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
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           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
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          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  








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               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  








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          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