonable conclusion is that the word relates to physical presence. Yet, Opinion 495 seems to divorce physical presence from the meaning of “temporary.”

One additional note on the pre-COVID-19 pandemic conduct of transactional lawyers. Before the pandemic, many lawyers traveled frequently on business, whether to meet with clients or to attend conventions. No doubt, when an Ohio lawyer is attending a convention in Georgia and working on existing matters from a hotel room at night, the lawyer is temporarily practicing law in Georgia on matters commenced and primarily carried out in Ohio. However, if the lawyer meets with a new Georgia client at the convention and starts work during the convention on this new deal, the question will arise whether this is “reasonably related” to the lawyer’s practice because this is a client the lawyer may not have met or even known about if the lawyer had remained in Ohio.

COVID-19 Pandemic

Let’s start with George. The fact that he has hunkered down in his Kentucky home for an extended period makes any claim that his practice in Kentucky is “temporary” more strained. Opinion 495, in discussing the pandemic, notes that how long the “temporary period lasts could vary significantly based on the need to address the pandemic.” The Kentucky Supreme Court does not have to accept the conclusions of Opinion 495, but the opinion gives George a solid good faith basis for defending his conduct.

But, what if, instead, the focus is on the much more strongly stated basis for Opinion 495, that a state has no interest in lawyers practicing for the benefit of clients not resident of the state and applying other states’ law? Then George could be challenged for representing his Kentucky estate planning client. And, as an additional twist, what if he and his firm obtained the client in July 2020 (with the firm offices closed and George working from his Kentucky home) and George has only met with the client via Zoom calls? And how concerned should George be about the location of the signing of any documents he prepares?

It may be easier for Monica, who is working from her Florida vacation home. Florida Rule 4-5.5(c)(4) differs little from MR 5.5(c)(4). Also, in August 2020 the Florida Bar Standing Committee on the Unlicensed Practice of Law issued a Proposed Advisory Opinion in response to an inquiry from a Florida resident who was licensed in New York and New Jersey and admitted to practice before the United States Patent and Trademark Office. The lawyer asked if he could continue his practice with his New Jersey law firm. While the lawyer’s request emphasized the federal nature of his practice, the Florida Proposed Advisory Opinion does not focus on the federal nature of his practice but, rather, focuses on the fact that neither Florida law nor Florida clients were involved. Monica, while working remotely from Florida during the pandemic, might claim good faith reliance on both Opinion 495 and the Florida Proposed Advisory Opinion, but she also has to keep in mind two things: 1) the Florida Supreme Court has not accepted Opinion 495 or the Florida Proposed Advisory Opinion, and 2) the Florida Proposed Advisory Opinion is based on the fact that the requesting lawyer was not representing Florida clients nor was he applying Florida law. So no Florida real estate deals or Florida clients for Monica while she’s in Florida.

Finally, what about Alejandro, who is working remotely during the pandemic from his parents’ home in Colorado? The Colorado version of MR 5.5 references Colorado Rule of Civil Procedure 205.1, which contains a “driver’s license” rule for transactional lawyers. A lawyer in good standing in another state can practice in Colorado as long as the lawyer does not become a Colorado resident, does not accept or solicit Colorado clients, does not represent to the public that the lawyer is practicing law in Colorado, and has “not established a place for the regular practice of law in Colorado.” In light of this, it would seem that Alejandro could stay at his parents’ Colorado home for the term of the pandemic and work on real estate deals involving Colorado real property and Colorado law but not representing Colorado clients.

Post-COVID-19 Pandemic

What if, after the pandemic is over, Monica takes Of Counsel status and moves permanently to Florida, and Alejandro moves permanently to Colorado? The Florida Proposed Advisory Opinion involved a lawyer who retired from a corporate position in New Jersey, moved to Florida, and then started working from Florida for a New Jersey law firm. Therefore, the Florida Proposed Advisory Opinion opens up the possibility that lawyers will be able to retire to Florida and continue practicing in states where they are licensed. This is true even if they enter into a practice relationship after they have moved to Florida, provided the practice does not involve Florida clients or Florida law. So, again, no Florida real estate deals or Florida clients for Monica.

But, unlike what the rule would be in Florida under the Florida Proposed Advisory Opinion, Alejandro could not move permanently to Colorado and continue to practice law as he had before becoming a Colorado resident. Also in contrast to the Florida Proposed Advisory Opinion, though Colorado prohibits the non-Colorado-licensed lawyer from becoming a resident, it does allow the lawyer to practice Colorado law involving matters in Colorado but not to accept or solicit Colorado clients. To carry out the “driver’s license” metaphor, once Alejandro moved to Colorado he would have to get licensed there if he wants to practice law.

Consequences

Finally, what is the risk that a transactional lawyer’s remote practice might be challenged and, if successfully challenged, sanctioned either by discipline or damages in a civil case? That is an open question. Disciplinary cases involving the unauthorized practice of law allegations against out-of-state lawyers almost always involve client solicitation; in those cases, client solicitation usually appears to be the greater issue. Civil cases involving the unauthorized practice of law allegations against out-of-state lawyers almost always involve either malpractice or breach of contract, or both: the unauthorized practice of law allegation is, to use a football metaphor, “piling on.”

Disciplinary authorities do not appear to be focused on the activities of transactional lawyers who are competently representing their clients. The complaining party most likely would be either a disgruntled client or an opposing counsel who may be attempting to disrupt a transaction or seeking retribution for a failed transaction.

In the highly unlikely event that a disciplinary action is brought and the lawyer’s remote practice is found to be the unauthorized practice of law, any disciplinary sanction may be light unless the lawyer has engaged in a long-standing activity involving multiple clients. For example, if the Kentucky Supreme Court were dealing with George over his representation of the Kentucky estate planning client, it seems unlikely that George’s working from his Kentucky home would bring more than a reprimand. In civil cases, it is difficult to see how any monetary damages would arise from the lawyer’s engaging in the unauthorized practice of law if the lawyer has performed competently in the matter undertaken. But—and it’s a big but—there are many cases where lawyers found to have been engaged in the unauthorized practice of law are denied recovery of fees for the legal work performed.

Conclusion

Opinion 495 is a significant development in the evolution of the rules on multijurisdictional practice. Opinion 495 provides a good faith argument for a lawyer whose remote practice of law is challenged if the lawyer has been practicing in a state that has not addressed the issue and whose version of Rule 5.5 generally tracks MR 5.5. Nonetheless, if a lawyer plans to practice remotely from a state, that state’s rules must be reviewed, and the lawyer should closely consider the lawyer’s conduct in terms of both the rule and the basis for the rule.

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By James Geoffrey Durham

James Geoffrey Durham, Professor Emeritus at the University of Dayton School of Law, is the Secretary of the Section.