On March 1, 2023, the ABA Standing Committee on Ethics and Professional Responsibility Issued Formal Opinion 504 addressing ABA Model Rule 8.5, which provides for disciplinary authority and choice of law for a lawyer practicing in more than one jurisdiction. See ABA Formal Opinion 504 (March 1, 2023). Rule 8.5 provides:
(a) Disciplinary Authority. A lawyer admitted to practice in this jurisdiction is subject to the disciplinary authority of this jurisdiction, regardless of where the lawyer’s conduct occurs. A lawyer not admitted in this jurisdiction is also subject to the disciplinary authority of this jurisdiction if the lawyer provides or offers to provide any legal services in this jurisdiction. A lawyer may be subject to the disciplinary authority of both this jurisdiction and another jurisdiction for the same conduct.
(b) Choice of Law. In any exercise of the disciplinary authority of this jurisdiction, the rules of professional conduct to be applied shall be as follows:
(1) for conduct in connection with a matter pending before a tribunal, the rules of the jurisdiction in which the tribunal sits, unless the rules of the tribunal provide otherwise; and
(2) for any other conduct, the rules of the jurisdiction in which the lawyer’s conduct occurred, or, if the predominant effect of the conduct is in a different jurisdiction, the rules of that jurisdiction shall be applied to the conduct. A lawyer shall not be subject to discipline if the lawyer’s conduct conforms to the rules of a jurisdiction in which the lawyer reasonably believes the predominant effect of the lawyer’s conduct will occur.
Formal Opinion 504
The ABA issued Formal Opinion 504 to highlight that Rule 8.5 deals with litigation matters differently from non-litigation matters. For litigation matters, the rule is simple: the rule provides that, for conduct in connection with a matter pending before a tribunal, the ethics rules of the jurisdiction in which the tribunal sits will apply. But for “any other conduct,” other provisions will apply, namely: a lawyer will be governed by the ethics rules of the jurisdiction where the lawyer’s conduct occurred, unless the “predominant effect” of that conduct is in a different jurisdiction. “Any other conduct” means all other conduct, including conduct “in anticipation of a proceeding not yet pending before a tribunal.” See Mode Rule 8.5, Comment 4.
To determine where the “predominant effect” of a lawyer’s conduct occurs, the Opinion directs lawyers to look to these factors:
- the client’s location, residence, and/or principal place of business;
- where the transaction may occur;
- which jurisdiction’s substantive law applies to the transaction;
- the location of the lawyer’s principal office;
- where the lawyer is admitted;
- the location of the opposing party and other relevant third parties; and
- the jurisdiction with the greatest interest in the lawyer’s conduct.
In addition, Rule 8.5 includes a safe harbor provision with respect to the “predominant effect” determination: “A lawyer shall not be subject to discipline if the lawyer’s conduct conforms to the rules of a jurisdiction in which the lawyer reasonably believes the predominant effect of the lawyer’s conduct will occur.”
Hypotheticals
The ABA Opinion poses several hypothetical scenarios applying this Rule to determine which jurisdiction’s ethics rules apply, including: 1) fee agreements; 2) law firm ownership; 3) reporting misconduct; 4) confidentiality duties; and 5) screening lateral hires.
Fee Agreements
Since the signing of a fee agreement is “conduct in anticipation of a proceeding not yet pending before a tribunal,” Rule 8.5(b)(2) applies. To find the state where the “predominant effect” of the lawyer’s conduct occurs, the Opinion points to factors such as: where the lawyer is admitted, where the client is located, and where the transaction will take place. The Opinion’s scenario proposes that a lawyer admitted in State X who is hired to represent a resident of State X for a lawsuit in State Y, can reasonably conclude that State X’s ethics rules will apply. In the example, a lawyer’s conduct— executing a fee agreement and accepting the representation in State X—takes place in State X, and the circumstances support the reasonable belief that the predominant effect of the conduct will take place in State X.
Law Firm Ownership
The ABA Opinion provides an example in which a law firm’s ownership structure does not constitute “conduct in connection with a matter pending before a tribunal.” A lawyer’s conduct with respect to establishing the structure of a law firm will have a predominant effect in the state where the law firm is. In the ABA Opinion’s example, State A allows nonlawyer partners in law firms, whereas State B does not (see Model Rule 5.4). A lawyer from State A appearing pro hac vice before a tribunal in State B would not, in this example, be prohibited from sharing fees earned in that case with the State A firm’s nonlawyer partners. After looking to the Model Rules on Pro Hac Vice Admission, the Opinion notes that there is “nothing in the Model Rules on Pro Hac Vice Admission that says the tribunal should inquire into the Lawyer’s business model particularly when it is permitted by the Lawyer’s home licensing jurisdiction.” The lawyer’s conduct—in this example, establishing a law firm structure in partnership with a nonlawyer in State A—has a “predominant effect” in State A.
Reporting Professional Misconduct
The ABA Opinion provides an example where a lawyer, admitted to practice law in States A and B, is hired by a client residing in State A to complete pending litigation in State A. In the example, the lawyer becomes aware of professional misconduct of prior counsel in connection with the pending case. The Opinion explains that the lawyer must follow the reporting rules of the jurisdiction of the tribunal where the matter was filed, regardless of where the lawyer has been admitted to practice law, where the lawyer who committed misconduct is admitted to practice law, or where the client’s residence is. The conduct in connection with the pending matter here is: the reporting of another lawyer’s professional misconduct. And Rule 8.5(b)(1) provides that “conduct in connection with a matter pending before a tribunal, the rules of the jurisdiction in which the tribunal sits” shall be applied.
Confidentiality Duties
The Committee provides an example related to the disclosure of confidential information, noting that Model Rule 1.6 permits, but does not require, disclosure of confidential information the lawyer reasonably believes if necessary “to prevent reasonably certain death or substantial bodily harm,” while other jurisdictions may require disclosure of such information. In the example, a client—the buyer in a transactional matter—discloses to the lawyer that the client intends to harm the opposing party—the seller. The lawyer’s conduct in this example is the disclosure of confidential communications. In assessing where the “predominant effect” of the lawyer’s conduct occurs, a lawyer should consider “where the client is located, where the client’s actions might occur, which jurisdiction’s substantive law would be applied to the client’s actions and where the lawyer is admitted.”
Screening Lateral Lawyers
Most states permit the screening of a lateral hire without imputing the prospective hire’s conflicts of interest (see Model Rule 1.10(a)(2). The Committee notes that “[t]he choice of law analysis for screening laterals will initially pivot on whether the imputed conflict of interest affects a pending lawsuit or transactional matter.” If the conflict that would be imputed in screening a lateral hire involves a transactional matter and not pending litigation, the analysis will turn on 8.5(b)(2), requiring a determination of where the “predominant effect” of the lawyer’s conduct will be. One consideration will be the location of the lawyer’s conduct itself—here, the conduct is handling a potentially conflicted representation. Other considerations will be the location of the party who will bear the harm of the imputed conflict, the principal places of business of the parties, the location of the subject of the transaction, the substantive law governing the transaction, and the location of deposited funds.
Conclusion
A lawyer trying to determine which jurisdiction’s rule of professional conduct applies to the lawyer’s conduct will look to Model Rule 8.5 for guidance. When the conduct is in connection with a matter pending before a tribunal, the lawyer must comply with the ethics rules of the jurisdiction where the tribunal sits. See Rule 8.5(b)(1). For all other conduct, a lawyer should look to where the “predominant effect” of the lawyer’s conduct will occur and apply the rules of professional conduct of that jurisdiction. See Rule 8.5(b)(2).
