THIS OPINION MODIFIES RI-144

RI-353

January 27, 2012

SYLLABUS

On reconsideration, as a result of statutory changes to relevant provisions of the "professional services corporation act," a federal judicial precedent interpreting federal standards governing practice before the federal bar, and the amendment of MRPC 5.5,[1] the opinion expressed by the Committee in RI-144, August 25, 1992, is modified. A Michigan lawyer may be a shareholder of a Michigan professional corporation, and may ethically practice under the corporation's name, even if the firm name contains the name of a lawyer licensed to practice law in another jurisdiction who is not licensed to practice law in Michigan.

References: MRPC 5.5, 7.1, 7.5; MCL 450.222(a) and (b); MCL 450.224; Desilets v. Delta Home Improvement Inc., 291 F3d 925 (CA 6, 2002).

TEXT

In RI-144, the Committee concluded, among other things, that a professional corporation organized for the practice of law whose name included lawyers licensed to practice in another jurisdiction, but not in Michigan, was an attempt to circumvent the Michigan Professional Services Corporation Act and therefore constituted conduct prejudicial to the administration of justice in violation of MRPC 8.4(c). The basis for the Committee's conclusion was primarily MCL 450.222(b), which at that time provided:

A professional corporation means a corporation which is organized under this act for the sole and specific purpose of rendering 1 or more professional services and which has as its shareholders only individuals who themselves are duly licensed or otherwise legally authorized within this state to render the same professional services as the corporation . . . .

Since RI-144 was issued, the pertinent provisions of the Professional Services Corporation Act have been amended. MCL 450.222(a) and (b) now state:

(a) "Licensed person" means an individual who is duly licensed or otherwise legally authorized to practice a professional service by a court, department, board, commission, or an agency of this state or another jurisdiction or any corporation all of whose shareholders are licensed persons. Emphasis added.

(b) "Professional corporation" means a corporation that is organized under this act for the sole and specific purpose of rendering 1 or more professional services and has as its shareholders only licensed persons, the personal representatives or estates of individuals, or other persons as provided in section 10.

In addition, MCL 450.224(6) provides:

A licensed person of another jurisdiction may become an officer, director, shareholder, employee, or agent of a professional corporation but shall not render any professional service in this state until the person is licensed or otherwise legally authorized to render the professional service in this state. Emphasis added.

Hence, a person licensed to practice law in another jurisdiction and not in Michigan may be a director, shareholder, officer, employee, or agent of a Michigan professional corporation engaged in the practice of law. The inquiry does not end there, however. MRPC 5.5, as amended, states:

(a) A lawyer shall not practice law in a jurisdiction in violation of the regulation of the legal profession in that jurisdiction, or assist another in doing so.

(b) A lawyer who is not admitted to practice in this jurisdiction shall not:

(1) except as authorized by law or these rules, establish an office or other systematic and continuous presence in this jurisdiction for the practice of law; or

(2) hold out to the public or otherwise represent that the lawyer is admitted to practice law in this jurisdiction.

(c) A lawyer admitted in another jurisdiction of the United States and not disbarred or suspended from practice in any jurisdiction may provide temporary legal services in this jurisdiction that:

(1) are undertaken in association with a lawyer who is admitted to practice in this jurisdiction and who actively participates in the matter;

(2) are in or reasonably related to a pending or potential proceeding before a tribunal in this or another jurisdiction, if the lawyer or a person the lawyer is assisting is authorized by law to appear in such proceeding or reasonably expects to be so authorized;

(3) are in or reasonably related to a pending or potential arbitration, mediation, or other alternative dispute resolution proceeding in this or another jurisdiction, if the services arise out of or are reasonably related to the lawyer's practice in a jurisdiction in which the lawyer is admitted to practice and are not services for which the forum requires pro hac vice admission; or

(4) are not covered by paragraphs (c)(2) or (c)(3) and arise out of or are reasonably related to the lawyer's practice in a jurisdiction in which the lawyer is admitted to practice.

(d) A lawyer admitted in another jurisdiction of the United States and not disbarred or suspended from practice in any jurisdiction may provide legal services in this jurisdiction that:

(1) are provided to the lawyer's employer or its organizational affiliates and are not services for which the forum requires pro hac vice admission; or

(2) are services that the lawyer is authorized by law to provide in this jurisdiction.

In RI-144, the Committee concluded that the use of a firm name that included the name of a lawyer licensed in another jurisdiction, but not licensed in Michigan, would assist the unauthorized practice of law by suggesting that the lawyer not licensed in Michigan was able to perform services equivalent to those a Michigan lawyer was authorized to perform. However, the multijurisdictional practice of law provisions of MRPC 5.5,[2] specifically paragraph (d)(2), permit lawyers admitted in another jurisdiction who are not disbarred or suspended in any jurisdiction to provide legal services that the lawyer is authorized to provide in Michigan.[3] And, in Desilets v. Delta Home Improvement Inc., 291 F3d 925 (CA 6, 2002), the United States Court of Appeals concluded that a lawyer licensed to practice law in Texas could practice bankruptcy law before a bankruptcy court in the Western District of Michigan without being admitted to a Michigan state court where the lawyer was eligible for admission to the Bar of the Western District of Michigan and was properly admitted there pursuant to local rule. In Desilets, the lawyer had law offices in Michigan and Wisconsin and the lawyer's practice in both jurisdictions was limited to bankruptcy matters in federal court. Thus, as noted in the Desilets opinion and codified in MRPC 5.5(d)(2), a lawyer may provide legal services in Michigan and maintain an office here even if the lawyer is not licensed to practice in Michigan, as long as that lawyer's practice is limited to federal matters.

In light of the amendments to the relevant statutes of the Michigan Professional Services Corporation Act, federal case law interpreting federal standards governing practice before the federal bar, and MRPC 5.5, as amended, it is ethically permissible to include the name of a lawyer licensed to practice law in another jurisdiction who is not licensed to practice law in Michigan in the corporate name of a Michigan law firm. When so doing, a Michigan lawyer does not necessarily assist a person who is not a member of the State Bar of Michigan in the performance of activity that constitutes the unauthorized practice of law. Nor do such facts suggest that the lawyer licensed to practice in another jurisdiction intends to unlawfully practice in Michigan. Under MRPC 5.5, as amended, and Desilets, lawyers not licensed to practice in Michigan are specifically permitted to do so under limited circumstances.

In summary, as long as appropriate safeguards are in place to prevent the public from being misled, a Michigan lawyer may be a shareholder of a Michigan professional corporation, and may ethically practice under the corporation's name, even if the firm name contains the name of a lawyer licensed in another jurisdiction who is not licensed to practice law in Michigan. A notation on the firm's letterhead, indicating the geographic practice limitation of the lawyers who are not licensed to practice in Michigan is one way to comply with the provisions of MRPC 7.1 and 7.5.

The remaining portions of RI-144 are unmodified.

[1]On October 26, 2010, the Michigan Supreme Court amended MRPC 5.5 to incorporate multijurisdictional practice of law provisions comparable to the ABA Model Rule 5.5. The amended Rule took effect on January 1, 2011.

[2] Paragraphs c and d of amended MRPC 5.5 are referred to as the multijurisdictional practice of law provisions and are generally consistent with the ABA Model Rule 5.5. Unlike MRPC 5.5(d)(2), paragraph 5.5(d)(2) of the ABA Model Rule 5.5 refers specifically to "federal law or other law of this jurisdiction," which is instructive regarding the intended application of this provision.

[3] The commentary to MRPC 5.5 also provides guidance regarding this issue and states in pertinent part: "Paragraph (d) identifies two circumstances in which a lawyer who is admitted to practice in another jurisdiction of the United States and is not disbarred or suspended from practice in any jurisdiction may establish an office or other systematic and continuous presence in this jurisdiction for the practice of law as well as to provide legal services on a temporary basis. Except as provided in paragraphs (d)(1) and (d)(2), a lawyer who is admitted to practice law in another jurisdiction and who establishes an office or other systematic or continuous presence in this jurisdiction must become admitted to practice law generally in this jurisdiction." The commentary further states that "[p]aragraph (d)(2) recognizes that a lawyer may provide legal services in a jurisdiction in which the lawyer is not licensed when authorized to do so by statute, court rule, executive regulation, or judicial precedent."