With all the things that a Connecticut company's in-house counsel has to worry about, being accused of practicing law without a license should not be one of them. But what happens when an in-house lawyer is transferred from her company's Cleveland facility to its new office in Stamford? Or when a lawyer in a large New York law firm is hired to become general counsel of a company headquartered in Hartford? Both of these lawyers may have been duly admitted and in good standing in Ohio and New York, respectively, but once they step into their new offices in Connecticut and begin to advise and represent their companies with respect to the same kinds of issues they dealt with in their states of admission, do they become outlaws, practicing law in violation of Rule 5.5 of the Connecticut Rules of Professional Conduct?
This issue has bedeviled scrupulous in-house counsel for many years, and is about to be addressed on Friday, June 29, 2007, at a meeting of the Judges of the Connecticut Superior Court to consider adopting proposed Section 2-15A of the Superior Court Rules. This Section would create a new category of "Authorized House Counsel." While the preamble to the Rule says that its purpose is "to clarify the status of house counsel," it really establishes a certification and registration requirement, whereby lawyers admitted to practice in other states but not Connecticut must seek registration as "Authorized House Counsel" if they are employed as lawyers for their companies in the state.
What looked at first glance like a welcome resolution of the nagging concern that some in-house counsel in Connecticut have had – that their working as lawyers in Connecticut for a corporate employer might put them at odds with the requirement of bar admission – turns out to be a decidedly mixed bag. Section 2-15A would remove the uncertainty, but not in the direction that many had hoped. It would require all in-house counsel to apply to become registered as Authorized House Counsel. Such registration would require that they be certified by the Connecticut Bar Examining Committee (CBEC) as to their good moral character, a process that involves filling out a lengthy application, recalling and reporting all kinds of details of their professional and personal life. The official commentary to the proposed Rule expressly states that the CBEC will be "required to investigate the good moral character of applicants under the Rule to the same extent that it does with regard to applicants to the bar…" (emphasis added). This requirement may be seen by many as onerous and unwarranted, since presumably a corporate employer that has hired an in-house attorney will have conducted considerable due diligence in that hiring.
Connecticut-based in-house lawyers must be registered under the Rule or risk running afoul of the prohibition on the unauthorized practice of law (UPL).
The proposed Rule was a delicately crafted compromise among several vocal constituencies in the bar who opposed the American Bar Association's straight-forward fix contained in amended Rule 5.5 of the Model Rules of Professional Conduct, which deals with UPL. New subsection (d) of Model Rule 5.5 reads as follows:
(d) A lawyer admitted in another United States jurisdiction, and not disbarred or suspended from practice in any jurisdiction, may provide legal services in this jurisdiction that:
(1) are provided to the lawyer's employer or its organizational affiliates and are not services for which the forum requires pro hac vice admission;… Connecticut's proposed variant to this Rule, which has been proposed and will also be on the Judges' agenda on June 29 at the same time as Section 2-15A, reads as follows:
(d) A lawyer admitted to practice in another United States jurisdiction, and not disbarred or suspended from practice in any jurisdiction, may provide
legal services in this jurisdiction that: (1) are provided to the lawyer's employer or its organizational affiliates and the lawyer is an authorized house counsel as provided in Section 2-15A of the Rules of Superior Court…(emphasis added)
The ABA Model Rule in its subsection (d) above simply empowers lawyers admitted in at least one U.S. jurisdiction and in good standing in all jurisdictions in which they are admitted, to serve as in-house counsel for a corporate employer without the need to register with the bar of the states in which they are practicing for that employer (many states, including Massachusetts,1 Rhode Island, and New Hampshire have adopted Model Rule 5.5 without change). Connecticut's proposed variant of the Rule, in conjunction with its proposed Section 2-15A, requires in-house counsel to apply to and be certified by the CBEC before they can become Authorized House Counsel. As part of this process, the CBEC will conduct a full scale moral character investigation probing such things as speeding tickets and similar infractions in the applicants' background.
Other salient provisions in proposed Section 2-15A are as follows:
- Applicants for registration must be in good standing in any state or jurisdiction in which they are licensed and must disclose in their applications any disciplinary sanctions they have received and any proceeding for discipline pending against them.
- An application for registration must be filed not more than three months prior to the applicant's beginning date of employment as an in-house lawyer in Connecticut and must be accompanied by a certificate from the employer attesting to such employment.
- An applicant must submit an affidavit from each of two members of the Connecticut Bar who have been licensed to practice law in Connecticut for at least five years, certifying that the applicant is of good moral character and is employed or will be employed by an organization in Connecticut.
- Authorized House Counsel may provide legal services only to the organization for which they are registered (and any subsidiaries or other affiliates of that organization).
- Authorized House Counsel may not appear before any state or municipal tribunal, agency or commission, or any court of the state unless specially admitted to appear in a case before such tribunal, agency, commission or court.
- Authorized House Counsel shall not represent themselves to be members of the Connecticut Bar but rather as Connecticut Authorized House Counsel.
- Authorized House Counsel must notify the CBEC of the termination of their employment or relocation for more than 180 consecutive days outside of Connecticut, and upon such an event their status as Authorized House Counsel will cease. Terminating lawyers who obtain new in-house positions with other Connecticut organizations within 30 days of leaving the position in connection with which they were Authorized House Counsel, will continue as such so long as their new employers file a certification confirming their new employment.
Because these rules (Rule 5.5(d) and Section 2-15A) have been so laboriously negotiated and so carefully packaged (together with a third new rule defining the "practice of law"), it is likely they will be adopted at the June 29 meeting of the Judges without change. However, there will be a grace period of a yet to be determined length within which existing in-house counsel will be able to file applications. More information will be learned about the length of the grace period (a) when the Judges act on the proposed rules on June 29 and set their effective date (which is expected to be January 1, 2008) and (b) when the CBEC adopts rules, regulations, and forms to implement Section 2-15A. We will report on the action of the Judges in a subsequent ALERT.
We will be scheduling breakfast briefings at our Hartford and Stamford offices in early September to address and analyze whatever action the Judges take on the proposed rules at their June 29 meeting, and to present and discuss recommended approaches for dealing with the new regime of Authorized House Counsel. You will be receiving invitations next month to the September breakfast briefings.