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Attorneys Defending Bar Requirements Say that Lawyer Must Violate Them To Bring a Challenge

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Princeton, New Jersey based solo, Ekaterina Schoenefeld did what every good lawyer is supposed to do:  she abided her state bar’s ethics rules even though doing so cost her financially.   Though duly licensed in New York, Schoenefeld couldn’t practice there.  That’s because New York Judiciary Code section 470 requires non-resident, New York barred lawyers like Schoenfeld to maintain a New York office to serve New York clients.  The office requirement applies only to non-resident, New York barred lawyers; those who reside in New York are not subject to the office requirement.

Lacking a New York office, Schoenefeld dutifully turned down business from prospective New York clients to comply with bar rules.  But because Schoenfeld was paying $350 a year to maintain a bar license that she couldn’t use, she challenged New York’s law in federal court, arguing that it violated the Privileges and Immunities Clause, the Fourteenth Amendment Equal Protection Clause and the Commerce Clause of the United States Constitution.

But no good deed goes unpunished.  Instead of getting praise from the Committee on Professional Responsibility and judiciary for complying with an unfair law, they moved to dismiss Schoenefeld’s challenge, arguing that  because Schoenefeld hadn’t actually violated the law, the case wasn’t ripe for review.  As such, the defendants characterized Schoenfeld’s case as a mere “academic exercise.”

I realize that in litigation, lawyers frequently raise procedural arguments for strategic reasons.  Even so, here, there’s a difference.  In my view, it’s simply inappropriate for a bar ethics committee to adopt a position — even for the sake of litigation — that attorneys must violate the law as a prerequisite to challenging it.

Let’s consider what would have happened had Schoenefeld decided to engage in a little civil disobedience.  According to the New York Law Journal, the state attorney general can bring misdemeanor charges for violations of §470 as well as seek treble damages, such as triple the fees that an out-of-state lawyer may have charged while practicing law in New York without having an office.  Furthermore, we all know that once lawyers violate the law, they’re vulnerable to ethics charges for unprofessional conduct.  Thus, even if Schoenefeld was prosecuted for violating the law, but successfully challenged §470 as a defense, her law license might still be in jeopardy for having violated the statute to begin with.  Yet, that’s precisely the route that the New York Disciplinary Committee preferred Schoenefeld to take.

My criticism of the defendants’ position isn’t limited to procedural matters, though.  At a time when thousands of large firm lawyers have been laid off, you’d think that the New York ethics authorities would want to do away with an archaic, protectionist law that makes it more difficult for displaced lawyers to start a practice.  Many New York licensed, former biglaw attorneys never lived in New York to begin with or may have moved out of state since their layoffs to save money.  Yet New York’s current law would prevent these lawyers from working  from home or even permanent offices space in adjacent jurisdictions – even though if they lived in New York, the same requirement wouldn’t apply.  As numerous commenters on this ABA news story point out, the New York rules don’t protect consumers from ne’er do wells.  A fly by night lawyer from Buffalo located six hours from New York City can represent a clients there without an office, while a New Jersey lawyer with a physical office just across the river in Newark (but without space in New York) and a short train ride from most New York courts could not.

It’s bad enough that New York already has draconian unemployment laws, under which a laid off lawyer earning a couple of bucks from a blog or potentially, from starting a practice is deemed ineligible for unemployment compensation.  But New York’s office space requirements for out of state residents presents another barrier for laid off lawyers determined to put their New York law degrees to good use.

Happily, Northern District Court judge Laurence Kahn concluded that Schoenfeld didn’t need to violate Section 470 to challenge it.  Kahn found that Schoenfeld’s loss of business and desire to abide by the law gave rise to a real controversy ripe for review by the court.  Meanwhile, Kahn also denied Defendants’ motion to dismiss Schoenefeld’s privileges and immunities claim, which means that her case will move forward.

Congrats to Ekaterina Schoenefeld for doing the right thing and obeying the law, even if the Disciplinary Committee would have had you do otherwise.  And good luck in the next phase of the case – MyShingle is rooting for you!  As we like to say here, Go, Solo, Go!!

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