Oregon State Bar Bulletin JUNE 2002

Bar Counsel
New Admission Rule: Expanding the practice capabilities of corporate lawyers
By George A. Riemer

Corporate counsel, especially those employed by large corporations, are a transitory group. Their clients may transfer them back and forth from corporate headquarters in California or New York to branch offices in Seattle, Boise and Portland, all within a matter of a few years.

Up until recently, that posed a licensing problem in Oregon. Prior to Nov. 1, 2001, out-of-state lawyers who sought to take up the active practice of law in Oregon as corporate counsel had to take and pass the Oregon bar examination or they risked engaging in the unlawful practice of law.

While the issue whether such practice did or did not constitute the unlawful practice of law under particular sets of facts was debated from time to time, the underlying requirement remained. Lawyers practicing law in Oregon had to be active members of the Oregon State Bar.1 And one of the requirements of obtaining that status was passing the Oregon bar examination (the same test new lawyers have to pass; Oregon does not have an attorney examination).

STUDY OF CORPORATE COUNSEL ADMISSION RULE CONCEPT; APPROVAL OF NEW RULE
During the 1997-1998 bar year, the Board of Governors asked the Unlawful Practice of Law Committee to undertake a study of the need for a more comprehensive definition of the unlawful practice of law in Oregon. The UPL Committee reported back to the board in July 1998. One of its recommendations was that Oregon adopt a corporate counsel admission rule. The Board of Governors asked the Board of Bar Examiners (BBX) for its input and that board supported the adoption of such a rule (the BBX's proposal differed somewhat from the one developed by the UPL Committee).

Along the way the OSB Corporate Counsel Section and other interested lawyers urged the adoption of such a rule. Under the proposed corporate counsel admission rule, a lawyer in good standing in the bar of another U.S. jurisdiction could obtain admission to practice law in Oregon as corporate counsel without the necessity of taking and passing the Oregon bar examination.

Eleven other jurisdictions have corporate counsel rules: Florida, Idaho, Kansas, Kentucky, Michigan, Minnesota, Missouri, Ohio, Oklahoma, South Carolina and Washington. Eight jurisdictions without corporate counsel rules permit out-of-state lawyers to serve as corporate counsel essentially as an exception to their prohibitions against the unlawful practice of law: Alabama, Connecticut, Maryland, New Jersey, North Carolina, Texas, Virginia and Washington, D.C. The remaining 36 jurisdictions in the United States do not have a corporate counsel rule and do not define corporate counsel practice as an exception to their unlawful practice of law statutes, rules and/or regulations. Virginia is presently considering the adoption of a corporate counsel rule.

The Oregon State Bar and Oregon Board of Bar Examiners undertook to study the desirability of recommending to the Oregon Supreme Court that a corporate counsel admission rule be added to the Oregon admission rules. After considerable discussion, a draft rule was proposed to the Oregon Supreme Court. And after considerable discussion by the court, a corporate counsel admission rule was approved, effective Nov. 1, 2001. Oregon became the 12th U.S. jurisdiction with a corporate counsel admission rule at that time.

TEXT OF NEW RULE
New Oregon Admission Rule 16.05 provides as follows:

16.05 Admission of House Counsel
An attorney employed by a business entity authorized to do business in Oregon, who has been admitted to practice law in another state, federal territory or commonwealth, or the District of Columbia, may be admitted to practice law as house counsel in this state, subject to the provisions, conditions and limitations in this rule, by the following procedure:

1. The attorney, if at least 18 years of age, may apply for admission to practice law as house counsel by:
(a) Filing an application as prescribed in Rule 4.15; and
(b) Providing verification by affidavit signed by both the applicant and the business entity that the applicant is employed as house counsel and has disclosed to the business entity the limitations on the attorney to practice law as house counsel as provided by this rule.

2. The applicant shall pay the application fees prescribed in Rule 4.10.

3. The applicant shall be investigated as prescribed in Rule 6.05.

4. The applicant shall take and pass the Professional Responsibility Examination prescribed in Rule 7.05.

5. If a majority of the non-recused members of the Board of Bar Examiners considers the applicant to be qualified as to the requisite moral character and fitness to practice law, the Board shall recommend the applicant to the Supreme Court for admission to practice law as house counsel in Oregon.

6. If the Supreme Court considers the applicant qualified for admission, it shall admit the applicant to practice law as house counsel in Oregon. The applicant's date of admission as a house counsel member of the Oregon State Bar shall be the date the applicant files the oath of office with the State Court Administrator as provided in Rule 8.10(2).

7. In order to qualify for and retain admission to practice law as house counsel, an attorney admitted under this rule must satisfy the following conditions, requirements and limitations:
(a) The attorney shall be limited to practice exclusively for the business entity identified in the affidavit required by section (1)(b) of this rule, and is not authorized by this rule to appear before a court or tribunal, or offer legal services to the public;
(b) All business cards, letterhead and directory listings, whether in print or electronic form, used in Oregon by the attorney shall clearly identify the attorney's employer and that the attorney is admitted to practice in Oregon only as house counsel or the equivalent;
(c) The attorney shall pay the Oregon State Bar all annual and other fees required of active members admitted to practice for two years or more;
(d) The attorney shall be subject to ORS Chapter 9, these rules, the Oregon Code of Professional Responsibility, the Oregon State Bar's Rules of Procedure, the Oregon Minimum Continuing Legal Education Rules and Regulations, and to all other laws and rules governing attorneys admitted to active practice of law in this state;
(e) The attorney shall promptly report to the Oregon State Bar: a change in employment; a change in membership status, good standing or authorization to practice law in a state, federal territory, commonwealth, or the District of Columbia where the attorney has been admitted to the practice of law; or the commencement of a formal disciplinary proceeding in any such jurisdiction.

8. The attorney shall report immediately to the Oregon State Bar, and the admission granted under this section shall be automatically suspended, when:
(a) Employment by the business entity is terminated; or
(b) The attorney fails to maintain active status or good standing as an attorney in at least one state other than Oregon, federal territory, commonwealth, or the District of Columbia; or
(c) The attorney is suspended or disbarred for discipline, or resigns while disciplinary complaints or charges are pending, in any jurisdiction.

9. An attorney suspended pursuant to section (8)(a) of this rule shall be reinstated to practice law as house counsel when able to demonstrate to the Oregon State Bar that, within six months from the termination of the attorney's previous employment, the attorney is again employed as house counsel by a qualifying business entity, and upon verification of such employment as provided in section (1)(b) of this rule.

10. An attorney suspended pursuant to section (8)(b) of this rule shall be reinstated to practice law as house counsel when able to demonstrate to the Oregon State Bar that, within six months from the attorney's failure to maintain active status or good standing in at least one other jurisdiction, the attorney has been reinstated to active status or good standing in such jurisdiction.

11. Except as provided in sections (9) and (10) of this rule, an attorney whose admission as house counsel in Oregon has been suspended pursuant to section (8) of this rule, and who again seeks admission to practice in this state as house counsel, must file a new application with the Board of Bar Examiners under this rule.

12. The admission granted under this section shall be terminated automatically when the attorney has been otherwise admitted to the practice of law in Oregon as an active member of the Oregon State Bar.

13. For the purposes of this Rule 16.05, the term 'business entity' means a corporation, partnership, association or other legal entity, excluding governmental bodies, (together with its parents, subsidiaries, and affiliates) that is not itself engaged in the practice of law or the rendering of legal services, for a fee or otherwise.

FURTHER AMENDMENTS UNDER CONSIDERATION
At the same time the supreme court approved the new corporate counsel admission rule, it requested that the bar study several issues concerning the new rule and report back to the court. At the time of this writing representatives of the Board of Governors and the Board of Bar Examiners have met several times to discuss these issues and are in the process of submitting several recommended changes to the Board of Governors and Board of Bar Examiners for review and approval for presentation back to the court.

The most significant of these changes are to clarify that corporate counsel admission applicants must present satisfactory proof of graduation from an ABA approved law school with a juris doctor degree or its equivalent and satisfactory proof of passage of a bar examination in the jurisdiction in which the applicant is admitted to practice law. Another proposed change would clarify that the prohibition against corporate counsel appearing before a court or tribunal would extend to any arbitration or mediation that is court-mandated or is conducted in connection with a pending adjudication. Corporate counsel would, however, be able to represent their corporate clients in rule-making proceedings before a tribunal.

The Supreme Court also asked if the rule should be expanded to include government agencies within the definition of 'business entity.' At the time of this writing the Board of Governors/BBX study group was going to recommend to the Board of Governors and BBX that the rule not be expanded in this fashion.

CONCLUSION
Oregon has joined Idaho and Washington in allowing out-of-state lawyers to obtain limited licenses to practice law for corporate clients without having to take and pass their respective bar examinations. This streamlined admission process is another option in the menu of options available to lawyers who wish to lawfully practice law in jurisdictions in which they are not presently licensed to practice. Corporate clients benefit by being able to utilize their legal staff in multiple jurisdictions without their lawyers having to take and pass additional bar examinations before they can do so. Corporate counsel benefit by this added portability of their personal services.

Other options in Idaho, Oregon and Washington include general reciprocity admission. And the three states are also looking at the adoption of rules that will allow lawyers to engage in legal work on a temporary basis in a jurisdiction in which they are not licensed to practice without being deemed to be engaged in the unlawful practice of law. Progress is being made to facilitate the lawful practice of law across state lines for the benefit of lawyers and the clients they serve.

ABOUT THE AUTHOR
George A. Riemer is general counsel and deputy director of the Oregon State Bar. Contact him at (503) 620-0222 or toll-free in Oregon at (800) 452-8260, ext. 405, or by e-mail at griemer@osbar.org.

ENDNOTE
1. But see Riemer, Limited Practices: Is there a 'federal law only' exception to the Oregon bar examination?, OSB Bulletin, June 2001, p. 25.

2002 George A. Riemer


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