"Don't Fence Me In"
By John McGuckin Jr.
THE ISSUES of multi-jurisdictional practice and the unauthorized practice of law have resurfaced recently both on the national and local levels. The debate began in earnest after the 1998 decision of the California Supreme Court in Birbrower, Montalano, Condon & Frank, P.C. v. The Superior Court of Santa Clara County, 17 Cal. 4th 119, 949 P.2nd 1 (Cal. 1998).
That case held that New York lawyers engaged in the unauthorized practice of law (and committed a misdemeanor) by performing legal work for a California-based client.
The initial reaction to the decision focused on the ability of non-California attorneys, in-house and outside counsel, to render any legal advice, transactional or litigation, oral or written, state or federal law, in California to California-based clients.
Under Birbrower, a New York lawyer who attends a meeting in San Francisco for a California client (and probably a non-California client as well), and faxes or e-mails an opinion letter or form to a California client (or even gives oral advice to a California client by phone) is probably engaging in the unauthorized practice of law.
The client, who may be a licensed California in-house counsel, is aiding and abetting the commission of a misdemeanor.
The Birbrower analysis has a broad implication for any lawyer with a mobile, multi-state practice. If other states follow the Birbrower rule (and Oregon already has), a New York attorney who responds to an e-mail from a Boston client has committed UPL in Massachusetts. A Philadelphia estate planner who answers e-mails on her laptop at Chicago's O'Hare airport, enroute to Santa Fe to meet with a client may be committing UPL both in Illinois and in New Mexico. A Washington, D.C., patent lawyer or Atlanta employment expert who builds up a national practice may be committing UPL in other states every time she provides legal services to her clients.
Against this background, the case for permitting attorneys -- especially in-house attorneys -- to engage freely in a multi-jurisdictional practice of law is compelling.
First, our clients need a wide range of specialized legal services on a state, national and, increasingly global, level. These clients, many with in-house legal staffs, seek -- by word-of-mouth, phone, fax or the Internet -- the best and most cost-effective legal counsel, wherever the lawyer may be located. These increasingly sophisticated legal consumers are not constrained by state boundaries, state rules about the practice of law or restrictive court rulings like Birbrower as they seek to use effectively both outside counsel and the company's in-house legal staff.
Second, the company's counsel provide legal services system-wide, not just in the state in which the legal department or the outside law firm is located. We have phone, fax and e-mail links to every office, plant, branch and division of the company around the country and around the world. Inside and outside counsel are expected to respond to the constant flow of legal inquiries which come from all parts of the company's system. In addition, in an effort to best utilize the experience and expertise of the in-house legal staff, our clients often send an in-house attorney on a temporary or a permanent basis to another state.
In short, the client's needs compel us to find ways to support an effective multi-jurisdictional practice throughout the United States. Fifteen states have already adopted, with variations in the details, an in-house counsel exception which protects the general public while recognizing the important reality of in-house practice. Four other states, including California, will consider the merits of such rules. It is time to build on the experience of these states and seek a national multi-jurisdictional practice uniformity for in-house counsel and for outside counsel as well.
After nearly two decades of study and debate, the American Corporate Counsel Association supports a proposal to permit in-house attorneys to engage in a multi-jurisdictional practice with a minimum of formality. Those in-house counsel transferred from one in-house position to another in different state should not be required to take another bar examination, provided that they are in good standing in their original state, pass the new state's character review, and agree to be subject to the disciplinary system of their new state of residence.
In addition, those in-house counsel who provide legal advice and services to employees of their corporate client located in other states in person or by phone, fax or e-mail should not be held to engage in the unauthorized practice of law.
The third leg of our proposal, as it relates to outside counsel, is similar and as necessary, but more controversial. First, the individual states would continue to regulate first-time lawyer admission. Second, any lawyer in good standing who has been previously admitted to a state bar may move to a new state of residence and be admitted to the practice of law without retaking the bar examination.
Third, the individual states would have the authority to regulate the multi-jurisdictional practice of lawyers who occasionally cross state lines under a "national compact" adopted by all the states. Those attorneys who are admitted in one state and whose business occasionally or temporarily takes them into other states will carry with them an "inferred license," like a driver's license, that authorizes their practice but subjects them to local regulatory control, without the need of additional bar exams, motions, associated local counsel or other formal requirements.
The time for change is now. The practice of law in Europe has already abandoned international boundaries as limitations and other federal systems, like Canada, Australia and soon Germany, are moving successfully toward multi-jurisdictional admissions and licensing standards which facilitate, rather than hinder, the practice of law. This is a complex, often emotional issue, in which change is not easy and reasonable minds often differ on the best approach. ACCA's proposal is simple and workable and in line with the important goal of our profession to provide high quality legal service to our clients. But, we think it is far more important that the legal profession not let this opportunity to address the MJP issue slip by without a reasoned analysis and some form of positive proposal from the organized bar.
John McGuckin Jr., is executive vice president, general counsel and secretary of Union Bank of California, N.A., based in S.F. He is chair of the advocacy committee of the American Corporate Counsel Association, and a member of the LTN Editorial Advisory Board.