New rules for a global marketplace

By Raymond Marshall

Marshall

The world has become a global marketplace, brought on by tremendous advances in technology and the rapid growth of multinational commerce. Not surprisingly, the legal profession has assumed a role as a major player, with lawyers leading the way in corporate expansion throughout the world.

Ironically, the realities of practice in a world where state and national boundaries often don’t matter led to an environment in which many lawyers who were not members of the California bar were nonetheless practicing here. While the phenomenon of multijurisdictional practice both enabled the legal world to expand its borders and allowed clients to select their attorney-of-choice, even if that lawyer was from another state, it also often resulted in far too many attorneys engaging in unauthorized practice.

Attorneys who fell in that category included lawyers practicing in regional, national and international law firms with offices in California, in-house counsel for corporations located in California, and solo attorneys from other states, whose business brought them to California on a regular basis.

Beginning Nov. 15, all that changes. What was permissible before remains permissible. And non-California lawyers who fall into one of four groups will be governed by a new set of rules that will give them a safe harbor and allow them to practice here lawfully, albeit with some restrictions. (See Top Headlines story Nov 15: New rules for out-of-state lawyers.)

Now they can safely take depositions, counsel their clients, conduct arbitrations, gather evidence, negotiate settlements — in short, do all those things outside the courtroom that are considered law practice. The rule also permits, on a temporary basis, transactional representation that arises out of or is related to the lawyer’s work in another jurisdiction.

Frankly, these practices have been widespread for years, and but for the lack of resources of district attorneys and the State Bar, lawyers who operated without a license could have been prosecuted.

The risks grew dramatically in 1998 when the state Supreme Court ruled in Birbrower v. Superior Court that two New York lawyers, who worked at the Birbrower firm, were not entitled to fees from their California client because they weren’t entitled to practice here in the first place.

That raised the stakes, put the out-of-staters on notice and served as a warning that something had to change.

Chief Justice Ronald George appointed a task force to examine the issue and it came up with a series of rules that I believe go a long way toward protecting both lawyers and clients. The task force took into consideration comments submitted by more than 50 individuals and groups and we revised, and I think enhanced, our proposals as a result.

Some of the public comment we received complained that the rules do not go far enough, and that out-of-state lawyers, particularly in-house counsel who work for California corporations, should be given free rein to practice here.

On the other hand, some of the comments suggested out-of-staters are the recipients of too many privileges under the new rules.

I believe the new standards offer a broad compromise to those beliefs.

It is understood that corporations that choose an in-house lawyer licensed elsewhere to handle its legal matters in California will assume any risk that arises out of that lawyer’s work on behalf of the corporation here. In the legal services area, the out-of-state lawyers will not have carte blanche: they must work under the supervision of a California attorney and for a qualified legal services provider and they must take the California bar exam within three years.

Further, while there was strong support on the task force for offering reciprocal privileges to lawyers from other states, it simply is not practical at this time. No other state is presently willing to grant practice privileges to California lawyers who did not graduate from an ABA-approved law school. The task force was not willing to open our doors wide to out-of-state lawyers while at the same time disenfranchising those licensed here and making them second-class citizens.

I believe the issue of reciprocal admissions should continue to be considered, and I favor the concept of reciprocity, but in the interim, we’ve taken solid first steps.

In addition, by allowing legal services attorneys who are admitted in another jurisdiction to provide legal help to the indigent before taking the California bar exam, the poor people of our state, who are often desperately in need of such assistance, can benefit greatly.

Under the new rules, there is no good reason for attorneys who practice in California without a license to continue to do so. In-house counsel and legal services attorneys must register with the State Bar, pay an annual registration fee and take continuing education courses. Those are small prices to pay for the privilege of practicing here. As for lawyers working temporarily in California, the new rules serve the needs of clients whose matters span numerous jurisdictions and at the same time protect those clients by making their lawyers subject to the State Bar’s jurisdiction.

In creating the new rules, the task force made public protection paramount. I believe we succeeded, while at the same time easing some of the burdens on practitioners, making access to attorneys-of-choice easier and providing what I hope will be increased access to legal services by the indigent.

Why should lawyers who have been skirting the law for years without consequences now sign up to do the right thing? I like to think most lawyers are law-abiding and do not wish to violate the rules. Beyond the honorable, the economic consequences of violating the law are potentially enormous, given the parameters of Birbrower. It’s not worth the risk.

• San Francisco attorney Raymond Marshall is a former State Bar president and chaired the task force on multijurisdictional practice.