Can an out-of-state law firm represent a lender on a loan to an Ohio borrower secured by Ohio property without engaging in the unauthorized practice of law?

Plain-English summary

The Board addressed whether an out-of-state law firm, representing lending institutions located in the firm's home jurisdiction, would engage in the unauthorized practice of law by preparing loan documents in its own offices, negotiating terms with the borrower's counsel, advising the lender on Ohio law, and traveling to Ohio for the loan closing, where the loans went to Ohio persons and entities and were secured by Ohio property.

The Board noted that the Code discourages unreasonable territorial limitations on a lawyer's right to handle a client's legal affairs (EC 3-9) and that EC 8-3 counsels against undue geographic restraints on representation, while DR 3-101(B) provides that a lawyer shall not practice law where doing so would violate the regulations of that jurisdiction's profession. On the facts presented, the Board concluded the firm would not be engaging in the unauthorized practice, but it stated the firm must make full disclosure to its clients that it is not licensed in Ohio and must inform the client of the limitations on its practice, including that pro hac vice admission would be required to appear before any Ohio tribunal, citing Leis v. Flynt.

The Board drew on Professor Wolfram's treatise for the proposition that no distant state can prohibit an out-of-state lawyer from advising a client about that state's law, and that an out-of-state lawyer may prepare a document intended to have legal effect in Ohio without disciplinary risk if the lawyer satisfies the competency requirement under Canon 6. It quoted Wolfram that in-state practice is tolerated when the client is a regular client and either the lawyer's presence is an isolated, non-extensive occurrence or the more extensive in-state work is incidental to advising on a multi-state problem, while a persistent practice in Ohio would be the unauthorized practice of law. The Board concluded the firm would not be engaging in the unauthorized practice of law by representing out-of-state lenders on loans made in Ohio and secured by Ohio property.

Currency note

The Board withdrew this opinion by Advisory Opinion 2018-02. It issued in 1990 under Ohio's former Code of Professional Responsibility (superseded by the Ohio Rules of Professional Conduct effective February 1, 2007). Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against the current Ohio Rules of Professional Conduct before relying on any specific rule mentioned here.

Common questions

Q: Can an out-of-state firm prepare and negotiate Ohio loan documents from its home office?

A: Under this opinion, yes. The Board concluded that preparing loan documents, negotiating terms with the borrower's counsel, and advising the lender on Ohio law would not constitute the unauthorized practice of law on the facts presented.

Q: Can the out-of-state lawyer attend the Ohio closing?

A: The Board concluded the firm may represent the lender at the Ohio loan closing, treating it as in-state work incidental to advising a regular client on a multi-state matter rather than a persistent Ohio practice.

Q: What did the firm have to disclose to the client?

A: The Board concluded the firm must disclose that it is not licensed to practice in Ohio and must inform the client of the limitations on its practice, including that pro hac vice admission would be required to appear before any Ohio tribunal.

Q: At what point would this cross into the unauthorized practice of law?

A: The Board concluded, drawing on Wolfram, that a persistent practice in Ohio would be considered the unauthorized practice of law.

Background and rules framework

The opinion interprets the former Code of Professional Responsibility: DR 3-101(B) (a lawyer shall not practice in a jurisdiction in violation of that profession's regulations), EC 3-9 and EC 8-3 (against unreasonable territorial and geographic restraints on representation), and Canon 6 (competence). The Board read these against the federal pro hac vice framework recognized in Leis v. Flynt.

Citations and references

Rules of Professional Responsibility (Ohio, former):

• DR 3-101(B), not practicing law in a jurisdiction in violation of that profession's regulations
• EC 3-9, against unreasonable territorial limitations on representation
• EC 8-3, against undue geographic restraints on representation
• Canon 6, competence

Cases:

• Leis v. Flynt, 439 U.S. 438 (1979), no automatic right to appear pro hac vice in another state's courts

Other authorities cited:

• Wolfram, Modern Legal Ethics 867-868 (1986), tolerance of incidental in-state practice for a regular client

See also

• Ohio BPC Op. 1989-037: Out-of-State Lawyer's Letterhead and Advice in Ohio
• Ohio BPC Op. 1988-035: Practicing While Delinquent in Registration and the Unauthorized Practice of Law
• Ohio BPC Op. 1990-006: Whether a Suspended Lawyer May Work as a Paralegal

Source

• Landing page: https://ohioadvop.org/advisory-opinion-index/
• Original PDF: https://www.ohioadvop.org/wp-content/uploads/2017/04/Op-90-012.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

The Supreme Court of Ohio
BOARD OF COMMISSIONERS ON GRIEVANCES AND DISCIPLINE
41 SOUTH HIGH STREET-SUITE 3370, COLUMBUS, OH 43215-6105
(614) 644-5800 FAX: (614) 644-5804

OFFICE OF SECRETARY

OPINION 90-12
Issued August 17, 1990
Withdrawn by Adv. Op. 2018-02

[CPR Opinion-provides advice under the Ohio Code of Professional Responsibility which is superseded by the Ohio Rules of Professional Conduct, eff. 2/1/2007.]

SYLLABUS: An out-of-state law firm does not engage in the unauthorized practice of law by representing out-of-state lending institutions regarding loans made to persons and entities in Ohio secured by property located in Ohio. The law firm may prepare the loan documents, negotiate the terms of the agreement with the borrower's counsel, and offer legal advice to the lending institution regarding Ohio law. The law firm may also represent the lending institution in Ohio at the loan closing. This Board cannot address any issues regarding the legal liability stemming from this type of practice.

OPINION: We have before us your request regarding the unauthorized practice of law. Your firm represents clients located in the jurisdictions where your lawyers are licensed to practice law. The lending institutions make loans to persons and entities within Ohio secured by property located in Ohio. You specifically inquire whether you may prepare loan documents in your offices, negotiate the terms of the agreements with the borrower's counsel, give legal advice to the lending institution regarding Ohio law and travel to Ohio for the loan closing.

The Code of Professional Responsibility discourages us from placing unreasonable territorial limitations upon the right of a lawyer to handle the legal affairs of his client or upon the opportunity of a client to obtain the services of a lawyer of his choice in all matters. Code of Professional Responsibility, EC 3-9. Moreover, Ethical Consideration 8-3 states that clients and lawyers should not be penalized by undue geographical restraints upon representation in legal matters, and the bar should improve licensing, reciprocity, and admission procedures consistent with the needs of modern commerce. However, a lawyer shall not practice law in a jurisdiction where to do so would be in violation of regulations of the profession in that jurisdiction. Code of Professional Responsibility, DR 3-101 (B).

Based upon the facts presented, we believe that you would not be engaging in the unauthorized practice by representing the lending institutions regarding Ohio based loans and property. However, you must make full disclosure to your clients that you are not licensed to practice in Ohio. You should inform the client of the limitations on your practice including that your pro hac vice admission would be required in order to appear in any Ohio tribunal. See, e.g., Leis v. Flynt, 439 US 438 (1979).

One commentator has stated that no distant state has the power to prohibit an out-of-state lawyer from advising a client about the distant state's law. Wolfram, Modern Legal Ethics, 867 (1986). Further, an out-of-state lawyer may prepare a document intended to be given legal effect in Ohio without risking disciplinary action provided the lawyer complies with the competency requirement under Canon 6 of the Code of Professional Responsibility. As Professor Wolfram points out in his treatise, when an out-of-state lawyer travels to Ohio the in-state law practice is tolerated if the client is a regular client and "either (1) the lawyer's presence is an isolated occurrence and the work is not extensive in duration or (2) the in-state practice is more extensive but is 'incidental' to advising a client on a multi-state problem." Id. (citations omitted). However, a persistent practice in Ohio would be considered the unauthorized practice of law. Wolfram, Modern Legal Ethics, 868 (1986).

Therefore, it is our opinion and you are so advised that an out-of-state firm would not be engaging in the unauthorized practice of law by representing out-of-state lending institutions regarding loans made in Ohio and secured by property located in Ohio.

This is an informal, non-binding advisory opinion based upon the facts presented and limited to questions arising under the Code of Professional Responsibility.