Resolving Multi-jurisdictional Practice of Law Issues in Estate Planning

1. Resolving Multi-jurisdictional Practice of LawIssues in Estate Planning February 10, 2012 By: Peter J. Walsh, Esq. O’Neil, Cannon, Hollman, DeJong & Laing S.C. 111 East Wisconsin Avenue, Suite 1400 Milwaukee, WI 53202 www.wiswalsh.com www.wilaw.com

2. Discussion Topics • Issues with UPL in estate planning • General prohibitions on UPL • Wisconsin’s new rule on UPL and multi-jurisdictional practice • Permissible practices in Wisconsin • Penalties for UPL

3. UPL Issues in Estate Planning • Mobility of clients • Long term nature of attorney/client relationship - when does the relationship need to end to avoid UPL? • Bright lines and gray areas

4. General Prohibitions on UPL • ABA Model Rule of Professional Conduct 5.5: UPL & Multijurisdictional Practice of Law (“MR”) • Response to Birbrower (NY-Attorneys, CA-client, CA-arbitration, denial of fees because of UPL). • Protecting public against rendition of legal services by unqualified persons. • Is there a harm needing to be addressed?

5. General Prohibitions on UPL • Broad prohibition of MR • A lawyer may not practice law in a state in which he is not licensed • Broad exceptions to the MR prohibition

6. General Prohibitions on UPL Four Important Considerations: • Does the conduct constitute the “practice of law”? • In which jurisdiction is the law being practiced? • Does the practice of law violate regulations of the applicable jurisdiction? • Would the practice be permitted in Wisconsin for lawyers not admitted in Wisconsin?

7. “Practice of Law” • Varies by jurisdiction. • Finding of UPL under a state’s ethical rules is contingent on the state’s definition of the practice of law. • WI Supreme Court Rule 23:01 provides guidance: • “[T]he application of legal principles and judgment [regarding] the circumstances . . . of another . . . Where there is a clientrelationship of trust . . . and which require the knowledge, judgment, and skill of a person trained as a lawyer.”

8. Practice of Law Examples of Practice of Law in Wisconsin: • Giving legal advice for a fee. • Drafting or selecting legal documents. • Representing a person or entity in court or other proceeding, or in an administrative proceeding. • Negotiating legal rights or responsibilities on another person’s behalf.

9. Practice of Law Activities that do not require a license to practice law in Wisconsin, include: • Selling legal forms in any format, • Activities preempted by federal law, and • Selecting or completing legal documents, where the document may contain various blanks to be filled in and the selection or completion of the document requires onlycommonknowledge regarding the required information and legal consequences

10. Practice of Law • Case law from other jurisdictions provides guidance • IL Supreme Court: the giving of advice that requires the use of any degree of legal knowledge or skill. • AZ Supreme Court: providing legal advice or services including preparing documents, expressing legal opinions, representation in a judicial or similar proceeding, preparing documents for filing with a court or other agency, and negotiating legal rights or responsibilities for another.

11. Practice of Law • Case law from other jurisdictions provides guidance (cont.) • FL Supreme Court: giving advice and performing services for compensation, which affect a person’s legal rights and requires that the person giving such advise possess legalskill and knowledge of the lawgreater than that possessed by the averagecitizen.

12. “Practice of Law” in Estate Planning • No cases in Wisconsin/cases from other states on the issue indicate the following may be the practice of law. • Information gathering for estate planning analysis. • Advice regarding testamentary transfers. • Preparing estate planning documents. • Preparing Deeds and Sales Agreements. • Conducting legal seminars. • Probate administration. • Assisting with IRS Audits and Preparing tax returns – Not UPL. • Federal practice – Not UPL.

13. The Jurisdiction • Modern technology makes identifying the jurisdiction more complicated. • Two types of presence, physical and virtual, need to be considered. • Physical presence: • An attorney practices in the jurisdiction in which her office is located. • In re Roel, Mexican attorney advising NY residents as to Mexican law practiced in NY because office located in NY.

14. The Jurisdiction • Physical presence (cont.) • In re Discipline of Lerner, AZ-attorney practiced law in NV by meeting with NV-client in NV-office. • Birbrower • NY-attorneys, CA-clients, CA-arbitration over CA-contract. • Meetings and negotiating sessions in CA • Practice in CA constituting UPL. • Spivak v. Sachs • CA-attorney, NY-client, CN-family law matter. • Attorney spent 14 days doing legal work in NY. • Practice in NY constituted UPL.

15. The Jurisdiction • Virtual Presence • Telephone, facsimile, emailing • MR - presence can be systematic and continuous even with no physical presence • FL Rule – presence may be regular even if lawyer is not physically present in State

16. The Jurisdiction • Virtual Presence (cont.) • Situs of the client is key • If client is resident of state of attorney’s license, then broad representation permissible • Attorney can represent in-state client with matters of home state law as well as matters of other state law • Restatement indicates that attorney can provide broad representation to residents of attorney’s state

17. The Jurisdiction • Virtual Presence (cont.) • Estate of Condon • CO-Attorneys, CO-client, CA-probate proceeding • CO-Attorneys performed work in CO • CA-Co-Counsel handled CA-court filings • Co-Attorneys did not practice in CA, No UPL • Client’s residence determinative factor

18. The Jurisdiction • Virtual Presence (cont.) • If client is not a resident of state of attorney’s license then representation may be limited • El Gemayel • Lebanese-Attorney representation of NY client on issue of Lebanese law permissible • Attorney’s visits with client in NY did not constitute practice in NY so no UPL

19. Permissible Practice • Look to the laws of the applicable jurisdiction to determine if practice is permissible. • Attorneys are subject to the discipline of any state in which they practice regardless of where attorney is licensed. • Reciprocal discipline is also a possibility.

20. Permissible Practice • Look to the MR for guidance (if the state has adopted a similar rule). • Most states have adopted some variation of the MR. • For example, Wisconsin and Florida have adopted similar versions of the MR. • Only 2 states, Kansas and New York, have declined to adopt the MR.

21. Permissible Practice in WI • Wisconsin version of the MR • Includes reciprocalprovision not included in the MR or Florida Rule • Provides that if it is okay for non-Wis. Attorney to do in Wis., then okay for Wis. Attorney to do in another state • Unclear whether this would apply in another state where version does not have a reciprocal provision

22. Permissible in Wisconsin • Four Exceptions for practice on an “Occasional Basis” • “Temporary basis” in MR • Recognition that temporary practice in jurisdiction may not cause an unreasonable risk to clients, public or courts

23. What constitutes “Occasional Basis”? • No single test. • Services may be temporary even if on a recurring basis. • Services may be more than temporary even if no physical presence in State.

24. What constitutes “Occasional Basis”? (cont.) • Examples: • Gould, NY-licensed attorney lived in FL for over 29 years and established an office there – NOT “temporary basis”. • District of Columbia UPL Op, Contractlawyer performing short-term legal work for lawyers and law firms in the District of Columbia was practicing on a regular and not temporary basis.

25. What constitutes “Occasional Basis”? • Examples (cont.) • In re Estate of Cooper, TN-licensedlawyer filed notice in a probate proceeding in Nebraska for TNclient considered to be practice on a “temporary basis” because it arose out of the lawyer’s home state practice and was an isolated filing.

26. Four “Occasional Basis” Exceptions 1.& 2. Participation in litigation, arbitration, mediation, and dispute resolution. - Meeting with clients, - Interviewing witnesses, and - Reviewing documents. 3. Co-counsel arrangements. 4. Representation arising out of or related to practice in a jurisdiction in which the lawyer is admitted to practice. *This list of exceptions is NOT exhaustive!

27. Co-Counsel Exception • “Association with local counsel may permit . . . activities not otherwise permissible.” • Licensed counsel must actively participate and share responsibility • Local counsel cannot be a mereconduit to instate practice • Arrangement can only be temporary

28. Co-Counsel Exception • The client should be informed that Attorney not admitted to State • Local Counsel may need to implement actions • Local Counsel may risk assisting in UPL if he fails to materially participate

29. Co-Counsel Exception • Examples: • Florida Bar v. Savitt, Non-Florida lawyer’s activities must merely constitute assistance of Florida lawyer • Florida Bar v. Beach, • local counsel assisted in UPL by acting as co-counsel • No supervision of out-of-state attorney nor interaction with client • In re Knight, Wis-Attorney suspended for allowing out-of-state attorney to use her name and trust account

30. Co-Counsel Exception • Examples (cont.) • Fought & Co. - No UPL • OR-Attorney, OR-Client, HI-Litigation, HI-co-counsel • OR-Attorney did not sign papers filed in HI • HI-co-counsel made all HI-court appearance • Situs of client important to determination

31. Co-Counsel Exception • Examples (cont.) • In re Waring’s Estate – No UPL • NY-Attorney, NJ-Client, NJ-Estate Administration, NJ-co-counsel • Permissible because NJ-Co-Counsel’s active participation and transitory nature of matter • In re Jackman, Mass-Attorney engaged in UPL by working in NJ-firm for seven years

32. Exception forRepresentations Arising out of Home-State • Exception for temporary representation that arises out of or is reasonably related to state of license • Covers matters that are ancillary to home state • Provides some latitude for transactional attorneys by allowing • Clients to retain same lawyer for multiple transactions • Cross-border services by recognized experts

33. Exception forRepresentations Arising out of Home-State (cont.) • May include much of estate planning • Some states limit exception to existing clients • Factors for determining whether exception applies include: • Past representation of client by attorney • Applicable issue has significant connection to home state • Client’s legal issues involve multiple states • Attorney has recognized expertise in area of law • Activities of all lawyers involved in representation are relevant

34. Exception forRepresentations Arising out of Home-State(cont.) • Examples: • Lindsey, NY-Estate Planning Attorney could draft and oversee an execution of Will by Mass-client because isolated incident • Restatement Example: IL-Estate Planning Attorney could prepare estate planning documents for FL residents – very lenient standard • Florida Bar, IL-Attorney committed UPL by preparing Will and antenuptial agreement for FL-clients

35. What May be Permitted in Wisconsin? • Preparing deeds for WI client to real property in another state. • Advising trustee of a WI trust as to real property located in another state; or advising trustee of a trust situs in another state under WI laws. • Preparing state income and estate tax returns for WI decedent or trust for interests with situs in another state; or preparing returns for non-WI decedent or trust with respect to property situs in WI.

36. What May be Permitted in Wisconsin? (cont.) • Preparing federal income tax returns and/or dealing with Federal income tax issues for any individual, trust, or business entity. • Representing non-WI clients with probate proceedings in WI court (i.e. probate, guardianship, and trust administration).

37. What May NOT be Permitted in Wisconsin • Representing a non-WI resident in estate planning matters without material participation of an attorney licensed in client’s home state. • Administering an estate or trust of non-WI resident concerning property not situs in WI. • Representing non-WI resident in probate proceedings in another state (i.e. probate, guardianship, and trust administration).

38. Potential Penalties for UPL • Criminal • Ethical Disciplinary Action • Denial of Pro Hac Vice • Malpractice Liability • Denial of Fees

39. Potential Penalties for UPL(cont.) • Criminal • UPL is Class C Misdemeanor in Wisconsin. • UPL is Felony in Third Degree in Florida. • In re Schrader, GA-Attorney charged with misdemeanor for filing a probate petition in NY without pro hac vice status

40. Potential Penalties for UPL(cont.) • Ethical Disciplinary Action • Civil contempt • Injunctive relief • Suspension • Disbarment • Reciprocal discipline

41. Potential Penalties for UPL • Ethical Disciplinary Action (cont.) • Reciprocal discipline • Attorney subject to discipline in both state of license and state of UPL • In re Kingsley, Attorney licensed in PN disbarred in DE for UPL in DE • In re Bailey, Attorney disbarred in MA as reciprocal discipline for disbarment in FL • In re Disciplinary Proceeding of Ness, WI-Attorney suspended in WI for UPL in MN • In re Disciplinary Proceeding of Crandell, Discipline in WI for misconduct elsewhere is permissible

42. Potential Penalties for UPL • Denial of Pro Hac Vice Motion • Preston, Attorney denied pro hac vice motion because filed 18 months after complaint • Office of Disc., OH-court denied NJ-Attorney pro hac vice motion even though timely filed because attorney appeared in court before motion granted

43. Potential Penalties for UPL • Malpractice Liability • Significant differences in substantive law and procedures between states • Court filing by unlicensed Attorney may be a “nullity” • Preston, AR-complaint signed by unlicensed attorney dismissed • Fruin, IL-complaint filed by WI-attorney dismissed because no prior permission granted to attorney

44. Potential Penalties for UPL • Court filing by unlicensed Attorney may be a “nullity” (cont.) • McEvers, IL-Court declined to follow harsh result of Fruin • Wellmore Coal, VA-Appeal dismissed because notice signed by unlicensed attorney

45. Potential Penalties for UPL • Court filing by unlicensed Attorney may be a “nullity” (cont.) • In Re Ambac Assurance Corp., WI-Court found that filing an appeal without pro hac vice status is a fundamentaldefect which cannot be corrected • If complaint can be disregarded what about a Trust or a Will drafted through UPL

46. Potential Penalties for UPL • Denial of Fees (cont.) • Successful attorneys can still be denied fees for UPL • Chandris, FL-court denied contingency fee because of UPL • Bolte, WI-attorney denied large contingency fee because of UPL in Colorado Goldberg, FL-Court rules that victims may bring private actions to recover attorney’s fees paid incident to UPL • Goldberg, FL-court rules that victim may bring private actions to recover attorney’s fees paid incident to UPA • ALR – Attorney may be ordered to return fees received for drafting a Will when work constitutes UPL

47. Issues in Multi-Jurisdictional Practice QUESTIONS By: Peter J. Walsh, Esq. O’Neil, Cannon, Hollman, DeJong & Laing S.C. www.wiswalsh.com www.wilaw.com