CHAPTER 9 CROSSING THE BORDER: ISSUES IN THE MULTISTATE PRACTICE OF LAW
| Jurisdiction | United States |
(Jan 1988)
CROSSING THE BORDER: ISSUES IN THE MULTISTATE PRACTICE OF LAW
Lohf, Shaiman & Ross
Denver, Colorado
The Overthrust Belt, Denver-Julesburg Basin, and other mineralized areas freely cross jurisdictional boundaries without any significant alteration in geological character. Lured by the prospect of applying successful interpretative techniques, mineral development companies often wish to follow these areas of mineralization into adjoining states, although they soon discover that, even though the geology may be similar, the title, operating and permitting requirements are very different. Some element of continuity may be preserved if a company uses legal counsel who are already familiar with the company's objectives and methods; if these lawyers are not licensed in the new jurisdiction, however, their business knowledge will be of little help in coping with the substantially different legal requirements imposed by the new jurisdiction.
In selecting counsel to work in a new jurisdiction, a company consequently must balance its existing counsel's familiarity with the company's business against the complexity of the legal matters which will be encountered in the new jurisdiction. While a lawyer must make a similar business decision in determining whether it is economically feasible to learn the relevant law of the new jurisdiction, he also faces a threshold question as to whether he is even legally permitted to perform the requested services. This paper assumes that a company and its counsel wish to continue work in a new jurisdiction, focusing on the legal and ethical constraints which may prohibit this from occurring.
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THE ETHICAL FRAMEWORK
Depending on the state, a lawyer's ethical responsibilities are governed either by the Code of Professional Responsibility (the "Code")1 or the Model Rules of Professional Conduct ("Model Rules").2 Both the Code3 and the Model Rules4 defer to local substantive law in determining the circumstances under which a
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lawyer may practice outside his licensing jurisdiction. Ethical Consideration 3-9 under the Code recognizes the danger of such blanket deference to state law and cautions that:
...the demands of business and the mobility of our society pose distinct problems in the regulation of the practice of law by the states. In furtherance of the public interest, the legal profession should discourage regulation which unreasonably imposes territorial limitations upon the right of a lawyer to handle the legal affairs of his client or upon the opportunity of a client to obtain the services of a lawyer of his choice in all matters....
The Model Rules take no comparable position on active resistance to territorial limitations, although they do recognize the present reality of multistate practice.5
The fear that there may be some uniquely ethical bar to activities outside a lawyer's home jurisdiction consequently is unfounded. The Code and Model Rules recognize that lawyers are often involved in activities of a multistate nature, but both accord states ultimate authority to determine whether such activities are permissible.6 As the American Bar Association Committee on Professional Ethics succinctly concluded, "[i]t is a matter of law, not of ethics, as to where an individual may practice law."7
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SUBSTANTIVE LAW
While frequently attacked as vehicles for the exclusion of otherwise qualified persons and the preservation of a monopoly on the part of the bar,8 legitimate state prohibitions on the unauthorized practice of law are intended to protect the public against incompetent or unethical providers of such services.9 To ensure such protection, all states have adopted statutes or rules addressing the unauthorized practice of law, none of which, however, is entirely satisfactory.10 California, North Dakota and
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South Dakota simply prohibit the practice of law by unauthorized persons, while Colorado, Idaho, Montana, New Mexico, Utah and Wyoming focus, to a greater or lesser degree, on the idea that unlicensed persons should not hold themselves out to the public as qualified lawyers. Not even the most detailed of these statutes adequately defines the practice of law for multistate practice purposes.
Courts have been no better in fashioning an appropriate definition. At least one court has simply refused to attempt a definition, maintaining that each specific factual situation must be judged according to its own circumstances.11 Courts which have
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attempted a definition often appear more foolish than bold, arriving at such conclusions as: "those acts, whether performed in court or in the law office, which lawyers customarily have carried on from day to day through the centuries";12 whether "difficult or doubtful legal questions are involved which, to safeguard the public, reasonably demand the application of a trained legal mind;"13 whether personal contact "in the nature of consultation, explanation, recommendation or advice" is involved;14 or whether a simple activity incidental to a person's normal business is at issue.15 Unauthorized practice committees of the various state bars compound these definitional problems by routinely issuing opinions concerning specific conduct.16 Absent a uniform, workable understanding of the scope of the practice of law, such opinions cannot aid in bounding the concept, but provide only isolated safe harbors. Indeed, since governance of the practice of law ultimately is a matter of substantive law, these advisory opinions do not even provide concrete assurance as to the harbor's safety. In short, no one has yet successfully determined what lawyers do with their time, other than charge handsomely for it.
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These efforts to define the practice of law are of interest primarily to lawyers working as landmen or inside counsel, who may argue that the activities which they perform do not constitute the practice of law. For example, a lawyer-landman who merely assembles copies of recorded documents for examination by a licensed attorney without opining on the validity or effect of such instruments likely will not be deemed engaged in the practice of law.17 Similarly, since a corporation may act only through its duly authorized directors, officers, employees and agents, an inside counsel who negotiates and drafts a contract on behalf of his employer is not likely to be deemed practicing law.18
In all other situations, however, a lawyer presumably is being retained to perform outside his licensing jurisdiction the very same services he performs inside his jurisdiction — preparing title opinions, negotiating and drafting complex lease or sale agreements, representing companies before governmental
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agencies and similar activities — in which he conducts himself and charges the same fee as he would if performing such services in his home jurisdiction. Under these circumstances, it would be disingenuous to claim that the work does not involve the practice of law; such services are, by definition, those "which lawyers customarily have carried on from day to day through the centuries."19 If a lawyer is to perform such services in a state in which he has not been licensed, it must be in reliance upon some specially created exception to the otherwise clear mandates of the unauthorized practice rules.
Admission Pro Hac Vice
The most commonly encountered exception, and the only one expressly created by statute or rule, is the discretionary right of a court to permit an out-of-state attorney to appear in a single litigation matter, usually in association with local counsel. Such admission pro hac vice provides no assistance to a natural resources lawyer working on a leasing play or otherwise not involved in litigation, but it does help to identify the protections which a state believes necessary when a lawyer is acting outside his licensing jurisdiction.
In accordance with avowed concerns for ethical integrity and legal competence of out-of-state attorneys, pro hac vice admissions in state courts generally require evidence that the attorney is in good standing in his licensing jurisdiction, disclosure of past disciplinary actions, and association with
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local counsel.20 While one may postulate a situation in which a licensing state might tolerate less ethical behavior on the part of its attorneys than the foreign state, thereby justifying the foreign state in denying admission pro hac vice to an attorney authorized to practice in the courts of his home state, the modern trend appears to accept admission in the home state as sufficient, unless some conduct before the foreign court suggests the contrary.21 The vast majority of state courts do, however, continue to require association with local counsel to ensure competence in local law matters and adherence to local court practices and procedures.22 To achieve this end, most states require that the local counsel have an active and responsible role in the litigation, not act merely as a figurehead.23
Many federal courts take a more relaxed approach to admission pro hac vice, recognizing that, while practice in the federal courts requires admission to practice in a state, such state need not necessarily be the same as the one in which the federal court
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is located.24 While the ability to appear pro hac vice in federal court is not guaranteed as a matter of constitutional right,25 a significant number of District Courts permit appearances by foreign counsel without independently inquiring into ethical conduct or requiring association with local counsel.26 Even though federal courts often may be involved in matters of local law as a result of the exercise of diversity or pendent jurisdiction, the fundamental thrust of these federal pro hac vice rules is premised on the existence of a truly federal practice, modified only by the minor vagaries...
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