Can a lawyer licensed in another state handle an Ohio loan closing for an out-of-state lender without retaining Ohio counsel?
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This page answers the general question as of 2018. Ezel answers yours: whether it's allowed on your facts, under the current Ohio Rules of Professional Conduct, with citations.
Plain-English summary
The Board considered whether an out-of-state lawyer not admitted in Ohio may prepare loan documents for a loan secured by Ohio property, negotiate the terms with the borrower or borrower's counsel, and attend the Ohio loan closing. It started from Prof. Cond. R. 5.5(b), which bars an out-of-state lawyer from establishing an office or systematic and continuous Ohio presence or holding out as Ohio-admitted, but noted that Rule 5.5(c)(1)-(4) provides safe harbors allowing a lawyer admitted elsewhere to provide certain services in Ohio on a temporary basis.
The applicable safe harbor, Rule 5.5(c)(4), permits nonlitigation activities that arise out of or are reasonably related to the lawyer's practice in the jurisdiction where the lawyer is admitted. Drawing on comment [14] and the Restatement (Third) of the Law Governing Lawyers, the Board identified relevant factors: that the client is currently or previously represented by the lawyer, that the client has substantial contacts with the licensing jurisdiction, or that significant aspects of the transaction involve that jurisdiction's law. The Board cautioned that out-of-state lawyers should fully inform clients they are not Ohio-licensed and that pro hac vice admission would be needed for any Ohio litigation.
On the "temporary basis" requirement, the Board observed there is no single test (comment [6]), but that the term is broadly construed to include recurring or extended services, while still implying a temporal limit distinct from a continuous presence. Because the legal services for a real-property loan transaction are typically completed in a short timeframe, they can reasonably be viewed as temporary. The Board concluded that where the lending institution is the lawyer's client and the lawyer is in good standing in the licensing jurisdiction, the lawyer may provide these temporary services, including drafting the lending agreement, negotiating with the borrower, and attending the closing, without engaging in the unauthorized practice of law. The opinion withdrew Advisory Opinion 90-12.
In practice
The opinion holds that, under the Ohio rule as it stood at the time, the transactional safe harbor in Prof. Cond. R. 5.5(c)(4) lets an out-of-state lawyer in good standing handle an Ohio loan closing for an out-of-state lending client on a temporary basis, including drafting documents, negotiating with the borrower, and attending the closing, without retaining Ohio counsel and without committing the unauthorized practice of law. Per the opinion, the safe harbor depends on the lender being the lawyer's client and the work arising out of or being reasonably related to the lawyer's practice in the licensing jurisdiction (comment [14] factors), and the lawyer may not establish an Ohio office; pro hac vice admission would be required for any Ohio litigation.
Common questions
Q: Can an out-of-state lawyer close an Ohio-secured loan without Ohio counsel?
A: The opinion concluded yes, where the lending institution is the lawyer's client and the lawyer is admitted and in good standing elsewhere, under the temporary-practice safe harbor in Prof. Cond. R. 5.5(c)(4).
Q: What work is covered?
A: The opinion concluded the lawyer may draft the loan documents, negotiate terms with the borrower or counsel, and attend the loan closing in Ohio.
Q: When does the work "arise out of or relate to" the lawyer's home practice?
A: The opinion concluded the comment [14] factors apply, such as the client being represented by the lawyer, the client's substantial contacts with the licensing jurisdiction, or significant aspects of the transaction involving that jurisdiction's law.
Q: Are there limits the lawyer must observe?
A: The opinion concluded the lawyer may not open an Ohio office or hold out as Ohio-admitted, should tell the client he or she is not Ohio-licensed, and would need pro hac vice admission for any Ohio litigation.
Background and rules framework
The opinion interprets Ohio Prof. Cond. R. 5.5 (unauthorized practice; multijurisdictional practice), in particular the 5.5(c)(4) transactional safe harbor and the "temporary basis" concept in comments [6] and [14] (Model Rule 5.5). It draws on the ABA's 2002 report introducing the safe harbors and the Restatement (Third) of the Law Governing Lawyers.
Citations and references
Rules of Professional Conduct:
- Ohio Prof. Cond. R. 5.5 (unauthorized practice of law; multijurisdictional practice), incl. 5.5(b), 5.5(c)(1)-(4), and cmts. [6], [14] (Model Rule 5.5)
Other authorities cited:
- ABA Report to the House of Delegates, No. 201(B) (Aug. 2002)
- Restatement (Third) of the Law Governing Lawyers, sec. 3 cmt. (e) (Am. Law Inst. 2000)
See also
- Ohio BPC Op. 1990-012: Out-of-State Firm and Ohio Secured Loans (withdrawn by this opinion)
- Ohio BPC Op. 2016-009: Out-of-State Lawyer With an Ohio Federal Practice
- Ohio BPC Op. 2011-002: Out-of-State Lawyer, Debt Settlement, and Temporary Practice
Source
- Landing page: https://ohioadvop.org/advisory-opinion-index/
- Original PDF: https://www.ohioadvop.org/wp-content/uploads/2018/06/Adv-Op-2018-02.pdf
Original opinion text
Reproduced from the official source for research purposes. The linked source is authoritative.
OPINION 2018-2
Issued June 8, 2018
Withdraws Opinion 90-12
Out-of-State Lawyer Representing Lending Institution
SYLLABUS: An out-of-state lawyer who is admitted and in good standing in another
United States jurisdiction may represent, on a temporary basis, an out-of-state lending
institution concerning loans made to persons and entities in Ohio secured by real
property located in Ohio. The out-of-state lawyer may prepare loan documents,
negotiate the terms of the agreement with the borrower or counsel, and attend the loan
closing in Ohio without engaging in the unauthorized practice of law.
This nonbinding advisory opinion is issued by the Ohio Board of Professional Conduct
in response to a prospective or hypothetical question regarding the application of
ethics rules applicable to Ohio judges and lawyers. The Ohio Board of Professional
Conduct is solely responsible for the content of this advisory opinion, and the advice
contained in this opinion does not reflect and should not be construed as reflecting the
opinion of the Supreme Court of Ohio. Questions regarding this advisory opinion
should be directed to the staff of the Ohio Board of Professional Conduct.
65 SOUTH FRONT STREET, 5TH FLOOR, COLUMBUS, OH 43215-3431
Telephone: 614.387.9370 Fax: 614.387.9379
www.bpc.ohio.gov
DAVID L. DINGWELL RICHARD A. DOVE
CHAIR DIRECTOR
SANFORD E. WATSON D. ALLAN ASBURY
VICE- CHAIR SENIOR COUNSEL
KRISTI R. MCANAUL
COUNSEL
OPINION 2018-2
Issued June 8, 2018
Withdraws Opinion 90-12
Out-of-State Lawyer Representing Lending Institution
SYLLABUS: An out-of-state lawyer who is admitted and in good standing in another
United States jurisdiction may represent, on a temporary basis, an out-of-state lending
institution concerning loans made to persons and entities in Ohio secured by real
property located in Ohio. The out-of-state lawyer may prepare loan documents,
negotiate the terms of the agreement with the borrower or counsel, and attend the loan
closing in Ohio without engaging in the unauthorized practice of law.
APPLICABLE RULES: Prof.Cond.R. 5.5
QUESTION PRESENTED: 1 Whether an out-of-state lawyer, not admitted to
practice in Ohio, may prepare loan documents for a loan secured by Ohio property,
negotiate the terms of the loan agreement with the borrower or borrower’s counsel, and
attend the loan closing in Ohio.
OPINION:
Under the Rules of Professional Conduct, an out-of-state lawyer may not establish
an office or other systematic or continuous presence, or hold out to the public that he or
she is admitted to practice law in Ohio. Prof.Cond.R. 5.5(b). However, the rules permit
a lawyer, admitted and in good standing in another United States jurisdiction, to provide
1The question presented in this advisory opinion is the same or substantially similar to the question
presented in Adv.Op. 90-12.
Op. 2018-2 2
certain types of legal services on a “temporary basis” in Ohio through the application of
one or more enumerated safe harbors. Prof.Cond.R. 5.5(c)(1)-(4).
One safe harbor applies to transactional legal services and permits an out-of-state
lawyer to engage in “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.”
Prof.Cond.R. 5.5(c)(4). This safe harbor provides some latitude for transactional lawyers
to provide legal services for established clients in jurisdictions in which they are not
formally licensed. ABA Report to the House of Delegates, No. 201(B) (August, 2002).
Despite this safe harbor, out-of state lawyers should fully inform their clients that they
are not licensed to practice in Ohio and that pro hac vice admission would be required in
order to appear in any Ohio tribunal in the event of litigation.
A determination of whether a lawyer’s out-of-state services “arises out of or are
reasonably related” to the lawyer’s practice in his or her licensing jurisdiction is aided by
the consideration of several factors enumerated in Prof.Cond.R. 5.5, cmt. [14]. The
comment states that, inter alia, facts demonstrating that the client is previously or
currently represented by the lawyer, that the client has substantial contacts with the
jurisdiction in which the lawyer is licensed, or that significant aspects of the transaction
involve the law of the lawyer’s jurisdiction, evidence the required relationship of the out-
of-state lawyer with his or her home jurisdiction. See also Restatement (Third) of the Law
Governing Lawyers, §3 cmt. (e) (Am. Law Inst. 2000). Here, if the out-of-state lawyer’s
services are provided to a current client, the transaction relates to the client’s out-of-state
business, and significant aspects of the work are conducted in the jurisdiction of
licensure, then the representation is “arising out of or are reasonably related” to his or
her practice in the licensing jurisdiction.
When applying the rule’s “temporary basis” requirement, there is no single test to
determine whether an out-of-state lawyer’s services in another jurisdiction are temporary
rather than permanent. Prof.Cond.R. 5.5, cmt. [6]. However, the term is broadly
construed to include legal services provided on a recurring basis or even over an
extended period of time. Id. In addition, the use of the term “temporary basis” in the
larger context of Rule 5.5 implies a temporal limitation that is different from the
establishment of an office or other systematic or continuous presence in the jurisdiction.
The legal services ordinarily required to conduct a loan transaction secured by real
Op. 2018-2 3
property can typically be completed by a lawyer in a relatively short timeframe and
therefore can reasonably be viewed as being provided only on a “temporary basis.”
Based on the foregoing, if the lending institution is a client of the lawyer, and the
lawyer is admitted and in good standing in his or her licensing jurisdiction, then the
lawyer may provide legal services on a temporary basis on behalf of the out-of-state
institutional client. Specifically, the out-of-state lawyer may engage in legal services
necessary to undertake the representation, including drafting the lending agreement in
accordance with federal or state regulations in Ohio or his or her licensing jurisdiction,
as well as negotiating the terms of the agreement with the borrower or counsel and
attending the loan closing.
CONCLUSION: A lawyer admitted and in good standing in another jurisdiction, may
represent an out-of-state lending institution in conjunction with a loan closing on
property located in Ohio without the need to retain local counsel. These services may
include the drafting of loan documents, negotiation with the borrower, and attendance
at the loan closing held in Ohio. Because the typical legal services required to complete
a loan transaction are usually of a short duration, the services meet the temporal
limitation of the rule as being provided on a temporary basis. An out-of-state lawyer
engaged in transactional legal services authorized under Prof.Cond.R. 5.5(c)(4) is not
engaged in the unauthorized practice of law in Ohio.
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