If you’re admitted to handle a case PHV, mind your P’s and Q’s.

Translation:  Pro hac vice admission to practice before a court outside the state where you’re licensed requires attention to a range of ethics duties, and running afoul of them can have bad consequences.  Two recent cases spotlight some of the issues.

We’re looking at you….

A Louisiana lawyer was admitted pro hac vice to represent a client in the Western District of North Carolina.  On the application, he certified that he had never been subject to a formal suspension or public discipline in Louisiana.  Whoops.  In 2014, the lawyer had been suspended in the Bayou State for neglecting a client matter and mishandling a client trust account, but the suspension was deferred pending successful completion of a two-year probation.

The lawyer argued that his certification on the PHV application was not a material misrepresentation.  Maybe not technically — but the district court in North Carolina was not buying it.  The lawyer’s missteps in his home state didn’t automatically disqualify from appearing in North Carolina, said the court.  But he was required to explain his disciplinary history.  The lawyer’s argument that he had to disclose only an actual interruption in his ability to practice was “manifestly not credible,” the court found.  Even making the argument demonstrated his lack of candor, the court noted.

The outcome:  revocation of the lawyer’s permission to represent his client in the case.

Lesson:  Your state has a version of Model Rule 3.3 (Candor toward the Tribunal), Model Rule 5.5 (Multi-jurisdictional Practice) and Model Rule 8.4(c) (dishonesty, misrepresentation).  Don’t try to shave the corner of the plate when you’re applying for PHV admission.  Explain anything that even arguably needs explaining.  Don’t try to justify a failure to disclose with an over-technical reading of the  requirements.  A court might not look kindly on that strategy.

Hand-flapping and harassment

An Ohio lawyer admitted pro hac vice before the Delaware Chancery Court was representing the defendants.  Things went awry when the lawyer deposed one of the plaintiff’s witnesses, and based on misconduct at the deposition, the court granted the lawyer’s own motion to withdraw his PHV admission.

From its review of the deposition transcript and video, the court noted that the lawyer

  • raised his hand and made yapping gestures toward plaintiff’s counsel while plaintiff’s counsel was speaking;
  • repeatedly interrupted plaintiff’s counsel and referred to him as “Egregious Steve,” and the “sovereign of Delaware”;
  • harassed the deponent with personal questions; and
  • called the deponent and plaintiff’s counsel “idiots.

For this conduct, which it called “not only rude, but tactically so,” the court granted the motion to withdraw, and also referred the matter to Delaware disciplinary counsel, along with imposing attorneys’ fees on the lawyer and his firm.

Lesson:  Be professional and dignified at all times, but especially when you are in someone else’s bailiwick.  As the court said, the lawyer was appearing in Delaware “as a courtesy extended to him to practice pro hac vice.”  Delaware, like many other jurisdictions, has a professionalism code, in addition to its Rules of Professional  Conduct.  The Delaware code stresses “civility,” respectfulness, “emotional self-control,” and refraining from “scorn and superiority in words or demeanor,” and is binding on those appearing pro hac vice, the court said.

The take-home from these two cases is obvious.  When you’re specially admitted before a court, any professional or ethical misconduct carries with it the added potential risk of being tossed from the case, with clear downsides for your client, as well as for you.  Mind those P’s and Q’s, and stay out of PHV trouble.

It’s cold outside, baby! At least it is here in northeast Ohio.  If you live in the frozen north, you might be lucky enough to have a winter home in a more weather-friendly state where you spend part of your time.  What if you want to do legal work from there while enjoying the sunshine – are there any ethics issues?  The answer is “Yes.”  There are things you need to watch out for while wearing those sunglasses.

Interstate UPL

Assuming that you don’t have a license to practice in that sunny state, the issue, of course, is the unauthorized practice of law (UPL), which is proscribed by Model Rule 5.5(a).  Exceeding the jurisdictional bounds of your license is nothing to fool around with.  We’ve blogged about a Colorado lawyer who was disciplined in 2016 by the Minnesota Supreme Court for helping his Minnesota in-laws in a debt collection matter in a Minnesota court.  The court reprimanded the Colorado lawyer, even though he was only negotiating over the phone with opposing counsel, and never came to Minnesota.  A flawed decision, as we pointed out — but  it illustrates the border-protecting outlook that can sometimes characterize state bar regulators.

No waive-ins

Of course, if you are going to be spending time in your winter get-away every year, you can consider being admitted in the other state on motion, without examination — aka “waiving in.”  Many states have a provision for that, if you have some years of practice under your belt.

The problem is that some of the states with the best weather also try to protect their resident lawyers from snow-bird competition — we’re looking at you, Florida, Nevada, California and Louisiana.   They are among the jurisdictions that the ABA’s most recent listing shows as lacking any form of admission by motion, requiring anyone seeking admission to take the state bar exam.

For other jurisdictions, there can be paperwork and fees involved in waiving in, along with varying requirements for the number of years you must have practiced in order to be eligible.

Temporary practice

What if you don’t want to undergo the waive-in process, or your temporary home is located in one of the states that doesn’t offer it?

Model Rule 5.5(c), adopted in some form in 47 states, creates four safe harbors for lawyers to “provide legal services on a temporary basis” in a jurisdiction where they are not admitted.  They are: (1) associating with local counsel who actively participates in the matter; (2) being admitted pro hac vice in litigation; (3) participating in arbitration or mediation; and (4) where the legal services in the other state “arise out of or are reasonably related to the lawyer’s practice in a jurisdiction in which the lawyer is admitted to practice.”

It’s that fourth factor that can be of help to a snow-bird lawyer, potentially covering work where you are not licensed.  A 2016 article by Ron Minkoff for the ABA’s Professional Lawyer notes that under that safe harbor, “if all you do in your second home is work for your … home state clients, applying only home state law, and do not attempt to solicit local clients, it is dubious that state disciplinary authorities [where your temporary home is located] will care.”

That’s good advice.  But some caveats:  “temporary practice” means temporary.  Minkoff cautions that regulators “will not be amused” if you hang out a shingle on your beach-side mailbox or list yourself in the local phone book — let alone rent out space in a storefront.  All those are indicia of more-than-temporary intent.

Also, broad though it may be, “arising out of” or being “reasonably related to” your practice in your home state is still subject to limits.  For instance, in the Minnesota case mentioned above, the lawyer tried to argue that his work for his in-laws related to his home-turf practice, but the court rejected the notion.

Comment [14] to Rule 5.5(c) lists some of the “varied” factors pointing to that “reasonable relationship,” among them:  the client may be a resident of your home state or have significant contacts there; the matter may have a significant connection to your home jurisdiction; the client may be drawing on your expertise in matters involving a “particular body of federal, nationally-uniform, foreign or international law.”  In the Minnesota case, there weren’t any factors pointing to a reasonable relationship with the Colorado lawyer’s home state, at least according to the court.

Keep warm and carry on

As always, local rules count here, and you should check those of the hopefully-warmer state where you winter — those are the ones that will apply to your border-crossing activities, not the rules in your state of admission.  But if you are one of those lucky snow-birds — well, I envy you.

Officer custom control signHas your mother-in-law ever asked you for legal help?  Giving legal advice to family members can be challenging for lots of reasons — but it often comes with the territory when you have a law license.  A Colorado lawyer, however, recently got into disciplinary trouble for helping his Minnesota in-laws in a small collection matter.  In a badly flawed decision, a divided Minnesota Supreme Court decided that he had engaged in the unauthorized practice of law, and that no “safe harbor” applied to permit his activities — which consisted of sending e-mails from Colorado into Minnesota in order to negotiate the judgment.

Coming 14 years after the ABA adopted Model Rule 5.5(b)-(d), this opinion spotlights how turf protection by state regulators has thwarted hopes for a multi-jurisdictional outlook that would be more in line with the realities of modern-day legal practice.

Admonished — astonished

The Colorado lawyer received the lowest level of discipline available in Minnesota — a private admonition — and therefore is not named in the court’s opinion.

His road to trouble in the North Star State began when his in-laws, residents of Minnesota, contacted him for help on a $2,300 judgment against them in a dispute with their condo association.  From his law office in Colorado, where he has been practicing for 30 years, the lawyer exchanged about two dozen e-mails with the condo association’s Minnesota attorney over a four-month span, culminating in a settlement offer by the lawyer.  Part of the lawyer’s litigation practice includes debt collection.

The state supreme court, agreeing with the hearing panel, held that “engaging in e-mail communications with people in Minnesota may constitute the unauthorized practice of law in Minnesota, in violation of Minn. R. Prof. Conduct 5.5(a), even if the lawyer is not physically present in Minnesota.”

Astonishingly, the court majority rejected the argument that the lawyer’s efforts on behalf of his in-laws “arose out of or were reasonably related to his practice in Colorado,” even though his practice there partly involves debt collection.  Minnesota’s Rule 5.5(c)(4), like its Model Rule counterpart, creates a safe harbor for temporary practice in a state where the lawyer is not licensed, if the lawyer’s activities grow out of practice in the lawyer’s home state.  Not here, said the four-justice majority.  In a stunning bit of reality-denial, the court held that “simply because his in-laws contacted him in Colorado or appellant has done collections work in Colorado,” that was not enough to make the lawyer’s representation of his in-laws arise out of or reasonably relate to his practice in Colorado.

Dissent:  This is a “step backwards”

The three dissenting justices wrote that the e-mails and “assistance with a small judgment-collection negotiation for his parents-in-law” were reasonably related to the lawyer’s Colorado practice, and thus within the safe harbor of Rule 5.5(c)(4).  They properly saw the majority’s holding as “troubling and counterproductive,” in light of Model Rule 5.5’s policy:  to be a “bold step towards new latitude in multijurisdictional practice of law, which accommodates the increasingly mobile and electronic nature of modern, national legal practice.”  The majority’s decision, the dissenters wrote, “represents a step backwards.”

Contrary to the principles and policy goals intended by Rule 5.5, the majority’s holding, said the dissenting justices, means that “when family members or friends — an abundant source of clients — email or call a practitioner admitted in another state, seeking assistance in areas in which the practitioner is experienced and competent, relying on a relationship of trust and confidence, they must be turned away.”

The majority opinion relies on the parochial view that the Colorado lawyer’s knowledge and experience in negotiating resolutions of collection matters stopped at the state line, and that his e-mails sent into the ether across that state line constituted unauthorized practice that the citizens of Minnesota (i.e. his in-laws) needed protection from.  It’s sad that we haven’t come farther than this since 2002 and the safe-harbor provisions of Model Rule 5.5.

Florida barIn a somewhat puzzling ruling handed down on May 25, a Florida district court judge held that the court lacked jurisdiction to address whether a Massachusetts lawyer who appeared on behalf of his defendant client at a Florida mediation was engaging in the unauthorized practice of law.

As reported by Law360 (subs. req.), the plaintiff, which runs an adult subscription service, is suing defendant Sun Social and others for allegedly hosting pirated content on their internet porn sites.

No jurisdiction, no sanctions

At the mediation, Sun Social appeared through its Massachusetts counsel, who had not yet sought pro hac vice admission.  Only after the parties reached an impasse did the plaintiff object to the Massachusetts lawyer’s participation.  The plaintiff charged the lawyer with unauthorized practice and sought sanctions, including disqualification.

The district court held that it could not address whether the lawyer’s conduct was UPL, because the Florida Constitution vests the state supreme court “with exclusive jurisdiction over … the prohibition of practice by persons not members of the Florida Bar,” and case law interpreting the provision delegates the determination of UPL solely “to the Florida Bar.”

The federal court judge denied the sanctions motion, ruling that “only the Florida Supreme Court has jurisdiction to determine whether the alleged acts constitute the unauthorized practice of law,” and noting that the lawyer had since sought and obtained pro hac vice admission.

Really without teeth?

The court seems to have reached the right outcome here, but for the wrong reason — and in holding that it was required to be agnostic on the issue of UPL, the court took a too-narrow view of its power to remedy future conduct that it might be presented with.

First, Rule 4-5.5 of the Florida Rules of Professional Conduct, like its Model Rule analog, creates some limited circumstances permitting lawyers admitted elsewhere to practice temporarily in Florida — including in “pending or potential” ADR proceedings like mediations (if the services arise out of or are reasonably related to the lawyer’s practice in his or her home jurisdiction).  And second, the Southern District of Florida’s own Local Rule 11.1 incorporates the Rules of Professional Conduct as standards and provides that for violating those rules, “attorneys may be subject to appropriate disciplinary action,” including under the court’s own Rules Governing Attorney Discipline.

If the district court lacks authority to sanction lawyers who sail outside the limited safe harbor of Rule 5.5’s temporary-practice provision, that limitation does not appear in the court’s local rules.  Indeed, it would appear to run counter to the court’s power to manage the proceedings before it.

“Immature and unprofessional mudslinging”

It is possible that the court was reflecting its impatience with the parties, which, the judge wrote, had engaged in “immature and unprofessional mudslinging.”  And after all, the Massachusetts lawyer had (after “blatantly drag[ging] his feet”) finally obtained the court’s permission to appear.  But in any event, the implication that the district court would be hamstrung in dealing with ethical misconduct constituting the unauthorized practice of law is unfortunate.

Untitled-1The client of a Colorado lawyer who filed an administrative appeal in North Dakota without being admitted there got a harsh result — the North Dakota Supreme Court ruled in Blume Construction v. State that the lawyer’s action was the unauthorized practice of law, and therefore that the client’s appeal was void.

Admission ticket required

Blume Construction had been assigned a penalty tax rate on its unemployment insurance, and hired a Colorado lawyer to appeal the determination.  Two days before the appeal deadline, the lawyer signed and submitted an electronic appeal request on behalf of Blume, giving the basis for the appeal, summarizing several statutory provisions and requesting relief.  Local practice rules required the lawyer to move for pro hac vice admission within 45 days of filing the appeal request; the lawyer did not do so.

In fact, at least 30 days before the scheduled administrative hearing on the appeal, the lawyer notified the referee that he could not secure a sponsoring attorney licensed in North Dakota, as required for pro hac vice admission, and Blume, the client, told the referee that a North Dakota lawyer would represent Blume instead.

On the morning of the administrative hearing on the appeal, the referee became aware that the notice of appeal had been filed by the Colorado lawyer.

The hearing was cancelled, and the referee ruled that filing an administrative appeal required North Dakota admission, and that Blume’s appeal request was void because it was filed by a nonresident lawyer not admitted to practice in the state; therefore, Blume was stuck with its penalty tax rate.  The intermediate court of appeals affirmed the referee’s decision.

No safe harbor

North Dakota’s version of Model Rule 5.5 provides safe harbor for some forms of temporary practice by out-of-state lawyers, including (1) “preparatory” efforts made by lawyers who intend to seek pro hac vice admission for the particular matter; and (2) services that the out-of-state lawyer carries out, but that could also be performed by non-lawyers.

Blume argued that filing the appeal request was merely preparatory, that its lawyer reasonably expected to be granted pro hac vice admission and, therefore, that the lawyer was within the safe harbor.  But the state supreme court disagreed, based on a 2009 case in which it had held that filing a request for reconsideration and being designated as counsel were not merely “preparatory.”

Blume also argued that a non-lawyer could have filed its administrative appeal, and therefore, that the Colorado lawyer did not need to be admitted in North Dakota.  Not so, said the court.  As a corporation, Blume couldn’t act through a non-attorney agent in a legal proceeding.  And the Colorado lawyer’s work in filing the appeal was more than clerical or just filling out a form; rather the lawyer applied legal skill and knowledge to the facts of the case.

Harsh result

With its harsh result — dismissal of Blume’s appeal — this case illustrates the risks to the client of unauthorized practice.  And, of course, lawyers who engage in unauthorized practice also put their licenses at risk.

Taking any action on behalf of a client before a tribunal in a jurisdiction where you are not admitted — or not yet admitted — requires close attention to several sources of authority in the jurisdiction you are headed for.  (Some lawyers make the mistake of looking to their home jurisdiction’s rules.)  You need to consider that jurisdiction’s ethics rules, its pro hac vice rules, its statutes, any applicable rules of court and its case law.  You may be under time pressure — as the Colorado lawyer was, with the client’s appeal deadline looming — but there is no substitute for knowing whether you have a safe harbor or a sinking boat.

Tensed Businesswoman Using Computer At DeskWith the goal of positioning his on-line legal forms company as a solution to America’s access-to-justice problem, Chas Rampenthal, General Counsel of LegalZoom, zoomed through my home state last week, with two speaking engagements.  I caught his speech at a breakfast meeting at my home-town bar association, the Cleveland Metropolitan Bar Association (@clemetrobar).

A panacea for the under-served?

Despite the early hour, Rampenthal was a high-energy presence as he described the “Number One problem facing the legal profession” as “under-consumption of our services.”  As he sees it, “Access to justice is a fundamental right,” but the “legal system is designed” to shut out massive numbers of consumers who need basic legal services at a reasonable cost. There must be a continuum of legal care, Rampenthal urged, just as there is in the medical profession.

He described his visit to an urgent care center, where he was seen by numerous support personnel, whose work was rolled up into the doctor’s final opinion on the X-ray of his broken bone.  “The business of law and the practice of law doesn’t all have to be provided by lawyers,” he said.  A “pure professionalism model,” Rampenthal asserted– one based on lawyer regulations aimed at protecting the public — can’t address the “massive underrepresentation” of those needing legal services.

Unauthorized practice still an issue

Of course, the issue raised by LegalZoom (and by other players in the same field, which Consumer Reports Magazine has called “legal DIY websites“) is whether the model constitutes the unauthorized practice of law (UPL) — which is proscribed by every jurisdiction under Rule 5.5 and/or other regulations — and whether it can harm consumers.  LegalZoom has been subject to lawsuits and bar resistance in several jurisdictions.  We previously wrote about that here.  In June, LegalZoom sued the North Carolina Bar for antitrust violations, the culmination of a decade of investigations and cease-and-desist efforts.  The bar has moved to dismiss.

Rampenthal acknowledged that consumers can be confused by what LegalZoom offers — he said that “Everyone thinks LegalZoom is a law firm,” despite disclaimers, and that when asked to name any law firm that came to mind, survey respondents often named LegalZoom.  LegalZoom’s advertising says that it is not a law firm, as does its website.

And Rampenthal got some sharp questions from the Cleveland Metropolitan Bar Association audience.  One lawyer said that clients had asked him to review documents that didn’t actually fit the clients’ needs, but which they had generated using LegalZoom’s self-help software.

Problems abound

Rampenthal closed with a rallying cry, urging lawyers and bar regulators to be more open to the LegalZoom business model, as part of increasing access to justice for legal consumers.

But many are far from being sold on the notion.  Frank DeSantis, a co-editor of this blog, for instance, is the former chair of the Ohio Supreme Court Board of Commissioners on the Unauthorized Practice of Law.  He noted that “UPL regulations exist to protect the public, not lawyers.  LegalZoom is very dangerous because it gives its users the false impression that they have received sound legal advice,” when actually they have just selected from some drop-down menus.  Legal consumers are often not in a position to know what they need to protect their interests.  That’s where legal advice comes in.  Creating and using the wrong document from a website can be more harmful than not having a document.

Reflecting on Rampenthal’s described visit to the emergency room, DeSantis commented, “Legal self-help is as pernicious as medical self-help.”

U.S. MapWe’ve written before to remind in-house lawyers that even if you don’t sign pleadings or appear in court on behalf of your corporate employer, you are still practicing law when you give advice and participate in business transactions on your employer’s behalf.  If you do so without being duly licensed, you are straying into unauthorized practice, in violation of ethics rules — and in many jurisdictions, in violation of statutory law.  Here are the two latest cautionary tales.

Failure to register as required

The first example, as reported a couple weeks ago in the Legal Profession Blog, involves an unnamed Massachusetts lawyer who received an admonishment.  The lawyer was general counsel of a company headquartered in Massachusetts.  When the company relocated its HQ to Philadelphia, the  GC moved there and continued to work, but failed to obtain the “Limited In-House Corporate Counsel License” required under Pennsylvania law.

Here’s the kicker:  the GC only advised the company on issues under Massachusetts and federal law, and referred issues concerning Pennsylvania law to outside legal counsel.  Even with these self-imposed limitations, the GC was held to have violated the Massachusetts version of Model Rule 5.5(a), prohibiting the unauthorized practice of law.  A ruling that smacks of over-zealousness?   Maybe.  And the GC received the lowest form of discipline (and anonymously, at that).  Still, would you want to be in that GC’s shoes?

“Holding out” as a lawyer where not licensed

The second tale of disciplinary woe comes from North Dakota, where last month a lawyer was admonished for violating North Dakota’s version of Rule 5.5, based on merely having been “held out” in a press release as authorized to practice there when he was not.

For about a year, the lawyer worked as a staff attorney in the Bismarck, North Dakota office of a firm that was based in Minneapolis. While in Bismarck, the lawyer worked as a registered lobbyist, conducted title research, and assisted in drafting title opinions — but although duly licensed in Minnesota, the lawyer was never licensed in North Dakota.

Contesting the charge of unauthorized practice, the lawyer asserted that his activities didn’t constitute legal practice.  Didn’t matter, said the state disciplinary board:

“Clear and convincing evidence establishes that [the lawyer] and his law firm held him out as someone authorized to practice law in North Dakota. The … firm’s news release plainly states [that the lawyer] was hired as an attorney in the firm’s Bismarck office, identifying him as a ‘government relations specialist’ and a ‘staff attorney.’ The release also states [that the lawyer’s] ‘energy practice focuses on title examination and oil and gas law.’ The news release contained no disclaimers alerting the public to the fact that [the lawyer] was not admitted to practice in North Dakota.” (Emphasis ours.)

The North Dakota board cited a 1998 opinion of the Ohio Supreme Court, here in my stomping grounds, in which general counsel for a county agency was held to have improperly held herself out as being licensed to practice in Ohio by using letterhead that identified her as “General Counsel” when she was licensed in two other jurisdictions, but not in Ohio.   She was also referred to in news articles as “general counsel” for the agency.  This conduct occurred while the GC was in the process of applying for an Ohio license.  That led the state supreme court to hold that the improper holding out did not signify a lack of moral fitness (!) to receive an Ohio license.  The conclusion seems a no-brainer, and the lawyer is listed on the current Ohio rolls as being licensed here — but obviously with some past delay and embarrassment.

Don’t let this happen to you

The take-aways for corporate and in-house lawyers are obvious.

  • If you are located in a jurisdiction where you are not licensed, check the rules of that locale — you may need to register, pay a fee (of course) and not hold yourself out (or be held out) as a lawyer until you do so.
  • Disclaimers can possibly help with the holding-out problem; both the North Dakota opinion and the Ohio opinion it cited mentioned the lack of any disclaimer indicating the limits on the offending lawyers’ licensure.

These rules are technical, and can appear to be designed to guard state borders in a way that can seem monopolistic; but you ignore them at the risk of inconvenience and embarrassment, at the very least.