Preserving—and Managing—Client Documents and Information During the Pandemic
During the COVID-19 pandemic, law firms are permitting their lawyers to work remotely even when a return to the office is possible and practicable. One of the main professional responsibility concerns about these arrangements is the risk of falling afoul of the rules governing the unauthorized practice of law (“UPL”). That this problem even exists is a throwback to the historic premise that the regulation of who may practice law is based on the lawyer's physical location, embodied in the states' systems of lawyer regulation. ABA Model Rule 5.5, adopted with variations and a patchwork of exceptions in almost every state1, restricts lawyers from engaging in the practice of law when they are physically located in a state where they are not licensed or admitted. The potential for engaging in UPL, already a problem in the pre-pandemic era, is exacerbated by the new remote practice culture. Even before the pandemic, this byzantine, state-by-state system of regulation sometimes posed potentially serious restrictions on the freedom of clients to choose lawyers to act for them on a nationwide basis.2
Two recent state court decisions highlight the inherent contradiction between the theoretical reach of UPL regulation despite the obvious and necessary – and inevitable – universality of the practice of law across state lines. In In re Charges of Unprofessional Conduct in Panel File No. 39302, a Colorado admitted lawyer exchanged approximately two dozen emails with a Minnesota lawyer. See 884 N.W.2d 661, 664-65 (Minn. 2016). Notably, the Colorado lawyer was never physically present in Minnesota. The Minnesota Supreme Court upheld the professional discipline in Minnesota of the Colorado lawyer, holding that “engaging in e-mail communications with people in Minnesota may constitute the unauthorized practice of law in Minnesota, in violation of Minn. R. Prof. Conduct 5.5(a), even if the lawyer is not physically present in Minnesota.” Id. at 663.
Similarly, in Ohio State Bar Assn. v. Klosk, a lawyer, who was not licensed to practice law in Ohio, and his law firm, which did not have another member of the firm admitted in Ohio, represented an Ohio resident in debtor-creditor negotiations with creditor's Ohio counsel. 155 Ohio St. 3d 420, 2018-Ohio-4864, 122 N.E.3d 107 (2018). The lawyer sent a single letter to creditor's counsel, on behalf of the Ohio debtor. Id. at 421. In its decision, the Ohio Supreme Court disregarded the debtor's signed power of attorney, not to mention Ohio's adoption of a temporary practice rule (see note 1 above), and found that the lawyer's conduct constituted the unauthorized practice of law. The court enjoined the debtor's representation and imposed a $2,000 civil penalty against the lawyer and the law firm.
These cases show how some courts refuse to recognize the realities of law practice in the digital age and make less and less sense, even before the advent of the pandemic. In today's world, where so many lawyers are working remotely, this parochial approach to lawyer regulation makes no sense at all.
As illustrated below, some states have made explicit moves to address – and to permit – the practice of remote lawyering.
Although these states are still in a minority in directly addressing the question, they point the way towards appropriate recognition of what is already pervasive practice by lawyers in every jurisdiction.4
Given that many of those lawyers currently sheltering in place at homes outside of their state of licensure due to the pandemic and will likely continue to work remotely when the pandemic is over, what are likely scenarios? Although enforcement of traditional UPL regulation in the states that have not yet recognized the reality of remote practice is unlikely during the pandemic, once the crisis has passed, if history is any guide, some states will assert UPL against these lawyers to protect their boundaries, and, in those states, lawyers seeking to continue to work remotely may have no choice but to apply for admission to the bar in the jurisdictions where they are actually located. Other states will move forward with the times and follow the states listed above.
From a risk management standpoint, law firms can help to protect themselves and their lawyers by having complete and accurate knowledge of where their lawyers are actually located and practicing. The following questionnaire5, for example, circulated to all the lawyers in a law firm, can help identify potential UPL issues for lawyers practicing remotely from states that have not yet eliminated UPL for remote working:
In sum, once the present crisis subsides, it will be important for individual lawyers and their firms to determine whether or not the lawyers are in locations where they may face UPL prosecution for working in places where they are not admitted. At the same time, given the current trend of lawyers working remotely, we can hope that the trend toward recognizing and permitting remote working as being outside the purview of UPL will gain greater momentum around the country.
1 A significant exception is for temporary practice, adopted in varying forms in most states either in Rule 5.5 or in a separate statute. This article does not address whether certain forms of remote working could fall within this exception. An example of a situation where remote working was found to be temporary practice where the lawyer was working solely on matters relating to the jurisdiction in which she was admitted while awaiting admission can be found in In re Jones, 156 Ohio St.3d 1, 123 N.E.3d 877 (2018).
2 A recent law review article, co-authored by Clyde & Co Of Counsel Anthony Davis, put the problem with this regulatory structure succinctly as follows:
Whatever the justifications of such a system at a time when the fastest means of communication was on the back of a horse and when almost all legal matters were 'local' by nature and impact, they are no longer persuasive in a nationwide market where lawyers’ services routinely have impacts across state lines and where information moves at the speed of light.
James W. Jones, Anthony E. Davis, Simon Chester and Caroline Hart, Reforming Lawyer Mobility—Protecting Turf or Serving Clients?, 30 GEO. J. LEGAL ETHICS 125 (2017).
3 Pursuant to the Rules regulating the Florida Bar, this proposed advisory opinion is scheduled to be filed for approval by the Supreme Court of Florida on or around August 17, 2020.
4 See In re Conduct of Harris, 366 Or. 475, 476 (2020).
5 The authors are grateful to Peter Halasz, a partner and the General Counsel of Schulte Roth & Zabel LLP, for permission to use his draft as the model for the version used here.
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