ACC Objects to Washington State In-House Rule
Washington State is considering a new rule to require in-house counsel therealready licensed to practice in another stateto register with the state bar. The Association of Corporate Counsel, for one, doesnt like it one bit.
It seems like a money grab, complained Amar Sarwal, ACCs vice president and chief legal strategist. Theres a pile of money in registration fees involved and hassles with bureaucratic paperwork, all for no good reason.
He conceded, however, that a majority of states have adopted some sort of registration requirement.
But Sarwal said there has been no evidence that in-house counsel have caused any practice or ethical problems in Washington that would support changing the rule there. So if its not broke, dont fix it, he told CorpCounsel.com.
The ACC has filed a comment letter [PDF] lambasting the change with the state supreme court, which must approve any proposed rule change. Besides Sarwal, the letter is signed by Bradley Toney, president of ACCs Washington Chapter and assistant general counsel to United Online/Classmates Media Corp.; and Evan Schultz, senior counsel and director of advocacy at ACC.
The letter insists the states current authorization system for in-house counsel is working well. Under the current rule, which adheres to the American Bar Associations Model Rules of Professional Conduct, an in-house lawyer licensed and in good standing in another state can simply show up and start working at a Washington company.
The rationale for such a system, according to the ABA, is that corporations are sophisticated legal users and tend to hire skillful and ethical lawyers without the states supervision. If a lawyer does a bad job, the company can simply fire him, Sarwal notes.
The proposal would allow out-of-state lawyers to waive into the Washington system, but would impose a slate of new requirements on in-house lawyers who register, including taking and passing the Washington law component of the bar exam, Sarwal said.
The proposed changes were authored by the Admission to Practice Rules Task Force, which the state bar said included lawyers from various-sized law firms, representatives from three Washington law schools, legal aid practitioners, and a law student. However, it doesnt mention any in-house counsel being included on the task force.
Sarwal said it doesnt seem like in-house lawyers were involved in fashioning the changes, and this has led to some ambiguous and confusing phrases in the rules.
For example, one part authorizes temporary in-house work, without defining what that means, while an attorney awaits admission in the state.
Sarwal noted that many corporations move in-house lawyers through companies in various jurisdictions. The boundary between temporary and continuous work therefore becomes critical, given that professional ethics sanctions are at stake, he said.
He also advocated eliminating a picayune rule requiring registered lawyers to use special business cards and letterhead to highlight that they are in-house counsel. The rule places a special burden on in-house counsel and their employers, he said, while also wondering: What if in-house and outside lawyers are signing the same letter or contract?
ACC also opposes another change that would prohibit in-house lawyers, once registered, from appearing in court unless they go through a cumbersome and expensive pro hac procedure. The letter sites other states, like Virginia and Colorado, that allow registered in-house counsel to appear in state court on behalf of their company.
But as long as the state is tinkering with its rules of practice, ACC urges it to expand its permission for in-house counsel to do pro bono work. The current and proposed rules both restrict in-house counsel from working with the full range of organized programs that support services to needy clients . . . [and] limit precious legal talent, the letter says.
Eve Runyon, director for Corporate Pro Bono, a partnership of the Pro Bono Institute and ACC, agreed. Runyon said in a statement, This is a wonderful opportunity for Washington to broaden its rules for in-house pro bono, given it is looking at other rules regarding in-house counsel.
Sarwal added, if the Washington State Supreme Court doesn't reject this transparent effort to place a pointless toll booth at its state borders, it should, at the very least, modify the proposed registration rule to better reflect the modern realities of in-house practice.