Why it might not be UPL, Part 2

Why it might not be UPL, Part 2

 

An intro to Arizona Supreme Court Rule 38

and

registered in-house counsel

 

To have a continuing presence in this state and practice law, you need to be admitted and licensed here. Except when you don’t need to be admitted and licensed here.

It’s confusing. If you’ve ever had reason to wade into Rule 38, Ariz. R. Sup. Ct., you know what I mean. We have special rules for non-Arizona lawyers who are employed by entities whose business is not the practice of law or the provision of legal services. We have special rules for non-Arizona lawyers who are full-time law-school faculty members; we have special rules for law-school clinical professors. We have special rules for non-Arizona attorneys who work for approved legal services organizations; who volunteer for approved legal services organizations; who work for certain indigent defense offices; and who have spouses in the military. And foreign legal consultants, who aren’t even licensed U.S. lawyers.

You know how baseball is often ridiculed for its seemingly infinite variety of stats? Like a player’s RBI percentage with 40-year-old limping baserunners on second and the team’s mascot holding a toddler? I feel the same way about Rule 38. It’s a weird version of Mad Libs: if you’re a ____ with ____, and under special circumstances of _____ and ____, you can practice law in this jurisdiction as long as you _____, have _____ and _____, and do it all while you’re holding a toddler. (Don’t know Mad Libs? Read up here.)

Our complex web of rules has resulted – in my humble opinion – from the legal profession’s insistence on strict geographic-bound licensing and non-national bar exams. When we realize that our licensing scheme doesn’t serve a public purpose, we add an exemption, such as the most recent exemption for military spouses. (We have an exemption for military spouses?)

Maybe, in a perfect world, we wouldn’t need the special categories of Rule 38, but that’s a humongous topic for another day.

As the saying goes, you go to war with the rules you have.

So let’s talk registered in-house counsel.

In general, a non-Arizona-licensed lawyer may live and work in this jurisdiction, and provide legal services to his or her employer, as long as that lawyer registers with the State Bar. The Arizona Supreme Court adopted the in-house-counsel rule (now designated as Rule 38(a), Ariz. R. Sup. Ct.) effective Jan. 1, 2009. The rule has been amended a couple of times since then, most recently as part of the changes that took effect this past Jan. 1.

Registered in-house counsel are not members of the State Bar, although they must comply with the Ethical Rules and are subject to the Supreme Court’s disciplinary jurisdiction. They don’t get admitted. There is no character-and-fitness analysis. We currently have about 250 registered in the state.

Here’s an example of how registered in-house counsel works:

Acme Corp. is an international manufacturing company with its headquarters in San Francisco and an outpost in Paris. Acme employs in-house lawyers in both locations. The San Francisco office lawyers are licensed only in California; the Paris office lawyers are licensed only in France. Acme wants to open a maquiladora in Nogales, Sonora, and a corporate office in Nogales, Arizona. Acme transfers one San Francisco lawyer and one Paris lawyer to Arizona to do its legal work.

If the California-licensed and France-licensed lawyers meet the relatively few requirements, they could register with the State Bar and live and work in Nogales, Arizona, practicing law without becoming admitted in this state. The registration requirements can be boiled down to these:

  •  File a one-page form with the State Bar;
  •  Pay an application fee and a yearly renewal fee;
  •  Complete the course on Arizona law that all new Arizona admittees must take; and;
  • Thereafter comply with MCLE requirements, either in a jurisdiction in which the lawyer is licensed or, if not licensed in an MCLE jurisdiction, then Arizona’s requirement.

Here's the one-page form, from the State Bar's website: 

Your mileage of course will vary, so make sure to read Rule 38(a) for all the specifics and consult knowledgeable counsel.

Assuming the California and French lawyers qualify, they could work for Acme in Nogoles, Arizona, negotiating multimillion-dollar contracts, sending demand letters, and doing anything else an Arizona-admitted lawyer can do, including representing Acme in court.

That last part may surprise you. If you have been familiar with registered in-house counsel, you may remember that they couldn’t appear in court for their employers. That was true until Jan. 1. Now they can apply to appear pro hac vice.

For the past several years, registered in-house counsel – who otherwise are restricted to only providing legal services to their employers – also have been allowed to volunteer to provide pro bono civil legal help to clients via approved legal service organizations. Now they can also appear in court for those clients, without having to apply to appear pro hac vice.

When Arizona adopted the registered in-house rule, it included a curious escape clause that’s not part of the American Bar Association’s model in-house counsel rule. It authorized the State Bar Board of Governors to waive any registration requirement. Effective Jan. 1, however, that waiver authority transferred to the Supreme Court.

Clever lawyers sometimes propose ways to use the registered in-house counsel rule to get around becoming licensed in Arizona. Consider these questions:

Q. Because I’m licensed only in California, I don’t qualify to be admitted on motion in Arizona. But I want to live and practice law in Arizona, and I really don’t want to take the bar exam again. Wouldn’t I qualify to register as in-house counsel if I establish my law practice in Arizona and serve as general counsel to it?

A. No. The business for which you serve as in-house counsel must be “other than the practice of law or the provision of legal services.” Rule 38(a)(1).

Q. What if I serve as outside general counsel for one of my corporate clients?

A. Are you “employed” by your corporate client? If so, you theoretically could qualify. But remember that the registered in-house counsel rule’s goal is to allow non-Arizona lawyers to provide legal services to their employers only. You can’t use being registered as a springboard to a law practice providing legal services to clients other than your employer.

 

Next: Military spouse rule

One for Conflict and Fees. Of Course!

One for Conflict and Fees. Of Course!

Why it might not be UPL, Part 1

Why it might not be UPL, Part 1