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A fight is brewing in the Virginia legal community over a proposal that would force in-house corporate lawyers to shell out cash and register with the State Bar association. Currently, attorneys in Virginia’s corporate legal departments do not have to become Virginia attorneys or even let the Virginia State Bar know who they are. The Bar believes that a vast number of the in-house corporate lawyers working in Virginia are licensed out of state, not in Richmond — leaving the Bar no way to monitor them or their activities. “We’ve got a lot of companies out here with big legal departments,” says LeClair Ryan partner Rebecca Kuehn, a commercial litigator. The State Bar “is very concerned about that.” Edward Rodriguez Jr., a former in-house lawyer who helped write the proposal, says the Bar is worried because advice given by corporate counsel is often then relied upon, even indirectly, by parties outside of the corporation. Now, after years of explosive growth by corporations — and their legal departments — the Bar proposal would require all in-house attorneys to become members of the Virginia Bar. Corporate counsel “need to be subject to the same education, discipline and culture, if you will, as the rest of the Bar,” says Sallie Mae Associate General Counsel Catherine Mayes, who also helped draft the proposal and chairs the VSB’s corporate counsel section. “This is a recognition of the evolution and the maturing of the role of corporate counsel.” But not everyone wants the change to go through, at least not in the form that has been debated. Under the Bar’s plan — known as Proposed Rule 1A:5 — all corporate counsel in the state who are not already licensed Virginia attorneys would be required to register with the State Bar. With their registration, they would be allowed to practice law and appear in court, though only on behalf of their employer. They would additionally be required to meet all the duties any registered Virginia attorney faces: an application fee and annual dues; 15 credits in mandatory continuing legal education courses each year; attendance at a one-time professionalism course; and a score of 85 or higher on the Multistate Professional Responsibility Examination. After registering, corporate counsel eventually would become eligible to waive into the Bar, and gain the full ability to practice law — instead of being restricted to representing only their employers. Under current rules, corporate counsel licensed out of state are often unable to waive in. With the Bar’s proposal likely to be sent to the Virginia Supreme Court in the next week for review and possible adoption, some corporate counsel have objected, concerned about the scope of the rule. SPEAKING FOR D.C. AREA COUNSEL One of the louder voices in the debate is that of the Washington Metropolitan Area Corporate Counsel Association, a bar group that represents in-house lawyers in the D.C. area. “One of WMACCA’s biggest concerns is that it appears that corporate counsel will have all of the obligations of a member of the state without all of the rights,” says WMACCA President Robin McCune, who is senior counsel at the Computer Sciences Corp. in Falls Church, Va. As Alan Hausman, senior deputy general counsel at McLean, Va.’s Freddie Mac, points out, most in-house counsel are not representing members of the general public — the very reason the State Bar monitors its lawyers so closely and requires them to take CLE and ethics courses. Instead, their only work comes from their employers. Yet in-house attorneys, under the proposal, would still have “imposed on them a rather rigorous application process, testing process and expense,” says Hausman, who is also a WMACCA board member. Indeed, the application fee and annual dues could prove to be a burden on a large number of companies and individuals across the state. Currently, the Virginia State Bar only keeps track of its own attorneys and doesn’t know how many non-Virginia attorneys are working in legal departments across the state, says VSB ethics counsel James McCauley. Of the approximately 800 members of WMACCA, more than 400 are based in Virginia. But the group does not know how many are not licensed in Virginia. And these numbers do not reflect the entire state, since WMACCA mainly draws its membership from the metropolitan Washington area. Unlike Virginia, most states keep track of their in-house counsel. Many require in-house lawyers to become full-fledged members of the bar, according to the American Corporate Counsel Association. But eight states, including Virginia, do not mandate admission to, or even registration with, the bar, says ACCA. With the adoption of the Bar’s proposal, Virginia would join a group of 12 states requiring corporate counsel to register. BIG AND SMALL WOULD FEEL PAIN The rule’s impact on Virginia companies promises to be huge. At Freddie Mac, for example, approximately 60 of the 80 in-house attorneys are not licensed in Virginia, says Hausman. At a much smaller Northern Virginia company, the MITRE Corp., General Counsel Sol Glasner says that two of the three attorneys he employs are not licensed in Virginia. For Freddie Mac, the new rule would mean $15,000 in annual dues — $250 for each attorney. The application fee, which goes to cover a character examination and background check, is a trickier issue. According to the proposal, in-house attorneys will “pay the application fee as may be established from time to time by the Board of Bar Examiners.” “Nobody knows as of yet what the cost will be for the character certification,” says W. Scott Street III. Street, a partner at Richmond’s Williams Mullen who chaired the task force that drafted the Bar’s proposal, is also the secretary for the Virginia Board of Bar Examiners. Some in-house counsel have speculated that the application fee would be the same amount as is paid by non-Virginia lawyers who waive into the Bar — namely, $1,500. For a company like Freddie Mac, a $1,500 application fee could mean a total bill of $90,000. Add to that the annual dues, and Freddie Mac’s bill could jump to $105,000. For individuals working at smaller companies that can’t afford to reimburse them, the fee and dues would have to come out of their own pockets. In a March 27 letter to Street and VSB President Michael Glasser, McCune wrote that WMACCA “believe[s] that it is inappropriate to charge the same amount for [the limited corporate counsel] status as for full admission to the bar.” Street agrees, adding that “the initial fee will probably be less than half” the $1,500 waiver fee. Street and Glasser plan to respond to McCune by letter, says Street. THE ROOTS OF THE DEBATE As riled up as some corporate counsel are about the thought of mandatory registration with the Bar, all concede that the genesis of the rule was in complaints made by in-house counsel. Until a few years ago, in-house counsel licensed out-of-state could easily waive into Virginia’s Bar. But the rules changed. State officials decided that any work that corporate counsel did in-state would not be considered the practice of law unless the attorneys were already licensed by the Virginia State Bar. That meant those attorneys could never meet the requirement for waiving in without taking the bar exam — that they practice law as a licensed attorney for five of the last seven years. Blocked from waiving in, in-house counsel lobbied for reform, says McCauley. “Momentum for this rule change came from in-house counsel.” At the Virginia Supreme Court’s request, the State Bar convened a task force that met about once a month last year. The result: Proposed Rule 1A:5. Members of the task force believe they successfully addressed both the waiver problems for in-house attorneys and the State Bar’s growing unease with the number of unmonitored corporate counsel in Virginia. But some in-house counsel don’t think that the proposal is the answer they were looking for. On top of the concerns about the mandatory nature of the rule and the fee structure, WMACCA President McCune says the proposal would discourage pro bono work and burden in-house counsel who lose their jobs. Because corporate counsel would be allowed to represent only their company, they could not take on the cases of individuals who needed free legal advice. “You can only provide legal services for your employer” under the current version of the rule, says McCune. “If this passes as is, they may not be willing to take the risk [on pro bono work] because it might be considered the unauthorized practice of law.” Another section of the Bar is studying the pro bono issue and could well come up with a solution, says Mayes, the Sallie Mae lawyer and task force member. McCune’s other concern is portability. The new in-house Bar registration would only be good for six months after a lawyer’s employment with a company ends. Attorneys would then have to re-register with the Bar. In her letter to Street and Glasser, McCune writes that six months, in a depressed economy, might not be enough time for laid-off lawyers to find a new job. “WMACCA currently has several dozen members in transition and … many of these very talented attorneys are finding that the job market is very tight,” she writes. But Glasner, the MITRE Corp. GC, says that overall the proposal is a good fix, despite the criticism. “Now, there is going to be a recognized path for ensuring in-house counsel have the credentials to practice in Virginia” and waive into the Bar, he says. ACCA President Frederick Krebs acknowledges that Virginia’s proposal is not a perfect one, but he says Virginia would take a big step forward in making it easier for in-house counsel to waive into the Bar. “Is it a significant improvement over the existing rules?” he asks. “Absolutely.”

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