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(Inquiry No. )
Unauthorized practice of law within other states – trusts and estates legal services provided to Florida client by New York Lawyer in consultation with Florida counsel.
Determining what constitutes the “practice of law” in Florida or another state is ultimately a question of law under Florida’s or other states’ court rules governing legal services in Florida or those of such other state where performed; it is not unethical, however, under N.Y. Lawyer’s Code DR 3-101(B) for a lawyer admitted to the New York Bar (but not the Florida Bar) to give legal advice and draft a trust and will and selected documents in New York for a Florida resident in consultation with Florida counsel who will review same and whose services will be disclosed to and paid for by the client.
The Inquiring Attorney’s financial planning colleague asked this New York attorney to assist a client in placing assets in trust for the client and his son. The client resides in Florida and his assets are wholly located in Florida. According to the attorney, the client places great trust in the financial planner in referring him to the attorney. The attorney plans to draft (1) a revocable trust that would pay income to the client and his son and (2) a will and various ancillary documents. In order to review the documents for compliance with Florida law the Inquiring Attorney plans to retain Florida counsel, who is to be paid a fee for these services. This relationship will be disclosed to the client.
Is it unethical under DR 3-101(B) for a New York lawyer working in a New York law office to draft trust and other estate-planning documents for a Florida resident client while consulting with Florida counsel to review same for compliance with Florida law?
This New York Professional Ethics Committee has no jurisdiction or competence to answer questions of Florida law regulating the “practice of law” within that state as defined in that state’s court rules. It is a question of Florida law whether the Inquiring Attorney’s described facts constitute the “unauthorized practice of law” in Florida, particularly in light of the Inquiring Attorney’s intention to consult with Florida counsel to review the documents for their compliance with Florida law. It is also, however, a question of professional ethics under DR 3-101(B) of the New York Lawyer’s Code of Professional Responsibility to determine whether the Inquiring Attorney would be “practicing law in” that jurisdiction. There would be no ethical violation in New York in light of (1) the implicit understanding that the Inquiring Attorney is not extensively consulting with and advising while meeting the client in Florida to perform these services, (2) the attorney is consulting with duly admitted Florida counsel to review the documents for compliance with Florida law, (3) the attorney will fully disclose these facts and arrangements to the client who is paying for these services, and (4) our view of New York law and ethics on this subject.
The Inquiring Attorney raises a question that presents a mixture of (1) an issue of law under another state’s court rules governing the practice of law in that state and (2) a question of professional ethics under the New York Lawyer’s Code of Professional Responsibility DR 3-101(B) affecting a New York lawyer’s performance of legal services in New York. This is a common problem among New York lawyers, whether, as here apparently, a solo practitioner is involved or a large multistate law firm. Therefore, while we would and could not reach any conclusion on the described facts regarding an issue of Florida law, we are authorized to give advice as to the issues of professional ethics involved for a New York lawyer, which is not necessarily determined by Florida law.
If desirous of receiving a definitive opinion on Florida law regulating legal practice in Florida, the Inquiry Attorney may request in writing an advisory opinion of The Florida Bar’s Standing Committee on the Unlicenced Practice of Law. It apparently has primary jurisdiction to rule on such questions, subject to review by the Florida Supreme Court. Such request must be made in writing to The UPL Department, The Florida Bar, 650 Apalachee Parkway, Tallahassee, Florida 32399- 2300, “stat[ing] in detail all operative facts upon which the request for opinion is based and containing the name and address of the petitioner.” Rule 10-9.1 of the Rules Regulating The Florida Bar of the Florida Supreme Court. In practical effect, if the New York Inquiring Attorney must look to the Florida courts to enforce a fee claim, then he or she must be prepared to comply with Florida’s court rules and judicial decisions governing the “unlicenced practice of law.”
The touchstone of our opinion under the New York Code must be DR 3-101(B) and related ethical considerations, EC 3-9 and EC 8-3. Disciplinary Rule 3-101(B) mandates that, “A lawyer shall not practice law in a jurisdiction where to do so would be in violation of regulation of the profession in that jurisdiction.” The supporting ethical consideration, EC 3-9, explains that whereas regulation of the “practice of law” is basically a question of state-law and state-court jurisdiction where the “practice of law” takes place, “the demands of business and the mobility of our society pose distinct problems in the regulation of the practice of law by the states.” This EC continues:
“In furtherance of the public interest, the legal profession should discourage regulation that unreasonably imposes territorial limitations upon the right of a lawyer to handle the legal affairs of a client or upon the opportunity of a client to obtain the services of a lawyer of the client’s choice in all matters including the presentation of a contested matter in a tribunal before which the lawyer is not permanently admitted to practice.”
These considerations are also reflected in EC 8-3:
“Clients and lawyers should not be penalized by undue geographical restraints upon representation in legal matters, and the bar should address itself to improvements in licensing, reciprocity, and ad-.mission procedures consistent with the needs of modern commerce.”
See, e.g., Charles W. Wolfram, Modern Legal Ethics § 15.4.1, at 865 (2d ed. 1986), outlining the principal justifications for the states’ universal prohibitions against a lawyer admitted in one state from the unlicenced practice of law in another state: in order (1) to assure competent handling of matters governed by local law, which differs from state to state, and (2) to give local authorities disciplinary control, over lawyers practicing in its jurisdiction for the protection of clients in that jurisdiction. Also involved is EC 6-3 and DR 6-101(A)(1) requiring a lawyer engaged to perform legal services not to do so without knowing that she or he is competent to handle that matter in accordance with applicable state or federal law, or to associate with counsel who is competent to handle it.
This state-by-state regulation of lawyers’ practice is a relatively modern phenomenon developing in the last fifty or sixty years, even while the demands of an interstate economy and the mobility of U.S. citizens and residents necessarily increase the need for lawyers to cross state lines, both physically and figuratively, and foster the growth of institutions such as multistate law firms and nationwide and international corporations with in-house counsel negotiating contracts effective in every imaginable jurisdiction. Exacerbating the problem of out-of-state practice, for example, are the rules regulating The Florida Bar as promulgated by the Florida Supreme Court, requiring all applicants for admission to that bar to pass its general bar examination (without regard to admission to the bars of other states or years of professional experience) and imposing examination and admission fees of up to $2500 for senior lawyers. See Amendments to the Rules of the Supreme Court Relating to Admissions to the Bar, 695 So.2d 312, 329-31 (1997) (as proposed by The Florida Bar). On the other hand, the Committee on Professional Responsibility of the Association of the Bar of the City of New York recently proposed the amendment of federal and state court rules in New York regulating the temporary admission of attorneys for a particular case (“pro hac vice”) not to require an out-of-state lawyer to associate with a local law office and urging that other states adopt reciprocating relaxations of these requirements.
Turning to the particulars of the Inquiring Attorney’s query, we note that Florida’s right to limit law practice to duly admitted Florida lawyers has been challenged before. See State ex rel. Florida Bar v. Sperry, 140 So.2d 587 (Fla. 1962), vacated on federal-law grounds, 373 U.S. 379, 83 S. Ct. 1322, 10 L.Ed.2d 428 (1963) (nonlawyer registered as federal patent agent may engage in patent work in Florida, because of federal preemption); Petition of Kearney, 63 So.2d 630 (Fla. 1953) (federal tax practitioner may not practice law relating to federal taxes in Florida). See also The Florida Bar v. Savitt, 363 So.2d 559, 560 (Fla. 1978) (enjoining New York law firm from practicing law through Miami office headed by non-Florida lawyer, except under limited conditions). The Florida courts and state bar continue to enforce its rules defining the “practice of law” and enjoining its “unauthorized” (or “unlicenced”) practice. See, e.g., Chandris, S.A. v. Yanakakis, 668 So.2d 180, 186 (Fla. 1995) (denying contingent fee award for Massachusetts attorney residing in Florida who entered into agreement in Miami with Greek seaman, without disclosing he was not member of Florida Bar; but stating “that a non-Florida attorney can join with a Florida attorney in a joint representation of a client in Florida on the basis of a contingent fee agreement that complies with the [Florida] rules”).
New York courts also promulgated such rulings in the past by denying a fee award for a California lawyer who came to New York for fourteen days to advise and represent a client in a New York matrimonial proceeding, even when the client was also represented by a New York lawyer in the matrimonial proceeding. Spivak V. Sachs, 16 N.Y.2d 163, 211 N.E.2d 329, 263 N.Y.S.2d 953 (1965). The New York Court of Appeals rejected the concept of an exception for a “single, isolated incident” not constituting the “practice” of law. The court emphasized the California’s lawyer’s prolonged presence in New York, the advice given as to the client’s rights and choice of jurisdiction for various issues under New York law, and his advice to change New York counsel. Id. at 167, 263 N.Y.S.2d at 955-56, 211 N.E. 21 at 329.
This decision was distinguished by the New York court in El Gemayel v. Seaman, 72 N.Y.2d 701, 533 N.E.2d 245, 536 N.Y.S.2d 406 (1988). The court held that a Lebanese lawyer working in Washington, D.C., who regularly reported by telephone to New York resident clients on child custody proceedings in Lebanon and made a single visit to his clients in New York to return personal items left in Lebanon and there mentioned his fees, was not practicing law in New York and was entitled to an agreed fee. Although the court held, in accordance with its precedents, that the practice of Lebanese law is within the New York statute regulating legal practice in New York, the Lebanese lawyer’s activities informing his clients by telephone of legal proceedings taking place elsewhere were “incidental and innocuous,” which “without more [do not] constitute the ‘practice’ of law in this State . . . . ” The court reasoned that to consider these activities of a foreign lawyer unlawful “would impair the ability of New York residents to obtain legal advice in foreign jurisdictions on matters relating to those jurisdictions since the foreign attorneys would be unable to recover for their services unless they were licensed both in New York as well as in the foreign jurisdiction.” The court also stated that it need not decide “whether a contract for legal services, rendered in a foreign jurisdiction to a New York client and which constitute the illegal practice of law in that foreign jurisdiction, is enforceable in this State,” since there was no proof that his conduct was unlawful in the jurisdictions from which he made the calls. Id. at 707, 533 N.E.2d at 249, 536 N.Y.S. 2d at 249.
Most of these cases do not discuss the tangible aspects of where the legal services occurred as well as the nature of the lawyer’s advice concerning the law of the state in which he is not admitted to practice, i.e., what constitutes the practice of law “in a jurisdiction,” as phrased in DR 3-101(B) and particular state rules. The latter were recently extensively discussed by the California and Hawaii Supreme Courts in Birbrower, Montalbano, Condon & Frank v. Superior Court, 17 Cal. 4th 119, 70 Cal. Rptr. 2d 304 949 P.2d 1 (1998), petition for cert. filed, 66 U.S.L.W. 3760 (U.S. May 5, 1998) (No. 97-1798), and Fought & Co. v. Steel Eng?g & Erection, Inc., 87 Haw. 37, 951 P.2d 487 (1998). In the first case, most of the legal services and advice were performed while the New York lawyers were in California participating in all arbitration, negotiating a settlement and modifying the fee agreement, without being licensed there or associated with local counsel. The California courts denied the New York firm’s fee claim as unenforceable and void under the California statute requiring that the practice of law “in California” be performed by a member of its Bar.
There was very little doubt the New York firm was engaged in the “practice” of law, but the court construed the phrase “in California” to mean “sufficient contact with the California client to render the nature of the legal service a clear legal representation”, plus “the nature of the unlicenced lawyer’s activities in the state. Mere fortuitous or attenuated contacts will not sustain a finding that the unlicenced lawyer practiced law in California.” The court opined that “physical presence” in California was only one factor to be considered, but also that it might be sufficient, to violate the statute to advise “a California client on California law in connection with a California legal dispute by telephone, fax, computer, or other modern technological means.” 17 Cal.4th at 128-29, 949 P.2d at 5.
In Fought & Co., the Hawaii court distinguished the facts of Birbrower, noting that in Hawaii an Oregon lawyer representing an Oregon corporation consulted with Hawaii counsel on an appeal in the Hawaii court, prepared papers in Oregon for mediation, assisted in legal research, planned strategy, and analyzed, reviewed and critiqued papers filed by the Hawaii adversary and the client’s Hawaii counsel, all while in Oregon. The Hawaii Supreme Court also closely analyzed the phrase “within the jurisdiction” as used in the Hawaii statutes and relied heavily on the Birbrower analysis while disagreeing with its dicta:
“While the scope of these statutes must be expansive enough to afford the public needed protection from incompetent legal advice and counsel, the transformation of our economy from a local to a global one has general compelling policy reasons for refraining from adopting an application so broad that a law firm, which is located outside the state of Hawaii [sic], may automatically be deemed to have practiced law within the jurisdiction merely by advising a client regarding the effect of Hawaii law or by “virtually entering” the jurisdiction on behalf of a client via telephone, fax, computer, or other modern technological means.”
We endorse the Hawaii court’s limiting dicta, instead of the California court’s expansive language, in determining the circumstances under which a lawyer may be found to practice law within a particular jurisdiction.
The recently adopted ALI Restatement of the Law Governing Lawyers (adopted in May 1998 and to be published in 1999), provides a concise and workable rule on the jurisdictional scope of the licensed practice of law:
“§ 3. Jurisdictional Scope of Practice of Law by Lawyer
A lawyer currently admitted to practice in a jurisdiction may provide legal services to clients in a matter: (1) at any place within the admitting jurisdiction; (2) before a tribunal or administrative agency of another jurisdiction or the federal government in compliance with requirements for temporary or regular admission to practice before that tribunal or agency; and (3) at a place within a jurisdiction in which the lawyer is not admitted to the extent the lawyer’s activities in the matter arise out of or are otherwise reasonably related to the lawyer’s practice under Subsection (1) or (2).”
With respect to litigation in the courts or agencies of other states or federal. courts and agencies, the rules are generally clear and necessarily determined by those courts and agencies. In the case of transactions and other non-litigation, comment e to § 3 states (emphasis added):
“Some [transactional] activities are clearly permissible. Thus, a lawyer conducting activities in the lawyer’s home state may advise a client about the law of another state, a proceeding in another state, or a transaction there, including conducting research in the law of the other state, advising, the client about the application of that law, and drafting legal documents intended to have legal effect there. While. lawyers would hesitate to do so due to lack of adequate familiarity, there is no per se bar against such a lawyer giving a formal opinion based in whole or,in part on the law of another jurisdiction. It is also clearly permissible for a lawyer from a home state office to direct communications to persons and organization in other states (in which the lawyer is not separately admitted), by letter, telephone, telecopier, or other forms of electronic communication. On the other hand, as with litigation, it would be impermissible for a lawyer to set up an office for the general practice of non-litigation law in a jurisdiction in which the lawyer is not admitted . . .
This comment gives some significance to a foreign lawyer’s association with a local lawyer:
“The customary practices of lawyers who engage in interstate law practice is one appropriate measure of the reasonableness of the lawyer’s activities out of state. Association with local counsel may permit a lawyer to conduct in-state activities not otherwise permissible, but such association is not required in most instances of in-state practice. Among other things, the additional expense for the lawyer’s client of retaining additional counsel and educating that lawyer about the client’s affairs would make such required retention unduly burdensome
Illustration 5 of § 3 specifically addresses the specific inquiry before us:
“Lawyer is admitted to practice and has an office in Illinois, where Lawyer practices in the area of trusts and estates, an area involving, among other things, both the law of wills, property, taxation, and trusts of a particular state and federal income, estate, and gift tax- law. Client A, whom Lawyer has represented in estate-planning matters, has recently moved to Florida and calls Lawyer from there with a request that leads to Lawyer’s preparation of a codicil to A’s will, which Lawyer takes to Florida to obtain the necessary signatures. While there, A introduces Lawyer to B, a friend of A, who, after learning of A’s estate-planning arrangements from A, wishes Lawyer to prepare a similar estate arrangement for B. Lawyer prepares the necessary documents and conducts legal research in Lawyer’s office in Illinois, frequently conferring by telephone and letter with B in Florida. Lawyer then takes the documents to Florida for execution by B and necessary witnesses. Lawyer’s activities in Florida on behalf of both A and B were permissible.”
Therefore, based on the settled practice of lawyers in this state, the commentary of various legal ethics experts and some of the sparse judicial decisions on the subject, as stated in the Restatement’s § 3, the comments and reporter’s notes, we adopt and endorse the terms and spirit of § 3 of the Restatement.
Returning to our own Code’s DR 3-101(B), it forbids a New York lawyer from practicing law “in a jurisdiction where to do so would be in violation of regulation of the profession in that jurisdiction.” As we must construe our own Code in light of the New York precedents cited above, we cannot give complete and automatic deference to any contrary rules or laws of other jurisdictions seeking to regulate the practice of law by New York lawyers in New York. There must be something more than “incidental and innocuous” physical presence in consulting infrequently with clients in a foreign jurisdiction to constitute a violation of DR 3-101(B), and although association with local lawyers may be preferred, this is not indispensable.
A fortiori, if Inquiring Counsel prepares a will in New York for a Florida resident and consults with duly admitted Florida counsel to review the document for compliance with Florida law, all while duly informing the client that Inquiring Counsel is not admitted to practice there, we conclude that the Inquiring Attorney would not violate our Code’s DR 3-101(B).
[Approved as revised by the Executive Committee on June 16, L998; tentatively approved by the Full Committee on May 24, 1998; finally approved by Full Committee on June 24, 1998.]