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In the face of heavy corporate lobbying, the Virginia State Bar has taken a step back from a proposal that would require all corporate counsel in Virginia to join the Bar. Bar officials were on the verge of sending the proposal to the Virginia Supreme Court for review and final approval last month. Instead, on May 2, the bar’s Executive Committee decided to send the proposal back to the task force that created it. The task force will “review what we’d done to see if there were issues we hadn’t adequately addressed or unintended consequences,” says Catherine Mayes, a member of the task force and associate general counsel at Sallie Mae. It all began more than a year ago with a simple request from the Virginia Supreme Court to the State Bar: Review the rules governing the practice of corporate counsel in Virginia. But in the last few weeks, the State Bar’s proposal to require the admission of all corporate counsel, once seemingly noncontroversial, has become the center of a heated debate, stunning bar officials. Bar officials want to keep better track of in-house lawyers, who under current rules get to work in Virginia while licensed in other states. But counsel view the proposal, which would require them to pay fees to the Bar and take annual courses, as an unnecessary burden. Placing himself at the forefront of the opposition, McGuireWoods partner Richard Cullen lobbied hard against the proposal, finding support in Sen. Kenneth Stolle, R-Virginia Beach, and Delegate William Howell, R-Fredericksburg. Stolle and Howell are the respective chairmen of the Virginia Senate and House Courts of Justice committees. Cullen, a former Virginia attorney general and U.S. Attorney in the Eastern District of Virginia, says he has also spoken to Virginia Secretary of Commerce and Trade Michael Schewel, and Robert Baldwin, executive secretary of the state’s courts. Verizon — a McGuireWoods client — has some 60 Arlington, Va.-based in-house attorneys, the vast majority of whom are licensed in other states. While not formally represented by Richmond, Va.-based McGuireWoods in this matter, AOL Time Warner Inc., Smithfield Foods Inc. and energy company Dominion have all given Cullen the green light to add their names to any calls he makes or letters he writes opposing the bar’s proposal. “All of these lawyers are admitted to practice in other states. They have no desire to become Virginia lawyers,” says Cullen. The strength — and timing — of the opposition has come as a surprise to many at the Virginia State Bar. “We thought we had everyone’s consent,” says President Michael Glasser, who notes that the task force that drafted the proposal included in-house attorneys. “Apparently, we might have been mistaken.” The Bar posted the proposal in its magazine earlier this year, but since the publication is sent only to members, many in-house counsel didn’t see it. According to Mayes, some of the momentum for the latest round of comments sprang from an April Legal Times article about the proposal, “Virginia Corporate Counsel in Bar Battle.” Now that the proposal is heading back to the task force, only a few things are certain. What is known is that the task force will meet at least once more. Glasser hopes it can reconvene and review the approximately 15 or 16 written comments that have been received before the Bar’s annual meeting in June. That’s the next time that the Bar Council — the body that must approve the proposal before it can be sent to the Virginia Supreme Court — meets. If that doesn’t happen, the next Bar Council meeting is not until this fall. Whether the proposal will survive the task force’s next meeting intact is harder to answer. Cullen and Howell both call the proposal as written “overregulation” that could place a chill on businesses moving to Virginia. Cullen and Howell have suggested an alternative. Under their two-tier system, in-house counsel who don’t want to waive in and become full-fledged members could continue to work in Virginia for their companies without registering. But those who eventually do want to waive in could register with the Bar and then take a one-time professionalism course, a series of continuing education classes, and pay annual dues. Like the task force’s proposal, such lawyers would be allowed to represent only their employers until they waive in and become full members. Thomas Edmonds, executive director of the Bar, contends that the lawmakers’ proposal oversimplifies the situation. “There seems to be an assumption we’re trying to extend our regulatory authority without basis. Nothing is further from the truth,” says Edmonds. The Bar simply wants to make it easier for in-house lawyers to waive into the Virginia Bar, while also keeping better tabs on the increasing number of in-house corporate lawyers in the state, according to Edmonds. “If they violate our rules of conduct, there’s no way the Bar can do something to them,” he says. Yet the Bar’s decision to regulate all corporate counsel in the state flies in the face of its history and tradition, say some opposed to the rule. “Verizon had moved to Arlington several years ago from the District of Columbia,” explains McGuireWoods’ Cullen. “They had gotten the OK from the State Bar that moving into the state wouldn’t require any more bar exams or certifications. They were shocked to learn the cow was almost out of the barn.” Cullen conveyed his concerns to Glasser, and he hopes there’s “an area of compromise.” Robin McCune, senior counsel at Falls Church, Va.’s Computer Sciences Corp. and president of the Washington Metropolitan Area Corporate Counsel Association, also urges a compromise that allows in-house counsel to waive into the Bar. The battle promises to continue if a middle ground is not reached. “The legislature has the power to modify rules of the court,” says Delegate Howell. “Whether they would do it or not would depend on whether the legislature felt the rule was overreaching.” But, says Howell, “that’s a step that’s always available.”

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