Oct. 19, 2016 – How far can you represent family members in legal matters when they reside in a state where you aren't licensed to practice? Hint: Begin by researching whether your activities would constitute the unauthorized practice of law in that state.
I am an experienced collections law lawyer. My parents-in-law, who live in another state, have a dispute over a debt owed to a homeowner's association in connection with property they own in that other state. They have asked me to help them resolve the problem, and I feel confident that I could do so. As their son-in-law, I want to help them, but I am not licensed in the state where the property and the homeowner's association is located. Can I at least begin negotiations with the association to see if I can resolve the matter?
This situation is based upon the facts of In re Charges of Unprofessional Conduct in Panel File No. 39302, 2016 BL 284077 (Minn. Aug. 31 2016).
In that matter, the respondent lawyer lived and practiced in Colorado, where he was admitted, but his parents-in-law lived in Minnesota, where he was not admitted. The in-laws contacted the respondent and asked for his help when a judgment was entered against them by a homeowners association, and the lawyer for the association began contacting them in an effort to collect.
He agreed. The respondent never traveled to Minnesota, but did explicitly inform opposing counsel that he was representing his in-laws and conducted negotiations, including offers of settlement, via email. At some point, the lawyer for the homeowner's association filed a grievance with the Minnesota Office of Professional Responsibility.
This case is noteworthy for two reasons. First, the court relied on the famous Birbrower case for the proposition that lawyers can practice in a jurisdiction without ever being physically present there.1 Second, the court interpreted provisions of Minnesota Rule of Professional Conduct (RPC) 5.5, which is substantially similar to Wisconsin SCR 20:5.5. Both rules govern multijurisdictional practice and are based upon ABA Model Rule 5.5.
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In considering whether respondent's action constituted the unauthorized practice of law in Minnesota, the Minnesota Supreme Court rejected the respondent's contention that he had never practiced law in Minnesota because he had never entered the jurisdiction, stating:
Other courts have addressed the issue of whether an attorney practices law in a jurisdiction even though the attorney was not physically present in that jurisdiction. In Birbrower, Montalbano, Condon & Frank, P.C. v. Superior Court, 17 Cal. 4th 119 , 70 Cal. Rptr. 2d 304 , 949 P.2d 1 , 5-6 (Cal. 1998), the California Supreme Court analyzed what constituted the practice of law in a jurisdiction by looking at the nature of the legal representation in the jurisdiction, instead of focusing solely on physical presence. In determining what it means to practice law in California, the court considered whether the lawyer had "sufficient contact with the California client to render the nature of the legal services a clear legal representation" and whether the lawyers' contact with California was merely "fortuitous or attenuated." Id. at 5. The court determined that a lawyer "may practice law in the state . . . although not physically present here by advising a California client on California law in connection with a California legal dispute by telephone, fax, computer, or other modern technological means." Id. at 5-6 ; see also In re Babies, 315 B.R. 785 , 791-93 (Bankr. N.D. Ga. 2004) (concluding that attorneys who were physically present in Illinois practiced law in Georgia by representing Georgia clients with respect to a bankruptcy, preparing documents related to that bankruptcy, and communicating with these clients via the telephone and mail).
The reasoning in Birbrower is persuasive. Based on that reasoning, we conclude that the Panel did not clearly err by finding that appellant practiced law in Minnesota, in violation of Minn. R. Prof. Conduct 5.5(a). Appellant contacted D.R., a Minnesota lawyer, and stated that he represented Minnesota clients in a Minnesota legal dispute. This legal dispute was not interjurisdictional; instead, it involved only Minnesota residents and a debt arising from a judgment entered by a Minnesota court. Appellant instructed D.R. to refer all future correspondence to him, and he continued to engage in correspondence and negotiations with D.R. over the course of several months. Appellant requested and received financial documents from his Minnesota clients and advised them on their legal options. By multiple emails sent over several months, appellant advised Minnesota clients on Minnesota law in connection with a Minnesota legal dispute and attempted to negotiate a resolution of that dispute with a Minnesota attorney. Appellant had a clear, ongoing attorney-client relationship with his Minnesota clients, and his contacts with Minnesota were not fortuitous or attenuated. Thus, there is ample support for the Panel's finding that appellant practiced law in Minnesota.
Next the court rejected the respondent's argument that his conduct fell within the safe harbor afforded by RPC 5.5(c), which states in relevant part:
A lawyer admitted 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 which:
. . . .
(2) are in or reasonably related to a pending or potential proceeding before a tribunal in this or another jurisdiction, if the lawyer, or a person the lawyer is assisting, is authorized by law or order to appear in the proceeding or reasonably expects to be so authorized;
. . .
(4) are not within paragraphs (c)(2) or (c)(3) and arise out of or are reasonably related to the lawyer's practice in a jurisdiction in which the lawyer is admitted to practice.
The court noted that there was no evidence that respondent took steps to investigate the procedures for pro hac vice admission or securing local counsel, and that mere speculation that a lawyer might be admitted pro hac vice if necessary is insufficient to fall under RPC 5.5(c)(2).
There are no special rules for representing friends and relatives – lawyers who provide legal assistance to relatives are bound by the same rules that apply to any lawyer-client relationship.
Next, the court dealt with respondent's contention that his representation of his in-laws was “reasonably related” to his practice in Colorado and thus allowed by RPC 5.5(c)(4):
The legal services appellant provided to his in-laws were unrelated to his environmental and personal-injury practice in Colorado. The record establishes that appellant was involved in litigation in Colorado state court, including eight trials in the past seven years in which collection issues arose, and that appellant negotiated the resolution of a debt with an out-of-state creditor on behalf of several Colorado residents. Although Rule 5.5(c) may permit appellant to negotiate with a Colorado client's out-of-state creditor because this representation is reasonably related to appellant's Colorado practice, the facts of this case are substantially different. Appellant's in-laws are not Colorado residents, and appellant had no prior attorney-client relationship with them.
Moreover, appellant's representation of his in-laws did not "arise out of" or "reasonably relate" to his practice in Colorado simply because his in-laws contacted him in Colorado or appellant has done collections work in Colorado. As the Director notes, appellant's in-laws were not long-standing clients; nor was there any connection between the in-laws' case and the state or laws of Colorado. And while appellant's Colorado practice may involve judgment collections work, nothing in the record establishes that this work was based on a body of federal or nationally uniform law. To the contrary, appellant's clients were Minnesota residents with a debt that arose in Minnesota that they owed to a Minnesota resident and that was governed by Minnesota law. Accordingly, Rule 5.5(c)(4) does not apply to appellant's conduct.
Lastly, the court noted that this was “nonserious” misconduct that warranted only a private admonition. Three justices dissented, arguing that the relationship between respondent and the clients, the fact that respondent had experience in collections law and the fact that he had been contacted in Colorado made the matter reasonably related to his practice in Colorado.
This case illustrates some important points for lawyers to consider:
- The regulation of lawyers' practice in jurisdictions in which they are not licensed varies from state to state. While most states have some variation of ABA Model Rule 5.5, not all do. The court noted that the record indicated that respondent “could not recall” researching whether his activities would have constituted the unauthorized practice of law in Minnesota, but any lawyer looking to practice in another jurisdiction should.
- Physical location is an important factor in determining where a lawyer practices, but it is not the determinative factor.
- There are no special rules for representing friends and relatives – lawyers who provide legal assistance to relatives are bound by the same rules that apply to any lawyer-client relationship.
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1 Birbrower, Montalbano, Condon & Frank, P.C. v. Superior Court, 17 Cal. 4th 119, 70 Cal. Rptr. 2d 304, 949 P.2d 1, (Cal. 1998) shocked many lawyers by ordering fee forfeiture as a remedy for unauthorized practice stemming from activities that were common among transactional lawyers at the time. The case eventually resulted in the development of the modern version of Rule 5.5.