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Local lawyers who worry about competition from national firms have a new reason to feel uneasy. The American Bar Association is considering a model rule that would make it easier for lawyers to practice in states where they are not admitted. And the New Jersey Bar Association’s defense radar has been activated. On Friday, it commissioned a study that could be a forum for an attack on the proposal. In most states, including New Jersey, a lawyer who isn’t admitted in that jurisdiction can’t represent a client without receiving temporary admission by court order. That’s usually not a big problem; the out-of-staters get a pro hac vice order and they’re in business temporarily. But the compilers of new ABA Model Rules of Professional Conduct have published a draft of R.P.C. 5.5 that would permit lawyers to work in a state, without temporary admission, if the matter in question is related to the lawyer’s practice on behalf of a client elsewhere. It also would not be an unauthorized practice for an in-house counsel or a lawyer associated with a colleague admitted to practice in the jurisdiction to handle the matter. The proposal was stirred by the growth of multistate law firms and corporate law offices, and by concern about the fuzziness of rules governing transactional work. “This is not a good proposal,” says Ellen O’Connell, a partner in the Newark, N.J., office of New York’s Skadden, Arps, Slate, Meagher & Flom, who chairs the New Jersey State Bar’s Standing Committee on Professional Responsibility. “How is the Court going to govern the professional conduct of folks who practice law here but aren’t admitted?” If nothing else, the vagueness of the proposal disturbs some students of the draft, like O’Connell and Floyd Shapiro, the State Bar’s trustee liaison to the Professional Responsibility Committee and a partner in Roseland’s Orloff, Lowenbach, Stifelman & Siegel. The State Bar is calling for more study. “It’s a complicated issue,” Bar President Barry Epstein said Friday after the association’s board of trustees discussed the issue during its regular meeting and commissioned an inquiry by the newly formed Ad Hoc Committee on Multi-Jurisdictional Practice. The chairman, Wayne Positan, of Roseland, N.J.’s Lum, Danzis, Drasco, Positan & Kleinberg, says that much of the impetus behind the proposal is from the American Corporate Counsel Association, a longtime advocate of the reduction of state barriers to practice. Positan says the proposed rule also was generated by the increased confusion among lawyers as to how much transactional work they can do in a state and whether they have to be admitted pro hac vice to engage in alternative dispute resolution. In some states, Positan notes, there are limits on how often a lawyer can be admitted pro hac vice. PART OF ETHICS 2000 COMMISSION The proposal is one of hundreds of changes drafted by the ABA’s Commission on Evaluation of the Rules of Professional Conduct. This fall, after two years of drafting and kibbitzing by fans, naysayers and just plain nitpickers, the commission will submit a completed proposal to the ABA House of Delegates. The final debate in the House would begin in 2001. The current set of model rules was approved in 1983, but it was never adopted by the New Jersey Supreme Court, which has a tradition of being a tougher ethics taskmaster than tribunals in other states. The Bar might recommend a go-it-alone approach again, if the current rewrite of the section on unauthorized practice, Rule 5.5, survives the final cut. The current terse model rule — New Jersey’s version is identical — is a 46-word testament to the beauty of simplicity and circularity. It says, “A lawyer shall not: (a) practice law in a jurisdiction where doing so violates the regulation of the legal profession in that jurisdiction; or (b) assist a person who is not a member of the bar in the performance of activity that constitutes the unauthorized practice of law.” Those principles would be preserved in the new rule. But for the first time, the stricture would state unequivocally that lawyers admitted temporarily are not engaged in the unauthorized practice of law. Then comes the expansion. First, a non-admitted lawyer could jump into a representation before temporary admission if the lawyer “reasonably expects” to get pro hac vice status. Second, the rule would allow a lawyer without pro hac vice status to practice if he or she is an employee of the client — in-house counsel, for example — or if the matter “arises out of or is otherwise reasonably related to the lawyer’s practice on behalf of a client” in a place where he or she is admitted. Finally, pro hac vice admission wouldn’t be necessary if “the lawyer is associated in a particular matter with a lawyer admitted to practice” in the jurisdiction. O’Connell says the rule seems to mean that corporate counsel should be allowed to appear before a New Jersey tribunal without being admitted. So could a member of a firm handling a similar matter for a client in another state. In its explanation of the draft, the ABA panel said, “states have a legitimate interest in restricting unlicensed lawyers from opening offices in their territory. “Nevertheless, given the increasingly interstate and international nature of some clients’ legal matters, the Commission believes that some latitude should be accorded an out-of-state lawyer.” The explanation added that the provision “recognizes that the complexity of a specific matter undertaken on behalf of a client in a jurisdiction in which the lawyer is admitted may require that the lawyer travel to other jurisdictions on an occasional basis, for example, to interview or consult with employees or other persons associated with the client concerning the matter.” The panel pointed out that the exceptions or “safe harbors” provided by the new rule would be limited to situations in which temporary admission was unavailable. In an article in the winter 2000 edition of the ABA’s The Professional Lawyer, commission member Margaret Colgate Love said the draft took an “incremental approach to the problem, an appropriate response to the growing sentiment against blanket ‘unauthorized practice’ restrictions on lawyers, while acknowledging the concerns of those who may have a more parochial view.” Even so, the draft reminds some lawyers of the now-shelved draft amendment to Model Rules 5.4 and 5.7 that would permit multidisciplinary practice. Those proposals also sought to mediate between traditional ethics regulation and a modern trend: lawyers flocking to firms controlled by accountants and other professionals. After a storm of protest — much generated by lawyers’ fear of losing business to accounting firms — the ABA put off a decision on the practice. Positan suggests that if the concern about proposed Rule 5.5 reaches the same fever as the MDP proposal, the ABA might have to take some interim action on multijurisdictional practice as well. “It all kind of blends together,” he says.

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