The final installment in a three-part series on local counsel. Click here for second installment.
The previous two installments (which appeared in our December and January newsletters) outlined the responsibilities of and the protection afforded by local counsel. This final installment will focus on the consequences for not following the rules for engagement of an out-of-state attorney. As in the previous two installments, I will use examples from Delaware to bring the regulations to life.
Valerie Glover Tonwe was a Pennsylvania lawyer. In a case of first impression, the Delaware Supreme Court disbarred her, even though she was never admitted to practice law in Delaware. She was disbarred for her unauthorized practice of law in Delaware, where she was not admitted and not associated with local counsel.
As an additional consequence, the Supreme Court of Pennsylvania disbarred her.
Disbarment anywhere generally results in disbarment, or denial of admission to practice, everywhere.
Lesson 1: The Delaware Supreme Court can discipline attorneys practicing in Delaware, even if they are not admitted to practice in Delaware.
The Delaware Supreme Court held:
The Office of Disciplinary Counsel (ODC) had authority to institute a disciplinary proceeding against a lawyer who engages in professional misconduct, whether admitted or not.
ODC could proceed under Rule 8.5, which states in relevant part:
(a) Disciplinary Authority. A lawyer not admitted in this jurisdiction is also subject to the disciplinary authority of this jurisdiction if the lawyer provides or offers to provide any legal services in this jurisdiction.
(b) Choice of Law…. In any exercise of the disciplinary authority of this jurisdiction, the rules of professional conduct to be applied shall be as follows:
” . . . for any other conduct, the rules of the jurisdiction in which the lawyer’s conduct occurred, or if the predominant effect of the conduct is in a different jurisdiction, the rules of that jurisdiction shall be applied to the conduct. A lawyer shall not be subject to discipline if the lawyer’s conduct conforms to the rules of a jurisdiction in which the lawyer reasonably believes the predominant effect of the lawyer’s conduct will occur.”
Lesson 2: Representing Delawareans in Delaware matters on a systematic and continuous basis will require an out-of-state attorney to seek admission or associate with local counsel.
Disciplinary Rule 5.5(b)(1) prohibits a lawyer who is not admitted in Delaware from establishing a “systematic and continuous presence in this jurisdiction for the practice of law.”
The Court held that physical presence is not required to establish that a person is providing, or offering to provide, legal services in this state, citing Birbrower, Montalbano, Condon & Frank v. Superior Court, 949 P.2d 1, 5 (Cal. 1998) and In re Coale, 775 N.E.2d 1079, 1081 (Ind. 2002).
The Court found that the following regular pattern of representation of Delaware clients constituted the practice of law “in Delaware” for purposes of Rule 8.5. Specifically, Ms. Tonwe accepted new clients who were Delaware residents involved in car accidents and who were seeking recovery under Delaware insurance policies. Ms. Tonwe did everything short of appearing in Delaware courts, and engaged Delaware attorneys as co-counsel, only if she could not resolve the matter without litigation. Otherwise, she worked out of a Pennsylvania office.
The “Safe Harbor” of Rule 8.5(b), allowing consideration of the attorney’s “reasonable belief” that the “predominant effect” of her representation of Delaware clients was in Pennsylvania did not apply, because of this pattern of conduct.
Delaware follows the ABA Standards for Imposing Lawyer Sanctions:
“This framework requires the Court to determine first: (i) the ethical duty violated; (ii) the lawyer’s state of mind; and (iii) the actual or potential injury caused by the lawyer’s misconduct. Based on these considerations, the Court will make a preliminary determination of the appropriate sanction. The Court then will review the particular aggravating and mitigating circumstances in the case to determine if an increase or decrease in the sanction is justified.”
Ms. Tonwe was disbarred because she “knowingly violated the Cease and Desist Order, thereby violating her ethical duties to the legal profession. Although her conduct may not have injured her clients, Tonwe’s disregard for the law seriously undermines the legal system.”
After law school, Ms.Tonwe was admitted to practice in Ohio, Pennsylvania, and Washington D.C. She took, but did not pass, the Delaware Bar Examination (reputed to be among the toughest in the nation). She opened a law office in her home in Milford, Delaware.
In 1991, Ms. Tonwe was convicted of bribing a federal immigration official and served 37 months in prison. Following her conviction, she was disbarred in Pennsylvania, Ohio, and Washington D.C. She was reinstated in Pennsylvania in 2002.
In 1991, the Delaware ODC discovered that Ms. Tonwe was representing Delaware residents in personal injury claims from her Delaware office. She entered into a Statement and Order of Voluntary Compliance.
Shortly after she was reinstated, she contacted the Pennsylvania Ethics Hotline to find out whether she could conduct “pre-litigation” meetings with Delaware clients who had personal injury claims arising from Delaware accidents. Pennsylvania authorities explained that she would have to contact the appropriate Delaware authorities, and that pre-litigation meetings with Delaware clients would not violate the Pennsylvania Rules of Professional Conduct as long as the Pennsylvania lawyer was not appearing in Delaware tribunals.
She never contacted anyone in Delaware to determine whether she could provide any legal services to Delaware clients.
Over the next few years, she developed a sizeable Delaware clientele. She never solicited business from Delaware residents, but her Delaware practice grew because she was involved in church groups and other civic activities.
In 2005, on inquiries from the ODC, she admitted that from 2003-2006 she represented more than 100 Delaware residents in Delaware matters.
After a hearing, the disciplinary board issued a “cease and desist” order and recommended the Delaware Supreme Court declare her permanently unfit for admission to the Delaware bar, and “request and recommend disbarment by the Supreme Court of Pennsylvania.”
Lesson 3: Associate with Delaware counsel for Delaware matters
MacElree Harvey has attorneys admitted to practice in both Pennsylvania and Delaware and is available to help you should you need local counsel representation in either state.
The following article is informational only and not intended as legal advice. Speak with a licensed attorney about your own specific situation. © Copyright 2011 MacElree Harvey, Ltd. All rights reserved.