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The practice of law has no universally-accepted definition, but the

unauthorized practice of law is well defined in jurisdictions around the


country. Most states have an assortment of rules of professional
conduct, statutes and/or court rules that establish the territorial
boundaries around unauthorized practice, who can practice, where,
when and how. Many states have liberalized their practice
requirements to allow for multijurisdictional practice, including
permitting in-house counsel who are admitted in another U.S.
jurisdiction to provide legal services through an office or other
systematic and continuous presence to their corporate employer or its
organizational affiliates. However, such legal services are limited to
non-litigation matters unless in-house counsel seeks admission pro hac
vice. See American Bar Association Model Rules of Professional
Conduct Rule 5.5(d). The purpose underlying the prohibition against
unauthorized practice is to protect the general public from the
unlicensed practice of law by non-lawyer individuals and entities who
are untrained to render legal advice.
In-house counsel are not shielded from potential liability involving
unauthorized practice simply because they provide legal advice to
their corporate employers. Their role as corporate employees,
providing both legal and business advice, and wearing multiple hats
within their organization can often create complex situations that can
possibly lead to unauthorized practice issues. Take for example, inhouse counsels corporate employer who may have multi-state
operations, businesses or offices that give rise to the need for legal
services by in-house counsel in jurisdictions where they are not
licensed. In-house counsel are asked to handle transactional matters
such as contracts or leases for its corporate employer in states where
it conducts business with its clients or customers but where in-house
counsel may not be admitted. Similarly, in-house counsel are asked to
coordinate the prosecution or defense of litigation proceedings on
behalf of its corporate employer pending in one or more courts around
the country where in-house counsel may not be licensed (or admitted
pro hac vice), and to manage or direct the work of outside counsel who
appear in court and handle cases.
It is in the context of litigation that in-house counsel and their
corporate employers need to tread very cautiously to avoid the risk of
unauthorized practice of law. A recent Florida Supreme Court case,
The Florida Bar re Advisory Opinion-Scharrer v. Fundamental Admin.
Servs., 176 So. 3d 1273, 1275 (Fla. 2015), illustrates how the degree of
involvement or control exercised by in-house counsel and their
corporate employer over pending litigation in a state where in-house
counsel is not licensed, can be a critical factor in determining whether
their conduct constitutes unauthorized practice of law. The Florida

case involved an in-house lawyer and the lawyers corporate employer


who provided administrative support services to their client and served
as a litigation liaison between the client and the Florida lawyers hired
to represent the client in various wrongful death cases brought against
the client in Florida. The client alleged that the in-house lawyer and
the lawyers corporate employer were substantially involved in the
wrongful death cases by engaging in the following conduct constituting
the unauthorized practice of law:

providing legal advice, strategy and services to the third-party


client in pending litigation where the corporate employer was
not a party;
hiring, directing, managing, controlling and supervising Florida
lawyers defending the third-party client where the corporate
employer was not a party to the litigation; and
preparing pleadings, discovery responses and other legal
documents, making strategic defense strategy decisions on
behalf of a third-party client, and construing and interpreting
the legal effect of Florida law on behalf of the third-party
client.

The Florida Supreme Court dealt with the applicability of a proposed


Florida Bar Advisory Opinion that analyzed whether a non-lawyer
company or its in-house counsel (who is not licensed in Florida)
engages in the unauthorized practice of law in Florida when the nonlawyer company and its in-house counsel control, direct and manage
litigation in Florida on behalf of the non-lawyer companys third-party
customers where such control, direction and management is directed
to a member for the Florida Bar who is representing the customer in
the litigation. The Florida opinion concluded that while generally such
conduct is not the unlicensed practice of law, there are circumstances
where the opposite may be true, and the activity of the non-lawyer
company or its in-house counsel could constitute unlicensed practice.
The opinion cautioned that, the answer would be dependent on the
level of involvement of the Florida lawyer versus the level of
involvement of the nonlawyer. Id. at 1276. Ultimately, however, the
Supreme Court of Florida disapproved of the Florida Bar Advisory
Opinion for failing to properly address the specific conduct at issue in
the case.
Practically speaking, when in-house counsel and their corporate
employer become involved in litigation proceedings for the corporation
or on behalf of a client or customer in a jurisdiction where in-house
counsel is not licensed but where outside counsel (who is admitted
there) is hired, it is vitally important to consider the actual role, specific

activities, and level of participation, involvement and control that inhouse counsel and their corporate employer will have in the matter to
avoid any concerns regarding the unauthorized practice of law.
Beyond that, if they venture across state lines, they should be aware
that each state may have different requirements when it comes to
protecting its borders from unauthorized practice. Moreover, most
states may have a complex matrix of ethics rules, statutes and court
rules that bar crossing state lines without a license. Further, the
consequences could be dire not only for in-house counsel but also for
the lawyers corporate employer. Penalties for in-house counsel could
range from professional discipline, sanctions by a court, disqualification
from representation, and reputational injury, whereas for the corporate
employer, the consequences could include criminal or civil penalties,
court sanctions, fines, and loss of attorney-client privilege.
In-house counsel engaged in cross-border litigations for their corporate
employer need to be vigilant in drawing a very careful line between
permitted and prohibited litigation activities to avoid endangering their
license and exposing their corporate employer to liability.
***
Devika Kewalramani is a partner at Moses & Singer LLP and co-chair of
its Legal Ethics & Law Firm Practice. Ms. Kewalramani focuses her
practice on legal ethics, risk management, compliance, loss prevention
and professional responsibility. She serves as the chair of the
Committee on Professional Discipline of the New York City Bar
Association.

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