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By Joan C. Rogers
Dec. 15 — Lawyers licensed outside New York are finally allowed to engage in temporary law practice in the Empire State, thanks to a new court rule adopted Dec. 10.
With this long-awaited step, New York became the 47th state to adopt a version of ABA Model Rule 5.5 on multijurisdictional practice. The new temporary practice rule goes into effect Dec. 30, or as soon as certain steps required by New York judiciary law are completed.
The New York rule differs from the MJP rules of other states in a couple of ways. Most notably, it allows temporary practice not just by lawyers licensed in other U.S. jurisdictions, but also by lawyers who are authorized to practice law in a non-U.S. jurisdiction.
Also, New York's new MJP rule is a rule of attorney admission rather than a rule of professional conduct. This approach enabled MJP to be adopted in New York without getting approval from the presiding justices of the four appellate divisions, as is required for professional conduct rules.
In addition to the temporary practice rule, New York's high court simultaneously enacted rule amendments that allow lawyers admitted in non-U.S. jurisdictions to work permanently in New York as registered in-house counsel. Like the temporary practice rule, this rule change was enacted Dec. 10 and goes into effect Dec. 30.
New York's new MJP rule (22 NYCRR §523) covers not just lawyers admitted or authorized to practice law in a U.S. jurisdiction, but also lawyers who are members of “a recognized legal profession in a non-United States jurisdiction,” if the members of the profession are “authorized to practice as attorneys or counselors at law or the equivalent and are subject to effective regulation” in their home jurisdictions. The lawyers must be in good standing everywhere they are authorized to practice.
The rule permits these lawyers to provide temporary legal services in New York if the services 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 authorized to practice; or
▸arise out of or are reasonably related to the lawyer's practice in a jurisdiction where the lawyer is authorized to practice.
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.
The amendments to the rule on registration of in-house counsel (22 NYCRR §522) cover the same foreign lawyers: those who are members of “a recognized legal profession in a non-United States jurisdiction” if they are “authorized to practice as attorneys or counselors at law or the equivalent and are subject to effective regulation” in their home jurisdictions.
Longtime MPJ advocates are pleased about getting a temporary practice rule in New York—finally.
“New York's new rules are a belated but important recognition of the fact that law practice now routinely crosses state and national borders,” New York University law school professor Stephen Gillers said in an e-mail to Bloomberg BNA.
“Every state's adoption of these rules is important because uniformity is key,” Gillers said. “But given its prominence as the financial capital of the nation, New York's late awakening to the needs of our national and international legal economy is critical.”
In a public statement about the new rule, Ronald Minkoff called it “a thrilling and important development” that “ends the disconnect between New York's lawyer admission rules and the reality of 21st century legal practice, while enhancing New York's reputation as the center of national and international commerce.” Minkoff is with Frankfurt Kurnit Klein & Selz P.C., New York.
The new rule brings New York into line with 46 other states that have adopted a version of Model Rule 5.5, Minkoff said. Although the rule isn't cast as a professional conduct rule, it will have the exact same effect, allowing lawyers to cross state lines to practice here without running disciplinary risks, he said.
In an interview with Bloomberg BNA, Anthony E. Davis also applauded the rule. “It's clearly a recognition, very belated in New York, that this is the way lawyers practice in the United States,” Davis said. He is a partner in Hinshaw & Culbertson LLP's Lawyers for the Profession® practice group out of the New York office.
“The new New York provision for temporary law practice by lawyers of others states closely tracks ABA Model Rule 5.5, bringing New York into line with virtually every other state,” Fordham law school professor Bruce Green said in an e-mail to Bloomberg BNA. Green was the reporter for the ABA Commission on Multijurisdictional Practice, which formulated Model Rule 5.5 more than a dozen years ago.
But New York is providing significant leadership, Green said, by now allowing foreign lawyers both to work temporarily in New York and to serve permanently as registered in-house counsel. These provisions, he said, “recognize the need for foreign companies and business people to be able to bring their lawyers with them when they come to New York to do business, and that regulatory interests can be served without shutting out the lawyers.”
Minkoff likewise praised the expansion of the in-house counsel registration rule to cover some foreign lawyers. That change “further expands the ability of foreign corporations to do business in New York and to use foreign legal advisors here to address questions of foreign law,” he said in an e-mail to Bloomberg BNA.
However, Minkoff noted that the new rule could have gone further, as advocated by the New York State Bar Association. “It is disappointing that the Office of Court Administration did not adopt the NYSBA proposal that would have allowed foreign in-house lawyers who are not admitted to the Bar in their home jurisdictions to register here,” Minkoff said.
In Europe, Minkoff noted, in-house lawyers are often not members of the bar; they are separately organized and regulated, but still perform the same services as in-house lawyers in the United States. This is true in France and several European countries, he said.
Not allowing these lawyers to register as in-house counsel in New York leaves a gap in the rule, Minkoff said. “I hope we can continue our dialogue with OCA to explain this concern, and close that gap,” he said.
Some of the comments submitted on the proposed amendments expressed similar concern about excluding many foreign lawyers from the ability to register as in-house counsel. (See http://nycourts.gov/Rules/comments/PDF/received/ForeignIn-HouseCounselProposal.pdf. )
For example, a comment from AFJE, the French Corporate Counsel Association, urged the court to build discretion into the rule so that a candidate's education and in-house experience as a lawyer may be considered for the purpose of being registered as in-house counsel under the rule in lieu of bar membership. This approach “would not only make sure that most foreign in-house lawyers can benefit from the rule, but also that NY-based clients have the most flexibility in hiring foreign legal talent of their choice,” AFJE president Stephanie Fougou said.
The ABA Section of International Law has endorsed such a change for Model Rule 5.5 and the ABA model rule governing the registration of in-house lawyers, according to AFJE's letter.
While characterizing the new temporary practice rule as a “huge advance” for New York, Davis pointed out that the court of appeals did not adopt a recommendation made by a group of large law firms that have offices in New York and other jurisdictions.
That recommendation took aim at the situation where a lawyer lives in one state but practices law remotely from an office in another state where the lawyer is admitted to practice. For example, a lawyer may live in New York and commute to New Jersey or Connecticut. In this situation, Davis said, it's a stretch to say the lawyer is temporarily in New York, and the lawyer arguably may be engaging in unauthorized practice there.
In comments on the proposed temporary practice rule, the large firms recommended additional language that would allow a lawyer authorized to practice law in a U.S. jurisdiction to provide legal services that exclusively involve federal law, the law of another jurisdiction or tribal law, provided the lawyer does not hold himself out in any way as having an office for the practice of law in New York.
This language, the firms said, would prevent UPL accusations against lawyers who live in New York and use technology to practice remotely as if they were physically in their state of admission, provided they do not practice New York law or hold themselves out as doing so. (See http://nycourts.gov/Rules/comments/PDF/received/TemporaryPractice.pdf. )
Arizona had the foresight to address this problem in changes adopted this year, Davis noted, referring to a package of changes made to Arizona Rule of Professional Conduct 5.5 and Arizona Supreme Court bar admission rules. The changes were made in August and go into effect Jan. 1.
After Model Rule 5.5 was adopted in 2002, the New York State Bar Association asked the New York court system to adopt a version of the ABA rule. In New York changes to professional conduct 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.
However, the idea of adopting a version of Rule 5.5 was strongly supported by outgoing Chief Judge Jonathan Lippman, who had to retire at the end of this year because he is 70 years old. In September—with only a few months remaining for Lippman to accomplish any reforms—the court of appeals floated the temporary practice rule for comment as a proposed court rule, making it unnecessary to obtain approval from the presiding justices of the appellate divisions. See 31 Law. Man. Prof. Conduct 547.
Comments submitted on the proposed temporary practice rule shed some light on why the earlier MJP proposals were rejected by the board. In a letter dated Nov. 3, the Committee on Professional Standards of the Appellate Division's Third Department, expressed opposition to the proposal for numerous reasons.
Among other things, the committee said that it's unfair to New York lawyers, who must register, pay registration fees and comply with CLE requirements, to let out-of-state attorneys practice in New York without these obligations. Also, the committee said that if out-of-state attorneys are permitted to handle legal business and transactions typically performed by New York attorneys, that would have the effect of “reducing the number of legal business and transactions performed by admitted attorneys and increasing the competition for legal business opportunities for admitted attorneys.”
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