Licensing Requirements for In-house Counsel Looking to Practice Law in Other US States (United States)

This Wisdom of the Crowd (ACC member discussion) addresses the licensing requirements needed by in-house counsel in the United States desiring to practice law in US states beyond the state in which the corporate office is headquartered. This resource was compiled from questions and responses posted on the forum of the Compliance and Ethics and the New to In-House ACC Networks. (Permission was received from ACC members quoted below prior to publishing their comments in this Wisdom of the Crowd Resource.)

 

A Word From Mary Blatch, ACC Director of Government & Regulatory Affairs: This is an issue that comes up often for our members. ACC does maintain links to the states' practice rules on our Advocacy page, Advocacy - Association of Corporate Counsel (ACC). [Click on the "Right to Practice" rules bar in the right hand corner to access]. Conceptually, for you and others who grapple with this issue, there are two issues at hand - being authorized to practice in the state in which your office is located, and being authorized to practice in states with which you have temporary contacts with. Each state will have different rules and processes to deal with these situations. I would recommend looking at the temporary practice rules for the states in which you anticipate negotiating contracts. In the American Bar Association (ABA) Model Rules, this would be Rule 5.5(c), but some of the states have numbered the rule differently. If you have questions about where to find the rules, feel free to contact me.

Response #1: Unless you are personally representing your company in court, I believe you should be okay. Model Rule 5.5 of the American Bar Association (ABA) was modified to address this very situation; otherwise, most of us in-house would be extremely challenged (See Model Rule 5.5(d)(1) and comment 16). I know Illinois has adopted this rule; hopefully Colorado has also. http://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_5_5_unauthorized_practice_of_law_multijurisdictional_practice_of_law.html.¹

Response #2: Some states follow the American Bar Association's (ABA) model rule but some have their own specific requirements. ACC has a summary of each state's requirements listed here: http://advocacy.acc.com/multijurisdictional-practice/ ²

Response #3: Also, remember that it is not an unauthorized practice of law (UPL) to practice law in your barred state and to give legal advice regarding another states laws. It may not be prudent (especially given the many variations), but it is not the UPL.³

Response #4: First, you can cross off all of the states of the 25 that do not require in-house licensing or registration. Many of the rest, if not most, might require some sort of registration. It seems to me that some of the jurisdictions may not require registration given your circumstances and the amount of work you would be doing within that jurisdiction.⁴

 

Response #5: Check the ACC archives. There was an excellent program on cross-jurisdictional licensing at the 2015 Annual Meeting in Boston. As I recall, you need to be registered in the state where your company's office is located if that is where you primarily work. Negotiating agreements with parties in other states does not rise to a level of "practicing law" in those states that would require a registration. The panelists were experts on the subject and this would be an excellent place to start.⁵

 

Response #6: I was the president of the New Jersey (NJ) ACC when the state passed its limited licensing requirement. I and others have provided input to our members on the licensing requirements. In the current environment of state lawyer licensing or ethics rules, this is how you can practice law in a state: 1) plenary license; 2) limited license for in-house counsel; and 3) multi-jurisdictional practice (MJP). I will avoid discussing the first as this is a full-blown license application and bar exam. For the limited license, the rules usually apply only if your primary office is in that state. It does not allow you to apply for a limited license if you have an office in Illinois and you spend part of your time in other corporate offices in four other states. If you do not qualify for the limited license in a state, the only other way to get around the unauthorized practice of law is the MJP provisions. These allow attorneys to engage in certain legal activities, such as negotiations, in that state. If court appearance is needed (even under limited licensing), a pro hac vice admission is required. In NJ, the MJP provisions are under Rule 5.5.6

The ACC website had and still should have a page that summarizes all of the licensing and MJP requirements. It was a good resource in the past. ⁶

Response #7: This post raised some questions for me as well, and I reached out to the ABA for guidance. This is the response I received, which, in a nutshell and in good legal practice states that the answer depends. The question of what constitutes the practice of law is a legal, factual question that is not defined in the rules of professional conduct.

 

The first sentence of paragraph [2] of the comment to Rule 5.5 states that the definition of the practice of law is established by law and varies from one jurisdiction to another: http://www.americanbar.org/content/aba/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_5_5_unauthorized_practice_of_law_multijurisdictional_practice_of_law.html

 

Disciplinary Authority; Choice of Law of the ABA Model Rules of Professional Conduct were amended in 2003 pursuant to the ABA Multijurisdictional Practice Commission's (MJP) recommendations. Their report, which was submitted to the House of Delegates, is located here: http://www.americanbar.org/groups/professional_responsibility/committees_commissions/commission_on_multijurisditional_practice.html

 

To the extent that you have questions about the unauthorized practice of law in a particular state, I suggest that you contact that state's unauthorized practice committee. A directory of such committees is available here: http://www.abanet.org/cpr/clientpro/cp-dir_upl.pdf

 

Links to various state unauthorized practice of law opinions are available here: http://www.abanet.org/cpr/clientpro/upl_ops.pdf

 

Here is additional information on the Model Rule for Registration of In-house Counsel:

Model Rule for Registration of In-House Counsel (Revised 103, February 8, 2016)

Model Rule for Registration of In-House Counsel (Revised 107B -redline February, 2013)

Model Rules for Registration of In-House Counsel (Final - February, 2013)

Chart with State In-House Counsel Rules

Comparison of In-House Counsel Rules

 

For further information on the ABA Center for Professional Responsibility, visit the website at the following address: http://www.americanbar.org/groups/professional_responsibility.html.

Information about how to join the Center is located here: http://www.americanbar.org/groups/professional_responsibility/membership.html.

Information about ETHICSearch is located here: http://www.americanbar.org/groups/professional_responsibility/services/ethicsearch.html.

A bibliography of legal ethics resource materials that are very widely available in law libraries is available here: http://www.americanbar.org/content/dam/aba/administrative/professional_responsibility/20151211_bibliography_revised.pdf.

A link to an annotated list of internet ethics research sites located on the ABA Center for Professional Responsibility web site is located here: http://www.americanbar.org/groups/professional_responsibility/resources/links_of_interest.html.

As you may be aware, ETHICSearch operates under the following disclaimer:

ETHICSearch is a research service only. We are not acting as your lawyers in this matter. The research assistance we provide is not to be construed as legal advice. Furthermore, the research assistance provided is not comprehensive and the inquirer is responsible for making his or her own final judgment on the ethical and legal issues presented.

Also, please bear in mind that the ABA Model Rules of Professional Conduct and ethics opinions are advisory only. The ethics rules, laws and court decisions of your jurisdiction are controlling.⁷

 

Response #8: "Anyone" who "practices law" in a state where they are not licensed or authorized is engaged in the unauthorized practice of law. But under your scenario, the drafting or negotiating of a contract may not per se be an unauthorized practice of law (UPL). Also, a lawyer (as opposed to a non-lawyer) may have other ethical duties to meet regarding UPL.⁸

Response #9: This topic is both complex and simple at the same time. It depends on the location of your in-house headquarters, the location of your operations, and the nature of such operations.⁹

Response #10: Unfortunately, the concept of negotiating contracts is complex. This is a brief response to the issue. Each state defines the concept of an Unauthorized Practice of Law (UPL) differently. If you are negotiating a contract on your own behalf, it may not be an UPL in many states. However, you may not be able to go to court to defend your company, but that depends on your state. The concept is that you are not representing others.

If you are a licensed lawyer in good standing in your home state, many states now have the lawyer fly-in and fly-out rules. Suppose that you do Commercial Real Estate contracts and you are licensed in Illinois but your client wants you to negotiate a contract in New York (NY). The NY Professional Responsibility rules now authorize you to negotiate the contract in NY. However, beware because you need to make sure that your client knows that you are not licensed in the fly-in state. You may not set up an office or put out a shingle, nor may you permanently be in the fly-in state.

The ABA has a great chart that was updated in April 2016 that provides a very brief review of each state and the URL for each state. There are also a couple of articles on the subject available on the Internet.

Hopefully this helps for the fly-in fly-out rule.

Everything changes if you are in-house counsel working in a foreign state. I am not addressing that since it was not part of the question, but a word of caution is that you need to be very careful about each state's rules for in-house counsel and the UPL.¹⁰

Response #11: The Virginia (VA) State Bar offers the following:

Specifically, the relation of attorney and client exists, and one is deemed to be practicing law whenever: ... (2) One, other than as a regular employee acting for his employer, undertakes, with or without compensation, to prepare for another legal instruments of any character, other than notices or contracts incident to the regular course of conducting a licensed business. So, at least in VA, there's recognition that "practicing law" is a fluid concept, particularly outside the courtroom. And the bar cannot be set at negotiating contracts for your employer.¹¹

 

Response #12: I will repeat a story of the definition of the practice of law as a warning that the rules of what is practicing law can be different for licensed attorneys than for lay practitioners. I am licensed in both Arizona and Minnesota. In my futile attempt to find employment, I applied for a non-lawyer job as a "technology contract negotiator" in Minneapolis for a well-known company. I had worried that if I was a licensed counsel negotiating with an opposing negotiator who was represented by counsel, unless I gained permission from their counsel, I would inappropriately be in contact with a represented party. I spoke to the ethics counsel in both states. While Arizona thought there was no problem no matter the view, Minnesota said it was very clear I would have to have opposing counsel's permission before negotiating a contract even though non-lawyers in the "contract negotiator" position were not considered to be practicing law for licensing purposes. Maybe this means the best path is to get a letter of advice from an ethics counsel with great malpractice insurance?¹²

______________________________

¹Claire Battle, Assistant General Counsel, ArcelorMittal USA (January 23, 2017)

²Tara Mercadante, Counsel, Ashland LLC (January 23, 2017)

³Anonymous (February 6, 2017)

⁴Murphy Burke, Vice President and General Counsel, Zurich Corporate Law (January 22, 2017)

⁵Paul Vince, Retired (January 23, 2017)

⁶Lee Braem, Senior Corporate Counsel & Chief Compliance Officer, Evonik Corporation (January 24, 2017)

⁷Abigail Morrow, Corporate Counsel, Cadence Bank (January 24, 2017)

⁸Lee Braem, Senior Corporate Counsel & Chief Compliance Officer, Evonik Corporation (January 26, 2017)

9 Manuel Sanchez-Alvarez, Vice President, Administration, QMax (January 27, 2017)

¹⁰Robert Moore, Corporate Secretary, NationsBuilders Insurance Services Inc. (January 27, 2017)

¹¹Patrick Samsel, Corporate Counsel, Contracts Manager, Fors Marsh Group (January 29, 2017)

¹²Michael Sneberger, Pro Bono General Counsel (January 25, 2017)