Rules 5.5, 5.8, 8.5 Unauthorized Practice of Law; Multijurisdictional Practice of Law; Law Firm Employment of Suspended or Disbarred Lawyers

• Library: Minnesota Legal Ethics: A Treatise (MSBA) (2022 Ed.)

Rules 5.5, 5.8, 8.5—Unauthorized Practice Of Law; Multijurisdictional Practice Of Law; Law Firm Employment Of Suspended Or Disbarred Lawyers

I. OVERVIEW

A. Rule 5.5—Unauthorized Practice of Law (UPL)

This chapter does not attempt to provide a comprehensive definition of UPL or a full survey the substantive law of UPL. It does not consider UPL that may be committed by nonlawyers, the exact boundaries of UPL, and permissible practice, which are beyond the scope of this treatise. However, this chapter does consider numerous UPL issues, insofar as they bear on lawyers committing or aiding UPL.

B. Rules 5.5, 5.8, 8.5

These Rules are considered together here, because of their closely related subject-matter. Rule 5.8 is largely a codification of Minnesota case law under Rule 5.5, and other law, regarding a lawyer's employment of a suspended and disbarred lawyer. Rule 8.5 is related to the multijurisdictional UPL issues addressed by Rule 5.5(c). Rule 8.5 addresses both jurisdictional and choice of law issues in multijurisdictional settings.

C. Policy

The rules relating to UPL have a basis similar to that of UPL statutes—"limiting the practice of law to members of the bar protects the public against rendition of legal services by unqualified persons." Rule 5.5 cmt. 2. However, "A vital consideration, too often overlooked, is 'the natural tendency of all professions to act in their own self interest,' which requires that courts 'closely scrutinize all regulations tending to limit competition in the delivery of legal services to the public.'" CHARLES W. WOLFRAM, MODERN LEGAL ETHICS § 15.1.3 at 835 (1986) (citing Fla. Bar v. Brumbaugh, 355 So. 2d 1186, 1189 (Fla. 1978)).

D. 2005 Amendments

In 2005, Minnesota amended UPL ethics and bar admission rules in three ways. First, and most importantly, rules were adopted permitting lawyers licensed in other jurisdictions to practice "on a temporary basis" in Minnesota. Rule 5.5(b)-(d). These rules, known as "multijurisdictional practice" rules, are discussed below. Second, former Rule 5.5(a) and (b), forbidding UPL and assisting UPL, were combined in Rule 5.5(a). Third, former Rule 5.7 ("Employment of Disbarred, Suspended, or Involuntarily Inactive Lawyers") was renumbered as Rule 5.8 and was amended in minor ways.

E. 2019 Amendments

In 2019, Minnesota amended Rules 5.5(b) and (c) to increase the multijurisdictional practice permissions for lawyers licensed elsewhere to practice in Minnesota. These amendments are discussed below. In addition, by separate order, the Court approved—but did not itself adopt—certain amendments to the comments to Rule 5.5, including a definition of "family member."

F. Model Rules and In-House Counsel

Rule 5.8 has no counterpart in the Model Rules. Rule 5.5 is nearly identical to the Model Rule. Minnesota declined to adopt ABA Model Rule 5.5(d)(1), which would have allowed a lawyer admitted outside of Minnesota, and in good standing, to act in Minnesota as in-house counsel, for a company or other organization. In 2004, rules were adopted that require in-house counsel in Minnesota to obtain a Minnesota license, discussed below. Rules for Admission to the Bar 9-10.

G. Criminal Offense

As in many states, UPL in Minnesota is a misdemeanor. Minn. Stat. § 481.02 subdiv. 8. Because UPL is punishable as a misdemeanor, any section that defines conduct as UPL must be construed narrowly, as a criminal statute. State v. Soto, 378 N.W.2d 625, 627-28 (Minn. 1985).

H. Hot Topic

Numerous articles in recent years by the Office of Lawyers Professional Responsibility (OLPR) and the Lawyers Board have addressed UPL and related issues. Martin A. Cole, Cross-Border Practice, BENCH & B. OF MINN., Jan. 2013, at 12; Martin A. Cole, UPL by Suspended Attorneys, BENCH & B. OF MINN., Sept. 2012, at 12; Cassie B. Hanson, ABA Addresses Foreign Outsourcing of Legal Work, MINN. LAW., Mar. 4, 2013, at 5. See also, Martin A. Cole, Suspended. . .Hired?, BENCH & B. OF MINN., Aug. 2010 at 12; Kent A. Gernander, 20/20 Vision, BENCH & B. OF MINN., Jan. 2010, at 22. The OLPR website has a page, "Cross Border Practice," which has links to relevant rules and statutes. CROSS BORDER PRACTICE, MINN. LAW. PROF'L RESP. BOARD & OFF. OF LAW. PROF'L RESP., http://lprb.mncourts.gov (Go to "Lawyer Resources" in the menu, and then select "Cross Border Practice." Last visited March 10, 2014).

I. Closely Related Rules

Rules closely related to Rules 5.5 and 5.8 include Rules 1.1, 1.4, 1.5, 5.1, 5.3, 5,4, 7.1, 7.5 and 8.5. The relationships of Rules 1.4, 1.5, and 5.1 to Rules 5.5 and 8.5 are addressed in In re Panel Case. No. 23236, 728 N.W.2d 254 (Minn. 2007) (discussed below).

J. Other States

UPL is variously regulated in different states. The nature of regulation in other states is beyond the scope of this treatise. Some states enforce UPL strictly and vigorously, while other states (including Minnesota) have no systematic enforcement mechanism for nonlawyer UPL. Notwithstanding this variety, most states identify certain basic activities as UPL. A nonlawyer drafting a will and receiving compensation would be one example of UPL in substantially all states. Another example would be a lawyer licensed in one state appearing in another state's court, without benefit of pro hac vice or permanent admission.

II. HOW LAWYERS ENGAGE IN UNAUTHORIZED PRACTICE

A. Frequent Disciplines

Perhaps it is counterintuitive, but many Minnesota lawyers have been disciplined for UPL.

From 2007 to early 2017, OLPR issued (a) four admonitions to non-Minnesota lawyers for engaging in the UPL in Minnesota; (b) five admonitions to Minnesota lawyers for UPL in other states; and twenty-six admonitions to Minnesota lawyers for UPL while their licenses were suspended in Minnesota for fees delinquencies, CLE non-compliance, or disciplinary sanction. (Patrick R. Burns, Deputy, Office of Lawyers Professional Responsibility, report to Minnesota State Bar Ass'n Rules of Prof. Conduct Comm.) In addition, the Minnesota Supreme Court disciplined eight attorneys in 2016, including two for practicing while suspended for other discipline offenses. Some of the public disciplines for UPL, if considered alone, would have warranted only private discipline, but the attorney committed other misconduct and the various violations were considered together.

How do so many violations occur?

B. License Maintenance—Annual Registration Fee, CLE Active Status

Some lawyers commit UPL, even though they have Minnesota law licenses, because they do not take the steps necessary to maintain their licenses. Some do not pay their attorney registration fees on time and are automatically suspended. Minn. Sup. Ct. R. Lawyers Reg. 2H (formerly Rule 3). Others do not take required CLE courses, or take the courses but fail to file reports, and are transferred to inactive status by order of the Minnesota Supreme Court after requests and warnings from the CLE Board Director. Minn. St. Bd. of Continuing Legal Educ. R. 2M, 2U, 12B. OLPR has frequently reminded lawyers of their attorney registration duties. Julie E. Bennett, What is Your Current Address?, MINN. LAW., Jan. 5, 2015. A lawyer whose registration fee was delinquent and who was on CLE inactive status continued to practice law. A disciplinary suspension was imposed. In re Beety, 864 N.W.2d 193 (Minn. 2015).

C. Continuing Practice and "Holding Out" While on Disciplinary Suspension

Suspended lawyers have received additional discipline during their suspensions both for continuing to practice law and for continuing to hold themselves out as lawyers.

In 2015-6, five attorneys received additional disciplinary suspensions for continuing the practice of law while on disciplinary suspension. In re Duchon, File No. A16-1274, 2016 WL 7387624 (Minn., Dec. 15, 2016); In re Obasi, File No. A16-1718, 2016 WL 7118919 (Minn. Nov. 30, 2016); In re Ruffing, File No. A15-1243, February 11, 2016 Order); In re Kennedy, 873 N.W.2d 133 (Minn. 2016); In re Griffin, 871 N.W.2d 567 (Minn. 2015).

The Court rejected three stipulations, as providing for insufficient discipline. In Ruffing and Kennedy, the court rejected stipulated recommendations for public reprimand, without suspension. The court explained, "To impose a public reprimand for respondent's unauthorized practice of law would make the original 30-day disciplinary suspension imposed by this court largely meaningless. See In re Jaeger, 834 N.W.2d 705, 708 (Minn. 2013) (explaining that the court has applied "harsher discipline" when a lawyer practices law while on a disciplinary suspension, as compared to when a lawyer practices law while suspended for noncompliance with registration fees or CLE requirements). As a result, we reject the parties' recommended discipline. We conclude that an appropriate disposition is a suspension for a minimum of 30 days and a 2-year extension of respondent's current disciplinary probation." In re Kennedy, 873 N.W.2d 133 (Minn. 2016). In Duchon, the Court imposed five years' suspension, rather than the recommended three years.

The Court has explained further its approach to discipline of attorneys who practice during suspension and thereby also commit contempt of court. Practicing law in deliberate violation of a suspension order not only "constitute[s] unauthorized practice of law 'it also constitutes contempt of court.'" In re Hunter, 473 N.W.2d 866, 869 (Minn.1991) (quoting In re Jorissen, 391 N.W.2d 822, 826 (Minn.1986)). But we have disciplined this misconduct in a variety of ways, taking into account what, if any, other misconduct the attorney committed. In Hunter, for example, we disbarred an attorney for practicing while suspended in addition to misappropriating client funds, forging a client's signature for personal gain, and failing to cooperate with the Director's investigation. 473 N.W.2d at 686-69. But we have only disbarred attorneys for practicing without a license in rare, extreme, cases. See Jorissen, 391 N.W.2d at 826 (disbarring attorney for...