May a state – consistent with the Privileges and Immunities Clause of Article IV – require non- residents, who are licensed to practice as attorneys in that state, to maintain a separate physical office in that state as a condition of practicing law there, when the state does not require resident attorneys to maintain any office in the state?”
That’s the issue posed in a recent certiorari petition that New Jersey solo, Ekaterina Schoenefeld filed at the United States Supreme Court, continuing her nine-year battle to declare New York’s Judiciary Code §470 unconstitutional.
For those new to this blog, or who haven’t followed our coverage of this story in the past, NY Jud. Code §470 permits New York lawyers who are also state residents to practice from home or virtual offices, while out-of-state residents must bear the cost of a bonafide office. The purported rationale for the law is to ensure that clients can access their attorney and files, as well as serve process on scofflaw out-of-state lawyers who may botch their case. But let’s face it: the real reason behind the law is protectionism, pure and simple. By making an out of state lawyer bear the cost of a second office – a cost that resident lawyers don’t have – the out-of-stater will either be discouraged from working in New York or will have to charge higher rates. Of course, the ruling also defies modern sensibilities and plain common sense – because a floundering lawyer in Buffalo working out of a basement bedroom on a typewriter is more likely to harm clients than a New Jersey attorney across the Hudson with a professional office space or virtual office.
The New York federal district court, where Schoenefeld’s lawsuit originated saw the light and declared Section 470 unconstitutional. But credit those dogged bar regulators who simply won’t call TOD on a 70 year old law persisted, seeking review at the Second Circuit which, after certifying the question of §470’s interpretation to the New York Court of Appeals , ultimately accepted the need for clients to serve process as a rationale for the process and agreed with the state that the statute wasn’t motivated by disciplinary intent.
Schoenefeld has several amici supporting her petition, including the New Jersey Bar Association and the Association of Corporate Counsel. Unfortunately, even if the Supreme Court grants cert, I’m not hopeful about the odds. After all, this is a court that while allowing e-filing, still requires submission of briefs in pamphlet form, and in a YouTube era still doesn’t allow cameras in the courtroom. In short, I’m not seeing how these judges – none of whom have practiced as solo or small firm lawyers will understand that lawyers can practice just as effectively from virtual offices.
Schoenefeld’s fight also shows the difficulty that solos have in changing bar rules. We don’t have the clout of vendors like cloud-based practice management providers who have been the impetus behind the steady stream of state ethics decisions approving cloud technology , or the ABA Ethics Committee’s relatively quick endorsement of pay per click . Somehow, there’s got to be a way to simplify the process of bringing bar challenges to outdated or flat-out unconstitutional ethics rules. In Part II of this post, I’ll tell you which ones I’d target.