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Supreme Court cracks opens the door to out-of-state attorneys

By Nancy McCarthy
Staff Writer

In a nod to the realities of modern law practice, the California Supreme Court approved new rules last month that will allow out-of-state lawyers to practice in California under limited circumstances. The new rules affect four categories of lawyers: in-house counsel, legal services attorneys, litigation attorneys who are in California in anticipation of litigation or in connection with litigation elsewhere, and non-litigation attorneys temporarily in California.

The rules are expected to take effect Nov. 15, after the State Bar creates a system to implement them.

Ray Marshall
Marshall

“I think we’ve done a great job in recognizing the realities and trying to address what people have been doing, said Raymond Marshall, a former bar president who chaired a task force appointed by the Supreme Court. “There’s no getting around the fact that this is a tremendous achievement.”

The issue of multijurisdictional practice has arisen in the last decade as attorneys increasingly travel to other states, often providing legal advice in jurisdictions where they are not admitted to practice. Mar-shall said attorneys who engage in activities outside the courtroom that would be construed as the unauthorized practice of law can now continue those activities without running afoul of professional conduct rules.

“It is typical for out-of-state lawyers to come in to California, take depositions, counsel clients, conduct arbitrations, do all those things that lawyers do outside the courtroom that would be construed as practicing law,” he explained. “Frankly, everybody was doing it.”

The Supreme Court’s task force was created as a result of legislation and spent a year coming up with recommendations which then were proposed as rules by an implementation committee. The American Bar Association also has recommended MJP rules that are broader than the California rules and lean toward reciprocity. Marshall said the task force rejected reciprocal admissions when no other state said it would admit a California lawyer who attended an unaccredited law school.

The new rules require that both in-house and legal services counsel register with the State Bar, agreeing to be subject to the bar’s jurisdiction. As a result, they must comply with all California rules, take MCLE courses and pay a fee. No amount has been set.

Non-litigation attorneys temporarily in California and litigation attorneys who expect to be involved in litigation will be protected by “safe harbors” that define when and to what extent they may provide legal services in California without engaging in the unauthorized practice of law.

The rules and those affected by them are:

  • Rule 964 — Registered legal services attorneys. Out-of-state lawyers may work exclusively for qualified legal services providers for no more than three years.
  • Rule 965 — Registered in-house counsel. Attorneys residing in California and working for a corporation, partnership or association with at least 10 fulltime employees in California must register with the State Bar and provide legal services only to the qualifying institution that employs him or her. May not make court appearances, must satisfy all MCLE requirements in the first year of practice and must re-register with the State Bar every year. No limit on practice duration.
  • Rule 966 — Litigators temporarily in California. Allows attorneys to provide legal services in California on a temporary basis for litigation pending or anticipated to be filed in a jurisdiction other than California and for litigation anticipated to be filed in California in which pro hac vice admission will be sought.
  • Rule 967 — Non-litigators temporarily in California. Allows attorneys to provide legal services in California if a material aspect of the transaction or other matter is taking place in a jurisdiction in which the attorney is licensed. Legal services may concern only a transaction or other nonlitigation matter.

Former bar president Andrew Guilford, who created a bar task force in 2000 to study the MJP issue and who has long advocated opening the doors to out-of-state lawyers because of the increasingly global nature of the legal profession, said the new rules represent “an appropriate step forward and I hope to see further steps in the near future. I do believe it is time we build gates instead of fences.”

Susan Hackett, general counsel of the Association of Corporate Counsel, gave the new rules a mixed review, noting that they don’t give in-house lawyers everything they wanted but they still represent a step forward.

Because states want to draft their own rules, “the result is an increasingly complex patchwork of state codes regulating the interstate practice of lawyers,” Hackett said. That means “that lawyers may need to understand the rules of 25 different states, plus the model rule in effect in another 23 and the prohibitions of the two states that refused to pass any reforms at all . . . We’ll have to see how this unfolds.”

The rules can be found at www.courtinfo.ca.gov.

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