Not breaking: Dentons didn’t have to say “aloha” to Hawai’i

Well, at least not the goodbye, “aloha.” They can still say the other one as much as they want.

So, you probably have seen a headline somewhere in your online surfing about this wacky issue litigated before the Hawai’i Supreme Court. But, just in case you didn’t, here’s all that I think you need to know about it.

Dentons, who has featured here a few times before, would appear to be the world’s largest law firm at present. Back in 2018, it swallowed up a Hawai’i law firm. Since then it has had lawyers in its firm practicing law in Hawai’i. Not the stuff so far of an interesting story.

In one of the pieces of litigation its lawyers have been handling in Hawai’i, they filed a motion to seek pro hac vice admission on behalf of a non-Dentons lawyer licensed in California. The opposing party opposed the pro hac motion not on the basis of any problem with the California lawyer, but on grounds that Dentons was engaged in the unauthorized practice of law. Why? Is a question you, dear reader, might ask. Well, because not every lawyer at Dentons is licensed in Hawai’i.

Sounds like a crazy argument doesn’t it?

It actually was a crazy argument, but it was an argument supported by a slightly-messed up court rule. You can read the entirety of the 21-page opinion resolving the situation here.

The short version of what you’d find if you had the time to read that 21-page opinion is that it is true that Hawai’i used to have extremely restrictive and parochial rules preventing anyone who was not a Hawai’i-licensed lawyer from serving as a partner in a law firm in Hawai’i.

Believe it or not, those restrictions were a part of Hawai’i’s ethics rules until 1981. Beginning with changes starting in 1981, those restrictions were lifted and modified. A number of places in the present ethics rules in Hawai’i clearly indicate that it must be true that a multi-state law firm can have offices in Hawai’i. (One of them is Hawai’i’s RPC 7.5 about letterhead. This marks the first time in history I’ve found an ethics rule about letterhead to have been a helpful part of a state’s ethics rules.) But there was still one Hawai’i rule, not in the ethics rules but a different Hawai’i Supreme Court rule that had potentially problematic language if you were part of a multi-state law firm — Haw. Sup. Ct. R. 6 “Lawyer’s Professional Business Organizations.”

Specifically, Section (d)(1) of that rule provided that “[s]hares or interests in a lawyers’ professional business organization may be owned only by a lawyers’ professional business organization or by one or more persons licensed to practice law in this state by this court….”

Sometimes it only takes the slimmest of reeds for a certain kind of lawyer to be willing to make what otherwise seems like an outrageously foolhardy argument on behalf of a client. Turned out that the lawyer opposing Dentons in this case was, at least for a short period of time, that kind of lawyer. (NB: If you are looking for further proof of any pet theories you have about living in a simulation, the lawyer’s surname is (no kidding) Bickerton and, according to this article from a publication in Hawai’i he had the chutzpah to actually call one of Dentons’ arguments a “dumb ass argument.”)

The Hawai’i Supreme Court was able to dispose of this issue, and avoid having to address serious constitutional questions that would have arisen had Bickerton’s client’s rule interpretation been given merit, by explaining that the rule in question had been superseded by implication.

The court also ended its opinion by addressing any concerns that might be raised over the possibility that attorneys not licensed in Hawai’i could direct the conduct of Hawai’i lawyers without being subject to the jurisdiction of the disciplinary authorities in Hawai’i. It did so by referencing case law that (thankfully) concluded that Oregon general counsel for an Oregon company was not engaged in unauthorized practice in Hawai’i by assisting from Oregon and being actively involved with local Hawai’i counsel.

That portion of the opinion seems only to have been necessary because Hawai’i is still operating with an antiquated version of RPC 5.5 in place. While the Hawai’i Supreme Court has these issues in the front of its mind, it really ought to give some thought to adopting a version of ABA Model Rule 5.5 to make things a bit easier over there.

Until then, Me ka aloha pumehana.

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