In-house lawyers licensed outside of Conn. risk ethics violation

Connecticut in June 2007 adopted an ethics rule requiring all in-house lawyers working in the state but admitted in other jurisdictions to either become a member of the state bar, or file an application and related fees for permission to continue providing advice as an “authorized house counsel” to their Connecticut employers.
Rule 2.15A of the Connecticut Rules of Court clarifies that in-house lawyers located in Connecticut are practicing law in the state – even if all of their work and advice for their companies is related to matters in other jurisdictions. Consequently, they must comply with Connecticut’s professional ethics rules and are subject to the jurisdiction of the statewide ethics grievance committee and Superior Court, which enforce the ethics rules.
Hundreds of in-house lawyers apparently haven’t taken the necessary steps to comply with the new rule, despite a one-year grace period that expired June 30.
Those lawyers are now engaging in the unauthorized practice of law. Will these lawyers be prosecuted for practicing law without a license? And what can they do to prevent this from happening?
Paul Boynton of New England In-House recently caught up with attorney James C. Graham, an expert in professional ethics and legal malpractice, to shed some light on the issue. Graham is a partner at Pepe & Hazard in Hartford, Conn.

* * *

In-House: What’s the likelihood of being disciplined if affected in-house lawyers haven’t filed their “house counsel” registrations?

Graham: The best thing to do is apply as quickly as possible. I think the ethics disciplinary authorities are more interested in getting people to become members of the bar. If you file after the deadline, you’re admitting that you’re engaging in the unauthorized practice of law. But I can’t say the ethics panel will push that. They’ll likely treat it differently if you file the application a few weeks after the deadline, as compared to two years from now. If you don’t file and you continue to fly under the radar, it could catch up to you. Someone may decide to report you. If there’s widespread non-compliance, the state might decide to resort to more punitive measures to get people to apply.

In-House: What can affected in-house counsel do to avoid the unauthorized practice of law?

Graham: They have to file an application, including disclosing whether they’ve ever been disciplined by another state bar, along with an affidavit from two members of the Connecticut bar attesting to their character, and they have pay a one-time fee of $1,000. Once you become a member of the Connecticut bar, you have to pay an annual occupation tax of $450 and contribute $110 to the client security fund.

In-House: How many in-house lawyers admitted in other state bars do you estimate haven’t filed their applications?

Graham: I would estimate some 800 to 1,000 folks likely fall in this category. I don’t believe more than a couple hundred of applications or so have been filed.

In-House: Why do you think affected in-house lawyers haven’t filed their applications?

Graham: I suspect it’s due to a confluence of factors. Some unawareness, some inertia. Time flies by. Ultimately the person making the application has to get personally involved. It can’t be fully discharged by someone else. You need to get affidavits from two Connecticut attorneys to attest to your character. It takes time to get this done. I don’t know how well-publicized this was. I don’t know if there was a special effort to reach out to corporate legal departments. It may explain timeliness, but it doesn’t justify non-compliance. Lawyers are obligated to keep abreast of these things.