BILL ANALYSIS SB 1782 Page 1 Date of Hearing: August 8, 2000 ASSEMBLY COMMITTEE ON JUDICIARY Sheila James Kuehl, Chair SB 1782 (Morrow) - As Amended: June 29, 2000 SUBJECT : PRACTICE OF LAW: OUT-OF-STATE ATTORNEYS KEY ISSUES : 1)SHOULD THE CALIFORNIA SUPREME COURT ADOPT RECIPROCITY RULES PERMITTING OUT-OF-STATE ATTORNEYS TO BE ADMITTED TO THE STATE BAR UNDER CERTAIN CIRCUMSTANCES? 2)SHOULD THE SUPREME COURT CONDUCT A STUDY OF THIS ISSUE? SUMMARY : Expresses legislative intent that the California Supreme Court adopt rules permitting admission to the State Bar for certain out-of-state attorneys. Specifically, this bill : 1)Declares the intent of the Legislature that the California Supreme Court adopt rules permitting attorneys licensed in other states to be admitted to the State Bar under certain circumstances. (This is commonly referred to as "reciprocity" or "reciprocal admission.") 2)States that the Legislature also recognizes that the question of reciprocal admission is a complex one, and requests that the Supreme Court appoint a task force to study and make recommendations regarding whether and under what circumstances attorneys who are licensed to practice law in other states and who have not passed the California State Bar Examination may be permitted to practice law in California. 3)States that the task force study should consider all of the following factors: (a) years of practice in other states; (b) admission to practice law in another state; (c) specialization of the attorney's practice in another state; (d) the attorney's intended scope of practice in California; (e) the admission requirements in the state or states in which the attorney has been licensed to practice; (f) reciprocity with and comity with other states; (g) moral character requirements; (h) disciplinary implications; and, (i) consumer protection. SB 1782 Page 2 EXISTING LAW : 1)Regulates, under the State Bar Act, the practice of law in this state and requires that applicants for a license to practice law satisfy certain requirements, including passage of a Bar examination. (Business and Professions Code section 6060 et seq . All further references are to this code.) 2)Provides, in the case of attorneys who have been admitted to practice law in another state or in any United States' jurisdiction, possession, territory, or dependency, that the applicant must take and pass either the general or Attorney's Bar examination. If the attorney has been an active member of the bar in the other jurisdiction for four or more years, he or she may opt to take the shorter Attorney's examination. [The Attorney's exam includes an essay portion and a performance test. The general exam additionally includes the multiple-choice question format Multistate Bar Exam (MBE).] (Section 6062.) FISCAL EFFECT : The bill as currently in print is not keyed fiscal. COMMENTS : According to the author, this bill is needed because California's restrictive rules governing admission to the bar are "currently preventing competent experienced attorneys from out of state from practicing in this state." As noted above, this bill, in its current form, addresses the issue of "reciprocity," which allows admission to the State's bar based on comity with other jurisdictions having a reciprocal admission policy, i.e., "we'll let your person in if you let our person in." Admissions criteria in other states compared . California is reputed to have one of the toughest Bar examinations in the country. California's test consists of three parts: essays, the Multistate Bar Exam (MBE), and performance tests. Most of the other states (all but three) require the MBE, like California. However, unlike California, most states do not use a performance test. In those that do, the performance tests are only half the length of California's: two 90-minute tests whereas California uses two three-hour tests. If the standards for admission are lower in the other states than in California, then valid consumer protection concerns may SB 1782 Page 3 be raised. For example, Wisconsin admits any graduate of its two law schools to practice without requiring passage of the bar examination. West Virginia also had diploma privileges for University of West Virginia graduates until about 1990 and Mississippi for Ole Miss graduates until the mid-1980s. If, like some of these other states, California were to allow admission via diploma privileges, the 2,568 graduates from California schools that failed the July 1999 Bar Exam would be licensed to practice law. In comparison, 2,757 graduates from California schools did pass, around 52%. As another comparison, less than half, 43.8%, of the out-of-state attorneys taking the Attorneys' Examination passed (138 of 315). As a whole, 4,089 of 8,040 of those taking the July 1999 exam passed, about 50.9%. Recent passage rates for the July Bar exam have been 52.2% in 1998 and 62.9% in 1997. The February exam, which generally has a higher percentage of repeat applicants, has had a pass rate of 41.1% in 1999, 40.0% in 1998, and 48.8% in 1997. (One reason why California may have a "tougher" exam is that California allows a broad range of applicants to take the exam, ranging from a graduate of an ABA approved law school, to an non-ABA but California licensed law school graduate, and to those who study with a judge or attorney. The difficult exam is intended to protect consumers by ensuring the competence of those licensed.) "Pro Hac Vice" procedures allow in-state practice by out-of-staters . Adopted in 1972, California Rules of Court, Rule 983(a) provides: A person who is not a member of the State Bar of California but who is a member in good standing of and eligible to practice before the bar of any United States court or the highest court in any state, territory or insular possession of the United States, and who has been retained to appear in a particular cause pending in a court of this state, may in the discretion of such court be permitted upon written application to appear as counsel pro hac vice, provided that an active member of the State Bar of California is associated as attorney of record. No person is eligible to appear as counsel pro hac vice pursuant to this rule if (1) he is a resident of the State of California, or (2) he is regularly employed in the State of California, or (3) he is regularly engaged in substantial business, professional, or other activities in the State of California. Absent special circumstances, repeated appearances by any person SB 1782 Page 4 pursuant to this rule shall be a cause for denial of an application. Thus, out-of-state lawyers may now appear in a particular cause in California pursuant to Rule 983. Subdivision (c) of the Rule provides for an application fee of up to $50, payable to the State Bar, to defray the expenses of administration, including any enforcement of the State Bar Act relating to the competent delivery of legal services. In Paciulan v. George , (9th Cir.Ct.App., No. 99-15687), a supporter of SB 1782, Mr. Giannini, is representing a party suing the California Supreme Court through Chief Justice George, claiming that Rule 983 is unconstitutional because it allegedly discriminates on the basis of residence, violates First Amendment rights, and violates due process with its automatic disqualification of sister-state attorneys from pro hac vice admission without a hearing. These contentions were rejected by the United States District Court for the Northern District of California, and this case is on appeal. ARGUMENTS IN SUPPORT : In support of the bill, the author cites to a recent January 2000 California Bar Journal article by the immediate past-president of the Bar, Andrew Guilford, in which he argues that the time has come for California to embrace reciprocity. Guilford wrote: The spread of information technologies and transportation advances have compressed the country and made possible, easy economical and immediate communication to and from virtually any location. The parochial boundaries of dividing states are becoming impediments to work efficiencies and the flow of commerce. Corporate in-house counsel, exclusively federal court practitioners, lawyers at mega-firms with branch offices worldwide, and others who travel constantly to serve their clients, have long been seeking a relaxation of what they view as unnecessary barriers to enable them to practice from state to state. (Quoting from "The Final Report of the Commission on the Future of the Legal Profession and the State Bar, pages 71-72.) Another supporter, Joseph Giannini (who is the counsel for the plaintiff in the Paciulan v. George case described above), writes that "[r]eciprocity will benefit the State Bar by SB 1782 Page 5 providing fresh blood and new ideas, as well as increased bar dues. Reciprocity will also benefit California consumers by providing a larger pool of attorneys and perspectives from which to choose." Giannini also argues that if out-of-state CPAs, engineers, nurses, and doctors with a certificate as a diplomat of a National Board of Medical Examiners are allowed to practice in California through reciprocity, why shouldn't out-of-state lawyers? Prior Pertinent Legislation . SB 845 (Haynes, Stats. 1998, Ch. 29), and SB 1321 (Calderon, Stats. 1996, Ch. 866), both of which make various clarifications to the procedures for out-of-state attorneys to gain admission to the California State Bar. REGISTERED SUPPORT / OPPOSITION : Support American Corporate Counsel Association Two individual attorneys Opposition None on file Analysis Prepared by : Daniel Pone / JUD. / (916) 319-2334