Academic journal article William and Mary Law Review

Behind Bars: Are Corporate Counsel Captive to State Licensure?

Academic journal article William and Mary Law Review

Behind Bars: Are Corporate Counsel Captive to State Licensure?

Article excerpt


"[A]n English judge observed ... 'short of those heavy consequences which would attach to the greater and more heinous offences, I own I can conceive of no jurisdiction more serious than that by which a man may be deprived of his degree and status as a barrister.'" (1) In the United States, as in England, the "arduous profession" (2) of practicing law enjoys a level of esteem afforded few other occupations. As a prerequisite to entering the hallowed field, however, there is an obstacle: the bar exam. (3)

Administration of the bar system has historically been delegated to the fifty states and the District of Columbia. (4) Because each of these has its own unique set of procedural and substantive laws, it follows that each necessitates a comprehensive examination unique to that jurisdiction's intricacies. Budding attorneys, having completed law school, often take a professional preparatory class to master a state's law.

The system at its base seems simple: hopefuls should take the bar exam in the state where they hope to begin their legal career. In reality, however, the nature of state licensure is anything but straightforward. The essence of law practice is changing rapidly. With the growing ease of interstate travel, the expansion of large companies, a multitude of mergers, and the explosion of technology, the practice of law crosses more state borders than at any time in United States history.

Modern practice of law differs from its traditional, largely local foundations. The American Corporate Counsel Association, the leader in law organizations tailored to in-house counsel, cites three characteristics of modern practice that together signify a changing landscape: (1) most U.S. companies do business nationwide, and most large companies have a centralized legal department; (2) companies need to attract and retain good counsel, regardless of where those attorneys reside; and (3) a typical in-house attorney has but one client: his or her employer. (5) These developments have placed the traditional licensure scheme at a critical crossroads. The stark contrast between the idealistic foundation of state licensure and attorneys' real-world, multijurisdictional practice necessitates addressing whether the traditional licensure model should exist in today's dynamic environment.

The California case of Birbrower, Montalbano, Condon & Frank, P.C. v. Superior Court (6) brought this conflict to the forefront. In Birbrower, the California Supreme Court held that a New York law firm had engaged in the unauthorized practice of law when it aided a California client in the settlement of a contract dispute. (7) The court's ruling barred the law firm's recovery of more than one million dollars in attorneys' fees. (8)

The Birbrower decision immediately "stirred the pot" of an already brewing controversy over multijurisdictional practice. (9) In determining what constituted the unauthorized practice of law in the state of California, the court found unimportant the lawyers' physical presence in the state. Specifically, the court noted that the defendants' failure to actually enter California was not dispositive of whether they had practiced law in the state. (10)

Critics, supporters, and legal scholars have scampered to assess the implications of the Birbrower decision. Transactional law has been at center stage. To date, dozens of law review articles and journal analyses have examined Birbrower under the lens of transactional law. (11) After all, transactions in today's marketplace are largely multijurisdictional.

As attorneys across the board face the issue of practicing law in different geographic regions when they, for example, give advice or engage local counsel in arbitration or litigation, in-house counsel are in a unique position in their vigorous representation of their one corporate client. They are compelled to meet the needs of their employer in various regions, and their practice is often predominantly interstate. …

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