BBO General Counsel Michael Fredrickson

In-house lawyers working in Massachusetts but licensed elsewhere will have to register and pay a registration fee annually to the Board of Bar Overseers under a new ethics rule adopted by the state’s Supreme Judicial Court.
The new rule goes into effect June 1, and lawyers affected by it have until July 15 to file the registration statement and fee, after which a $50 late fee will be assessed.
The registration form will be available by May 1 at the BBO website (www.massbbo.org). Until then, in-house attorneys can send business, home and e-mail address information to [email protected], which the BBO says will not be disclosed to the public.
The new rule (SJC Rule 4:02, subsection 9) was prompted by a desire to clarify the status of this group of in-house lawyers, as well as the BBO’s desire to track them down in the event of any potential ethics violations, according to BBO General Counsel Michael Fredrickson.
“We wanted to clear up any uncertainty as to whether they are practicing without authority,” Fredrickson said. “We wanted to give them some sort of assurance that we’re not after them. And it [also] allows us to find them if we do have issues with them. We limned the contours of what they can or can’t do in their capacity as in-house counsel.”
In 2006, the SJC adopted Professional Conduct Rule 5.5(d)(1), which permits lawyers admitted in other states to provide in-house legal services to Massachusetts employers.
In-house lawyers affected by this rule still can’t appear in court unless admitted under pro hac vice rules.
The new rule dispels any concern that the attorney-client privilege doesn’t apply to counsel licensed elsewhere who are providing regular advice to companies based in Massachusetts, Fredrickson added.

Necessary rule?

The Association of Corporate Counsel questions why the SJC adopted the new rule.
“It isn’t necessary,” said Paul C. Nightingale, who heads the advocacy committee of the Northeast Chapter of the Association of Corporate Counsel. “We’ve been living in a regime that as long as an in-house attorney is in good standing in another state, they are authorized to practice as an in-house counsel in Massachusetts.”
Susan Hackett, general counsel for the ACC, said Rule 5.5 fully authorizes out-of-state in-house counsel to practice in Massachusetts, which makes a registration system unnecessary.
“A registration statement only serves the purpose of letting a bar know where these lawyers are,” Hackett said. “The states want to count them.”
And while the registration will create additional revenue, Hackett questions whether it will be worth the expense.
“They have to create a database, create a new registration form,” she said. “And what if someone doesn’t register? Will [the BBO] go out and prosecute that person? That costs money. A registration system is a net expense. It will never pay for itself.”
Individuals outside of a company are unlikely to complain to the BBO about an in-house lawyer, she asserted.
“Why are we worried about these lawyers? Who’s going to complain? Their employer will fire them if they’re unsatisfied with their work. A company won’t call the BBO and ask for an ethics proceeding,” Hackett said.
Despite the ACC’s opposition, Nightingale said the rule change is tolerable: “As these things go, the rule is not unreasonable in its scope. We prefer not to have it, but we can live with it. Compared to what other states have done, it’s fairly reasonable.”
It’s unclear how many lawyers the new rule will impact, but Nightingale, general counsel for H.P. Hood, Inc. in Chelsea, Mass., thinks it’s “a goodly number since in-house counsel move around a lot in today’s economy.”
Another concern moving forward is how the BBO will administer the new rule, since that will determine whether it’s burdensome, Nightingale said.
Steven H. Gans, president of the New England Corporate Counsel Association, said the new rule “is prudent and makes sense because the BBO is trying to ensure that all lawyers who practice here are of the highest integrity and competency.”
Gans, general counsel for the New England Mobile Book Fair in Newton, Mass., said the scope of the rule is reasonable since it applies to in-house lawyers actually practicing in Massachusetts, rather than to in-house counsel stationed elsewhere with a company that happens to do business in the Bay State.
The BBO website indicates that the rule applies to lawyers “who are resident and employed as in-house counsel in Massachusetts.”

Rule particulars

The new rule states lawyers admitted in another state and who want to “engage in the practice of law as in-house counsel” in Massachusetts must file an annual registration statement, accompanied by a certification as to whether they are in good standing where they are licensed. The statement also has to be signed by an “authorized representative” of the lawyer’s company.
The rule defines “practice of law as in-house counsel” as providing legal services to a single organization or its affiliates, or a governmental entity.
Once the annual registration and fee are filed, lawyers licensed out-of-state lawyers “may engage in the practice of law” in the state unless the BBO objects, according to the rule.
Annual fees are $300 for lawyers who have been practicing between six to 50 years, $220 for lawyers in practice five years or less, and $20 for lawyers in practice more than 50 years.
In-house lawyers who change or end their employment with a particular company must file a “supplemental statement of change in information” with the BBO – regardless of whether they want to continue as an in-house lawyer in Massachusetts with another company.
You can read the entire rule in the “important documents” section of the New England In-House website (www.newenglandbizlawupdate.com).