By Anna Louie Sussman
Feb 6(Reuters) - The policy-making body of the American Bar
Association plans to tackle the contentious issue of registering
foreign in-house counsel at its annual February midyear meeting,
which starts today in Dallas, said a co-chair of the ethics
Four proposals making it easier for foreign lawyers to
register as in-house counsel will be introduced by the
Commission on Ethics 20/20. To be presented on Feb. 11 to the
ABA's policy body, the 560-member House of Delegates, the
proposals will amend current model rules to allow foreign
in-house counsel to handle some matters in the United States and
to provide judges with guidelines on admitting foreign lawyers
into court on specific cases, said Michael Traynor, co-chair of
the ethics commission.
With the number of foreign companies operating in the
United States growing, there are already foreign-trained lawyers
working as in-house counsel, according to Traynor. Currently
they operate with little oversight, an ABA report notes, and the
new rules would help identify and regulate them.
The proposals "respond to the need to facilitate commerce
and transactions, but yet have it be supervised," said Traynor.
Opponents, however, argue that the resolutions could pave
the way for legal malpractice and that lawyers with little to no
education on the intricacies of U.S. law will fall short of
their professional and ethical responsibilities. Foreign
lawyers, for example, could file tax returns improperly,
mishandle contracts and misunderstand domestic regulations, said
Larry Fox, a lecturer at Yale Law School and former chair of the
ABA Standing Committee on Ethics and Professional
Responsibility, a different body than the commission.
"Even the lawyers who have a good education engage in
malpractice every day," said Fox. "Why should we add to the
malpractice by adding to our profession people who by definition
don't have an education in these matters?"
It is an issue Fox has written several commentaries about
that he circulated among delegates as well as debated over the
past year at meetings and round tables. He is expected to speak
at the ABA meeting to once again express his concerns.
EASIER IN SEVEN STATES
Traynor, the commission co-chair, said that global companies
were unlikely to hire or assign inexperienced foreign lawyers to
complex domestic legal matters.
"I think (Fox's) whole approach is exaggerated," he said.
The resolutions, he said, include several provisos designed
to safeguard clients and limit the scope of foreign lawyers'
practice. For example, they prohibit foreign lawyers from
advising on U.S. law except on the basis of advice from an
American lawyer licensed to practice in the relevant
A report issued by the ethics commission said the existing
practice of foreign lawyers has not given rise to any known
adverse consequences to date, Traynor said.
The ethics commission has been meeting for three years, he
said, throughout which it has held over a dozen open meetings on
the issue and reviewed more than 400 comment submissions.
Seven states already have made it easier for foreign lawyers
to work as in-house counsel.
Starting in 2004, as part of Georgia's strategy to attract
more foreign corporations, the Georgia State Supreme Court has
adopted a number of resolutions making it easier for in-house
foreign counsel to work in the state.
Last December, a task force established by the Texas Supreme
Court recommended making it easier for foreign legal consultants
and foreign lawyers to work in the state as a way to attract
foreign investment. It also said in its report that the state
would benefit if more foreign lawyers were to sit for the Texas
After the ABA's ethics commission introduces the
resolutions, delegates will debate them. There will then be a
voice vote on whether to adopt them as part of the ABA's model
policy for professional conduct. A simple majority will win.
If the proposals are approved, a separate implementation
group will work with state bar associations to encourage their
adoption state by state. Lawyers are regulated at the state
level while the ABA is a national and voluntary professional
(This post has been corrected. A previous version erroneously
described Lawrence Fox as a professor and a former chair of the
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