Anthony E. Davis

This article addresses a problem that bedevils lawyers and clients, that the admission and regulation of lawyers is principally based on their physical location at any given moment. In an article in the Georgetown Journal of Legal Ethics, the author of this column and others wrote that the current rules restricting the ability of American lawyers to engage in the practice of law on a nationwide basis come to us from a time "when the fastest means of communication was on the back of a horse and when almost all legal matters were 'local' by nature and impact…" (See Jones, Davis, Chester and Hart Reforming Lawyer Mobility – Protecting Turf or Serving Clients? 2017 GJLE 125, 128) (the "Mobility article"). These rules are no longer rational or workable, are contrary to the best interests of clients, and are unnecessary to protect the public from harm. Whatever the justifications of such a system at the end of the Eighteenth Century, they are no longer persuasive in a nationwide market where lawyers' services routinely have impacts across state lines and where information moves at the speed of light.

The problems faced by lawyers today in dealing with local regulation in the age of the Internet come in many forms. The location of lawyers' place of admission to the bar often has very little to do with what they are actually doing, and where they are doing it in the course of their daily practice.

Four situations referenced in the Mobility article (at pages 133 and 134) stand out as prime examples of the ludicrous results of local regulation of law practice in the Twenty First Century:

• A lawyer who commutes to work across state lines and in the evenings and on weekends works remotely using technology from her home (in a state where she is not admitted) is presumably engaged in the unauthorized practice of law, even under the revised Rule of Professional Conduct 5.5 (which in most states' versions permits some form of "temporary practice"), because her presence is not temporary (she has a "systematic and continuous presence") even if none of her clients are located in the state where she lives. In other words, she is "practicing" in the state where she resides just because she is sitting there when she works remotely.

• A lawyer in State A is requested by a new client in State B to negotiate a business transaction in State C. Even assuming that State C has adopted the revised Rule 5.5, the lawyer remains at risk of engaging in unauthorized practice in State C because it could be argued that his activities in that state do not "arise out of or are reasonably related to" the lawyer's practice in State A, because the new client is in State B

• A lawyer who advertises on the internet—perhaps using only social media like LinkedIn—could be found to be engaged in the unauthorized practice of law in another state in which she is not licensed to practice. Many states, while taking care not to penalize the act of advertising on the internet itself, nonetheless expressly penalize lawyers who accept clients from their states who respond to internet advertising.

• A real estate developer client in State A asks its law firm in State B to handle all of the company's commercial leases in states throughout the country, to include the negotiation, drafting, and final execution of all necessary documents. This situation was addressed in N.J. Comm. on the Unauthorized Practice of Law, Op. 49 (2012), and the Opinion (which is approved by the New Jersey Supreme Court), stated that the negotiation of the leases would not be the unauthorized practice of law (UPL) in New Jersey because non-lawyers can negotiate leases, but actually drafting and/or supervising the execution of leases for properties in New Jersey would constitute UPL in New Jersey.

And a fifth example should drive the point home to every lawyer who ever uses email to communicate with a lawyer in another jurisdiction regarding a matter pertaining to that jurisdiction. In the case of In re Charges of Unprofessional Conduct in Panel File No. 39302,68 a Colorado-admitted lawyer, without ever setting foot in Minnesota, exchanged approximately two dozen emails with a Minnesota lawyer in order to intercede on behalf of his parents-in-law against whom the Minnesota lawyer was trying to enforce a $2,368.13 judgment. The Minnesota Supreme Court upheld the professional discipline in Minnesota of the Colorado lawyer on these facts, holding that "engaging in e-mail communications with people in Minnesota may constitute the unauthorized practice of law in Minnesota, in violation of Minn. R. Prof. Conduct 5.5(a), even if the lawyer is not physically present in Minnesota."

The potential consequences for lawyers (and their clients) if they are found to have engaged in UPL include criminal culpability; civil liability, including the potential for treble damages; discipline in the lawyer's "home" state (i.e., state of admission); discipline in the "host" state (where the infraction occurred)—followed by reciprocal discipline in the lawyer's home state; treating the lawyer's acts as a nullity; and denial of legal fees.

The most prevalent consequence of the current regulatory system falls on lawyers who move to a new state. This happens to lawyers with great frequency, whether to take a new job, to accompany a family member who is taking a new job, or for any number of other personal reasons. The problem is that because the only exception to local regulation is "temporary" practice—which is itself defined differently around the country—they do not qualify for that exception and therefore must get admitted in the jurisdiction where they are now residing. This is true even if the lawyer carefully refrains from holding herself out as a lawyer in the new state of residence, is shown only on the website of the office where she has traditionally practiced, and limits her practice to exclude matters involving her new state of residence. And the problem has multiple dimensions:

• Assuming the lawyer does seek admission in the new state of residence, how should she be described on her firm's website, and should she be permitted to sign correspondence as a "lawyer" in the period prior to her actual admission? And assuming again that she does seek admission in her new state, does the state permit admission on motion, and if so does she qualify (for instance has she practiced for the requisite number of years (often five of the prior seven years) in her state of admission, or must she sit for the new state's bar examination?

• And if she is unaware of the need to be admitted in the new state, and practices there as if she were admitted, the consequences may include:

• If she later seeks admission, after realizing her prior failure to do so, will the state admit her, given that in the interim she has admittedly been engaged in UPL?

• Possible exposure of the firm where she has been working to allegations that it assisted her in engaging in UPL; and

• Possible issues relating to billing of her time while she was not admitted.

Regrettably, these problems of practicing prior to or without admission can even arise with respect to individuals who take and pass the bar exam, but fail to complete the admission process—going through the laborious character and fitness review process. This can happen for many reasons, from inertia to fears of encountering a problem due to past conduct. But when it does occur, the individual's problems, and his firm's, are identical to those described above for the mobile lawyer who failed to seek admission after moving.

The Mobility article proposes a legislative solution, a narrowly drawn federal legislative solution in the form of a statute that mandates mutual recognition of rights of practice by lawyers across state borders. Briefly stated, it suggests that Congress should mandate that any person licensed to practice law and in good standing in any United States jurisdiction will be deemed qualified to practice law in every other United States jurisdiction (whether or not specifically licensed there).

• In all matters pending before the courts of the United States;

• In all matters involving federal law;

• In all matters involving international treaties;

• In all matters involving tribal law; and

• In all matters affecting interstate or foreign commerce.

Persons practicing under these provisions would be subject to the disciplinary authority of the relevant jurisdictions.

At least one bar association—the Association of Professional Responsibility Lawyers (APRL)—is actively considering what changes in the regulatory system may be possible to eliminate all of these problems, including a legislative solution along the lines proposed in the Mobility article, but no report has been completed.

However, any uniform national solution is nowhere near achievement. In the interim, it is critically important for individuals to complete the admission process in New York, whether following passage of the bar examination or on motion if applicable, or by way of registration of in-house counsel. And firms need to rigorously monitor the admission status of every lawyer in every office to be sure they comply—or get into compliance with the local rules. Even though Geography is out of favor as a classroom subject in most schools, it still rules when it comes to the right to practice law, and will likely do so into the foreseeable future.

Anthony E. Davis is a partner of Hinshaw & Culbertson and is a past president of the Association of Professional Responsibility Lawyers.