New Jersey. The state over the bridge. The state where many lawyers in New York and Pennsylvania are licensed to practice law. The state that has traditionally been perceived as a bit difficult for lawyers not based in New Jersey to set up offices and/or practice. Remember the bona fide office rule, for example.
Well, times are changing for lawyers licensed in New Jersey who do not have in-state offices. In addition, for lawyers not licensed in New Jersey who may need to provide some legal advice, my advice is "be very careful." This article will address two concepts that continue to affect lawyers who want to practice in New Jersey, focusing on the bona fide office rule and multi-jurisdictional practice.
Bona Fide Offices
Under the New Jersey Rules of Professional Conduct, attorneys were required to maintain a bona fide office, which has been defined as "one or more fixed physical locations where client files and the attorney’s business and financial records may be inspected on short notice by duly authorized regulatory authorities, where mail or hand-deliveries may be made and promptly received, and where process may be served on the attorney for all actions, including disciplinary actions, that may arise out of the practice of law and activities related thereto."
This rule has prevented some New Jersey-licensed attorneys from practicing in the state and has been criticized as unnecessary and self-protective. Despite the criticism, the rule remained.
Along came technology — specifically, technology allowing lawyers to work from virtually anywhere. For example, my firm is based in Pennsylvania and Maine, and our technological infrastructure has eliminated many barriers to client service, except purely geographical ones. Even those limitations are reduced because of the use of webcams, cellphones, file-sharing systems and other devices. As a result, all of our staff can assist with every client matter and when preparing documents, for example, our case management system is the glue that holds everything together.
Of course, there is also the phenomenon of the "virtual law office," essentially an Internet-based law office that operates without the need for brick-and-mortar locations. Most states and state bar associations have approved the use of virtual offices. In Pennsylvania, for example, the Pennsylvania Bar Association committee on legal ethics and professional responsibility issued Opinion 2010-200 ("Ethical Obligations on Maintaining a Virtual Office for the Practice of Law in Pennsylvania"), which concluded, inter alia, that an attorney (a) may maintain a virtual law office (VLO); (b) is not required to meet with clients at the address listed in any advertisements and/or in the geographic location where the attorney will perform the services advertised; (c) must disclose to the client all information required under the Rules of Professional Conduct; (d) an attorney practicing in a VLO may not state that his or her fees are lower than those of traditional brick-and-mortar law offices, but may state, if accurate, that the firm’s overhead may be lower than traditional brick-and-mortar offices, thereby possibly reducing the fees the firm charges clients. The committee noted that there are no additional precautions for an attorney in a VLO to comply with the duty of confidentiality beyond those required of all attorneys.
Finally, the committee opined that attorneys in a VLO must take appropriate safeguards to confirm the identity of clients and others, particularly when a client may have diminished capacity.
On the other hand, on March 25, 2010, the New Jersey Advisory Committee on Professional Ethics and the Committee on Attorney Advertising jointly concluded that "a home office can qualify as a bona fide office for the practice of law under Rule 1:21-1(a), but a ‘virtual office’ does not." Thus, virtual law offices were unethical in New Jersey.
Thankfully, 2013 brings a new perspective from New Jersey. On January 17, the Supreme Court of New Jersey amended Rule 1:21-1, effective February 1, to eliminate the bona fide office requirement, and to permit attorneys to practice in New Jersey provided they structure their practices in an appropriate manner, to wit: (a) an attorney need not maintain a fixed physical location, but must structure his or her practice in such a manner as to assure prompt and reliable communication with and accessibility by clients, other counsel and judicial and administrative tribunals before which the attorney may practice; (b) an attorney who does not maintain a fixed physical location for the practice of law in New Jersey must designate the clerk of the Supreme Court as the agent for service of process; (c) an attorney shall be reasonably available for in-person consultations requested by clients at mutually convenient times and places.
Essentially, the rule now allows New Jersey-licensed lawyers to maintain a virtual law office, provided they comply with Rule 1:21-1.
While this rule change addresses some concerns, for lawyers who are not licensed in New Jersey there are other concerns, particularly for lawyers not licensed in New Jersey but who provide legal services of advice to clients in the state.
The issue of multi-jurisdictional practice of law, i.e., when a lawyer provides legal service or guidance to clients in a state where the lawyer is not licensed, is fairly common. But lawyers who are not licensed in New Jersey, but who might travel to the state for a deposition or offer legal advice to a client in the state, may well be practicing law without a license unless they follow the guidelines under the New Jersey rules.
The American Bar Association explained the conundrum lawyers face, noting that "there are occasions in which a lawyer admitted to practice in another United States jurisdiction, and not disbarred or suspended from practice in any jurisdiction, may provide legal services on a temporary basis in this jurisdiction under circumstances that do not create an unreasonable risk to the interests of their clients, the public or the courts."
Thus, if a lawyer licensed only in State A takes a deposition in State B for a case pending in State A, that lawyer could be considered practicing law without a license, commonly known as the "unauthorized practice of law."
To prevent this problem, and to permit lawyers to irregularly assist clients in states where they are not licensed, the ABA proposed Model Rule 5.5, with the aspiration that all states adopt the rule verbatim, thereby allowing lawyers to temporarily practice in another state without risking disciplinary action.
The Pennsylvania Supreme Court agreed, adopting Rule 5.5, which allows out-of-state lawyers to temporarily practice in the state, provided, inter alia, (a) the legal services are undertaken in association with a lawyer admitted to practice in Pennsylvania who actively participates in the matter; (b) the legal services are in or reasonably related to a pending or potential proceeding, arbitration, mediation or other alternative dispute resolution proceeding in Pennsylvania or another jurisdiction.
Of prime importance is that each state’s version of Rule 5.5 applies to lawyers not licensed in that state who temporarily handle a matter there, i.e., Pa.R.P.C. 5.5 applies to lawyers not licensed in Pennsylvania but who have the need to assist a client in Pennsylvania.
While most states’ versions of Rule 5.5 were identical, or virtually identical, to the model rule, New Jersey Rule 5.5(b)(3) differs and places other requirements upon attorneys who want to temporarily practice in the Garden State, including the requirement that the attorney "register" with the clerk of the Supreme Court.
Thus, to practice in New Jersey, a lawyer licensed only in another jurisdiction may do so only by complying with the rules as well as the conditions in the October 3, 2012, Opinion of the New Jersey Committee on the Unauthorized Practice of Law.
In that opinion, the committee concluded that an out-of-state attorney may only practice in New Jersey if the lawyer "registers" with the clerk of the Supreme Court. This means that during the period the lawyer practices in New Jersey, he or she must: (a) submit a form consenting to appointment of the clerk as agent for service of process; (b) pay the annual assessment for the discipline system; (c) submit an annual registration statement; (d) pay the annual assessment for the Lawyers’ Fund for Client Protection; and (e) pay the annual assessment for the Lawyer Assistance Program.
In other words, if you "engage in the practice of New Jersey law," you cannot merely assist a client or appear at a deposition. You must also register and comply with all of those requirements. Otherwise, you are engaging in the unauthorized practice of law. Sit attornatum cavete (let the attorney beware). •
Daniel J. Siegel is the principal of the Law Offices of Daniel J. Siegel, which provides appellate, writing and trial preparation services to other attorneys, as well as ethical and disciplinary guidance. He is also the president of Integrated Technology Services LLC, a consulting firm that helps law offices improve their workflow through the use of technology. He can be reached at firstname.lastname@example.org.