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Barry Blum, chief counsel for Miami-based Burger King, recently traveled to several cities in Louisiana, Alabama and Mississippi to conduct negotiations for his company’s repurchase of 60 restaurants from a major franchisee. Blum is licensed to practice law only in Florida and Pennsylvania, but that didn’t stop him from handling the deals in those other states. He says he felt sufficiently familiar with the legal issues involved to handle the acquisitions without the help of a local attorney. An official of the Alabama State Bar says that while his organization doesn’t encourage this, clients aren’t complaining. “If you’re dealing with a simple transaction that doesn’t require any real specialized knowledge,” Blum says, “I don’t believe it’s always necessary to pay a local attorney to handle your matter.” Some attorneys disagree. The American Bar Association and the Florida Bar recently have established commissions that may recommend limits on the ability of lawyers to handle transactions in states where they are not licensed to practice. The impetus was a recent California Supreme Court ruling holding that New York lawyers who handled an arbitration matter in California were practicing without a license. ABA President Martha Barnett, a partner in the Tallahassee, Fla., office of Holland & Knight, says that decision created national shock waves. “It scared a lot of lawyers,” she says. “They were worried about what could happen to their own fees.” Of course, attorneys around the country routinely handle matters across state lines. These activities, known as multijurisdictional practice, are increasing as the economy becomes more global and new communications technologies make it easier for lawyers to handle complex matters remotely. While such work theoretically could be considered the unlicensed practice of law, state bar groups generally have taken no action to stop it. Indeed, many clients want their attorney or law firm to handle everything that’s involved in a matter, no matter where this takes them geographically. That’s partly because they trust that attorney or firm, and partly because they don’t want to shell out to hire an additional attorney in each jurisdiction. But the ABA is under growing pressure from many state bars and small law firms to set boundaries. State bars fear that the growth of multijurisdictional practice could erode their regulatory and disciplinary authority. Local law firms fear that they could lose work to national firms. On the other hand, corporations and corporate counsel are pressing the ABA and state bars to allow attorneys to more easily practice law in states where they have not been admitted to the bar. Having their staff lawyers or their primary outside law firms handle matters in other states is often cheaper than hiring local counsel. In 1998, the California Supreme Court decided a case, Birbrower Montalbano Condon & Frank v. Superior Court, involving a New York law firm that had signed an agreement to represent a California company in an arbitration to be conducted in California and governed by California law. The company was a subsidiary of a New York-based client of Birbrower Montalbano’s. Three of Birbrower’s attorneys, who were not members of the California Bar, traveled to California to advise the client, negotiate with the opposing party and interview possible arbitrators. But, after the dispute was settled, Birbrower and the client had a falling-out and the client sued for malpractice. The California Supreme Court held that Birbrower was not entitled to payment for work its lawyers did while physically present in California because it constituted the unlicensed practice of law. In response to the ruling, California lawmakers are considering legislation that would allow out-of-state lawyers in good standing in their home states to practice law in California under the state Bar’s regulatory purview. Barnett’s response was to appoint a 12-member ABA commission on multijurisdictional practice late last year to examine the legal and ethical issues. In August 2002, the commission is slated to issue recommendations on what steps, if any, state bars should take. The issue originally was scheduled for discussion at the ABA annual meeting this June, but ABA and state bar officials asked for more time to study the issue. The ABA commission will examine how common it is for lawyers to handle depositions in states where they aren’t licensed, to travel out of state to advise clients’ subsidiaries, and to call out of state to negotiate on behalf of clients. It’s possible — though unlikely — that the panel will recommend establishing a uniform national licensing system, Barnett says. Alternatively, the panel could urge each state to establish a system for registering out-of-state lawyers for limited practice rights. Similarly, the Florida Bar is establishing an 11-member commission to make recommendations on multijurisdictional practice to the ABA. The panel, to be appointed by President Herman Russomanno, will examine the potential impact of new rules on the ability of the Florida Bar and the Florida Supreme Court to regulate and discipline lawyers. The Florida Bar’s position is that an attorney should be a member of the bar in Florida before practicing there, says Lori Holcomb, director of the Bar’s unlicensed practice of law section. The Bar also frowns on Florida-licensed attorneys practicing in other states where they are not licensed. But she acknowledges that these principles are often honored in the breach. “People sell crack on the street every day, but that doesn’t make it OK,” she says. Holcomb notes, however, that the Florida Bar is ahead of most other state bars in regulating multijurisdictional practice. It already requires out-of-state corporate counsel to register with the Bar before performing legal work in Florida for their employer. This registration must be renewed each year. This places the corporate counsel under the disciplinary authority of the Florida Bar and the state supreme court. One of the strongest proponents of multijurisdictional practice is the 12,000-member American Corporate Counsel Association in Washington, D.C. Under its proposal, all attorneys who are licensed and in good standing in their home states would be allowed to travel to other states to handle legal matters without belonging to the bars in those other states or paying any special fees. But they would have to submit to the host states’ professional rules. The host states would have the power to prosecute visiting attorneys for disciplinary infractions. The corporate counsel group also proposes a limited licensing system to allow lawyers to set up offices in other states. Out-of-state lawyers would have to pay all required fees, pass a background investigation and submit to the host state’s rules and discipline, including continuing legal education, pro bono, and insurance requirements. But they would not have to take the host state’s bar exam and receive admission to the bar. Carol Gillespie, general counsel of Ivax Corp., a Miami-based pharmaceuticals manufacturer, says she supports the group’s proposals because handling certain types of legal matters varies little from state to state. These areas include patent law, securities law, and some commercial and tax work. On the other hand, Gillespie notes, real estate, environmental and employment laws differ significantly from state to state. In these fields, she says, companies should consider hiring local lawyers. Still, Gillespie argues that attorneys should be allowed to make that judgment call on their own, because hiring local counsel is a significant added expense. “If you don’t need a local counsel, you shouldn’t have to hire one,” she says. Kinder Cannon, a corporate attorney who travels widely in his work, also likes the idea of greater geographic flexibility. Cannon, a partner in the Jacksonville office of Holland & Knight, says new rules like those proposed by the corporate counsel group would be beneficial because they would make it easier for law firms to transfer lawyers between offices in different states. But Stuart Grossman, a former member of the Florida Bar Board Of Governors and partner at Grossman & Roth in Miami, strongly opposes any new rules encouraging multijurisdictional practice. He predicts that the Bar will balk at giving out-of-state attorneys greater leeway to practice in Florida without first obtaining a Florida license. The Bar already has a hard time keeping adequate disciplinary watch over Florida-licensed attorneys, he says. And local attorneys will not welcome lowering the barriers to out-of-state competitors. “There is no way the public can be served well by encouraging more attorneys who know nothing about the local system of law coming into the state to practice,” Grossman says. Barnett argues, however, that the world has changed in ways that make it impossible to shut out lawyers from other states. Technology has evolved to the point where any law firm can offer its services globally through the click of a computer mouse. “I suspect that a lot of lawyers are practicing law where they technically shouldn’t be,” Barnett said. “We need to determine if there is a way for lawyers who are required to travel as a part of their job to be in compliance.”

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