Unauthorized Practice of Law: In-House Counsel and the

Multi-Jurisdictional Practice Problem

Todd C. Toral

Daniel Dashiell, Barclays Global Investors

Introduction

• Topics To Be Discussed:– What is the “Unauthorized Practice of Law”?

• Statutes, Rules of Professional Conduct and Judicial Decisions– Consequences of Violating UPL Restrictions – Enabling Multi-Jurisdictional Practice– “To Whom” Can and Can’t the In-House Lawyer

Provide Advice– Registration of In-House Lawyer with the Bar of Jurisdiction Where

Office Located– Status of Model Rule 5.5 in the U.S.– California, other notable jurisdictions and other issues– The “Global Village”

What Is“Unauthorized Practice of Law”?

• Statutes – Some Treat UPL as Criminal– Cal Bus & Prof Code section 6126(a)– N.Y. Judiciary Law section 485

What Is“Unauthorized Practice of Law”? (cont’d)

• Rules Of Professional Conduct– Prohibit Assisting in UPL

• Cal Rules of Prof. Conduct (CRPC) Rule 1-120 • ABA Model Rule 5.5(a)

– What Rules Govern• CRPC Rule 1-100(D) • ABA Model Rule 8.5

What Is“Unauthorized Practice of Law”? (cont’d)

• Judicial Decisions and Ethics Opinions– Liberal approach – where not holding out as licensed attorney

or opining on law of jurisdiction where not licensed – see The Florida Bar v. Savitt, 365 So.2d 559 (1978); Lindsey v. Ogden, 406 NE2d 701 (Mass. 1980); Virginia Unauthorized Practice of Law Opinion 201 (1/22/01)

What Is“Unauthorized Practice of Law”? (cont’d)

• Judicial Decisions and Ethics Opinions (cont’d)– Conservative approach – Birbrower, Montalbano, Condon &

Frank PC v. Superior Court of Santa Clara County, 17 Cal 4th 119 (1998); Spivak v. Sacks, 16 NY2d 163, 211 NE2d 329 (1965); but cf. El Gemayel v. Seaman, 72 NY2d 701, 533 NE2d 245 (1988)

What Is“Unauthorized Practice of Law”?

• Judicial Exceptions to UPL Prohibitions– Federal agency practice – Sperry v. Florida ex rel Florida Bar,

373 U.S. 379 (1963)– Assisting or being supervised by licensed lawyer –

The Dietrich Corporation v. King Resources Company, 596 F.2d 422 (10th Cir 1979)

– Federal court practice – Ginsburg v. Kovrak, 139 A2d 889 (Pa), appeal dismissed for want of substantial Federal question, 358 U.S. 52 (1958); Spanos v. Skouras Theatres Corp., 364 Fed 161, 166 (2d Cir. 1966)

What Is“Unauthorized Practice of Law”? (cont’d)

• Judicial Exceptions to UPL Prohibitions (cont’d)– Admission pro hac vice for litigation purposes

• Note limitation on number of appearances in some jurisdictions –state may limit ability of out-of-state lawyers to appear pro hac vice in state courts – Leis v. Flynt, 439 US 838 (1979); Norfolk & Western Ry. Co. v. Beatty, 423 US 1009 (1975).

– State agency practice – Arbitration. Superradio Limited Partnership v. Walt “Baby”

Love Productions, Inc., 818 NE2d 589 (Mass. 2004).

Consequences of Violating UPL Restrictions

• Disciplinary Proceedings

• Criminal Prosecution

• Loss of Fees

• Contempt of Court

• Disqualification

• Loss of Certificate as LLP

Enabling Multi-Jurisdictional Practice

• Revised Model Rule 5.5 – Premise of MJP and UPL– The Test for Temporary Practice– Relief and Application for the In-House Lawyer

Rule 5.5(a) and (b) – Basic Premise of MJP and UPL

a) 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.

b) A lawyer not admitted to practice in this jurisdiction shall not:

1) Except as authorized by these Rules or other law, establish an office or other systematic and continuous presence in this jurisdiction for the practice of law;

2) Hold out to the public or otherwise represent that the lawyer isadmitted to practice law in this jurisdiction.

Rule 5.5(c) – The Test forTemporary Practice

• Recognition of Existing Practicesc) A lawyer admitted in another United States jurisdiction, and not

disbarred or suspended from practice in any jurisdiction, may provide legal services on a temporary basis in this jurisdiction that:1) Are undertaken in association with a lawyer who is admitted

to practice in this jurisdiction and who actively participates in the matter;

2) Are in or reasonably related to a pending or potential proceeding before a tribunal in this or another jurisdiction, if the lawyer, or a person the lawyer is assisting, is authorized by law or order to appear in such proceeding or reasonably expects to be so authorized.

Rule 5.5(c) – The Test forTemporary Practice (cont.)

• Recognition of Existing Practices (cont’d) c) A lawyer admitted in another United States jurisdiction, and not

disbarred or suspended from practice in any jurisdiction, may provide legal services on a temporary basis in this jurisdiction that:3) Are in or reasonably related to a pending or potential arbitration,

mediation, or other alternative dispute resolution proceeding in this or another jurisdiction, if the services arise out of or are reasonably related to the lawyer’s practice in a jurisdiction in which the lawyer is admitted to practice and are not services for which the forum requirespro hac vice admission; or

4) Are not within paragraphs (c)(2) or (c)(3) and arise out of or are reasonably related to the lawyer’s practice in a jurisdiction in which the lawyer is admitted to practice.

Rule 5.5(d) – Relief and Applicationfor the In-House Lawyer

• Requirements of In-House Counseld) A lawyer admitted in another United States jurisdiction, and

not disbarred or suspended from practice in any jurisdiction, may provide legal services in this jurisdiction that:1) Are provided to the lawyer’s employer or its organizational

affiliates and are not services for which the forum requires pro hac vice admission.

“To Whom” Can the In-House Lawyer Provide Advice

• Comment [16] – Paragraph (d)(1) applies to a lawyer who is employed by a

client to provide legal services to the client or its organizational affiliates, i.e., entities that control, are controlled by, or are under common control with the employer:

– This paragraph does not authorize the provision of personal legal services to the employer's officers or employees.

– The paragraph applies to in-house corporate lawyers, government lawyers, and others who are employed to render legal services to the employer.

“To Whom” Can the In-House Lawyer Provide Advice (cont’d)

• Comment [16] (cont’d)– The lawyer's ability to represent the employer outside the

jurisdiction in which the lawyer is licensed generally serves the interests of the employer and does not create an unreasonable risk to the client and others because the employer is well situated to assess the lawyer's qualifications and the quality of the lawyer's work.

Registration of In-House Lawyer with the Bar of Jurisdiction Where Office Located

• Don’t Delay

• CLE– Comment [17]

• If an employed lawyer establishes an office or other systematic presence in this jurisdiction for the purpose of rendering legalservices to the employer, the lawyer may be subject to registration or other requirements, including assessments for client protection funds and mandatory continuing legal education.

Status of Model Rule 5.5 In the U.S.

• States that have adopted

• States with adoption pending

• States that have rejected

• States with modified versions

California

• California Rule 9.48 (renumbered from Rule 967 effective 1/1/07)– Non litigating attorneys temporarily in California to provide legal services– Requirements– Permissible Activities– Restrictions– Conditions

California (con’t)

• California Rule 9.46 (renumbered From Rule 964 effective 1/1/07) – Registered in-house counsel– Requirements– Duration and other qualifiers

Some Notable Jurisdictions and Issues

• The New Jersey Trap!

• Jurisdictions with No In-House Counsel Exception

• Pro Bono Work

• Part-Time Counsel

The Global Village

The Global Village

• Globalization created by advances in communication and technology are eliminating barriers

• Do US MJP rules need to liberalize to meet global challenges?

• How does US compare on global stage?

• Significant state, national and international debate about best way to move through…

The Global Village (con’t)

• Communication revolution

• Technology

The Global Village (con’t)

• Conservative US System (is it antiquated or necessary?)– 53 states or territories each with their own system– Specialization

The Global Village (con’t)

• How does the US compare:– Easier in:

• EU • The Russian Federation• The People’s Republic of China (Wow!)

– Some Countries Embracing Liberal Approach

The Global Village (con’t)

• Debate – Issues: Tensions and Trends

• States’ rights and inherent powers or economic protectionism?• State licensing assures quality, high character

– National stage• Standardization

- National Lawyer Regulatory Database– International Stage

• WTO• International Standard Lawyer Numbering System?

QUESTIONS?

Good Luck!

Thank You!

Todd C. Toral

Nixon Peabody LLP

One Embarcadero Center, 18th Floor

San Francisco, CA 94111

(415) 984 – 8206

ttoral@nixonpeabody.com