California Bar Journal
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Panel urges relaxing some rules
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global nature of many businesses, the needs of clients and the practices of their lawyers no longer stop at state lines, the report said.

Corporations and large business entities in particular may be hindered by the requirement that their in-house counsel belong to the California bar in order to practice in the state. In-house counsel may thus be forced to move to the state or travel here often in order to meet the company's legal needs, a firm might not be able to choose the right lawyer for a particular task, and business costs may increase, the panel suggested.

As a result, it concluded a change for in-house counsel is warranted and it also recommended that restrictions be eased for out-of-state public interest lawyers to provide legal services to indigent clients in California for a limited time period. The task force recommended easing restrictions for:

In-house counsel providing out-of-court services exclusively for a single, full-time business entity, such as a corporation or partnership, that does not provide legal services to third parties; and

Public interest lawyers providing legal services to indigent clients on an interim basis before taking the California bar exam, under the supervision of an experienced member of the State Bar, through a qualified legal services provider. This change could help meet the pressing legal needs of the indigent, the panel said.

The task force suggested two ways those groups could practice in the state without taking the bar exam:

Through a registration process that would be similar to admission to the bar but without having to take the bar exam. Registration would permit an attorney licensed and in good standing in another jurisdiction to practice in California on an ongoing basis.

Changing the definition of the unauthorized practice of law to allow out-of-state lawyers to undertake a specific task without violating California law. This "safe harbor" approach would apply when an attorney's involvement in California is too brief or infrequent to warrant the time and expense that registration would require.

The change in the unauthorized practice definition also would permit two other groups of out-of-state lawyers to undertake certain tasks in California: transactional and other non-litigating attorneys providing legal services on a temporary or occasional basis, and litigating lawyers providing legal services in California in anticipation of filing a lawsuit in the state or as part of litigation pending in another jurisdiction.

The UPL recommendation, which Marshall said "reflects what lawyers do as a matter of course today," is contingent on crafting narrow and clearly defined exceptions to the general prohibition on out-of-state lawyers practicing here.

The panel rejected reciprocity with other states out of concern that it would create difficulties, including how to treat states that would extend reciprocity only to students who graduate from ABA-approved law schools. Many California attorneys are licensed without attending such schools. Nonetheless, the panel said the possibility of reciprocity should not be permanently foreclosed.

Comity, a system which would permit attorneys licensed in other states to practice in California even without a reciprocal privilege, also was nixed, because the panel felt it would mean the requirements to practice in California would in effect be the lowest standard adopted in any other state.

Marshall said the reciprocity issue was the most difficult the panel addressed because California is the only state with law schools not accredited by the ABA. Thousands of California lawyers are graduates of those schools.

"We were advised that no other states would be willing to accept graduates of non-ABA accredited schools," he said.

The panel also decided that experienced lawyers from out of state should not be permitted to practice in California simply because of their long years of practice. And it rejected any change to the scope of permissible practice by government lawyers.

Also left unresolved were questions of how to discipline out-of-state practitioners, an exact definition of the entity for whom in-house counsel may practice by registration and any rules spelling out how public interest lawyers from out of state would be supervised.

The task force was appointed after the passage of legislation, authored by Sen. Bill Morrow, R-Carlsbad, to require a study of reciprocity and comity. There are already some exceptions to the prohibition of practice by out-of-state lawyers, including consent by a trial judge, as counsel pro hac vice ("for this occasion"), as a legal representative in arbitration proceedings, as a foreign legal consultant and as military counsel.

The recommendations will be reviewed by the Supreme Court, and the task force recommended that the court appoint a committee to resolve the many issues the report raises and that it forward the report to the legislature. Any changes should be reviewed after five years, the task force said.