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When the American Bar Association’s House of Delegates convenes next Monday, it will ponder a host of proposed revisions to the Model Rules of Professional Conduct that touch on many facets of how lawyers do business. The proposals are the work of the ABA’s Ethics 2000 Commission, whose report was issued last November. One of the most controversial revisions, especially in New Jersey, is one that lessens strictures against the unauthorized practice of law by allowing some lawyers, primarily in-house or corporate counsel, to practice in jurisdictions where they are not licensed. “States have a legitimate interest in restricting unlicensed lawyers from opening offices in their territory,” the commission said in its preliminary report. “Nevertheless, given the increasingly interstate and international nature of some clients’ legal matters, the Commission believes that some latitude be accorded an out-of-state lawyer.” Proposed Rule 5.5 would limit the safe harbor to lawyers working solely for their employers or their employers’ affiliates, and it would be available only in states where pro hac vice admission is not an option. Other Ethics 2000 proposals to be aired at the meeting include Model Rules revisions that: � Clarify the allocation of authority between lawyer and client (Rule 1.2). � Require lawyers to detail the scope of representation and the basis for fees in writing, and require that clients sign any contingent fee or fee-splitting agreement (Rule 1.5). � Prohibit lawyers from having sex with clients, unless a consensual sexual relationship predated the lawyer-client relationship (Rule 1.8). � Set procedures for screening laterals, government lawyers and other lawyers in cases that otherwise would present ethical conflicts for firms. Imputed disqualification could be avoided if the disqualified lawyer is timely screened from any participation in the matter and derives no financial interest from the fee, and if prompt, written notice is given to the former client (Rules 1.10, 1.11). � Define lawyers’ obligations to prospective clients (Rule 1.18). � Clarify a lawyer’s responsibilities as to funds whose ownership is disputed (Rule 1.15). � Create a new ethical standard on service as a “third party neutral” (Rule 2.4). � Permit communications with a represented person pursuant to a court order (Rule 4.2). � Define a lawyer’s obligations in providing legal advice to unrepresented people (Rule 4.3). � Require lawyers who receive a document and know or should know that it was sent to them by mistake to immediately notify the sender (Rule 4.4). To delegate Michael Prigoff, the commentary to Rule 4.4 is worrisome. “For purposes of this Rule, ‘document’ includes e-mail or other electronic modes of transmission subject to being read or put into readable form,” it says. “I get hundreds of e-mails sent to me a day that I never solicited, and I would guess that 10 to 15 a week are sent to me inadvertently,” says Prigoff, a partner at Englewood, N.J.’s Lebson, Prigoff & Baker. “Usually I just delete them,” he says. “If I had to track down everybody who sends me an e-mail by mistake, I’d just get overwhelmed.” It is one thing, he says, to notify another party in a matter that an e-mail relevant to some transaction or dispute was sent by mistake. It is another to notify senders who mistakenly send him e-mails about which he knows nothing and which are not in at least some way connected with his practice. SAFE HARBOR NEEDS DREDGING The ABA may not finalize the safe-harbor provision at its upcoming meeting because its Committee on Multijurisdictional Practice has still not reported back. However, adoption appears inevitable. “There will be some type of safe-harbor provision,” says committee chairman Wayne Positan, a partner at Roseland, N.J.’s Lum, Danzis, Drasco, Positan & Kleinberg. “It’s just that the final wording has not been decided on.” Positan says the current proposal is almost certain to undergo some revisions. Various bar-related organizations have submitted competing suggestions to the ABA for consideration. � The American Corporate Counsel Association has proposed a “driver’s license” rule that would establish a national compact on licensure, similar to the current system of states recognizing each other’s driver’s licenses. Once licensed to practice in one jurisdiction, a lawyer could practice in another jurisdiction temporarily and move permanently after passing only a character and fitness review. � The Association of Professional Responsibility Lawyers has recommended a “green card” approach. There, lawyers could open an office in another jurisdiction where they are not admitted, provided they are in good standing in their original jurisdiction, are sponsored by two lawyers in the new jurisdiction, and have been licensed to practice in at least one jurisdiction for three years. � The ABA’s Real Property Section says transactional activity should be permitted as long as the client consents after being informed of the risks involved. � The International Association of Defense Lawyers recommends that attorneys be allowed to conduct prelitigation activities, such as investigations, on a pro hac vice basis. � The American Law Institute proposes that lawyers be permitted to practice outside their licensed jurisdiction so long as their activities were “reasonably related” to their area of practice. � The ABA’s Business Law Section says the safe-harbor provision should be restricted to occasional forays into other states, but would also allow lawyers to become involved in alternative dispute resolution matters in other jurisdictions. Positan says his committee hasn’t reported back because a number of state bar associations still haven’t weighed in. He says the report should be ready when the ABA holds its midyear meeting in Philadelphia, beginning on Jan. 30. The issue of multijurisdictional practice is a thorny one for the New Jersey State Bar Association. New Jersey, seeing an influx of out-of-state firms opening offices in the state, has long taken steps to protect the interests of lawyers licensed to practice here. But, sensing the changing nature of the legal profession, the State Bar’s Committee on Multijurisdictional Practice has concluded that some sort of limited safe-harbor provision is warranted. “Approaches to MJP that eliminate or reduce substantially practice barriers will add to public suspicion about the competence and credibility of the bar and will hasten the profession into little more than a commercial guild devoid of respect for the core values that have long set lawyers apart,” said the committee in a preliminary report released June 25. The committee, chaired by Allen Etish, a partner at Cherry Hill, N.J.’s Kenney & Kearney, dislikes the “driver’s license” and “green card” approaches. “Adoption of either on a national basis might enhance the short-term financial prospects of some lawyers but in the long term would have a devastating impact on the profession,” the committee wrote. “The core activities of the bar — client protection funds, pro bono service, IOLTA, continuing education, the disciplinary and fee dispute system, referral services — would be weakened by a bar admission system that favors mobility over commitment and accountability. The ideal of a ‘profession’ would be lost amidst a scramble to chase clients across jurisdictional borders.” The State Bar committee made a number of recommendations: � Prelitigation work in another jurisdiction is acceptable, provided that the lawyers associate with local counsel. Pro hac vice admission cannot be obtained until litigation begins, and the committee believes the out-of-state lawyer should have some contact with the local legal system. “It is essential that out-of-state counsel be able to take the steps necessary to prepare for litigation. It is also essential that they be accountable to clients, potential adversaries and the courts. This would be facilitated through association with local counsel,” the committee said. � Any safe-harbor rule must state clearly that the lawyers’ entire compensation comes from their employer and, that while working in a jurisdiction in which they are not licensed, they cannot perform legal work for anyone else. � Cross-border transactional work is acceptable but should be for an existing client, the committee said. “Thus, a Wisconsin lawyer could come into New Jersey to negotiate the terms of a purchase of goods for a Wisconsin distributor,” it said as an example. � Safe-harbor rules should be permissible in ADR cases, but only for an existing client. In addition, the matter would have had to have originated in or be related to the jurisdiction where the lawyer already is admitted. � A safe harbor for other matters should be allowed for existing clients, but should be permitted only occasionally and only when forcing the client to hire local counsel would result in “substantial inefficiency, impracticality or detriment.” � Lawyers practicing in states where they are not licensed should first agree to be bound by local ethics rules. Lawyers should also agree that the state’s highest court will be the final arbiter of any disciplinary matters.

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