Crossing State Lines — Which Law Governs?

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By Mary C. Daly
[Originally published in NYPRR September 1999]


Advances in communications and transportation over the past 20 years have enormously facilitated the interstate practice of law. The spread of law firms across the land will not stop. The provision of legal services in more than one state can create any number of ethical conundrums, however. Which states’ rules of professional conduct apply to a lawyer who is admitted to practice in more than one jurisdiction? What should a lawyer do if the states’ ethics rules conflict?

The adoption of DR 5-105, 22 NYCRR §1200.5-a, marks the first time that the New York Code of Professional Responsibility (Code) has tackled this thorny issue. Copied almost word-for-word from Rule 8.5 of the ABA Model Rules of Professional Conduct, DR 5-105 addresses two interrelated concerns in multistate practice: the scope of disciplinary authority and choice of law. Subsection (a) states that a lawyer licensed to practice in New York is subject to the State’s disciplinary authority regardless of where the lawyer’s conduct occurs. It also explicitly recognizes that a multi-licensed lawyer may be subject to discipline for the same conduct both in New York and the other licensing jurisdiction.

Litigation and ‘Other Conduct’

Subsection (b), the choice of law provision, is divided into two sections, the first dealing with litigation and the second with “any other conduct.” The latter is an undefined term and presumably includes pre-litigation conduction and transactional representation. Applying a single standard to lawyers who are generally admitted to practice in a jurisdiction and those who are admitted pro hac vice for a single proceeding, (b)(1) provides that “the rules to be applied shall be the rules of the jurisdiction in which the court sits, unless the rules of the court provide otherwise.” Interpreting this rule is not terribly difficult.

Consider how it applies to Lawyer A who is admitted to practice in both New York and New Jersey. If Lawyer A is arguing a motion in a New York state court on Monday morning, the Code governs her conduct. If she tries a case in a New Jersey state court on Tuesday morning, the New Jersey Rules of Professional Conduct govern her conduct.

The choice of law rule “for any other conduct” in subsection (b)(2) is more problematic. If a lawyer is licensed only in New York, the issues are relatively simple and “the rules to be applied shall be the rules of this state.” [DR 5-105(b)(2)(I).] Let’s return to Lawyer A. Imagine that Lawyer A is licensed only in New York and is retained by a New Jersey client to represent it in connection with a dispute in New Jersey. In the course of the representation, she travels to New Jersey on several occasions and eventually negotiates a settlement.

If the client later complains about Lawyer A’s conduct, under DR 5-105, the disciplinary authority must apply the New York Code. In addition to any specific complaint the client might have, the disciplinary authority presumably would consider whether lawyer A engaged in the unauthorized practice of law in New Jersey.

Multi-State Practice

The choice of law problem becomes more acute, however, if Lawyer A is licensed in both New York and New Jersey Subsection (b)(2)(ii) provides that if a lawyer is licensed in more than one jurisdiction, the rules to be applied are “the rules of the admitting jurisdiction in which the lawyer principally practices; provided, however, that if particular conduct clearly has its predominant effect in another jurisdiction in which the lawyer is licensed to practice law, the rules of that jurisdiction shall be applied to that conduct.”

This section raises a number of interesting questions. For example, how is Lawyer A to determine where she “principally practices”? Or where her “particular conduct has its predominant effect”? In some instances, answering these questions may be fairly simple. For example, if 75 percent of Lawyer A’s time and revenue comes from providing services in New York and the Other 25 percent from providing services in New Jersey she practices principally in New York. If she is representing a New Jersey client in a New Jersey real estate transaction, the “predominant effect” is most likely to be in New Jersey.

Difficult Issues

But answering these questions may be more difficult in other cases. Imagine that the ratio of the time Lawyer A devotes to matters for her New York and New Jersey clients is 60/40, respectively, but that the ratio of revenue generated by these clients is 40/60, respectively In these circumstances, where she principally practices is eminently debatable. Similarly, if Lawyer A is retained by a New York client to advise it on the purchase of a company headquartered in New Jersey that owns major assets in both states, where her conduct has its predominant effect may not at all be clear.

How successful is DR 1-105? The answer depends on the circumstances in which a lawyer looks to it for guidance. The new disciplinary rule should work well for litigators and single licensed lawyers who provide legal services outside New York. It should also work well for multiple licensed lawyers in situations in which the determination of “principally practices” and “predominant effect” are relatively simple. The rule is clearly less helpful for lawyers when those determinations are more difficult. A lawyer confronted with such a challenge would do well to examine how the courts and disciplinary authorities in other jurisdictions have construed Rule 8.5. She might also examine traditional choice of law jurisprudence. If the circumstances of the representation involve matters of serious ethical concern such as client fraud or criminal conduct, the lawyer would be wise to seek the assistance of a bar association ethics committee or obtain the advice of an ethics expert.

Mary C. Daly is James H. Quinn Professor of Legal Ethics at Fordham Law and Chair, Committee on Professional and Judicial Ethics, Association of the Bar of the City of New York.

DISCLAIMER: This article provides general coverage of its subject area and is presented to the reader for informational purposes only with the understanding that the laws governing legal ethics and professional responsibility are always changing. The information in this article is not a substitute for legal advice and may not be suitable in a particular situation. Consult your attorney for legal advice. New York Legal Ethics Reporter provides this article with the understanding that neither New York Legal Ethics Reporter LLC, nor Frankfurt Kurnit Klein & Selz, nor Hofstra University, nor their representatives, nor any of the authors are engaged herein in rendering legal advice. New York Legal Ethics Reporter LLC, Frankfurt Kurnit Klein & Selz, Hofstra University, their representatives, and the authors shall not be liable for any damages resulting from any error, inaccuracy, or omission.

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