Wednesday, December 12, 2012

NJ Clarifies Permissible Role of Out of State Lawyers


The New Jersey Supreme Court's Committee on the Unauthorized Practice of Law has in Opinion 49 clarified issues of cross-border/multi-jurisdictional practice under the State's version of RPC 5.5. The Committee replied expansively to an inquiry - `Can an out-of-state lawyer representing an out-of-state client in a commercial real estate transaction for the purchase of commercial real estate in New Jersey negotiate the terms of the transaction, and prepare the contract and other related documents?'

The short answer is NO.  "Preparing real estate sale and lease contracts for a third person is the practice of law."  But the `third person' qualification leaves in-house counsel free to do that - assuming compliance with NJ's limited licensure rule.

And New Jersey's version of ABA Model Rule 5.5 contains a number of exceptions to the broad "NO", the last of which does not appear in the ABA rule and is particularly noteworthy - the "occasional", non-recurring representation and the Rule's consideration of the client's interests:
RPC5.5 (b)(3)

  • i) the lawyer engages in the negotiation of the terms of a transaction in furtherance of the lawyer's representation on behalf of an existing client in a jurisdiction in which the lawyer is admitted to practice and the transaction originates in or is otherwise related to a jurisdiction in which the lawyer is admitted to practice;(ii) the lawyer engages in representation of a party to a dispute by participating in arbitration, mediation or other alternate or complementary dispute resolution program and the services arise out of or are reasonably related to the lawyer's practice in a jurisdiction in which the lawyer is admitted to practice and are not services for which pro hac vice admission pursuant to R. 1:21-2 is required;(iii) the lawyer investigates, engages in discovery, interviews witnesses or deposes witnesses in this jurisdiction for a proceeding pending or anticipated to be instituted in a jurisdiction in which the lawyer is admitted to practice;(iv) the out-of-state lawyer’s practice in this jurisdiction is occasional and the lawyer associates in the matter with, and designates and discloses to all parties in interest, a lawyer admitted to the Bar of this State who shall be held responsible for the conduct of the out-of-State lawyer in the matter; or(v) the lawyer practices under circumstances other than (i) through (iv) above, with respect to a matter where the practice activity arises directly out of the lawyer's representation on behalf of an existing client in a jurisdiction in which the lawyer is admitted to practice, provided that such practice in this jurisdiction is occasional and is undertaken only when the lawyer's disengagement would result in substantial inefficiency, impracticality or detriment to the client.
    Though the "occasional" limitation is not to be toyed with, it does enable an out of state client to enter the state with the confidence that comes from using its customary lawyers. Who, we can hope, will recognize the wisdom of hiring local counsel who are sufficiently immersed in the practice to assure that all goes well.  
    This is not to encourage casual practice.  Lawyers who seek to take advantage of the safe harbor provisions must register with the Supreme Court, pay fees, and designate the clerk of the court as agent for service of process.

h/t Nicole Hyland - Legal Ethics Forum

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