Virtual Lawyering and "Virtual Presence" under Model Rule 5.5 (b) (1)

 

The ABA Commission on Ethics 20/20 Working Group on Uniformity, Choice of Law, and Conflict of Interest has identified some issues related to defining limits on Virtual Practice under Rule 5.5. Model Rule 5.5 (b) (1) requires a lawyer to obtain a license in a jurisdiction if the lawyer has an office or a “systematic and continuous” presence there, unless the lawyer’s work falls within one of the exception identified in Rule 5.5 (d). The Commission has identified as a potential problem the situation where lawyers are physically present in one jurisdiction, yet have a substantial virtual practice in another. The problem is “that it is not always clear when this virtual practice in a jurisdiction is sufficiently “systematic and continuous” to require a license in that jurisdiction.”

This comment could be interpreted to mean that lawyers who have a virtual law practice, mostly solos and small law firms, may have an issue about whether they need to “secure a license” in the other jurisdiction.

This is a solution looking for a problem where none exists as far as the typical virtual law practice is concerned.

A virtual law practice is commonly associated with the online delivery of legal services. Lawyers engaging in virtual practice are only able to provide legal work that pertains to the laws of the state(s) in which they are licensed or they are in violation of 5.5. Whether or not their delivery methods or work with the clients takes place in a physical location other than where the lawyer is licensed, the key factor is that the lawyer is practicing the law of the jurisdiction they are licensed in and to which the client’s legal needs pertain. A law firm will have a website that anyone in any jurisdiction may find and read online. The lawyer places the appropriate disclaimers on the website and makes it clear in any registration process for a client portal that the law firm is only permitted to practice the laws of a certain jurisdiction. This is not misleading to the public nor is it the unauthorized practice of law.

For example, a client living in Florida who owns real estate in Maryland should be able to work online with a lawyer licensed in Maryland to handle the matter. That lawyer licensed in Maryland, whether he or she lives in Florida or New York, is not creating a “systematic or continuous presence” in the state of Florida to subject the lawyer to Rule 5.5(b). Contacts for the purpose of determining “systematic and continuous presence” in the context of determining “personal jurisdiction” have nothing to do with a virtual law firm that limits its practice to residents of the state in which it is primarily located, or serving out of state residents who have matters that are within the state where the attorney is licensed.

When an attorney creates a virtual law office, the gateway to the virtual law office is a Website that any other law firm would create and which is available for viewing by anyone in the world. The difference is the addition of a secure client portal where the prospective client and existing clients will register for assistance. The virtual law office Website states throughout where the attorney is licensed to practice law. The terms and conditions or disclaimers on the site should clearly explain where the attorney is licensed to practice law. This is no different than a traditional law firm Website.

Only residents of the state where the attorney is licensed, or out of state residents who have a legal matter within the state are permitted to register as clients of the law firm. Often the attorney may have the online client sign a traditional or digital engagement agreement that provides notice of which state’s law will apply should there be any dispute.

In addition, some virtual law office platforms have jurisdiction checks so that in order to register, the prospective client must provide their address. If the client is not physically located in the state, a notice is sent to the attorney reminding the attorney that before the client can be accepted as a client of the firm the attorney has to determined that the matter to be handled is a legal matter within the attorney’s jurisdiction. A notice is also sent to the client, reminding the client that the attorney is only licensed to practice law in the state in which the attorney is located. A client’s presence in a different geographic location than his or her attorney does not mean that a state’s ethics rules should come into play for the attorney handling a project that is unrelated to that state’s laws. Just because an attorney’s Website can be viewed in another state, doesn’t mean that a state should have disciplinary authority over that attorney because the Website and the law firm are not offering to provide “legal services” in that state. The alternative logic would suggest that a law firm should be available to be viewed only in the state in which the lawyer is a member of the bar – a truly absurd result – not worthy of further discussion.

To summarize: There are two separate questions about when a UPL claim would arise. First, what contacts does a state require to establish presence when the lawyer is not admitted there but is working with a client who physically resides in that state? Second, in the situation where the lawyer is admitted to practice in that state, but the lawyer physically wants to reside outside of that jurisdiction, what are the contacts that would need to be required to establish presence in the state where the lawyer is licensed? Again, the answer to both questions should be that the legal work that the lawyer provides to the client is what matters rather than where either the client or the lawyer is physically located. 

Stephanie Kimbro contributed to this post and see:  What constitutes virtual presence?  see also Carolyn Elefant's post on this subject on her MyShingle Blog.

 

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Comments (2) Read through and enter the discussion with the form at the end
Kat Tidd - August 14, 2012 10:52 AM

There are several other issues. What about transactions that cross state lines, such as franchising, where documents can be prepared anywhere that a franchisor based in another state will use, probably with its own state law governing.. a state in which counsel is probably not licensed. Franchisors require ongoing counsel. OK to use a lawyer not licensed in their jurisdiction for continuing needs? How should this work?

Kat:

You raise some good points.

Cincinnati bankruptcy attorney - June 17, 2013 2:38 AM

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