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Reforming Lawyer Mobility—Protecting Turf Or Serving Clients?

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Reforming Lawyer Mobility—Protecting Turf Or Serving Clients? Reforming Lawyer Mobility—Protecting Turf or Serving Clients? JAMES W. JONES,* ANTHONY E. DAVIS,† SIMON CHESTER,‡ AND CAROLINE HART§ ABSTRACT In this Article, we describe in detail the current problems with the regulation of lawyer mobility in the United States and the compelling reasons that a fundamental change in the present approach is required. We contend that the current rules regarding multijurisdictional practice by licensed lawyers impede the ability of clients to achieve more efficient and cost effective legal services, are unnecessary to protect the interests of clients, and undermine the integrity of the overall regulatory structure by articulating requirements that as a practical matter cannot be complied with. Drawing on lessons from Australia and Canada, both common law countries with a long tradition of regulation of the legal profession at the state/provincial levels, we offer a proposal for the recognition of rights of practice of all American lawyers engaged in federal or interstate matters in all American jurisdictions. This proposal, if adopted, would enable clients to use counsel of their choice on a nationwide basis. Such a change is critical if American lawyers are to remain responsive to the legitimate expectations and demands of their clients and true to the highest standards of professionalism. TABLE OF CONTENTS INTRODUCTION.......................................... 128 I. A BRIEF HISTORY OF THE REGULATION OF LAWYERS IN THE UNITED STATES..................................... 128 II. THE CURRENT PROBLEMS WITH THE REGULATION OF LAWYER MOBILITY IN THE UNITED STATES ....................... 130 * James W. Jones is a Senior Fellow at the Center for the Study of the Legal Profession at the Georgetown University Law Center. † Anthony E. Davis is a Partner at Hinshaw & Culbertson LLP. ‡ Simon Chester is Counsel at Gowling WLG (Canada) LLP. § Caroline Hart is a Senior Lecturer (Law) at the School of Law and Justice at the University of Southern Queensland and Director of the National Rural Law and Justice Alliance. The authors wish to thank Michael G. Ruff, an associate attorney at Hinshaw & Culbertson LLP, for his contributions to this Article. © 2017, James W. Jones, Anthony E. Davis, Simon Chester, and Caroline Hart. 125 126 THE GEORGETOWN JOURNAL OF LEGAL ETHICS [Vol. 30:125 A. THE REVISED RULE 5.5 HAS NOT BEEN UNIFORMLY ADOPTED...................................... 131 B. THE REVISED RULE 5.5 FAILS TO ADDRESS SOME KEY ISSUES ........................................ 133 C. THE PENALTIES IMPOSED FOR VIOLATIONS OF RULE 5.5 CAN BE SEVERE................................. 135 1. USE OF CRIMINAL PENALTIES ....................... 135 2. CIVIL DAMAGES ................................ 136 3. NULLIFYING ACTS OF UNAUTHORIZED PRACTICE ........... 137 4. PROFESSIONAL DISCIPLINE IN THE HOST STATE AND RECIPROCAL DISCIPLINE IN THE HOME STATE...................... 137 5. PROFESSIONAL DISCIPLINE IN THE HOME STATE ............ 138 6. DENIAL OF LEGAL FEES ........................... 139 7. USE BY STATE COURTS OF UNAUTHORIZED PRACTICE RULES AS A DETERRENT TO OUT-OF-STATE LAWYERS ................ 139 III. COMPELLING REASONS FOR REVISING THE U.S. APPROACH TO LAWYER MOBILITY .................................. 140 A. THE CURRENT APPROACH IMPEDES THE RIGHT OF CLIENTS TO ACHIEVE INCREASED EFFICIENCY AND COST EFFECTIVENESS IN THE DELIVERY OF LEGAL SERVICES ..................................... 140 B. THE CURRENT APPROACH IS UNNECESSARY TO PROTECT THE INTERESTS OF CLIENTS ............... 142 C. THE CURRENT APPROACH CREATES RULES THAT ARE IMPOSSIBLE TO COMPLY WITH ..................... 143 IV. REFORM OF THE RULES ON LAWYER MOBILITY IN AUSTRALIA AND CANADA ...................................... 145 A. REGULATION OF LAWYER MOBILITY IN AUSTRALIA .... 146 1. REGULATION OF THE LEGAL PROFESSION AND HISTORIC RESTRICTIONS ON LAWYER MOBILITY .................. 146 2. PRESSURE FOR CHANGE FROM OUTSIDE THE LEGAL PROFESSION .................................. 148 3. THE LEGAL PROFESSION’S MOVE TOWARD MULTIJURISDICTIONAL PRACTICE ..................... 150 2017] REFORMING LAWYER MOBILITY 127 a. Mutual Recognition.......................... 150 b. The Legal Profession Model Law Project ........... 151 c. Subsequent Developments: The Legal Profession National Reform Project 2009 ................... 155 4. EXPERIENCE SINCE MOBILITY REFORM ................. 158 a. Admission to Practice ........................ 158 b. Professional Discipline ....................... 159 5. IMPROVED RELATIONSHIPS AMONG PROFESSIONAL AND REGULATORY BODIES ............................ 160 B. REGULATION OF LAWYER MOBILITY IN CANADA ...... 160 1. REGULATION OF THE LEGAL PROFESSION AND HISTORIC RESTRICTIONS ON LAWYER MOBILITY .................. 161 2. CONSTITUTIONAL PRESSURES FOR MOBILITY REFORM ........ 164 3. ANTITRUST PRESSURES FOR MOBILITY REFORM ............ 172 4. PRESSURES FROM TRADE LIBERALIZATION AGREEMENTS FOR MOBILITY REFORM .............................. 174 5. THE LEGAL PROFESSION’S MOVE TOWARD MULTIJURISDICTIONAL PRACTICE .................................... 175 a. The First Step to Reform: The Inter-jurisdictional Practice Protocol ................................. 177 b. Adoption of the National Mobility Agreement ........ 178 c. Canada’s Remote Northern Territories and the National Mobility Agreement ......................... 179 d. The Special Situation of Que´bec................. 180 6. EXPERIENCE SINCE MOBILITY REFORM ................. 183 V. LESSONS LEARNED FROM THE AUSTRALIAN AND CANADIAN REFORM PROCESSES ................................. 186 VI. REFORM OF LAWYER MOBILITY IN THE UNITED STATES:A PROPOSED WAY FORWARD ............................ 189 CONCLUSION ........................................... 193 128 THE GEORGETOWN JOURNAL OF LEGAL ETHICS [Vol. 30:125 INTRODUCTION It is the contention of this Article that the current rules restricting the ability of American lawyers to engage in the practice of law on a nationwide basis are no longer rational or workable, are contrary to the best interests of clients, and are unnecessary to protect the public from harm. 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. In support of these conclusions, in the sections that follow we examine how the existing structure of lawyer regulation came about, and the problems that now arise in trying to conform the day-to-day practices of modern lawyers to the complex, overlapping, and inconsistent rules of the numerous states and other jurisdictions that comprise the United States. We proceed to describe why fundamental change is needed in the system, and review the objections that have traditionally been raised to liberalizing current rules. We then describe the positive experiences in Australia and Canada—both common law countries that, like the United States, regulate the practice of law primarily at the state or provincial level—in reforming the rules governing lawyer mobility and in implementing a more rational approach to the regulation of legal practice on a nationwide basis. Finally, we suggest a way forward for implementing similar changes in the United States. We begin, however, with a brief look at the historical reasons that the American legal profession evolved as it did. I. A BRIEF HISTORY OF THE REGULATION OF LAWYERS IN THE UNITED STATES In his much-celebrated book Undaunted Courage, which recounts the history of the Lewis and Clark Expedition, Stephen Ambrose illuminates the cultural, political, and philosophical ideas that dominated American society when Thomas Jefferson became President in 1801. Those ideas were shaped and limited in important ways by certain fundamental facts that had existed for so long that most people regarded them as permanent and unchangeable. Not the least of these involved the inherent limitations on communications resulting from the vast distances encompassed by the North American continent. As Ambrose wrote: A critical fact in the world of 1801 was that nothing moved faster than the speed of a horse. No human being, no manufactured item, no bushel of wheat, no side of beef (or any beef on the hoof, for that matter). No letter, no information, no idea, order, or instruction of any kind moved faster. Nothing 2017] REFORMING LAWYER MOBILITY 129 had ever moved faster, and, as far as Jefferson’s contemporaries were able to tell, nothing ever would. Since the birth of civilization, there had been almost no changes in commerce or transportation....TheAmericans of 1801 had more gadgets, better weapons, a superior knowledge of geography, and other advantages over the ancients, but they could not move goods or themselves or information by land or water any faster than had the Greeks and Romans.1 The reality of the limitations of geography and distance that Ambrose described influenced almost all aspects of early American life, including the development of American law. As Professor Lawrence Friedman noted in A History of American Law, early efforts by the old established bars of the original colonies to keep the legal profession small and elite through rigorous admissions standards following the American Revolution largely collapsed, in no small part because of the diverse legal needs of a vast and rapidly expanding country of individual
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