Author: LegalEase Solutions
Introduction
You have asked us to research the requirements of a Michigan law firm (an entity formed and organized in Michigan) to open/own/operate an office in New York. You have asked us to review the rules of professional conduct of both Michigan and New York , and review any applicable case law. The current issue calls for the discussion of:
- Michigan Professional Code of Conduct for Lawyers
- New York Professional Code of Conduct for Lawyers
- Any applicable New York or Michigan case law
Discussion
- Michigan Professional Code of Conduct for Lawyers (MRPC)
A review of the MRPC and Opinions interpreting the MRPC reveal very little treatment of the issue of a Michigan law firm owning/operating a law office out-of-state. The MRPC and Opinions, of course, treat the issue of unauthorized practice of law[1]. However, the opening/operating of a New York office does not necessarily implicate these rules, as the New York office would be staffed with New York licensed attorneys.
The MRPC references in passing Michigan law firms having out-of-state offices under Rule 7.5 Firm Names and Letterheads. The Rule reads in part:
Rule 7.5 Firm Names and Letterheads
(b) A law firm with offices in more than one jurisdiction may use the same name in each jurisdiction, but identification of the lawyers in an office of the firm shall indicate the jurisdictional limitations on those not licensed to practice in the jurisdiction where the office is located.
Thus by clearing referring to law firms having offices in different jurisdictions, the above rule clearly suggests that a Michigan law firm can have offices in other states outside its jurisdiction . As stated above, no prohibition of any kind is found in the MRPC or the Opinions against out-of-state offices for a Michigan law firm.
- New York Professional Rules of Conduct
Like Michigan, New York State Bar Association Lawyer’s Code of Professional Responsibility does not directly address the issue of a out-of-state law firm opening up an office in New York. Similar to Michigan, the Code prohibits unauthorized practice of law.[2]
Various New York ethics opinions interpreting the NY DR 3-101 have commented in passing on issues that may be relevant to owning/operating a New York law office.
In Proposed Internet Web Site Soliciting Trademark Work: N.Y. State Bar Op. 709 (1998) an Attorney proposed an internet web site soliciting clients who need assistance regarding federal trademark issues. The committee considered whether such an arrangement violates NY DR 3-101 (B). The committee commented that determining whether the attorney’s conduct constitutes the unauthorized practice of law in the other jurisdiction (where potential client resides) was a question beyond the committee’s jurisdiction. However, the committee noted that lawyers licensed in one state may appropriately render legal service to clients resident elsewhere in many circumstances.
In Preparation of Will for Florida Client in Concert with Florida Counsel. Nassau County Bar Op. 98-8 (1998), the committee held that under NY DR 3-101 (B), an attorney may prepare a will in New York for a Florida resident where he consults with Florida counsel to review the documents for compliance with Florida law and he discloses to the client that he is not admitted to practice in Florida.
NY EC 3-9 recognizes the need for lawyers to operate outside of their State to facilitate the needs of their clients. It reads:
Regulation of the practice of law is accomplished principally by the respective states. Authority to engage in the practice of law conferred in any jurisdiction is not per se a grant of the right to practice elsewhere, and it is improper for a lawyer to engage in practice where not permitted by law or by court order to do so. However, the demands of business and the mobility of our society pose distinct problems in the regulation of the practice of law by the states. In furtherance of the public interest, the legal profession should discourage regulation that unreasonably imposes territorial limitations upon the right of a lawyer to handle the legal affairs of a client or upon the opportunity of a client to obtain the services of a lawyer of the client’s choice in all matters including the presentation of a contested matter in a tribunal before which the lawyer is not permanently admitted to practice
Similarly NY EC 8-3 states in part:
The fair administration of justice requires the availability of competent lawyers . . . . Clients and lawyers should not be penalized by undue geo graphic restraints upon representation in legal matters, and the bar should address itself to improvements in licensing, reciprocity, and admission procedures consistent with the needs of modern commerce.
In summary, neither the Michigan nor New York Rules governing professional conduct of attorney discourage or prohibit law firms in one state from operating in other states, granted the attorneys are licensed to practice in whichever state they happen to practice in.
- New York Case Law on what constitutes a proper office in New York
In William T. Lichtenstein, Plaintiff, v. Steven Emerson 171 Misc. 2d 933; 656 N.Y.S.2d (1997) the court was asked to determine whether a New York licensed attorney who did not reside in New York and claimed to have an office in New York ran afoul of 470 of the Judiciary Law. Section 470 of the Judiciary Law states:
A person, regularly admitted to practice as an attorney and counsellor, in the courts of record of this state, whose office for the transaction of law business is within the state, may practice as such attorney or counsellor, although he re-sides in an adjoining state.
The court held that § 470 should be interpreted to require all nonresidents, not just residents of adjoining States, who wish to appear as attorneys of record in the courts of New York State to maintain an office in this State. Id. at 935. In this case, the petitioner’s claimed office was located in the basement of a restaurant and bar in which the attorney had a proprietary interest. The ‘office’ consisted of a 10-foot by 12-foot room that can be reached only by going through the kitchen and down a flight of stairs, and contained three desks, none of which the nonresident attorney claimed is his, and no law literature other than a copy of the Federal Rules of Civil Procedure. The court held that such a facility was not an office for the transaction of law business within the meaning of that term. Id. at 936.
In Stanley Rosenberg et al., Plaintiffs, v. Johns-Manville Sales Corporation et al. 99 Misc. 2d 554; 416 N.Y.S.2d 708 (1979) the defendant moved for an order dismissing a cross complaint interposed against it by a codefendant upon the grounds that the attorneys who have appeared in the action on behalf of codefendant are not authorized to practice law in New York and have no capacity to represent any client in a New York court. The codefendant cross motioned for an order admitting an employee to practice in New York pro hac vice.
The court citing section 470 of the Judiciary Law found that codefendant had no office in New York. Id. at 557. The court also held that an associate of an out-of-state law firm who is admitted to practice law in this New York may not maintain an office for the New Jersey law firm which has no partner admitted to practice law in New York, since a law firm has no capacity to practice law within the State and cannot serve as attorney of record in New York litigation, nor may it maintain an office for such purpose, if it has no partner who is admitted to practice law in New York. Id. The court reasoned that resident partner is required to be held accountable to the public, clients and particularly, the supervising judicial authorities; therefore, as a matter of public policy, an associate admitted in New York may not maintain an office for the firm or practice law for the firm within the State, as the employee is not capable of setting policy or accepting legal responsibility for the acts of the firm or its other employees. Id.
The court further stated:
Upon the basis of these decisions it seems absolutely clear that there is no way that an out-of-State law firm, without a partner admitted to practice within this State, may maintain an office for the practice of law in this State in its firm name. These decisions have relaxed prior practice and name limitations to enable a nonadmitted partner to be shown in the firm name. They continue to bar a firm name which contains no admitted partner within the jurisdiction. Such authorization would be totally misleading and conducive to fraud upon the public. The use of the letterhead in this case, or probably, the one being printed with a New York address, would justifiably lead the public to conclude that they were dealing with a firm of New York lawyers, although in actuality they were not.
The court discussed an opinion, Opinion No. 175 of the Committee on Professional Ethics of the New York State Bar Association (1971) which held as follows:
To avoid the danger of franchising and the risk of misleading the public, the Committee is of the opinion that a multi-state law firm may not use in New York a name composed of one or more lawyers not admitted to practice in New York unless the local lawyer is a true partner with a real share in the overall profits, liabilities and professional responsibilities of the entire firm.
Id. at 558-559.
In sum, it is clear that New York requires at the least that a non-resident attorney licensed to practice in New York maintain a real office in New York. Furthermore, it appears from the above case and Opinion No. 175 that the name of the firm in New York must not contain the name of an attorney not licensed to practice in New York. However a review of a more recent opinion by the same committee, Opinion 704 of 1998 does not mention any similar prohibition relating to the name of the firm. Opinion 704, rather, regulates the listing of attorneys not licensed to practice in New York, on letterheads used in the New York office of a multi-state law firm. The opinion does not prohibit a law firm from using the same name in New York as it does in its home state, even if the firm name consists of lawyers not licensed to practice in New York. Thus it can be presumed that a law firm need not change its name when it opens an office in New York, even if the name consists of lawyers not licensed to practice in New York. The law firm must, however, ensure that any listing of its attorneys in New York (whether on firm letterhead or business cards) make clear whether such attorney is licensed to practice in New York.
CONCLUSION
In conclusion, a Michigan law firm can set up office in New York provided it does not engage in the unauthorized practice of law, and that the office in New York is fully functional office with at least one partner admitted to practice in New York.
[1] Rule 5.5 Unauthorized Practice of Law
A lawyer shall not:
(a) practice law in a jurisdiction where doing so violates the regulation of the legal profession in that jurisdiction; or
(b) assist a person who is not a member of the bar in the performance of activity that constitutes the unauthorized practice of law.
[2] NY DR 3-101 (B) provides: A lawyer shall not practice law in a jurisdiction where to do so would be in violation of regulations of the profession in that jurisdiction.
