Can an out-of-state lawyer provide debt settlement services to Ohio clients found through the internet under the temporary-practice rule?

Plain-English summary

This was the Board's first advisory opinion interpreting Prof. Cond. R. 5.5 (unauthorized practice of law; multijurisdictional practice). The Board addressed whether the temporary-practice provisions of Rule 5.5(c) authorize out-of-state lawyers to provide debt settlement legal services to Ohio clients. On the facts presented, a self-described "national law firm" located in another state, with lawyers not admitted in Ohio, no association with Ohio lawyers, and no Ohio office, advertised on the internet; Ohio residents with no prior contact located the firm online and contracted for debt settlement services, and the firm's lawyers investigated the clients' debts and negotiated with creditors (located in Ohio and elsewhere) for a monthly fee, with no litigation or alternative dispute resolution pending.

The Board concluded that this conduct was not authorized under Rule 5.5(c)(4). The Board reasoned that, in these circumstances, the nonlitigation activities did not arise out of, and were not reasonably related to, the lawyer's practice in the jurisdiction of admission. It identified the absence of three connections as decisive: the matter was not connected to the lawyer's jurisdiction of admission; there was no pre-existing relationship between the lawyer and the client; and the lawyer did not have a recognized expertise in a particular body of federal, nationally uniform, foreign, or international law applicable to the matter.

In practice

The opinion holds that, under Prof. Cond. R. 5.5(c)(4) as it stood at the time of the opinion, an out-of-state lawyer's temporary provision of debt settlement legal services to Ohio clients is not authorized where the matter lacks a connection to the lawyer's home jurisdiction, there is no pre-existing client relationship, and the lawyer lacks recognized expertise in an applicable body of federal, nationally uniform, foreign, or international law. Per the opinion, those missing links mean the nonlitigation activities do not arise out of or reasonably relate to the lawyer's practice in the jurisdiction of admission.

Common questions

Q: Can a national debt settlement firm's out-of-state lawyers serve Ohio clients they meet online?

A: The opinion concluded no; under Rule 5.5(c)(4) such temporary practice was not authorized where the matter had no connection to the lawyer's home jurisdiction, there was no pre-existing client relationship, and the lawyer had no recognized expertise in an applicable body of federal, nationally uniform, foreign, or international law.

Q: Why did the lack of a pre-existing relationship matter?

A: The opinion concluded that, together with the absence of a home-jurisdiction connection and recognized expertise, it showed the nonlitigation activities did not arise out of or reasonably relate to the lawyer's practice in the jurisdiction of admission, as Rule 5.5(c)(4) requires.

Q: Would recognized expertise in federal or nationally uniform law change the analysis?

A: The opinion treated recognized expertise in a body of federal, nationally uniform, foreign, or international law applicable to the matter as one of the connections that can bring temporary nonlitigation work within Rule 5.5(c)(4); on these facts it was absent.

Background and rules framework

The opinion interprets Ohio Prof. Cond. R. 5.5 (unauthorized practice of law; multijurisdictional practice), and in particular R. 5.5(c)(4), which permits an out-of-state lawyer to provide legal services on a temporary basis in Ohio where the services arise out of or are reasonably related to the lawyer's practice in the jurisdiction of admission (Model Rule 5.5).

Citations and references

Rules of Professional Conduct:

• Ohio Prof. Cond. R. 5.5(c), 5.5(c)(4) (temporary multijurisdictional practice) (Model Rule 5.5)

See also

• Ohio BPC Op. 2009-006: Outsourcing Legal and Support Services

Source

• Landing page: https://ohioadvop.org/advisory-opinion-index/
• Original PDF: https://www.ohioadvop.org/wp-content/uploads/2017/04/Op_11-002.pdf

Original opinion text

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

BOARD OF COMMISSIONERS ON GRIEVANCES & DISCIPLINE
65 SOUTH FRONT STREET, 5TH FLOOR, COLUMBUS, OH 43215-3431
614.387.9370 888.664.8345
RICHARD A. DOVE FAX: 614.387.9379 MICHELLE A. HALL
SECRETARY www.supremecourt.ohio.gov SENIOR STAFF COUNSEL

                                  OPINION 2011-2
                               Issued October 7, 2011

      Multijurisdictional Practice and Debt Settlement Legal Services

SYLLABUS: An out-of-state lawyer is not authorized to provide debt settlement
legal services, including investigation, negotiation, and other nonlitigation
activities, on a temporary basis in Ohio under Prof. Cond. Rule 5.5(c)(4) when the
matter is not connected to the lawyer’s jurisdiction of admission to the practice of
law, there is not a pre-existing relationship between the lawyer and the client,
and the lawyer does not have a recognized expertise in a particular body of
federal, nationally-uniform, foreign, or international law that is applicable to the
matter. Under these circumstances, the nonlitigation activities do not arise out
of, and are not reasonably related to, the lawyer’s practice in his or her
jurisdiction of admission for purposes of Prof. Cond. Rule 5.5(c)(4).

QUESTION PRESENTED: Do the temporary practice provisions of Prof. Cond.
Rule 5.5(c) (Unauthorized practice of law; multijurisdictional practice of law)
authorize out-of-state lawyers to provide debt settlement legal services to Ohio
clients?

FACTS: A self-proclaimed ‚national law firm‛ located in another state provides
legal services in the areas of consumer debt and foreclosure relief. The firm’s
lawyers are not admitted to the practice of law in Ohio, and the firm does not
associate with Ohio lawyers or maintain an Ohio office. The firm advertises its
services on the internet. Ohio residents, with no prior contact with the firm,
locate the firm’s website and subsequently contract with the firm’s lawyers for
debt settlement legal services. The lawyers investigate the debt of the Ohio
clients and negotiate with their creditors in an effort to settle debts for less than
the amount owed. The creditors are located in both Ohio and other states.
Neither litigation nor alternative dispute resolution proceedings are pending
Op. 2011-2 2

involving the Ohio clients. The firm charges a monthly fee to the Ohio clients for
the debt settlement legal services.

APPLICABLE RULE: Rule 5.5 of the Ohio Rules of Professional Conduct

OPINION: This is the Board’s first advisory opinion on Prof. Cond. Rule 5.5,
which the Supreme Court of Ohio adopted effective February 1, 2007. However,
the Board addressed the viability of out-of-state lawyers practicing in Ohio more
than twenty years ago. In Opinion 90-12, the Board was asked to determine
whether out-of-state lawyers may represent out-of-state lending institutions in
real estate transactions involving Ohio residents and property. In these
transactions, the out-of-state lawyers prepared loan documents, negotiated
contracts, and represented the lenders at the loan closing. The lender clients
were located in jurisdictions where the lawyers were admitted to practice.
Finding that the provision of legal services by the out-of-state lawyers in Ohio
was in the best interest of the lender clients, the Board concluded that the
practice was permissible. In particular, the Board stated that the Ohio practice
should be ‚tolerated‛ when ‚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.’‛ Ohio Sup. Ct., Bd. Of Comm’rs on
Grievances and Discipline, Op. 90-12, at 2 (Aug. 17, 1990), citing Wolfram,
Modern Legal Ethics, 867 (1986). The Board further found that ‚a persistent
practice in Ohio would be considered the unauthorized practice of law.‛ Id.

   Twelve years later, the American Bar Association (ABA) addressed the

multijurisdictional practice concepts discussed in Opinion 90-12 through changes
to the Model Rules of Professional Conduct. In 2002, the ABA amended Model
Rule 5.5 to allow out-of-state lawyers to engage in the multijurisdictional practice
of law ‚in identifiable situations that serve the interests of clients and the public
and do not create an unreasonable regulatory risk.‛ ABA Center for Professional
Responsibility, A Legislative History: The Development of the ABA Model Rules
of Professional Conduct 1982-2005, at 625 (2006).

   In 2007, the Supreme Court of Ohio created a framework for

multijurisdictional practice in Ohio as part of the adoption of the Ohio Rules of
Professional Conduct. The Ohio Rules are based upon the ABA Model Rules and
Ohio’s multijurisdictional practice provisions are found in Prof. Cond. Rule 5.5.
As indicated by the Supreme Court’s Task Force on Rules of Professional
Op. 2011-2 3

Conduct (Task Force), ‚t+o provide complete client service, a lawyer
occasionally may be required to perform work in a jurisdiction in which the
lawyer is not admitted<the adoption of ABA Model Rule 5.5 is endorsed+<to
establish certain safe harbors from charges of unauthorized practice of law for
lawyers admitted elsewhere than Ohio.‛ Report of the Supreme Court Task
Force on Rules of Professional Conduct, 25 (Oct. 2005). Prof. Cond. Rule 5.5
varies only slightly from Model Rule 5.5. Id.

   The central premise of Prof. Cond. Rule 5.5 is that a lawyer not admitted

to practice in Ohio may not ‚establish an office or other systematic presence in
Ohio+ for the practice of law‛ unless authorized to do so by the Ohio Rules of
Professional Conduct or other law. Prof. Cond. Rule 5.5(b)(1). Also, a lawyer not
admitted in Ohio may not ‚hold out or otherwise represent that the lawyer is
admitted to practice law in Ohio+.‛ Prof. Cond. Rule 5.5(b)(2).

   Prof. Cond. Rule 5.5(c) contains the ‚safe harbors‛ referenced by the Task

Force, and permits a lawyer not admitted in Ohio to provide legal services on a
temporary basis in Ohio if the services fall within one or more of four categories.
Specifically, out-of-state lawyers may provide legal services on a temporary basis
in Ohio if:

     The services are undertaken in association with a lawyer who is
      admitted to practice in [Ohio] and who actively participates in the
      matter;
     The services are reasonably related to a pending or potential
      proceeding before a tribunal in this or another jurisdiction, if the
      lawyer, or a person the lawyer is assisting, is authorized by law or
      order to appear in such proceeding or reasonably expects to be so
      authorized;
     The services are reasonably related to a pending or potential
      arbitration, mediation, or other alternative dispute resolution
      proceeding in this or another jurisdiction, if the services arise out of or
      are reasonably related to the lawyer’s practice in a jurisdiction in
      which the lawyer is admitted to practice and are not services for which
      the forum requires pro hac vice admission;
     The lawyer engages in negotiations, investigations, or other
      nonlitigation activities that arise out of or are reasonably related to the
      lawyer’s practice in a jurisdiction in which the lawyer is admitted to
      practice.

Op. 2011-2 4

Prof. Cond. Rule 5.5(c)(1)-(4).

    In the hypothetical posed to the Board, out-of-state lawyers are providing

debt settlement legal services to Ohio clients. Because the lawyers are not
admitted to practice in Ohio, their conduct constitutes the unauthorized practice
of law unless it falls within one of the four temporary practice exceptions set out
in Prof. Cond. Rule 5.5(c).1 The first three exceptions, however, clearly do not
apply. The debt settlement legal services are not being provided through
association with Ohio lawyers, related proceedings are not pending before
tribunals, and the services are not related to alternative dispute resolution
proceedings. See Prof. Cond. Rule 5.5(c)(1)-(3). The remaining question is
whether the exception contained in Prof. Cond. Rule 5.5(c)(4) for nonlitigation
activities authorizes out-of-state lawyers to provide debt settlement legal services
for Ohio clients.

   Again, for temporary practice in Ohio to be authorized under Prof. Cond.

Rule 5.5(c)(4), the out-of-state lawyer must engage in ‚negotiations,
investigations, or other nonlitigation activities that arise out of or are reasonably
related to the lawyer’s practice in a jurisdiction in which the lawyer is admitted
to practice.‛2 As with Model Rule 5.5(c)(4), Prof. Cond. Rule 5.5(c)(4) ‚recognizes
that the complexity of a specific matter undertaken on behalf of a client in a
jurisdiction in which the lawyer is admitted may require that the lawyer travel to
other jurisdictions on an occasional basis, for example, to interview or consult
with employees or other persons associated with the client concerning the
matter.‛ ABA Legislative History, supra, at 619.

    The Official Comment to Prof. Cond. Rule 5.5 contains substantial

guidance for determining whether an out-of-state lawyer’s nonlitigation
activities ‚arise out of‛ or are ‚reasonably related‛ to the lawyer’s home state
practice. In Comment [14], the following seven factors are identified as evidence
of this relationship:

1 Under Prof. Cond. Rule 5.5(d), out-of-state lawyers may practice in Ohio if they are registered as
corporate counsel pursuant to Gov. Bar R. VI or providing legal services that are authorized by
federal or other law. There is no indication that the out-of-state debt settlement lawyers fall
within these practice designations.
2 The nonlitigation activities ‚include both legal services and services that nonlawyers may

perform but that are considered the practice of law when performed by lawyers.‛ Prof. Cond.
Rule 5.5, Comment [13].
Op. 2011-2 5

      The client was previously represented by the lawyer;
      The client is a resident in or has substantial contacts with the lawyer’s
       state of admission;
      The matter at issue has a significant connection with the lawyer’s state
       of admission;
      A significant portion of the lawyer’s work is conducted in the state of
       the lawyer’s admission;
      A significant aspect of the matter at issue involves the law of the
       lawyer’s state of admission;
      The client’s activities or the legal issues involve multiple jurisdictions;
      The lawyer has a recognized expertise in ‚matters involving a
       particular body of federal, nationally-uniform, foreign, or international
       law.‛

Prof. Cond. Rule 5.5, Comment [14]. These factors come directly from a leading
treatise on legal practice. See Restatement (Third) of The Law Governing
Lawyers § 3 cmt. e (2001). As an example of appropriate temporary practice by
an out-of-state lawyer, the Restatement references a multinational corporation
asking its lawyer to assist with selection of a location for a new United States
facility by negotiating with local officials on zoning, taxation, and environmental
matters. Id. The commentary to Prof. Cond. Rule 5.5 makes a similar illustration
of appropriate temporary practice when multiple jurisdictions are involved and
‚the officers of a multinational corporation survey potential business sites and
seek the services of their lawyer in assessing the relative merits of each.‛ Prof.
Cond. Rule 5.5, Comment [14].

    The ABA Commission on Multijurisdictional Practice’s 2002 report, which

spawned the temporary practice provisions of Model Rule 5.5, is also instructive.
The ABA Commission identified three categories of temporary practice that
would be justified under Model Rule 5.5(c)(4), upon which Prof. Cond. Rule
5.5(c)(4) is based. First, Rule 5.5(c)(4) is ‚intended<to cover services that are
ancillary to a particular matter in the home state‛ when the lawyer is ‚one who
practices law in the client’s state or in a state with a connection to the legal matter
that is the subject of the representation.‛ ABA, Report of the Commission on
Multijurisdictional Practice, 7 (Aug. 2002). Second, Rule 5.5(c)(4) ‚respect*s+
preexisting and ongoing client-lawyer relationships by permitting a client to
retain a lawyer to work on multiple related matters‛ where ‚clients are better
served by having a sustained relationship with a lawyer or law firm in whom the
Op. 2011-2 6

client has confidence.‛ Id. at 7-8. Third, the Commission indicated that Rule
5.5(c)(4) would allow temporary practice by a lawyer who ‚has developed a
recognized expertise in a body of law that is applicable to the client’s particular
matter.‛ Id. at 8. Practice areas of ‚recognized expertise‛ cited by the
Commission include federal tax, securities, or antitrust law and the law of a
foreign jurisdiction. Id. Particularly telling is the Commission’s statement
regarding a client’s hiring of a lawyer for the first time: ‚*W+ork for an out-of-
state client with whom the lawyer has no prior professional relationship and for
whom the lawyer is performing no other work ordinarily will not have the
requisite relationship to the lawyer’s practice where the matter involves a body
of law in which the lawyer does not have special expertise.‛ Id. at 10.

    Applying the seven factors outlined in Prof. Cond. Rule 5.5, Comment

[14], and the concepts detailed in the legislative history of Model Rule 5.5, the
Board concludes that the hypothetical out-of-state debt settlement lawyers are
not authorized to practice law temporarily in Ohio. The Ohio clients became
aware of the out-of-state lawyers for the first time through an internet search,
and had no prior contact or relationship with the lawyers. The clients are not
residents of the lawyers’ home jurisdictions of licensure, and the work done for
the clients crosses into a number of jurisdictions where the creditors are located.
The lawyers may be physically located in their state of licensure, but a significant
portion of the work done for the clients is not centrally located in that home state.
The debt settlement work performed by the out-of-state lawyer is likely not
governed by the law of the lawyers’ home state, as the Ohio clients may be facing
state law collection actions and presumably have Ohio assets as well as income
and debt incurred in Ohio.

   While the Ohio clients have creditors in multiple jurisdictions, a factor

identified in Comment [14], this alone does not establish the ‚reasonable
relationship‛ envisioned by the drafters of Model Rule 5.5 and Prof. Cond. Rule
5.5. As evidenced by the examples described in the Restatement, Model Rule 5.5
was intended to address transactional practice for multijurisdictional, national,
or multinational clients with complex legal needs, not individuals facing
personal legal issues such as consumer debt. In regard to any ‚recognized
expertise‛ in a ‚particular body of federal, nationally-uniform, foreign, or
international law,‛ it is the Board’s opinion that general debtor / creditor law is
not the type of nationally-uniform law intended by the drafters that, without
more of a nexus between lawyer and client, would permit multijurisdictional
practice under Prof. Cond. Rule 5.5(c)(4). The primary areas of concern for
Op. 2011-2 7

clients seeking debt settlement legal services are consumer protection, debt
collection, garnishment, repossession, foreclosure, and general contract law.
Even though some federal statutes may come into play, such as the Fair Debt
Collection Practices Act,3 all of these areas implicate state law in Ohio. In
addition, an internet search for ‚debt settlement law firms,‛ similar to the search
probably conducted by the Ohio clients, produces approximately two million
results.4 Facing this many website options, a typical consumer could not
realistically identify lawyers with a ‚recognized expertise‛ in an area of
nationally-uniform law that may justify temporary practice in Ohio.

    In finding that Prof. Cond. Rule 5.5(c)(4) does not permit temporary

practice in Ohio based upon the facts presented, it is not the Board’s intention to
reconstruct the geographical barriers denounced in Opinion 90-12. The modern
practice of law is complex and in many legal fields a lawyer cannot satisfy his or
her duty to provide competent representation without crossing state lines. As
stated by the ABA’s Commission on Multijurisdictional Practice, ‚under certain
circumstances, it is in the public interest for a lawyer admitted in one United
States jurisdiction to be allowed to provide legal services in another United States
jurisdiction because the interests of the lawyer’s client will be served if the
lawyer is permitted to render the particular services, and doing so does not
create an unreasonable risk to the interests of the lawyer’s client, the public or the
courts.‛ Commission Report, supra, at 1. As previously stated, temporary
practice by out-of-state lawyers serves the interests of the public and clients
when there is a connection to a home state matter, an existing client-lawyer
relationship, or a recognized expertise in an area of federal, nationally-uniform,
foreign, or international law. The debt settlement hypothetical presented to the
Board does not fulfill these criteria, especially given that lawyers are exempt
from the Ohio Debt Adjusters Act5, which protects Ohio consumers receiving
debt settlement services. The Board cannot conclude that it is in the best interests
of clients and the public to allow out-of-state lawyers to provide debt settlement
legal services to Ohio clients whose sole connection to the lawyers is an internet
search.

   Although the Board was asked to analyze the practice of the out-of-state

debt settlement lawyers only in regard to Prof. Cond. Rule 5.5(c), the conduct of
the lawyers may potentially violate other provisions of Prof. Cond. Rule 5.5. For

3 See 15 U.S.C. §§1692-1692p.
4
Search results as of October 7, 2011.
5 See R.C. 4710.03(B).
Op. 2011-2 8

example, through internet advertising and representation of a number of Ohio
clients, the lawyers may have established a ‚systematic and continuous presence
for the practice of law‛ in Ohio. See Prof. Cond. Rule 5.5(b)(1) and Comment [4].
‚Systematic and continuous presence‛ includes both physical and virtual
presence in Ohio. Id. Also through internet advertising, the lawyers may have
‚*held+ out to the public or otherwise represent[ed] that [they are] admitted to
practice law‛ in Ohio. See Prof. Cond. Rule 5.5(b)(2). For purposes of this
opinion, the Board assumes the lawyers’ Ohio practice was ‚temporary‛ and
does not address the question of whether the practice was actually ‚systematic
and continuous,‛ which would require admission in Ohio. The Board also does
not have sufficient information to evaluate the lawyers’ fee structure and
methods of advertising in relation to other provisions of the Ohio Rules of
Professional Conduct. See, e.g., Prof. Cond. Rules 1.5 (Fees and expenses), 7.1
(Communications concerning a lawyer’s services), and 7.3 (Direct contact with
prospective clients).

CONCLUSION: Applying the ‚reasonable relationship‛ factors set out in Prof.
Cond. Rule 5.5, Comment [14], it is the Board’s opinion that the hypothetical out-
of-state debt settlement lawyers are not engaged in nonlitigation activities that
arise out of or are reasonably related to the lawyers’ practice in their jurisdiction
of admission. The Ohio clients’ matters are not connected to the lawyers’ home
state of admission, there is not a pre-existing relationship between the lawyers
and the clients, and the lawyers do not have a recognized expertise in a
particular body of federal, nationally-uniform, foreign, or international law that
is applicable to the consumer debt matters. Accordingly, the out-of-state debt
settlement lawyers are not authorized to provide legal services on a temporary
basis in Ohio pursuant to Prof. Cond. Rule 5.5(c).

Advisory Opinions of the Board of Commissioners on Grievances and
Discipline are informal, nonbinding opinions in response to prospective or
hypothetical questions regarding the application of the Supreme Court Rules
for the Government of the Bar of Ohio, the Supreme Court Rules for the
Government of the Judiciary, the Ohio Rules of Professional Conduct, the
Ohio Code of Judicial Conduct, and the Attorney’s Oath of Office.