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self-study / Legal Ethics

Unauthorized practice of law; multijurisdictional practice of law (Rule 5.5)

Pansky ellen web

Ellen A. Pansky

Partney, Pansky Markle Ham LLP

Email: epansky@panskymarkle.com

Special Coverage

PROPOSED RULES OF PROFESSIONAL CONDUCT

In 2002, the American Bar Association introduced amendments to Model Rule 5.5, governing unauthorized practice, to permit lawyers to practice in jurisdictions other than ones to which they are admitted. The amended ABA rulecreated create numerous “safe harbor” provisions preventing disciplinary prosecutions for multi-jurisdictional practice.

In 2004, the California Supreme Court adopted new Rules of Court, which incorporated parts of Rule 5.5 to permit certain specific “carve out” areas in which out-of-state attorneys are permitted to practice law here. However, these rules were not codified as part of California’s Rules of Professional Conduct. Currently, Business and Professions Code Sections 6125 and 6126 make the unauthorized practice of law a misdemeanor, while current Rule 1-300 of the Rules of Professional Conduct prohibits California lawyers from practicing without a license in other jurisdictions.

The Rules Revision Committee has now proposed to the California Supreme Court the adoption of a version of ABA Model Rule 5.5. The comments to the proposed rule incorporate parts of the 2004 Rules of Court, which have been amended several times since. Pertinent multi-jurisdictional Rules of Court are summarized as follows.

Arbitration

Rule 9.43 governs out-of-state arbitration counsel. Such counsel is one who is not a member of the California bar, but who is eligible to practice law before the bar of another jurisdiction, and who has been retained to appear in an arbitration in California.

The attorney must also serve a certificate of out-of-state attorney arbitration counsel in accordance with the requirements of Code of Civil Procedure Section 1282.4. That statute generally requires the attorney to disclose information similar to that required in a pro hac vice application. The arbitration tribunal must approve the certificate, and a copy of the certificate must then be served on all parties and counsel to the arbitration as well as the State Bar, and the attorney becomes subject to California’s Rules of Professional Conduct. Failure to timely file and serve the required certificate, and “appearances in multiple separate arbitration matters are grounds for disqualification from serving in the arbitration in which the certificate was filed.”

Litigation

Rule 9.40 authorizes pro hac vice admission of a foreign attorney in litigation proceedings in California if the attorney (a) is in good standing in his/her home jurisdiction; (b) does not reside in California; (c) cannot maintain an office or a continuous and regular presence in California; and (d) does not regularly seek pro hac vice status here.

Rule 9.47 permits under certain circumstances the temporary practice of litigation law by a foreign attorney. The rule is designed to address the status of non-California lawyers who are here as part of anticipated litigation, but prior to any pro hac vice application or arbitration certification. Such an attorney must: (1) maintain an office in a U.S. jurisdiction where he/she is licensed to practice; (2) already be retained by a client in the matter (the attorney may provide legal advice to a potential client, at the potential client’s request, to assist the client in deciding whether to retain the attorney); (3) indicate on websites/advertisements that are accessible in California either that the attorney is not a member of the California bar or that the attorney is admitted to practice law only in the states listed; and (4) be in good standing in another U.S. jurisdiction.

An attorney who meets the requirements of Rule 9.47 does not engage in unauthorized practice of law if the lawyer’s services are part of: (1) a formal legal proceeding that is pending in another jurisdiction and in which the attorney is authorized to appear; (2) a formal legal proceeding that is anticipated but is not yet pending in California and in which the attorney reasonably expects to be authorized to appear; (3) a formal legal proceeding that is anticipated but is not yet pending in another jurisdiction and in which the attorney reasonably expects to be authorized to appear; or (4) a formal legal proceeding that is anticipated or pending and in which the attorney’s supervisor is authorized to appear or reasonably expects to be authorized to appear.

An attorney practicing under Rule 9.47 may not: (1) hold out to the public that he or she is admitted in California; (2) establish or maintain a resident office or other systematic or continuous presence in California for the practice of law; (3) be a resident; (4) be regularly employed here; (5) regularly engage in substantial business/professional activities here; or (6) have been disbarred/suspended in another jurisdiction.

Non-Litigation Matters

Rule 9.48 permits a foreign attorney to temporarily practice transactional law in California. The attorney must follow the same requirements and restrictions described by Rule 9.47.

Additionally, an attorney meeting these requirements is not engaging in the unauthorized practice of law if the attorney: (1) provides legal assistance or legal advice in California to a client concerning a transaction or other nonlitigation matter, a material aspect of which is taking place in a jurisdiction other than California and in which the attorney is licensed to provide legal services; (2) provides legal assistance or legal advice in California on an issue of federal law or of the law of a jurisdiction other than California to attorneys licensed to practice law in California; or (3) is an employee of a client and provides legal assistance or legal advice in California to the client or to the client’s subsidiaries or organizational affiliates.

Registered In-House Counsel

Rule 9.46(c) permits attorneys admitted to practice in other states to serve as in-house counsel to a qualifying institution that employs him or her. To do so, the attorney must be an active member in his/her home jurisdiction and generally meet the all requirements for admission to the California bar, except that the attorney need not take the California bar exam or the MPRE; and can practice while waiting for the moral character results. The attorney also must comply with the State Bar Registered In-House Counsel Program rules; only practice for a single qualifying institution (and the attorney may, if so qualified, simultaneously practice law as a registered legal services attorney); abide by laws and rules that govern members of the California bar (including ongoing MCLE requirements); satisfy the standard three-year MCLE requirements, applicable to regular bar members, in his or her first year of practice; and reside in California.

Effect of Proposed Rule 5.5

Proposed Rule 5.5 does not substantively modify the requirements set forth in the California Rules of Court. The effect of the proposed rule is to increase the likelihood that a lawyer who fails to comply with the provisions of the Rules of Court will be subject to disciplinary enforcement by the State Bar’s Office of the Chief Trial Counsel.

If Rule 5.5 is adopted, a California lawyer will be subject to discipline if he or she engages in unauthorized practice in another jurisdiction, or if the California lawyer fails to comply with the multi-jurisdictional practice regulations of another jurisdiction while practicing in that jurisdiction.

It will be interesting to see whether the State Bar of California will initiate action against a lawyer not admitted to practice in California under proposed Rule 5.5(b), in light of the fact that the State Bar typically does not have jurisdiction over lawyers not admitted to the California Bar, and normally simply refers such a matter to the jurisdiction where the lawyer is admitted to practice.

Rule 5.5 Unauthorized Practice of Law; Multijurisdictional Practice of Law

(a) A lawyer admitted to practice law in California shall not:

(1) practice law in a jurisdiction where to do so would be in violation of regulations of the profession in that jurisdiction.

(2) knowingly* assist a person* or entity in the unauthorized practice of law.

(b) A lawyer who is not admitted to practice law in California shall not:

(1) except as authorized by these rules or other law, establish or maintain a resident office or other systematic or continuous presence in California for the practice of law; or

(2) hold out to the public or otherwise represent that the lawyer is admitted to practice law in California.

Comment

Paragraph (b)(1) prohibits lawyers from practicing law in California unless otherwise entitled to practice law in this state by court rule or other law. (See, e.g., Bus. & Prof. Code, §§ 6125 et seq. See also California Rules of Court, rules 9.40 (counsel pro hac vice), 9.41 (appearances by military counsel), 9.42 (certified law students), 9.43 (out-of-state attorney arbitration counsel program), 9.44 (registered foreign legal consultant); 9.45 (registered legal services attorneys), 9.46 (registered in-house counsel), 9.47 (attorneys practicing temporarily in California as part of litigation), and 9.48 (non-litigating attorneys temporarily in California to provide legal services).)

#207

Ben Armistead


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