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Oct. 24 — Numerous factors must be weighed in determining which state's ethics rules will govern the noncourt-related conduct of a lawyer who is licensed to practice in more than one jurisdiction, the New York state bar's ethics committee advised Oct. 16.
The opinion clarifies the application of New York Rule of Professional Conduct 8.5(b), which is murky on “choice-of-law” questions that arise when bar officials pursue disciplinary action against a New York attorney who is also licensed in another jurisdiction.
The committee's advice was tailored to an inquiry from a lawyer who has offices in New York and the District of Columbia.
The lawyer limits his practice to negotiating commercial contracts, handling real estate deals and representing clients before federal agencies. Because the lawyer “does not handle any matters pending in court,” the committee said Rule 8.5(b)(1) does not apply in determining which forum's ethics rules apply to his conduct.
That's because Rule 8.5(b)(1) only addresses a dual-licensed lawyer's conduct “in connection with a proceeding in a court,” which is subject to “the rules of the jurisdiction in which the court sits.”
Instead, the panel said, the applicable standard is Rule 8.5(b)(2)(ii), which provides that a dual-licensed lawyer's noncourt-related conduct is governed by:
• the “rules of the admitting jurisdiction in which the lawyer principally practices”; or
• if the conduct “clearly has its predominant effect in another jurisdiction in which the lawyer is licensed to practice, the rules of that jurisdiction shall be applied.”
However, the committee noted, “Neither the text of Rule 8.5 nor its Comments provide any guidelines for determining where a lawyer principally practices.”
And “no simple formula is available to determine where the ‘predominant effect' [of a lawyer's conduct] will occur,” it added.
Tackling the first ambiguity in Rule 8.5(b)(2), the committee said “various factors are relevant to determining the [jurisdiction] in which the lawyer principally practices,” including:
(a) the number of calendar days the lawyer spends working in each jurisdiction;
(b) the number of hours billed in each jurisdiction;
(c) the location of the clients the lawyer serves;
(d) the activities the lawyer performs in each jurisdiction (e.g., legal work for clients vs. administrative work for a law firm); and
(e) any special circumstances (such as a recent move, an extended illness, or a natural disaster).
The committee said the guidance that these factors supply is necessary because technological changes have eroded some of the geographic constraints on legal representation.
“Given the increase in law practice over the Internet, and the corresponding decrease in the importance of a lawyer's physical location, the jurisdiction in which a lawyer ‘principally practices' for purposes of Rule 8.5(b)(2)(ii) is becoming less certain, and we should consider a lawyer's significant contacts with all jurisdictions, not solely the jurisdiction in which the lawyer is most often physically present,” the opinion states.
But the committee cautioned that determining “the jurisdiction in which the Dual-Licensed Lawyer principally practices” may not be dispositive of the question of which forum's ethics rules should be applied.
Rather, “his conduct could in some situations be evaluated by the ethics rules of the other admitting jurisdiction because of the exception stated in Rule 8.5(b)(2)(ii),” the committee explained.
Rule 8.5(b)(2)(ii) states that the rules of the forum where a lawyer “principally practices” should not be applied “if particular conduct clearly has its predominant effect in another jurisdiction in which the lawyer is licensed to practice.”
But according to the committee, choosing between two sets of ethics rules in this alternative scenario is also complicated by a lack of black-letter guidance. The problem is that “no simple formula is available to determine where the ‘predominant effect' will occur,” it said.
Accordingly, the committee generated another list of gap-filling considerations to inform the “predominant effect” inquiry. Those factors, it said, include:
(a) where the clients reside, and where they work;
(b) where any payments will be deposited;
(c) where any contract will be performed; and
(d) where a new or expanded business will operate.
“For example,” the committee said, “if a lawyer principally practices in D.C. but is advising a New York client on how to draft (or interpret, or enforce) a commercial contract among several parties, and all of those parties live and work in New York, and the contract will be performed solely in New York, then advising the client would ordinarily be conduct that ‘clearly has its predominant effect' in New York.”
“But if some of the parties to the contract work outside New York, or if part of the contract will be performed outside New York, then the lawyer's advice may not ‘clearly' have its predominant effect in New York—in which case the ethics rules applicable under Rule 8.5(b)(2)(ii) will be the rules of the jurisdiction in which the lawyer principally practices,” the committee said.
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