New York Appears Ready to Accept Cross-Border Practice

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By Joan C. Rogers

Sept. 18 — Is New York finally ready to allow lawyers licensed elsewhere to engage in temporary practice in the Empire State? A new proposal from the state court system seems to signal yes.

The court system Sept. 4 asked for public comment on the proposed adoption of a New York Court of Appeals rule to authorize the temporary practice of law in New York State by out-of-state and foreign attorneys in four sets of circumstances. (See box.) Comments may be submitted until Nov. 3 to rulecomments@nycourts.gov.


Proposed New York Rule Would Allow Temporary Practice by Out-of-State and Foreign Lawyers

The proposed New York Court of Appeals temporary practice rule is based on ABA Model Rule 5.5 and a 2012 proposal by the New York State Bar Association. It would permit lawyers in good standing elsewhere to provide temporary legal services in New York if they are:

▸undertaken in association with a New York lawyer who actively participates in and assumes joint responsibility for the matter;

▸related to a pending or potential proceeding in which the lawyer or a person the lawyer is assisting is authorized or expects to be authorized to appear;

▸related to an alternative dispute resolution proceeding, don't require pro hac vice admission and arise out of or are reasonably related to the lawyer's practice in a jurisdiction where the lawyer is admitted; or

▸are in other situations reasonably related to the lawyer's practice in a jurisdiction where the lawyer is admitted.

Lawyers engaging in temporary practice would be forbidden to establish an office or other systematic and continuous presence in New York or to hold themselves out as admitted to practice in New York. Moreover, they would be subject to New York's Rules of Professional Conduct and New York disciplinary authority.

While welcoming comments, the court system announcement particularly invited feedback on these issues: (1) whether and how “temporary practice” should be defined: (2) whether temporary practitioners should be required to notify court administrators of the dates and scope of temporary practice; (3) whether and what procedures should be adopted to make sure temporary practitioners fulfill their disciplinary responsibilities; (4) whether and how the rule should apply to candidates applying for admission to the bar; and (5) whether the rule should apply to registered in-house counsel and licensed legal consultants.

The current proposal does not include any version of the ABA Model Rule on Practice Pending Admission, nor does it include a path to easier admission for military spouse attorneys in keeping with ABA policy on that issue. See 28 Law. Man. Prof. Conduct 509; 28 Law. Man. Prof. Conduct 97.


New York lawyers who spoke with Bloomberg BNA about the proposal were enthusiastic about the prospects of finally getting a temporary practice rule in New York.

“This is potentially a great moment for our state,” Ronald Minkoff said in an e-mail to Bloomberg BNA. “It is high time we recognize the realities of 21st century practice and join the 45 other states who have adopted versions of [ABA Model] Rule 5.5 [on multijurisdictional practice].”

Minkoff is with Frankfurt Kurnit Klein & Selz P.C., New York, and has been active in efforts to get a temporary practice rule adopted in New York.

“This will bring the rules in line with the everyday realities of New York practice, where lawyers in large firms and small, upstate and downstate, cross state lines, either in person or by phone or computer, every single day,” Minkoff said.

New York University law school professor Stephen Gillers also applauded the proposal. “The value of this change is huge,” he said in an e-mail to Bloomberg BNA.

Gillers said that while the change benefits both New York lawyers and lawyers elsewhere, the more important effect is what is tells the rest of the nation: “New York realizes fencing out lawyers from elsewhere is bad policy. It hurts clients and hurts the bar and benefits no one,” he said.

Positive Signs

“It's great the New York courts are on the verge of adopting the rule,” Fordham law school professor Bruce Green said in an interview with Bloomberg BNA. The New York state bar played a major role in developing the ABA rules on multijurisdictional practice, including Model Rule 5.5, he noted. Green was the reporter for the ABA Commission on Multijurisdictional Practice, which formulated Model Rule 5.5 more than a dozen years ago.

Green said he sees it as a hopeful sign that the state's high court itself is proposing the rule. The fact that the proposal comes from the Court of Appeals suggests it's a foregone conclusion that the court wants to adopt some version of the rule, he said.

Asked if he expected any opposition to the proposal, Green said “I'd be shocked if anybody did oppose it.” For years New York bar groups have been urging the court system to adopt a version of Rule 5.5, he pointed out.

In an interview with Bloomberg BNA, longtime MJP advocate Anthony E. Davis said adoption of the proposed rule “ought to be a no-brainer,” considering that most other states have already adopted some version of Model Rule 5.5. He is a partner in Hinshaw & Culbertson LLP’s Lawyers for the Profession® practice group out of the New York office.

“It ought to pass, and I hope it will pass, but there are Luddites in our profession who like protecting turf,” Davis said.

Why Now?

A big factor in reviving MJP at this point appears to be the imminent retirement of Chief Judge Jonathan Lippman, who has been ambitious about reforming aspects of law practice in New York and has supported the idea of adopting a version of Rule 5.5 in New York. Lippman is trying to do as much good as he can before retiring, Green said.

The New York state constitution will force Lippman to step down at the end of this year because he is 70 years old. In 2013 voters rejected a ballot measure to extend the mandatory retirement age for judges, so only a few months remain for Lippman to accomplish any additional reforms.

Gillers noted that after the ABA adopted Model Rule 5.5 in 2002, the New York State Bar Association asked the state courts to adopt a version of ABA rule. In New York, changes to ethics rules must be approved by a board consisting of the chief judge and the presiding justices of the four supreme court appellate divisions. The board rejected the state bar's request—twice, Gillers noted.

As for why that happened, Gillers said his understanding is that upstate justices did not wish to adopt a rule that could result in a loss of business to New York lawyers.

“This view is ironic because at the MJP Commission we worried that small states would see a temporary practice rule as a way for big states like NY to cherry pick the best cases,” Gillers said. Yet smaller states adopted the rule, including New Jersey and Connecticut, and New York did not, he noted.

Gillers said Lippman has long favored the change, including when he was a presiding justice in the appellate division in Manhattan. However, the upstate justices had veto power on the board, so the temporary practice proposals went nowhere.

“Now as Chief Judge, Lippman doesn't have to go through the Board and amend the NY professional conduct rules,” Gillers said. “Instead, the New York Court of Appeals can adopt the rule as a court rule, which is what the proposal would do.”

The court of appeals can do this because the state constitution gives it authority over admission to practice in the state, which includes temporary practice, he explained.

Another apparent factor in putting MJP on the front burner is a nationwide push to permit cross-border practice by foreign-licensed lawyers as a means to encourage freer movement of goods and services between the U.S. and foreign nations.

“The Conference of Chief Justices issued a resolution this year strongly encouraging state judiciaries to adopt explicit policies permitting temporary practice by foreign lawyers,” the court system said in its public comment notice.

Potential Benefits.

Like Minkoff, Gillers pointed out that 45 states have adopted the ABA MJP rule verbatim or in a substantially similar form. “New York has been the only financially important state in the country to have held out on adoption of the rule,” he said.

“By opening its borders modestly, as the proposal would do, New York is signaling that it is finally prepared to recognize the reality of a large and growing national legal economy,” Gillers said.


Big MJP Changes Adopted in Arizona

Rule amendments adopted Aug. 27 in Arizona will soon dramatically expand what's allowed in that state for lawyers licensed elsewhere.

Under a package of changes to Arizona Rule of Professional Conduct 5.5 and Arizona Supreme Court bar admission rules, lawyers licensed in other states will be allowed to practice the law of another jurisdiction while living in Arizona.

Non-Arizona lawyers will be permitted to engage in the regular practice of Arizona law for up to one year if they apply for admission on motion to the state bar before beginning to practice and meet certain conditions. The amendments take effect Jan. 1, 2016.


“New York lawyers have much to gain from generous rules on cross border practice nationwide,” Gillers said. Among those who will benefit, he said, are specialists in both small and large firms whose client base is defined not by a geographical area but by client needs for their particular skills. New York has many specialists, he noted.

The change is also important, Gillers said, because lawyers already are crossing state lines in their practice. “The current New York prohibition is routinely ignored—assuming that lawyers from elsewhere are even aware of it,” he said.

As Gillers noted, New York lawyers do not need the new rule to enable them to travel into another state, so long as the other state has a temporary practice rule. “But if New York were to continue to post a ‘keep out' sign for other lawyers, while taking advantage of the permissive rules elsewhere, New York might expect that other states would adopt reciprocity rules excluding New York lawyers, as Connecticut did,” he said.

If It Walks Like a Duck…

Anthony Davis told Bloomberg BNA the proposal doesn’t go nearly far enough to reflect the reality of how lawyers practice. For example, he said, lawyers licensed in one state conduct negotiations in other states, take depositions in other states, draft leases for clients to use in numerous states and work from their homes representing clients in another state.

Rules preventing these activities on grounds that “if you are physically located in our state you must be licensed in our state—even if what you are doing for out-of-state clients has nothing to do with our state”—are anti-competitive and harm clients as much as the individual lawyers, Davis said.

“In the age of the internet and secure remote technology, where you are physically located at any given moment is in no way determinative of what you are doing or who you are serving as a lawyer,” Davis stated.

Rather, he said, the “duck principle” ought to apply—“if you’re a lawyer somewhere else in good standing, you’re a lawyer.”

“The proposal therefore, while important, is modest,” he said. “It moves the ball, but it’s not a complete solution.” The proposal authorizes less cross-border practice than in Canada and Australia, and far less than in Europe. “But it’s better than what we’ve got now,” he said.

What It's Not

Bruce Green pointed out that if the proposed temporary practice rule is adopted, it would be a court rule (22 NYCRR §523) and not a professional conduct rule.

Although it would have pretty much the same effect, he said, the state bar would not develop comments to the new rule as the bar does for the lawyer conduct rules, and bar associations would not interpret the new rule in their ethics opinions—at least not those addressing the professional conduct rules.

Green noted that when New York shifted from its former Code of Professional Responsibility to a version of the Model Rules, the state bar worked with the court system's staff to ensure that the comments the bar created would reflect the justices' intent in adopting the rules. Because this proposed rule is not a professional conduct rule, that process won't take place, he said.

To contact the reporter on this story: Joan C. Rogers in Washington at jrogers@bna.com

To contact the editor responsible for this story: Kirk Swanson at kswanson@bna.com

Full text of New York's proposed rule and background materials at http://www.nycourts.gov/RULES/comments/index.shtml.

Full text of Arizona's recent rule amendments at http://www.azcourts.gov/Portals/20/2015Rules/R-15-0018.pdf.

 

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