18 November 2003

On the Whole, Would I Rather Be in Philadelphia?

And if so, must I be a member of the Pennsylvania bar? At present, that is the rule. Lawyers are licensed state by state. For example, my controlling license is in Illinois (although I am also licensed in a few other places). Thus, when I have an occasional matter in, say, California, I must get the specific permission of a California court to be involved in it. This is called pro hac vice admission, and extends even to the federal courts—I had to apply for pro hac vice status to appear in the US District Court for the Central District of California in Ellison v. Robertson.

If you think this sounds like a script idea that was rejected for Dumb and Dumberer, you're right. Once upon a time, when state law predominated in everything and the now-archaic Field Code used in New York state courts would have been considered a vast simplification of legal procedure, perhaps there was some non-competition-restricting value to the practice. However, even though every state continues to have quirks in its substantive law and rules of procedure, those quirks are easily accessible with even moderate research and cooperation between lawyers; and there is no excuse whatsoever for Federal courts requiring membership in the local state bar. (Sensibly, some Federal courts, such as the District of Connecticut, do not.)

What this practice does do is force two anticompetitive practices that both harm clients. First, some states, such as Delaware, have an inordinate proportion of certain kinds of litigation, even though the clients may well be thousands of miles away. In order to have a Delaware-chartered corporation's lawsuit (either defensively or offensively) heard in the Delaware courts, one must hire Delaware counsel in addition to the counsel one would otherwise prefer, who may well be more competent (and is almost certainly more familiar with the facts) than the required Delaware counsel. This makes just as much sense as requiring Microsoft to have its support staff licensed in specific states to deal with broken databases that are located outside of Washington state. It also drives up prices for both the lawyers themselves—artificial fee enhancement to cover expenses and fees paid to outside counsel is just the tip of the iceberg, not to mention the number of additional meetings and memos—and consumers, who must price-shop in the local community for attorneys who may not be competent in the subject matter. For example, I practice author/creator's side publishing and intellectual property law, with a smattering of other matters (primarily attorney ethics and athlete drug testing). I am the last lawyer someone with a child custody problem should consider; but, if the child custody dispute must be heard in an Illinois court and the client has moved to New Hampshire, the client could not get a family-law specialist—even the leading expert in the nation on that particular problem, or conversely competent counsel who is less expensive—to do the work without at least hiring me as local counsel. (As a general rule, courts will not approve "naked" pro hac vice petitions—one must also designate local counsel. Some Delaware firms make their respective livings on this basis, doing little work other than appearing as local counsel in the Court of Chancery for corporations chartered in Delaware but headquartered elsewhere.)

More subtly, this practice encourages a "not invented here" syndrome that inhibits both the uniformity and development of the law. Consider, for example, the interstate issues raised in Perry v. Household Retail Servs., Inc., et al., 953 F. Supp. 1365, 953 F. Supp. 1371, 953 F. Supp. 1378 (M.D. Ala. 1996) N.B. I was the primary counsel in those matters—pro hac vice, of course. Until I convinced the court that Illinois law—the place where Household had its headquarters—would apply equally to that corporation's conduct in Alabama in a predatory lending context, this was a "pure federal law" case only, because Alabama was one of the few states that did not have a modern UDAP statute to protect consumers from certain kinds of deceptive acts, practices, and statements. I brought the Illinois law in; the Perry decisions have been cited a number of times since in Alabama courts to protect consumers from even more egregious conduct than I was trying to deal with at that time. Thus, bringing in out-of-state counsel with a fresh perspective both advanced the state of the law and made the law more nationally consistent (even if just a little bit) concerning multistate businesses. (And I didn't have much trouble dealing with "arcane" Alabama issues such as the particular Alabama standards for piercing a corporate veil.)

I wish the states would get out of the business of lawyer regulation. The continued problems demonstrate that they're not competent to do so, or at least choose not to do so. The least that states can do is respect the Sixth Amendment right to counsel of one's own choice—without regard to which side of some arbitrary boundary the attorney has his or her office. If counsel is capable of handling the matter, that is all that should matter. Restrictions on multijurisdictional practice are an implicit accusation that out-of-state counsel is not competent and capable of representing the interests of local parties (or out-of-state parties involuntarily hauled into court). We don't need that kind of Balkanization, whether from a logical or any other point of view. And since the US is now negotiating a treaty that would prohibit this same xenophobia in international provisions of services, explicity including legal services, it seems to me that logic compels that we avoid it within the nation.

<SARCASM> Sorry. I forgot. I'm still under the misimpression that law is a profession with a duty to serve clients' best interests, not a cutthroat business. </SARCASM>