1. Summary of the Issue: Recent national and international developments, such as the ABA MJP Task Force Report of 2002, the revisions to the ABA Model Rules of Professional Conduct; the resultant adoption/revision of rules by other states, and ongoing negotiations under the General Agreement on Trade in Services (GATS), have prompted the Virginia State Bar to review its existing disciplinary and unauthorized practice of law rules and procedures regulating the practice of law in Virginia. The primary issue is under what circumstances should the bar permit attorneys licensed in other states or foreign countries to practice in Virginia, either on a temporary or permanent basis, and how can they be held accountable to the public and bar in Virginia?
2. The ABA MJP Task Force Report: The American Bar Association's Commission on Multijurisdictional Practice in August 2002 (the "ABA Report") issued a report on these issues. Based on the recommendations contained in the ABA Report, the ABA Model Rules of Professional Conduct were amended with respect to allow (i) the temporary practice of law by foreign lawyers; and (ii) the assertion of disciplinary authority over foreign attorneys practicing in a jurisdiction where they are not admitted. The ABA has also developed a model rule for the licensing of foreign legal consultants. These amendments to the ABA Model Rules have formed the basis for various states to amend their Rules of Professional Conduct with respect to these issues. The complete text of the ABA MJP Commission's report can be viewed at: http://www.abanet.org/cpr/mjp-home.html
3. Adoption/Revision of Rules by Other States. Most states within the United States have adopted versions of the ABA Model Rules. As of this writing, at least 23 states, including North Carolina, New York, Florida and Texas, have adopted rules governing foreign legal consultants. Many states are reviewing the temporary practice of law by foreign lawyers and at least 15 states have adopted a rule identical or similar to ABA Model Rule 5.5 permitting temporary practice by a foreign lawyer. For a complete report on the states' adoption of the ABA's MJP proposals go to: http://www.abanet.org/cpr/mjp-home.html
4. Impetus of the WTO Deliberations. The Council for Trade in Services of the World Trade Organization ("WTO") has recognized that trade in legal services has grown as a result of the internationalization of the economy, and that, as such, merited a review involving market access, national treatment, and domestic regulation. As a result of WTO deliberations, (i.e., including the discussions during the Uruguay Round negotiations in 1989 and the discussions which led to the WTO Council for Trade in Services report of July 1998), other countries have made commitments in the area of legal services which include (i) limitations on market access, (ii) national treatment restrictions, and (iii) scheduled domestic regulatory measures. The position of member nations, including the United States, regarding trade in legal services continues to be a topic of discussion in connection with the current round of negotiations relating to the General Agreement on Trade in Services ("GATS"). Both the ABA and the United States Trade Representatives are asking the states to adopt Foreign Legal Consultant (FLC) rules and rules allowing foreign lawyers to practice in a U.S. jurisdiction, if such practice is incidental and reasonably related to an ongoing representation of a client the foreign attorney is authorized to represent in a jurisdiction in which he or she is authorized to practice.
5. Why is this issue important?
(a) The Virginia State Bar and Members of the Bar should
remain informed of changes. As other states within the
United States adopt or amend their rules pertaining to the
temporary practice of law by foreign lawyers and the licensing of
foreign legal consultants, the Virginia State Bar should be aware of
the nature and trend of such changes and should be prepared to
react, if necessary and in a manner which is in the best interests
of Virginia attorneys.
(b) The Virginia State Bar should be poised to provide input to the U.S. Trade Representative regarding these issues. Negotiations are currently under way in connection with the current round of GATS discussions and trade in legal services is a topic for ongoing review. Some U.S. states have submitted comments to the USTR, and the United States has made an initial offer to the WTO regarding these issues. Since the USTR is likely to continue to develop the position of the United States relative to the issues at hand based upon the submissions of the various states, the Virginia State Bar should have a full understanding of the implications of the U.S. offer and the long-term impact of the GATS negotiations. Once the negotiations are concluded and the proposals are incorporated into a binding trade agreement to which the U.S. is a party, the states will/may have less flexibility in amending their rules. Indeed, once rules establishing the rights of foreign attorneys to practice in the U.S. are made part of an international treaty to which the U.S. is a signatory, those rules may trump a state's rules, to the extent that the state's rules are more restrictive of the foreign attorney's rights to practice. However, experts and legal commentators are uncertain about the effect of GATS and federal supremacy over the rights of each state in this country to regulate the practice of law.
6. What is the current position in Virginia?
(a) Temporary practice of law by foreign lawyers. Virginia
currently allows a foreign lawyer to practice in Virginia on a
temporary basis, incident to the representation of an existing
client, but the rule requires a lawyer to be admitted to practice in
another state in the United States. Va. S. Ct. R., Pt. 6, § I (C).
With respect on non-U.S. lawyers, there is currently no
provision that regulates such persons. ABA Rule 5.5 contains an
absolute prohibition against a lawyer establishing "an office or
other systematic and continuous presence in this jurisdiction
without being admitted to practice generally there."
A non-Virginia attorney can have an office in Virginia so long as
she/he practices only (i) the law of the jurisdiction in which
she/he is licensed; (ii) federal law not involving Virginia law,
i.e., federal taxation, immigration and patent law; or (iii) some
other governmental agency practice that does not require a
Virginia license.
(b) Licensing of foreign legal consultants. There is no
Virginia rule which governs the licensure of foreign legal
consultants.
7. What changes in the Virginia rule are being proposed?
Virginia's MJP Task Force has published for comment a new Foreign Legal Consultant (FLC) rule and will ask the VSB Council to approve the proposed FLC rule at its next meeting on February 19, 2005. If Council approves the FLC rule, the bar will petition the Supreme Court of Virginia to adopt the rule. The Supreme Court may adopt, modify or reject the proposed rule. A discussion about the need for the proposed rule, and the complete text of the proposed rule can be found at the VSB's website at this address:
http://www.vsb.org/profguides/proposed/rule_1A7.html
The proposed FLC rule carves out a rather limited role for the foreign legal consultant. A FLC will not be permitted to render any legal services based on the application or interpretation of Virginia law or the law of another U.S. jurisdiction. They cannot appear before a tribunal nor prepare any pleadings on behalf of another. The proposed rule prohibits the FLC from preparing any legal instruments effecting the transfer or registration of title to real estate located in the United States. A FLC cannot prepare any will or trust instrument effecting the disposition on death of any property located in the United States and owned by a resident of Virginia, nor can he or she prepare any instrument relating to the administration of a decedent's estate in the United States. The proposed rule also prohibits a FLC from preparing any instrument relating to the marital or parental relations, rights or duties of a resident of the United States, or the custody or care of the children of such a resident. Finally, a FLC cannot hold him/herself out as a member of the Virginia State Bar.
The proposed FLC rule benefits clients because it provides access to foreign law expertise with accountability; FLCs will be subject to the ethics rules and discipline system in Virginia. Many of the clients in Virginia that are engaged in import or export activities will need advice about foreign law. The proposed FLC rule serves the interests of clients because it makes it more likely that these clients could remain in the U.S. and find foreign law expertise. In addition, the foreign-born residents in Virginia will be better served if they have access not just to U.S. lawyers who can advise on domestic law, but FLC's who can advise them on the law of a foreign country. Without the proposed FLC rule, foreign-born citizens and clients needing professional advice on the law of a foreign country would have to look for FLCs in another state where they are authorized to practice. This translates to lost revenue and business opportunities for Virginia.
Adoption of the FLC rule will help Virginia lawyers as well. Experience has shown that in a global economy, when jurisdictions close their borders to foreign lawyers, global businesses move to another jurisdiction where foreign lawyers are available. By recognizing the rights of foreign lawyers to practice in a limited fashion in the U.S. temporarily and with accountability, the proposed FLC rule makes it more likely that multinational clients will continue to rely on Virginia lawyers (rather than UK or Canadian lawyers) for their legal work. While a solo practitioner or small firm is less likely to represent multinational corporations, chances are good that many of their clients will in the future have legal issues involving foreign law.
In addition, in the very near future, the VSB MJP Task Force will propose amendments to Virginia Rules 5.5 and 8.5 permitting a foreign attorney to practice in Virginia on a temporary basis to render legal services in connection with or related to a matter that the foreign attorney is handling in a jurisdiction where he or she is authorized to practice. In addition, the proposed rule amendments will make clear that the foreign attorney, by practicing in Virginia on a temporary basis, is subject to the Virginia Rules of Professional Conduct and the disciplinary authority of the VSB. Full texts of these rule amendments will be published for comment very soon.