In-House Counsel Beware: Corporate Attorneys and the Practice of Law in Kansas and Missouri, 0119 KSBJ, 88 J. Kan. Bar Assn 4, 44 (2019)

Author:By J. Nick Badgerow
Position:88 J. Kan. Bar Assn 4, 44 (2019)
 
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In-House Counsel Beware: Corporate Attorneys and the Practice of Law in Kansas and Missouri

88 J. Kan. Bar Assn 4, 44 (2019)

Kansas Bar Journal

April, 2019

By J. Nick Badgerow

I. INTRODUCTION AND OVERVIEW.

Corporate lawyers come to Kansas and Missouri companies from all over the country. Those lawyers bring a wide array of talents and expertise to their new employers, and help those employers to grow and succeed—while avoiding or mitigating legal liability. The services provided by in-house lawyers are as varied as the lawyers themselves and the needs and activities of the companies that employ them.

When lawyers take on employment with a company in Kansas or Missouri, they bring, along with their knowledge and expertise, their law licenses from other states. Some lawyers believe that, because they are consulting with constituents of their new employer in various states around the country, or even in other countries, and perhaps the corporate employer is based in another state, it is unnecessary for them to seek and obtain a license to practice law in their new state of residence, be that Kansas or Missouri, so long as they maintain their licenses in their originating state(s).

The purpose of this article is to explain that lawyers who work with and for a single corporate employer in these states, and who advise clients about matters of law in various states, must still (in most instances) be licensed to practice law in the states where they now find their offices – at least in Kansas and Missouri. Failure to do so may subject the lawyers to a claim of the unauthorized practice of law.

Fortunately, both Kansas and Missouri provide a procedure by which a lawyer licensed in another state may apply for a limited license to work for their single corporate employer (without taking the bar examination)—if the lawyer is otherwise qualified under the specific rules, which are discussed below.

This article also lists the requirements and procedures for making application for a limited, single-employer license in both states.

II. THE PRACTICE OF LAW IS A PRIVILEGE.

Most lawyers understand that the right to practice law in a particular jurisdiction is not a right, but a privilege. Kansas Supreme Court Rule 705(a) expressly provides that “[t]he practice of law is a licensed privilege, not a right.”1

Similarly, the Missouri Supreme Court has held:

The ability to practice law is a privilege, accorded only to those who ‘demonstrate the requisite ... moral character.’ [In re] Haggerty, 661 S.W.2d [8] at 10 [(Mo. banc 1983)].”[2]

Moreover, every lawyer is bound by Rule not to engage in the unauthorized practice of law.3 Notably, the Rule also prohibits a lawyer from assisting another lawyer in the unauthorized practice.4 This means that in-house supervising lawyers have a duty to ensure that all lawyers under their supervision are appropriately licensed to practice law by the applicable jurisdictions.[5] See also, Rule 5.1(a): (a) A partner in a law firm, and a lawyer who individually or together with other lawyers possesses comparable managerial authority in a law firm, shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that all lawyers in the firm conform to the Rules of Professional Conduct.6

Moreover, in most states, the unauthorized practice of law is a crime.7

The legislature has also determined that the unauthorized practice of law is a danger to the people of Missouri. It has made the “practice of law” and engaging in “law business” by unlicensed individuals a misdemeanor crime. § 484.020.8

III. WHAT IS THE “PRACTICE OF LAW?” KANSAS.

The “practice of law” has not been specifically and definitively defined by statute in Kansas, and the definition must be gleaned from a series of cases, mostly arising from the work of suspended or disbarred lawyers who attempt to skirt the rules and continue unabated in practicing as a lawyer.

A general definition of the “practice of law” has been quoted with approval as follows: “‘As the term is generally understood, the “practice” of law is the doing or performing of services in a court of justice, in any matter depending therein, throughout its various stages, and in conformity to the adopted rules of procedure. But in a larger sense it includes legal advice and counsel, and the preparation of legal instruments and contracts by which legal rights are secured, although such matter may or may not be depending in a court.’” State ex rel. Boynton v. Perkins, 138 Kan. 899, 907-08, 28 P.2d 765 (1934) (quoting Eley v. Miller, 7 Ind.App. 529, 34 N.E. 836 [1893]).9

Advising Kansas clients on legal matters is clearly the “practice of law” in Kansas.10

This court has repeatedly recognized the actions of counseling and advising clients on their legal rights and rendering services requiring knowledge of legal principles are included within the definition of practicing law. State ex rel. Stovall v. Martinez, 27 Kan. App.2d 9, 11-12, 996 P.2d 371 (2000).11

MISSOURI.

The “practice of law” is defined as: ... the appearance as an advocate in a representative capacity or the drawing of papers, pleadings or documents or the performance of any act in such capacity in connection with proceedings pending or prospective before any court of record, commissioner, referee or any body, board, committee or commission constituted by law or having authority to settle controversies. § 484.010.1. The “law business” is defined as: ... the advising or counseling for a valuable consideration of any person, firm, association, or corporation as to any secular law or the drawing or the procuring of or assisting in the drawing for a valuable consideration of any paper, document or instrument affecting or relating to secular rights or the doing of any act for a valuable consideration in a representative capacity, obtaining or tending to obtain or securing or tending to secure for any person, firm, association, or corporation any property or property rights whatsoever. § 484.010.2. . . . [T]he “practice of law” includes acts done both in and out of court. . . 12

Thus, while the Missouri statutes purport to define the terms “practice of law” and “law business,” that is not the boundary of the terms. Because the judiciary is the “sole arbiter of what constitutes the practice of law,” Hulse

[v. Criger, 363 Mo. 26], 247 S.W.2d [855] at 857-58 [(1952)], such statutes merely act in aid of this Court’s regulation of the practice of law and cannot “supersede or detract from, the power of the judiciary to define and control the practice of law.” Id. Nonetheless, this Court has used these statutory definitions of the “practice of law” as a reference point for determining the scope of the practice of law. See, e.g., id.; Eisel v. Midwest BankCentre, 230 S.W.3d 335, 338 (Mo. banc 2007).13

Advising clients on matters of law and legal interpretation constitutes the practice of law.14 Consulting with clients “for the purpose of advising them of their rights and the action to be taken concerning them, is engaging in the practice of law.”15

In addressing a particular lawyer-respondent’s conduct, the Missouri Supreme Court stated: [He has engaged in] advising members of the public as to their rights under the Workmen’s Compensation Law including the evaluation of their claims, legally and otherwise, and he has regularly negotiated and brought about, through his advocacy, compromise settlements of a multitude of such claims. This can be nothing other than the practice of law.16

IV. WHAT ABOUT THE PRACTICE OF “FEDERAL L AW ”?

A lawyer may practice exclusively in the area of law reserved to federal law, such as bankruptcy, patents or immigration. If a lawyer’s practice in Kansas or Missouri is expressly limited solely to an area of federal law, and not involved in any way in state law, that individual may consider proceeding without a license in their state of residence.

KANSAS.

Kansas’ Rule on the unauthorized practice includes a provision found in the Model Rules, which provides a “federal law” exception. (d) A lawyer admitted in another United States jurisdiction or in a foreign jurisdiction, and not disbarred or suspended from practice in any jurisdiction or the equivalent thereof, may provide legal services through an office or other systematic and continuous presence in this jurisdiction that: . . .

(2) are services that the lawyer is authorized by federal law or other law or rule to provide in this jurisdiction.17

Under this Rule, a lawyer whose practice is exclusively limited to an area reserved for federal practice need not be licensed in the state where s/he practices.18

MISSOURI...

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