Legal ethics

Examples #2,145 and 2,146 of the scope of the problem.

Having just scratched long unscratched itches of topics over which dust has gathered last week, let’s resume talking about more recent topics. Specifically, a topic that is going to need to continue to be bellowed about until we can get it fixed: the flaws in RPC 5.5.

Thankfully, we have two further recent situations — one very recent and one a bit less so — demonstrating aspects of the scope of the problem. As a bonus, one of them is currently ripe in my own state of Tennessee.

Let’s start with the slightly older development which comes from Maryland. It involves a long-suffering attorney who earlier this year finally had disciplinary proceedings against her come to an end with a finding that she had technically violated Maryland’s RPC 5.5. but did not deserve to have any punishment inflicted against her or her license. (Of course, the “punishment” both financial and employment-wise of laboring under the disciplinary knife for more than four years is pretty substantial on its own.)

Her only failing? If we are being honest, her only failing was trusting Maryland disciplinary counsel. If we want to be pretty honest, but less cynical, her failing was opening a Maryland office of her law firm when she was only licensed in the District of Columbia. If we want to be a little bit less honest, but more strictly adherent to what was stated in the proceedings, her failing was to have signed off on two alias summonses that were issued in cases in Maryland being handled primarily by others in her firm.

You can unpack all that baggage to your heart’s content by reading the full opinion of the Maryland Court of Appeals issued in January 2022 that ended the case against her without the imposition of discipline here.

The best part of the opinion, however, was the Maryland Court’s overall recognition of the problem that it has laboring with a rule that is broken as it called specifically for:

Our current Rule 5.5 does not reflect the reality of a modern, portable profession. Additionally, in the context of a multi-jurisdictional practice, this case highlights the challenges posed by a professional rule that equates the “unauthorized practice
of law” solely with physical presence. As written, the rule may create complications for
multi-jurisdictional law firms maintaining an office in Maryland where some lawyers
employed by the law firm are not licensed in Maryland but are licensed to practice in another jurisdiction. For the reasons expressed by the Supreme Court of New Hampshire, discussed supra, we shall refer this Rule to the Standing Committee on Rules of Practice and Procedure for consideration and recommendation, as a matter of general policy, regarding whether an amendment to Rule 5.5(b)(1) may be warranted.

Now, here’s a development from this month that could provide a basis for my home state of Tennessee to recognize that our own RPC 5.5 is broken.

It comes in the form of our Board of Professional Responsibility having put out a draft ethics opinion for public comment. The proposed opinion would be 2022-F-168. To get the preliminaries over with, the draft opinion is a pretty good opinion, as far as it goes, and I think tries to do the right thing. But it doesn’t go far enough, nor can it, because it labors under the shackles of the deeper problem.

You can read the proposed opinion here.

If you are plowing forward without reading the opinion (which is admittedly what I would do in your shoes) then you need a bit of a very quick primer on Tennessee’s approach to in-house counsel registration.

In 2002, the Tennessee Supreme Court issued an opinion called Crews v. Buckman Labs, which made painfully clear that if a lawyer was working as an in-house lawyer for a Tennessee company (in that case Buckman Laboratories), then they had to be a fully licensed Tennessee lawyer or they were engaged in the unauthorized practice of law.

Years later, and at a point where many in-house counsel for important Tennessee companies were still not in compliance, Tennessee revised its rules to allow people who were licensed somewhere else, but who moved to Tennessee to work as in-house counsel for Tennessee companies, to apply for a registration status in Tennessee that would allow them to practice law without having to apply for full admission as long as they limited their work to only representing their employer client. Along with that rule revision came an amnesty period for people who were long practicing out of compliance.

Contemporaneous (relatively speaking) with those revisions, Tennessee also adopted roughly the ABA version of RPC 5.5 in terms of drawing a line between temporary practice in our state and a systematic and continuous presence in Tennessee for the practice of law. Thus, the origin of the in-house counsel registration provision can be inextricably tied to the idea that — but for that registration provision — someone could not move to Tennessee and begin working as in-house counsel here based only on their license from another state.

Now with that primer, we can move on.

The new draft ethics opinion tries to address a laundry list of questions about remote or virtual practice in terms of whether someone who is licensed only in a state other than Tennessee but who has a job as in-house counsel for a company that has a presence in Tennessee also has to apply for in-house registration or be treated as engaged in the unauthorized practice of law.

Now, the opinion (for the most part) answers the questions posed correctly (I think) under generally accepted notions of how things should work. For example, if a lawyer gets hired to work entirely virtually for a Tennessee company but they are going to live and log-in to their computer in a state where they are fully licensed then that shouldn’t be a problem. The proposed TN opinion tries mightily to mimic ABA Formal Op. 495 which was issued in 2020. Where the opinion is flawed is in two respects: one is based on what the law currently is and the other revolves around what the law ought to be.

Both of those flaws come from the question on which the draft opinion hedges (or possibly punts): what is the outcome if the in-house lawyer sitting in a jurisdiction where they are fully licensed provides advice to the Tennessee company as to Tennessee law? The opinion explains that its various answers to questions could be different if the in-house lawyer engages in the practice of the law of Tennessee.

But what in the world is that exactly? And also, how does the opinion resolve the fact that going all the way back to Crews, our Court has said that being in-house counsel for a Tennessee company means you are inherently engaged in the practice of law in Tennessee? One way to resolve that might be to tackle the foundations of Crews and explain that such a view was moored to the idea that physical presence in a state was believed to be the ultimate fact that mattered.

Staking out that explanation though would force examination of whether that should actually really matter. If a company with a huge presence in Tennessee, whether that company is FedEx or Nissan or the Tennessee Valley Authority, knowingly hires a lawyer who is only licensed in some other state to represent its interests, then fundamentally that really ought to be okay. Right? The client knows exactly what it is getting.

Getting to that level of reform is what the APRL proposal transmitted to the ABA is all about. If you missed anything about that proposal, you can learn more here. But the opportunity to comment on the TN proposed opinion can be about pointing out flaws that would not even require going all the way down the path that the APRL proposal offers. Such comments could focus on trying to get to Tennessee to admit that if (a) a company based in Tennessee hires a lawyer who (b) physically resides in a jurisdiction in which they are fully licensed, then (c) Tennessee has no legitimate regulatory basis for trying to say that the lawyer somehow has to obtain some permission from Tennessee to do that legal work.

The deadline for public comment in October 16, 2022 and you can learn more about how to submit your comment here.