If an out-of-state lawyer works remotely as full-time in-house counsel for a company based in Tennessee, must the lawyer register as in-house counsel or is that the unauthorized practice of law?

Plain-English summary

The Board took up a question that became common after the growth of remote work: a lawyer who lives in another state, is licensed only in that other state, and works full time as in-house counsel for an organization headquartered in Tennessee (with offices in other states), who has not registered as in-house counsel in Tennessee. Do those circumstances alone establish a "systematic and continuous presence" in Tennessee for the practice of law, so that the lawyer is engaged in the unauthorized practice of law? The opinion answers no. The circumstances alone do not establish such a presence "unless the lawyer is engaging in conduct that would evidence an indicia of a presence in Tennessee for the practice of law."

The opinion works from Tenn. Sup. Ct. R. 8, RPC 5.5, and the in-house counsel registration requirement in Tenn. Sup. Ct. R. 7, Section 10.01(a). Comment [4] to RPC 5.5 says a lawyer's presence may be systematic and continuous even without physical presence, but that physical presence alone is not the test. The opinion adopts the analysis of ABA Formal Opinion 495 (2020): a lawyer does not "establish" an office or a systematic and continuous presence in a jurisdiction merely by being physically there if the lawyer does not hold out a local address as an office and a local address does not appear on letterhead, business cards, websites, or other indicia of the lawyer's presence. Conversely, a lawyer who lists a Tennessee address on those materials, without noting jurisdictional limits, may be said to have established such a presence.

Applying that framework to a series of registration questions from the Board of Law Examiners, the opinion concludes that remote in-house employment for a Tennessee-based company, standing alone, does not require registration or amount to unauthorized practice. The opinion also notes that RPC 5.5(c) separately authorizes lawyers licensed elsewhere to provide legal services in Tennessee on a temporary basis, and that this authority applies to in-house lawyers the same as to others. The opinion references a March 14, 2022 Tennessee Supreme Court order giving the Board of Law Examiners discretion to waive the late-registration fee and to approve in-house registrations without determining when a lawyer established a "presence," while the underlying uncertainty is resolved.

In practice

Under this opinion, an out-of-state lawyer who works remotely as in-house counsel for an organization with its principal place of business or a satellite office in Tennessee is not, by that fact alone, practicing law without authorization in Tennessee and is not required to register as in-house counsel under Tenn. Sup. Ct. R. 7, Section 10.01. The opinion identifies the operative line as conduct constituting "indicia of a presence" for the practice of law: per ABA Formal Opinion 495, the opinion lists a Tennessee address on websites, letterhead, business cards, or advertising, without indicating the lawyer's jurisdictional limitations, as the kind of conduct that would establish such a presence. The opinion separately preserves the temporary-practice authority in RPC 5.5(c) for in-house lawyers.

Common questions

Q: Does an out-of-state lawyer working remotely as in-house counsel for a Tennessee company commit the unauthorized practice of law?

A: No, not on those facts alone. The opinion concludes that remote in-house work for a Tennessee-based company does not by itself establish a systematic and continuous presence in Tennessee for the practice of law, so it is not unauthorized practice absent conduct showing such a presence.

Q: Does that lawyer have to register as in-house counsel in Tennessee?

A: Not unless the lawyer has established a systematic and continuous presence for the practice of law in Tennessee through conduct constituting indicia of such presence. The opinion says there is otherwise no basis for requiring registration under Tenn. Sup. Ct. R. 7, Section 10.01.

Q: What conduct would cross the line into a "presence" requiring registration?

A: The opinion adopts ABA Formal Opinion 495's list: providing a Tennessee address on websites, letterhead, business cards, or advertising without indicating the lawyer's jurisdictional limitations. That kind of holding-out is what establishes an office or systematic and continuous presence for the practice of law.

Q: Does it matter that the company is the lawyer's only client?

A: The opinion says no. It reasons that a jurisdiction has no real interest in barring a lawyer from practicing the law of a jurisdiction in which the lawyer is licensed, and that Model Rule 5.5's purpose is to protect the public from unlicensed, unqualified practitioners, not to bar qualified out-of-state in-house counsel.

Q: Can such a lawyer still provide legal services in Tennessee temporarily?

A: Yes. The opinion notes that RPC 5.5(c) authorizes lawyers licensed elsewhere to provide legal services in Tennessee on a temporary basis, and that this authority applies to in-house counsel the same as to lawyers in private or government practice.

Background and rules framework

The opinion interprets Tennessee RPC 5.5 (Model Rule 5.5), which governs the unauthorized practice of law and multijurisdictional practice. RPC 5.5(b)(1) refers to establishing "an office or other systematic and continuous presence" in the jurisdiction for the practice of law; Comment [4] explains that such a presence may exist even without physical presence and that a lawyer must not hold out as admitted in the jurisdiction. RPC 5.5(c) authorizes temporary practice by out-of-state lawyers, and RPC 5.5(d) addresses in-house and authorized practice. The registration obligation itself comes from Tenn. Sup. Ct. R. 7, Section 10.01(a), which requires a lawyer with a systematic and continuous presence as in-house counsel to register within 180 days of starting employment. The opinion supplies content for the undefined phrase "systematic and continuous presence" by adopting ABA Formal Opinion 495's reasoning.

Citations and references

Rules of Professional Conduct:

• Model Rule 5.5 / Tennessee RPC 5.5(b), (c), (d) (unauthorized practice; multijurisdictional practice)

Other authorities:

• Tenn. Sup. Ct. R. 7, Section 10.01 (registration of in-house counsel)
• Tenn. Sup. Ct. R. 8 (Rules of Professional Conduct)
• Tennessee Supreme Court Order of March 14, 2022 (Board of Law Examiners waiver discretion)

Other opinions cited:

• ABA Formal Op. 495 (2020): lawyers working remotely

See also

• ABA Formal Op. 495: Lawyers Working Remotely
• CA COPRAC Op. 2023-208: Remote Practice From Out of State
• Colorado Formal Op. 149: Virtual Practice

Source

• Landing page: https://www.tbpr.org/ethic_opinions/2022-f-168

Original opinion text

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

2022-F-168 Circumstances that establish a systematic and continuous presence in Tennessee for the practice of law as in-house counsel

BOARD OF PROFESSIONAL RESPONSIBILITY OF THE SUPREME COURT OF TENNESSEE FORMAL ETHICS OPINION 2022-F-168

The Board of Professional Responsibility has been requested to issue a Formal Ethics Opinion regarding the following question: “Whether a lawyer who resides and is domiciled outside of Tennessee, who is working remotely as full-time, in-house counsel for an organization that has its principal place of business in Tennessee (and offices in other states), who is admitted to the practice of law only in a jurisdiction other than Tennessee, and who is not registered as in-house counsel in Tennessee is engaging in the unauthorized practice of law. In other words, do such circumstances themselves establish a ‘systematic and continuous presence’ in Tennessee for the practice of law as in-house counsel.”

OPINION

A lawyer who resides and is domiciled outside of Tennessee, who is working remotely as full-time, in-house counsel for an organization that has its principal place of business in Tennessee (and offices in other states), who is admitted to the practice of law only in a jurisdiction other than Tennessee, and who is not registered as in-house counsel in Tennessee is not engaging in the unauthorized practice of law because these circumstances alone do not establish a “systematic and continuous presence in Tennessee for the practice of law” as in-house counsel unless the lawyer is engaging in conduct that would evidence an indicia of a presence in Tennessee for the practice of law.

DISCUSSION

“Virtual and remote practice by lawyers is now well established and growing, and the Board has experienced a significant increase in registration applications for in-house counsel by lawyers who reside and are domiciled in other states but are working remotely for companies that have their principal place of business or satellite offices in Tennessee.”[1] Technology has made it possible for an in-house lawyer to practice virtually in a jurisdiction where the lawyer is licensed even though the organizational client may be physically located in a different jurisdiction where the lawyer is not licensed.

Under Tenn. Sup. Ct. R. 7 (“Rule 7”), Section 10.01 (a), “[a] lawyer who is admitted to the practice of law in another U.S. jurisdiction or is a foreign lawyer who is employed as a lawyer by an organization, the business of which is lawful and consists of activities other than the practice of law or the provision of legal services, and who has a systematic and continuous presence in this jurisdiction pursuant to Tenn. Sup. Ct. R. 8 (“Rule 8”), RPC 5.5(d)(1),[2] shall register as in-house counsel within 180 days of the commencement of employment as a lawyer …”

On March 14, 2022 the Tennessee Supreme Court entered an Order that set forth the following: “The widespread use of employees working remotely has created uncertainty concerning when a lawyer has established a ‘systematic and continuous presence’ in Tennessee for the purposes of Tenn. Sup. Ct. R. 8, RPC 5.5(d)(1) and the registration requirements of Tenn. Sup. Ct. R. 7, Section 10.01(a). Until this uncertainty is resolved, the Board of Law Examiners is hereby granted discretion to waive the late fee imposed by Tenn. Sup. Ct. R. 7, Section 10.01(h) for registration by lawyers working remotely for a Tennessee company and to approve the registration of a lawyer working as in-house counsel without determining when the lawyer established a ‘presence’ in Tennessee. See Tenn. Sup. Ct. R.7, Section 10.01(a), (h). A lawyer approved for registration shall be deemed registered as if the application to register as in-house counsel had been timely filed. This order granting the Board of Law Examiners limited wavier discretion under section 10.01(h) will take effect immediately and will remain in effect until further order of this Court.”

Further, Tenn. Sup. Ct. R. 8, RPC 5.5(c) authorizes certain lawyers licensed outside Tennessee to temporarily provide legal services in Tennessee in specified situations. This authority extends to lawyers working as corporate counsel just as it does to lawyers in private or government practice. Nothing in this opinion is intended to limit that authority granted by Rule 5.5(c).

Numerous questions have arisen due to extensive remote practice by in-house counsel:

• “Is a lawyer who is admitted to the practice of law in another jurisdiction and who is working remotely for a company located in Tennessee required to register as in-house counsel?”

• “Other than a physical presence, what conduct or circumstances constitute a systematic and continuous presence in this jurisdiction?”

• “If a lawyer is working remotely as in-house counsel for a company that has its principal place of business or a satellite office in Tennessee, and the company is the lawyer’s only employer and so only ‘client’, is the lawyer required to register as in-house counsel?”

• “If a lawyer is working remotely as in-house counsel for a company that has its principal place of business or a satellite office in Tennessee, is such employment alone sufficient to find a systematic and continuous presence in this jurisdiction?

• “What if the company has a presence in Tennessee via an office or offices, but it is headquartered in another jurisdiction? Would a lawyer’s remote work as in-house counsel constitute a systematic and continuous presence in this jurisdiction?”

“Systematic and continuous presence” is not defined in either Supreme Court Rule 7 or Rule 8. Comment [4] to Rule 8, RPC 5.5 indicates that a lawyer’s physical presence in Tennessee is not required for there to be a “systematic and continuous presence.”

[4] Other than as authorized by law or this Rule, a lawyer who is not admitted to practice generally in this jurisdiction violates paragraph (b)(1) if the lawyer establishes an office or other systematic and continuous presence in this jurisdiction for the practice of law. Presence may be systematic and continuous even if the lawyer is not physically present here. Such a lawyer must not hold out to the public or otherwise represent that the lawyer is admitted to practice law in this jurisdiction.

The American Bar Association issued Formal Ethics Opinion 495 in December 2020, which provides guidance for a lawyer who is remotely practicing law of the jurisdiction or jurisdictions in which the lawyer is licensed while the lawyer is physically present in another jurisdiction in which the lawyer is not admitted to practice.

That opinion discusses the meaning of the words “systematic and continuous presence”. “Words in the rules, unless otherwise defined are given their ordinary meaning. ‘Establish’ means ‘to found, institute, build, or bring into being on a firm or stable basis.’[3] A local office is not ‘established’ within the meaning of the rule by the lawyer working in the local jurisdiction if the lawyer does not hold out to the public an address in the local jurisdiction as an office and a local jurisdiction address does not appear on letterhead, business cards, websites, or other indicia of a lawyer’s presence. Likewise, it does not ‘establish’ a systematic and continuous presence in the jurisdiction for the practice of law since the lawyer is neither practicing law of the local jurisdiction nor holding out the availability to do so. The lawyer’s physical presence in the local jurisdiction is incidental; it is not for the practice of law. Conversely, a lawyer who includes a local jurisdiction address on websites, letterhead, business cards, or advertising may be said to have established an office or a systematic and continuous presence in the local jurisdiction for the practice of law.”[4]

American Bar Association Formal Opinion 495, although not specifically addressing in-house counsel in the various situations posed in the questions set forth herein, which have arisen with regard to the registration of in-house counsel who reside and are domiciled outside of Tennessee, but who have been remotely practicing law for a company that has its principal place of business or satellite office in Tennessee, provides a basis for analyzing the issues.

• “Is a lawyer who is admitted to the practice of law in another jurisdiction and who is working remotely for a company located in Tennessee required to register as in-house counsel?”

Response: Under the American Bar Association analysis a lawyer who is admitted to the practice of law in another jurisdiction and who is working remotely for a company located in Tennessee would not have to register as in-house counsel if the lawyer was not holding himself/herself out as a lawyer in Tennessee by using an address in Tennessee as an office or having it appear on letterhead, business cards, websites, or other indicia of the lawyer’s presence in Tennessee.

• “Other than a physical presence, what conduct or circumstances constitute a systematic and continuous presence in this jurisdiction?”

Response: Conduct or circumstances that have been denoted as indicia of a presence for the practice of law, by the American Bar Association in its Formal Opinion 495, include information provided on websites, letterhead, business cards, or advertising without indicating the lawyer’s jurisdictional limitations.

• “If a lawyer is working remotely as in-house counsel for a company that has its principal place of business or a satellite office in Tennessee, and the company is the lawyer’s only employer and so only ‘client’, is the lawyer required to register as in-house counsel?”

Response: “The purpose of Model Rule 5.5 is to protect the public from unlicensed and unqualified practitioners of law.”[5] “A local jurisdiction has no real interest in prohibiting a lawyer from practicing the law of a jurisdiction in which the lawyer is licensed and therefore qualified to represent clients in that jurisdiction.”[6] Therefore, unless in-house counsel has established a systematic and continuous presence for the practice of law in Tennessee by conduct constituting indicia of such presence, there is no basis for requiring registration in Tennessee under Tenn. Sup. Ct. R. 7 Section 10.01. A lawyer working remotely as in-house counsel for a company that has a place of business in Tennessee may provide legal services in Tennessee on a temporary basis pursuant to Rule 5.5(c), which applies to in-house counsel in the same manner that it applies to other lawyers who are not licensed to practice law in Tennessee.

• “If a lawyer is working remotely as in-house counsel for a company that has its principal place of business or a satellite office in Tennessee, is such employment alone sufficient to find a systematic and continuous presence in this jurisdiction?

Response: If a lawyer is working remotely as in-house counsel for a company that has its principal place of business or a satellite office in Tennessee, such employment alone is not sufficient to find a systematic and continuous presence in this jurisdiction unless the lawyer engages in conduct that would establish a presence in Tennessee for the practice of law.

• “What if the company has a presence in Tennessee via an office or offices, but it is headquartered in another jurisdiction? Would a lawyer’s remote work as in-house counsel constitute a systematic and continuous presence in this jurisdiction?”

Response: If a company has a presence in Tennessee via an office or offices, but it is headquartered in another jurisdiction a lawyer’s remote work as in-house counsel would not constitute a systematic and continuous presence in this jurisdiction unless the lawyer was engaged in conduct that would indicate a presence in Tennessee for the practice of law as set forth hereinabove. A lawyer working remotely as in-house counsel for a company that has a place of business in Tennessee may provide legal services in Tennessee on a temporary basis pursuant to Rule 5.5(c), which applies to in-house counsel in the same manner that it applies to other lawyers who are not licensed to practice law in Tennessee.

CONCLUSION

The question of what constitutes a “systematic and continuous presence in Tennessee for the practice of law”[7] by out of state in-house counsel is determined by whether the lawyer is engaging in conduct that would evidence an indicia of a presence in Tennessee for the practice of law. Conduct that has been denoted as such indicia by the American Bar Association in its Formal Opinion 495 includes information provided on websites, letterhead, business cards, or advertising without indicating the lawyer’s jurisdictional limitations. Therefore, unless in-house counsel for a company located in Tennessee is engaging in conduct that evidences an indicia of a presence in Tennessee for the practice of law, in-house counsel licensed and domiciled in another United States jurisdiction working remotely for a Tennessee company is not engaging in the unauthorized practice of law and should not have to register as in-house counsel pursuant to Tenn. Sup. Ct. R. 7, Section 10.01.

This 9th day of December, 2022.

ETHICS COMMITTEE

Jennifer Hagerman, Chair

Jody Pickens

Floyd Bonner

APPROVED AND ADOPTED BY THE BOARD

[1] Revised Request for Formal Ethics Opinion, Tennessee Board of Law Examiners, Page 2, April 13, 2022.

[2] Tenn. Sup. Ct. R. 8, RPC 5.5(d) provides: “(d) A lawyer admitted in another United States jurisdiction, and not disbarred or suspended from practice in any jurisdiction, may provide legal services through an office or other systematic and continuous presence in this jurisdiction that: (1) are provided to the lawyer’s employer or its organizational affiliates and are not service for which the forum requires pro hac vice admission; or (2) are services that the lawyer is authorized to provide by federal law or other law or rule of this jurisdiction. (3) A lawyer providing legal services pursuant to paragraph (d)(1) is subject registration pursuant to Tenn. Sup. Ct. R. 7, Section 10.01, and may be subject to other requirements, including assessments for client protection funds and mandatory continuing legal education. Failure to register in a timely manner may preclude the lawyer from later seeking admission in this jurisdiction.”

[3] American Bar Association Formal Opinion 495, Page 2, December 16, 2020; DICTIONARY.COM, https://www.dictionary.com/browse/establish?s=t (last visited Dec. 14, 2020).

[4] American Bar Association Formal Opinion 495, Page 2, December 16, 2020.

[5] American Bar Association Formal Opinion 495, Page 3, December 16, 2020.

[6] American Bar Association Formal Opinion 495, Page 2, December 16, 2020.

[7] Tenn. Sup. Ct. R. 8, RPC 5.5(b)(1).