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The California State Bar is throwing open its doors to out-of-state lawyers. But strict conditions and relatively high costs have some worried about tripping over the welcome mat. The Bar’s Board of Governors, during a September meeting in Fresno, approved new rules to allow in-house counsel and legal services lawyers to practice in California without taking the state’s bar exam. The rules, which went into effect Nov. 15, establish registration requirements and set fees that are designed to help cover the expense of running the programs. Other new rules adopted by the Bar’s governing board revise the application standards for out-of-state lawyers who are already allowed to practice in the state under certain conditions, such as arbitrators and attorneys practicing pro hac vice on particular cases with local counsel. Filing fees for such lawyers went up from $50 to $250. State Bar officials estimate that about 500 in-house counsel and 50 legal services attorneys will apply to practice in California in 2005. They also predict that about 315 arbitrators will apply to work in the state next year, along with as many as 3,000 pro hac vice applications. If those numbers hold up, the Bar could bring in an additional $1.5 million worth of fees in the first year. Breaking down the state’s barriers to out-of-state lawyers has long been considered inevitable, particularly as the legal profession continues to go global. Many of the biggest boosters for multi-jurisdictional practice have been in-house counsel who work for large national and international companies. Earlier this year, the California Supreme Court approved rules to allow out-of-state lawyers to practice in the state, leaving it to the State Bar to come up with a way to implement those rules. John McGuckin Jr., the immediate past chairman of the nationwide Association of Corporate Counsel, is concerned about the State Bar’s approach. His group had unsuccessfully proposed a few revisions, including a shorter application form, permission to practice pro bono and no requirement to list the title “registered in-house counsel” on all letterheads and correspondence. “We’re disappointed that the Board of Governors, of which I was a member in the 1990s, saw fit not to adopt any of the changes we suggested,” says McGuckin, general counsel of the San Francisco-based Union Bank of California. “We’re most disappointed that the rules as proposed prohibit in-house lawyers from providing pro bono services to the poor and indigent across the state of California. We see no basis for this major step back.” McGuckin also thinks the out-of-state fee schedule is out of line. To practice in California, in-house attorneys will have to pay one-time fees of $550 to apply and $363 to undergo a moral character check. They also will have to pay the annual fee paid by most California Bar members — now $390 — and complete 25 hours of continuing legal education within a year. McGuckin says the rules and fees will create “two classes of lawyers” with out-of-state attorneys treated as “second-rate.” Starr Babcock, special assistant to State Bar Executive Director Judy Johnson, says the fees place the California Bar “sort of in the middle of what other states have done.” For example, State Bar documents note that application fees for registered in-house counsel range from $50 in Virginia to $1,300 in Florida, with a majority of states charging in the $750-$1,000 range. Mike McKee is an associate editor at The Recorder in San Francisco.

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