Bloomberg Law
May 3, 2023, 8:00 AM

ABA Guidance Doesn’t Fully Clarify Ethics and Interstate Practice

Sarah Sheridan
Sarah Sheridan
Moore & Van Allen

Many attorneys practice in multiple jurisdictions and appear pro hac vice before courts without being licensed in that state. Since ethical rules differ across jurisdictions, questions often arise about which jurisdiction’s ethical rules apply when an attorney is licensed in one state, but whose conduct occurs or has an impact in another state.

In March, the ABA Standing Committee on Ethics and Professional Responsibility released Formal Opinion 504, which gives guidance on these questions.

Rule 8.5(b) of the Model Rules of Professional Conduct addresses choice-of-law questions regarding which jurisdiction’s ethical rules apply to an attorney’s conduct. For pending disputes, the ethical rules of the jurisdiction in which the tribunal sits apply. For “any other conduct,” the ethical rules of the jurisdiction where the attorney’s conduct occurred apply, unless the “predominant effect” of that conduct is in another jurisdiction.

There have been questions regarding what constitutes “any other conduct,” including whether it applies to investigations, transactions, or any other matter not involving a tribunal, such as conduct occurring before a case is filed. The Ethics Committee explained that the phrase “any other conduct” broadly includes “all other conduct, including conduct in anticipation of a proceeding not yet pending before a tribunal.”

The Committee also noted there has been confusion regarding what constitutes a “predominant effect” and provided the following factors for attorneys to consider:

  • Client’s location, residence, and principal place of business
  • Where the transaction may occur
  • Which jurisdiction’s substantive law applies to the transaction
  • Location of the attorney’s office
  • Where the attorney is admitted
  • Location of opposing counsel and other third parties
  • Jurisdiction with the greatest interest in the attorney’s conduct

The complexity in applying a seven-factor test and the relative weight given to each factor means the test may not provide the clarity attorneys seek, particularly in interstate matters or when the effects are felt across state lines. However, it frames the factors to be considered, which is a notable improvement.

Trial Publicity

The choice-of-law analysis is significant because the ethical rules vary by jurisdiction and can have real-life impacts on the obligations imposed on attorneys. For instance, with respect to trial publicity, for pending cases attorneys must follow the ethical rules of that tribunal. However, for investigations or other disputes not yet pending before a tribunal, attorneys must determine where the “predominant effect” of the statement will be and follow the ethical rules of that jurisdiction.

Such analyses should include weighing factors such as where the client and other potential parties are located, where a potential lawsuit may be filed, where the impact of the public statement will be felt most, and where the attorney is located.

Model Rule 3.6 states that an attorney who is “participating or has participated in the investigation or litigation of a matter shall not make an extrajudicial statement” that the attorney knows or reasonably should know “will have a substantial likelihood of materially prejudicing an adjudicative proceeding in the matter.”

Notably, the Model Rules and the rules of most states do not impose any obligations on attorneys regarding such statements by third parties. By contrast, Florida’s ethical rules require attorneys to “exercise reasonable care to prevent investigators, employees, or other third persons assisting in or associated with a case from making extrajudicial statements that are prohibited.” Virginia’s ethical rules are unique in imposing limitations on trial publicity only when the attorney is involved with “a criminal matter that may be tried by a jury.”

Fee Agreements

One of the more common choice-of-law issues relates to fee agreements. Ethical rules vary by jurisdiction as to whether the arrangement must be in writing, whether contingency fee agreements must be signed by the client, and whether the fee may be divided among law firms.

When an attorney admitted and practicing in State A is hired by a client based in State B to file a litigation in State C, the attorney must determine which state’s ethical rules apply to drafting the fee agreement. Since the case is not yet before a tribunal, the attorney should determine where the “predominant effect” will be. The Committee suggested that after balancing the factors, attorneys will typically find that the “predominant effect” with respect to entering a fee agreement occurs in the state where the attorney is licensed and practicing, and thus where the attorney will research and prepare for the matter.

Safe Harbor

The Committee’s opinion also provides guidance on other choice-of-law dilemmas that may arise. Attorneys practicing in multiple jurisdictions should carefully review the Committee’s guidance and be aware of the ethical rules in various jurisdictions that may apply to their conduct. However, it is unclear whether states will embrace the seven-factor “predominant effect” test identified by the Committee.

Thankfully, the Model Rules and several states provide attorneys with a safe harbor whereby attorneys will not be subject to discipline if their conduct conforms to the ethical rules where the attorney reasonably believes the predominant effect of the attorney’s conduct will occur. The question remains whether other states that do not include such a safe harbor will be as forgiving.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Sarah Sheridan is a litigation associate at Moore & Van Allen.

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