SC Lawyer, May 2006, #3. Multi-jurisdictional practice.

• Author: By John Freeman

South Carolina Lawyer

Ethics Columns.

SC Lawyer, May 2006, #3.

Multi-jurisdictional practice

South Carolina LawyerMay 2006Multi-jurisdictional practiceBy John FreemanThe rising usage of ADR procedures, principally in the form of arbitrations and mediations, has created a new set of ethical conundrums. One group deals with unauthorized practice problems apt to crop up when an arbitration or mediation's locale is set for a neighboring state in which you are not admitted. Consider, for example, the facts in the following hypothetical.

Your client, a Richland County resident, plainly had been defrauded by an out-of-state aluminum siding installation company based in Missouri. Only after you sued in local circuit court did you become aware that the service contract signed by your client demanded that disputes be resolved purely by arbitration in Charlotte. The defendant has moved to compel arbitration, and your research indicates the motion is likely to be granted. You are not admitted in North Carolina and are worried about what must be done for you to continue representing your client in the Charlotte arbitration you foresee as inevitable. Must you refer the case out to a North Carolina lawyer or at least associate North Carolina co-counsel? There is reason for concern.

In Birbrower, Montalbano, Condon & Frank v. Superior Court, 17 Cal. 4th 119, 949 P.2d 1, 70 Cal.Rptr.2d 304 (Ct. App. Cal. 1998), a lawyer from a New York firm who was unlicensed to practice law in California was barred from accepting attorneys fees for having committed the unauthorized practice of law by participating in an arbitration in California. Likewise, in Florida Bar v. Rapoport, 845 So.2d 874 (Ct. App. Fla. 2003), an attorney admitted in Washington, DC, but not licensed in Florida, was found to have engaged in the unauthorized practice of law by representing Florida citizens in arbitrations in the Sunshine State.

On the other hand, a number of cases, including Colmar, Ltd. v. Fremantlemedia North America, Inc., 344 I11.App.3d 977, 801 N.E.2d 1017, 280 Ill.Dec.72 (Ill App. 2003), and Williamson v. Quinn Construction Corp., 537 F. Supp. 613 (S.D.N.Y.1982), have ruled that an out-of-state attorney's representation of a party in a commercial arbitration did not constitute the unauthorized practice of law.

So what is our hypothetical lawyer to do about the impending Charlotte arbitration? What are you to do when faced with an impending arbitration or mediation in a foreign state in which you are not admitted to practice? Fortunately, as with most questions of this nature, there is a simple answer: check the local rules.

Here, for example, is what a lawyer admitted in a foreign state but not South Carolina who wants to try an arbitration in South Carolina quickly can learn by dialing in to our Supreme Court's rules. First, SCACR 407, Rule 5.3(c) permits lawyers from other states who are in good standing (i.e., not disbarred or suspended) to handle on a temporary basis "a pending or potential arbitration, mediation, or other alternative dispute resolution proceeding in this or another jurisdiction, if the services arise out of or are reasonably related to the lawyer's representation of an existing client in a jurisdiction in which the lawyer is admitted to practice and are not services for which the forum requires pro hac vice admission."

This brief directive sheds considerable light as to three requirements. First, if you do not have a valid license to practice in effect, do not think about ADR in South Carolina. Second, if you intend "regularly," not on a temporary basis, to provide legal services in South Carolina, get a South Carolina law license. The Comment to Rule 5.5(c) notes that lawyers appearing in more than three matters within 12 consecutive months are presumed to be appearing in South Carolina on a regular, not temporary, basis. Third, and finally, if whatever tribunal you are appearing before has procedures for pro hac vice admission, use them. South Carolina lawyers need to understand that each of these three requirements is standard. They stem from the ABA's revised Model Rules of Professional Conduct that were largely adopted by our Supreme Court, effective October 1, 2005, meaning that many other states have parallel provisions. However, remember Rule 1: check the forum state's rules.

Each state is free to season the ABA's standards to local taste, and this can lead to additional requirements. It has in South Carolina. For foreign state lawyers seeking to arbitrate or mediate in South Carolina, there remains a requirement grafted onto Rule 5.5(c)(3) in Comment 14, namely the demand that: "[a] lawyer providing legal services pursuant to paragraph (c)(3) must comply with the requirements of Rule 404, SCACR." Rule 404 imposes a $250 charge to be paid by the lawyer seeking to mediate or arbitrate in South Carolina, plus modest filing and service requirements.

What rules govern our hypothetical South Carolina lawyer who seeks to arbitrate in Charlotte or, for that matter, Augusta or Atlanta? Happily, there is a simple answer. Both North Carolina and Georgia adopted provisions that mirror new South Carolina Rule 5.5(c)(3). Even better for South Carolina practitioners, neither neighboring state imposes through Rule 5.5(c)(3)'s comments a filing requirement or a fee charge.

Suppose, having researched the issue, you find no clear direction in the law of the foreign state to which your arbitration is headed. What then? Restatement (Third) of the Law Governing Lawyers§ 3 (2000) does not expressly address arbitration-it generally permits an outofstate attorney to "provide legal services" in another jurisdiction to a client so long as the matter is reasonably related to the attorney's homestate practice.

Perhaps due to the ubiquitous nature of ADR proceedings, the pendulum is clearly swinging in favor of liberality. For example, in March of this year, the Massachusetts Supreme Court decided Superadio Ltd. Partnership v. Winstar Radio Productions, LLC, ___ N.E.2d ___, 446 Mass. 330, 446 Mass. 330, 2006 WL 762593 (2006). Superadio dealt with an appellate challenge to an arbitration conducted by a licensed out-of-state attorney admitted to practice in the forum state, Massachusetts. Massachusetts has not as yet adopted Rule 5.5(c)(3). The Massachusetts Supreme Court nonetheless refused to set aside an arbitration award on the ground of unauthorized practice.

Is it thus fair to say that, in the words of the current airline advertising slogan, "You are now free to move around the country"? Hardly. But lawyers called to engage in ADR proceedings in foreign states on behalf of their South Carolina-based clients today are on a firmer, more secure footing than ever before thanks to new Rule 5.5(c)(3).