ABA Formal Opinion 504: Guidance for Which States’ Ethics Rules Apply to Lawyers

Lawyers admitted to multiple jurisdictions may be subject to different ethical requirements in the different states in which they are licensed to practice. Multi-jurisdictional practice is becoming more common due to client needs, emerging technologies, remote work, temporary practice and increased pro hac vice admissions. In these situations, which state’s ethical rules govern the lawyer’s conduct?

The ABA Standing Committee on Ethics and Professional Responsibility addressed this issue in Formal Opinion 504, released on March 1, 2023. The governing rule noted in Formal Opinion 504 is ABA Model Rule of Professional Conduct 8.5, which provides in subsection (a) that:

“A lawyer admitted to practice in this jurisdiction is subject to the disciplinary authority of this jurisdiction, regardless of where the lawyer’s conduct occurs. 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 legal services in this jurisdiction.”

This means that lawyers are subject to the disciplinary authority of the jurisdictions where they are licensed, as well as the jurisdictions in which they provide legal services (even if they are not licensed there).

Model Rule 8.5(b) deals with choice-of-law for ethical issues facing lawyers who practice in multiple jurisdictions. Rule 8.5(b) treats litigation matters differently than non-litigation matters, and spells out which rules apply:

1. “For conduct in connection with a matter pending before a tribunal, the rules of the jurisdiction in which the tribunal sits, unless the rules of the tribunal provide otherwise.”

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.” (Emphasis added).

In the opinion, the committee identified several factors to help determine the predominant effect:

• The client’s location, residence and/or principal place of business

• Where the transaction may happen

• Which jurisdiction’s substantive law applies to the transaction

• The location of the lawyer’s principal office

• Where the lawyer is admitted

• The location of the opposing party and other relevant third parties (residence and/or principal place of business)

• The jurisdiction with the greatest interest in the lawyer’s conduct

For this predominant effect or “safe harbor” to apply, the lawyer’s belief must be reasonable.

But what about the situations that aren’t clearly before a tribunal? For example, which state’s rules apply when a lawyer in Tennessee negotiates a fee agreement in anticipation of filing a case in Alabama? Which state’s rules apply to reporting misconduct in Alabama when the tribunal is in Tennessee?

According to the opinion, while a lawyer is subject to the rules of the jurisdiction of the court before which he is litigating a case, Comment 4 to Model Rule 8.5 explains that “conduct in anticipation of a proceeding not yet pending before a tribunal” is covered by Model Rule 8.5(b)(2), not Model Rule 8.5(b)(1). In other words, it is subject to the predominant effect test.

To avoid ambiguity, the opinion cautions lawyers to determine the predominant effect and identify exactly which jurisdiction’s rules of professional conduct will apply to fee agreements, law firm ownership, reporting professional misconduct, confidentiality duties, and screening for laterals.