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Resolving a nearly year-long controversy, the Virginia Supreme Court has decided to permit lawyers to work in the state as corporate counsel without ever becoming members of the state bar. The court’s somewhat unexpected decision rejects a more restrictive Virginia State Bar proposal that many in-house counsel had criticized as burdensome on them and bad for business. It marks a signal victory for a lobbying campaign mounted by Richard Cullen, a former state attorney general who is a partner at McGuireWoods. Cullen represents Verizon Inc., which employs 45 in-house lawyers in Virginia, many of whom aren’t admitted to practice in the state. The court accepted Cullen’s proposal without dissent in a letter dated Jan. 3, from Chief Justice Harry Carrico. As a result, the Virginia Bar will set up a two-tier system under which in-house lawyers who want to waive in to the state bar can do so — but those who don’t want or need to be admitted can opt simply to register their names with the bar. Crucially, lawyers on the registry will be subject to bar discipline in Virginia if they act unethically. Additionally, such lawyers will be allowed to function as in-house counsel but not to represent any clients other than their employer. The scheme would likely even rule out pro bono work in most instances. Dues for an active member of the Virginia Bar are $250 a year, while lawyers on the registry would pay only $50 a year, according to Cullen’s plan. Cullen’s arguments were driven by the recent growth of Northern Virginia as a haven for high-tech and telecommunications companies drawn by the state’s favorable business climate and its proximity to Washington, D.C. “This is a practical court,” says Cullen. “The proposed rule could have been a roadblock to those who would relocate in Virginia. This is a result that makes sense.” Other major companies in the state, including AOL Time Warner Inc., Nextel Communications, Smithfield Foods Inc., and Dominion, weighed in to support Cullen’s efforts. The key point of the proposal, say Cullen and others, is the provision giving the state bar the power to discipline in-house attorneys whose names appear on the registry but who are not formally admitted to practice. That resolves the bar’s concern that some wayward lawyers might fall through the cracks and never be subject to discipline. Cullen says that once the new rule is adopted, perhaps as soon as next month, life will become easier for in-house counsel and for their employers. He explains that if a company based in Pittsburgh, for example, decides to transfer an in-house lawyer to McLean, Va., the lawyer “just has to register, let them know she’s here, certify that she’s in good standing in some other state, and say she doesn’t want to be in the first tier [the one that leads to formal admission]. Of course, she could go into the first tier if she wanted to.” Under the proposal put forth by the state bar and rejected, that lawyer would have had to take annual legal education classes, undergo a background check, and pass an ethics exam. Cullen’s two-tier proposal seems to have not only won the court’s approval but also to have disarmed his opposition. W. Scott Street III, a partner at Richmond’s Williams Mullen, chaired the bar task force that made the now-discarded recommendation that all in-house counsel become bar members. That proposal was approved unanimously last October by the Virginia State Bar Council, the bar’s governing body. But now that the court has acted, Street is voicing support for the new approach. “Richard [Cullen] produced something logical, and the court found it pretty persuasive,” says Street. “This will probably be one of the most progressive rules of any state in the country.” Maryland and the District of Columbia already have liberal rules in effect. In the District, lawyers who provide “legal advice only to [their] regular employer” are exempt from the requirement that attorneys must be members of the D.C. Bar. A Maryland statute says basically the same thing, and specifically provides that in-house lawyers working in Maryland are subject to discipline in that state. Corporate counsel are understandably pleased about the court’s action. Susan Hackett, senior vice president and general counsel of the American Corporate Counsel Association, says, “This rule accommodates corporate counsel’s interests in both directions — both those who want a Tier 2 approach and those who are interested in a more robust offering.” Robin McCune, president of the Washington Metropolitan Area Corporate Counsel Association (WMACCA), also welcomes the new regime. McCune says WMACCA will encourage its members to join Tier 1 because it provides “more benefits,” including the opportunity to do pro bono work and the chance to represent a corporate employer in court without having to be admitted on a case-by-case basis. “For some people, though, Tier 2 is going to be the right choice,” says McCune, who will join American Management Systems as associate general counsel next month. Street says his task force is now preparing the wording of the new rule, as the court had suggested. He says he will “run it by Richard and make sure it comports with his understanding,” then send the document back to the court for final approval. The whole process is expected to take no more than a few weeks. Cullen says he sees his advocacy on behalf of Verizon as an instance of “acting as counsel before the judicial branch.” He shies away from the term “lobbying.” Still, the well-connected former U.S. attorney and former state attorney general pressed the right buttons in the relatively genteel world of Virginia courts and politics. He attended public task force meetings to press his proposal and buttonholed his friends on the task force. But it was Cullen’s Nov. 27 letter to the court that turned things around for his client and brought a resolution to a problem that had been festering for several months. In the understated letter, Cullen wrote that his aim was to “honor the goals behind the Bar’s proposal, but in a less burdensome manner for the corporations in this Commonwealth.” Cullen also lined up support from key legislators, including William Howell, a Republican delegate from Fredericksburg who is the new speaker of the state’s House of Delegates. Howell wrote a strong letter of support to the court on Nov. 25. Cullen covered his legislative base in other ways. He says that Howell and other lawmakers were “primed to introduce legislation that would have codified the two-tier proposal,” had the court not acted as it did. Now that the court is poised to put Cullen’s proposal into effect, the bar is taking steps to welcome the corporate counsel who will be registering rather than being admitted to the bar. “I’m looking forward to involving many of the talented in-house counsel in the affairs and activities of the Virginia State Bar,” says Streets. “We have no intention of creating a second-class citizenship.”

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