In Formal Opinion 504, the ABA Standing Committee on Ethics and Professional Responsibility sought to clarify ABA Model Rule 8.5’s choice-of-law provision. The Opinion provides an overview of Rule 8.5, and illustrates the Rule’s application by applying its choice-of-law considerations to various scenarios.

Model Rule 8.5 offers guidance as to which jurisdiction’s ethics rules govern the lawyer’s actions in the representation when the representation spans multiple jurisdictions.

Today, lawyers’ work often spans multiple jurisdictions. When faced with an ethical question in the course of a representation involving more than one jurisdiction, lawyers must determine which jurisdiction’s ethics rules govern their actions.

Under ABA Model Rule 8.5(a), “[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.”^[i] Model Rule 8.5(b) guides a disciplinary authority’s choice-of-law analysis. For “conduct in connection with a matter pending before a tribunal,” Rule 8.5(b)(1) mandates that rules of the jurisdiction in which the tribunal sits are to be applied, unless the tribunal has rules to the contrary.^[ii] For “any other conduct,” Rule 8.5(b)(2) states that the ethics rules of the jurisdiction where the lawyer’s conduct occurred should govern unless the predominant effect of that conduct is in a different jurisdiction and, in that instance, the rules of that jurisdiction shall apply.^[iii] According to Comment [4], the phrase “any other conduct” means “all other conduct, including conduct in anticipation of a proceeding not yet pending before a tribunal.”^[iv] 

Model Rule 8.5(b)(2) also contains a “safe harbor” provision for lawyers deciding where the “predominant effect” of their conduct takes place: “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.”^[v] The lawyer’s belief about the jurisdiction of where the “predominant effect” takes place must be a reasonable belief.^[vi] 

This “predominant effect” test can be unclear in practice, particularly when a lawyer’s conduct involves significant contacts with more than one jurisdiction.^[vii] Comment [5] to Model Rule 8.5 provides that “[w]ith respect to conflicts of interest, in determining a lawyer’s reasonable belief under paragraph (b)(2), a written agreement between the lawyer and client that reasonably specifies a particular jurisdiction as within the scope of that paragraph may be considered if the agreement was obtained with the client’s informed consent confirmed in the agreement.”^[viii] 

To explain how the Rule’s choice-of-law analysis may play out in different scenarios, the Committee applied the Rule to several hypotheticals in Formal Opinion 504.

When drafting a fee agreement, lawyers should generally adhere to the rules of professional conduct of the jurisdiction in which the “predominant effect” of the lawyer’s conduct will occur.

In the first scenario, the Committee presents a situation where a lawyer is admitted in State X, enters into a client-lawyer relationship in State X, and will file litigation in State Y. While ABA Model Rule 8.5(b)(1) applies the rules of the jurisdiction for conduct “in connection with a matter pending before a tribunal,” Comment [4] clarifies:

As to all other conduct, including conduct in anticipation of a proceeding not yet pending before a tribunal, paragraph (b)(2) provides that a lawyer shall be subject to the rules of the jurisdiction in which the lawyer’s conduct occurred, or, if the predominant effect of the conduct is in another jurisdiction, the rules of that jurisdiction shall be applied to the conduct.

Therefore, Rule 8.5(b)(2) applies, because securing a fee agreement is “conduct in anticipation of a proceeding not yet pending before a tribunal.”^[ix] 

In this case, the Committee’s opinion is that State X’s rules of professional conduct apply to the preparation of the fee agreement even though litigation will be filed in State Y because the agreement will be signed in State X, the lawyer’s office is located in State X, the lawyer is admitted to practice in State X, the lawyer will prepare for the matter in State X, and the client resides in State X. Moreover, “from a client protection perspective, the jurisdiction where the lawyer is licensed and/or the jurisdiction where the client resides has a significant interest in requiring certain provisions in the fee agreement, and therefore, application of that jurisdiction’s version of Rule 1.5 is most appropriate.”^[x] Thus, a lawyer who reasonably believes that the predominant effect of a fee agreement will take place in one jurisdiction should 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.”^[xi] 

A jurisdiction cannot discipline a lawyer from another jurisdiction for having a firm structure that does not conform to the ethics rules of the first jurisdiction, even when the lawyer seeks admission pro hac vice to the first jurisdiction.

Next, the Committee presents a scenario where a lawyer from State A, which permits law firms to have non-lawyer partners, seeks admission pro hac vice in State B, which prohibits non-lawyer partners in law firms. The lawyer has a firm with non-lawyer partners, in accordance with the professional conduct rules of State A, but the structure violates the rules of State B.

Lawyers seeking to appear before a tribunal pro hac vice generally agree to be bound by the rules of that tribunal. “There is nothing in the Model Rules on Pro Hac Vice Admission that says the tribunal should inquire into the Lawyer’s business model particularly when it is permitted by the Lawyer’s home licensing jurisdiction.” ^[xii] Yet, Model Rule 8.5 provides that a tribunal’s rules of professional conduct apply to “conduct in connection with a matter pending before at tribunal [. . .]”.^[xiii]

The Committee clarifies that law firm structure is not “conduct in connection with a matter pending before a tribunal,” and therefore Model Rule Rule 8.5(b)(2), not (b)(1), governs. “Thus, even if the Lawyer is admitted before a tribunal in State B, pro hac vice, the Lawyer’s law firm ownership in State A is governed by State A’s ethics rules and not State B’s.”^[xiv] 

Lawyers are obligated to report professional misconduct in accordance with the rules of professional conduct of the jurisdiction where a matter is pending before a tribunal if the lawyer’s reporting is in connection with the matter.

In another hypothetical scenario, a lawyer is admitted to practice law in States A and B, maintains an office in State B, and is hired by a client residing in State A to hand litigation pending in State A. Prior counsel on the matter forged the client’s signature on a document filed with the State A tribunal and prejudiced the rights of the client in the litigation. State A’s professional conduct rules require lawyers to report professional misconduct of other lawyers to the disciplinary authority even if doing so requires lawyers to disclose information without client consent, while State B’s rules follow Model Rule 8.3, which mandates that lawyers may only reveal information relating to client representation if the client gives informed consent.^[xv] 

According to the Committee, “[b]ecause Lawyer is representing a State A client and Lawyer’s work for Client is in connection with a matter pending before a State A tribunal, Rule 8.5(b)(1) would require Lawyer to follow the Rules of State A and report prior counsel in accordance with State A’s version of Rule 8.3.”^[xvi] 

When determining which jurisdiction’s professional conduct rules apply to the disclosure of client information to prevent bodily harm to another, lawyers should consider where the client is located and where the client’s actions might take place.

The Committee also presents a situation where a lawyer is faced with the question of whether he or she is required to disclose a threat by the client. The lawyer is licensed in States A and B and maintains an office in State A. State A follows Model Rule 1.6, which permits, but does not require, lawyers to disclose information relating to the representation of a client to the extent necessary “to prevent reasonably certain death or substantial bodily harm,”^[xvii] while State B requires disclosure.

In a contentious transaction, the lawyer represents the client-buyer, who resides in State B and seeks to purchase real estate in State A from a seller in State A. The negotiations are taking place in State B. In one of these meetings, the client tells lawyer that he is going to seriously physically harm the seller at the next meeting if the seller refuses to accept buyer’s terms, and the lawyer reasonably believes that the client will carry out this threat.^[xviii] 

The Committee instructs that the lawyer should look to Rule 8.5(b)(2) because the matter is a transaction not pending before a tribunal. “Although the Lawyer’s conduct, informing the Seller of the Client/Buyer’s threat, could take place from any number of locations, the Committee believes that the predominant effect of Lawyer’s conduct is in State B” because that is where the client is located and where the threatened harm would occur.^[xix] The Committee further opines that in assessing where the “predominant effect” of the lawyer’s conduct would occur, the lawyer should consider the client’s location and where the client’s actions may take place, along with which jurisdiction’s substantive law would apply to the client’s conduct, and where the lawyer is admitted to practice.^[xx] In this scenario, the lawyer must disclose the client’s threat because State B’s rules require disclosure.

The choice of law analysis for screening lateral hires depends on whether the imputed conflict of interest affects a pending suit or transactional matter.

Finally, the Committee goes through the steps of a choice of law analysis for a law firm screening a lateral hire. Here, a law firm with offices across multiple U.S. states wants to hire “Lawyer A” to work at the firm’s office in State A. Hiring Lawyer A would impute a conflict of interest to another lawyer at the firm, Lawyer B, who practices law from the firm’s State B office.^[xxi] 

State A’s rules of professional conduct permit the law firm to screen Lawyer A without obtaining the affected clients’ consent to prevent the imputation of the conflict, while State B’s rules would impute the conflict unless the affected clients give informed consent, confirmed in writing. The initial question is whether the imputed conflict of interest affects a pending lawsuit or a transactional matter. If the conflict concerns litigation, then the screening rules of the jurisdiction where the litigation takes place will control, unless those rules provide otherwise.^[xxii] 

The Committee cautions that the choice of law analysis to determine where the predominant effect of a transactional matter takes place is more complicated, and notes that various factors should be considered such as the location of the affected clients; the location of the subject of the transaction; the substantive law governing the transaction; and the location of deposited funds. Where the affected clients are located in multiple jurisdictions, determining where the predominant effect of a lawyer’s conduct occurs may prove tricky. “For those situations, it would be prudent for [a lawyer to follow] the more restrictive rule,” but the lawyer will not be subject to discipline so long as the lawyer acts in accordance with the rules of the jurisdiction where he or she reasonably believes the predominant effect of the representation will occur.^[xxiii] 

Conclusion and Practical Takeaway:

Lawyers should comply with the ethics rules of the jurisdiction in which a tribunal sits if the lawyers’ conduct is in connection with a matter pending before a tribunal. “For all other conduct, including conduct in anticipation of litigation not yet filed and conduct not involving litigation, a lawyer must comply with the ethics rules of the jurisdiction where the lawyer’s conduct occurs or, if different, where the predominant effect of the lawyer’s conduct occurs.”^[xxiv] Generally, lawyers will be protected from discipline if their conduct conforms to the rules of the jurisdiction in which the lawyers reasonably believe the predominant effect of their conduct will take place.

^[i] Am. Bar Ass’n, Formal Op. 504, 1.

^[ii] Model Rules of Prof’l Conduct R. 8.5(b)(1).

^[iii] Model Rules of Prof’l Conduct R. 8.5(b)(2).

^[iv] Model Rules of Prof’l Conduct R. 8.5, cmt. [4].

^[v] Am. Bar Ass’n, Formal Op. 504, 2.

^[vi] Am. Bar Ass’n, Formal Op. 504, 2.

^[vii] Am. Bar Ass’n, Formal Op. 504, 3.

^[viii] Model Rules of Prof’l Conduct R. 8.5, cmt. [5].

^[ix] Am. Bar Ass’n, Formal Op. 504, 4.

^[x] Am. Bar Ass’n, Formal Op. 504, 5.

^[xi] Model Rules of Prof’l Conduct R. 8.5(b)(2).

^[xii] Am. Bar Ass’n, Formal Op. 504, 6.

^[xiii] Model Rules of Prof’l Conduct R. 8.5(b)(1).

^[xiv] Am. Bar Ass’n, Formal Op. 504, 7.

^[xv] Am. Bar Ass’n, Formal Op. 504, 7.

^[xvi] Am. Bar Ass’n, Formal Op. 504, 8.

^[xvii] Model Rules of Prof’l Conduct R. 1.6(b)(1).

^[xviii] Am. Bar Ass’n, Formal Op. 504, 8.

^[xix] Am. Bar Ass’n, Formal Op. 504, 8.

^[xx] Am. Bar Ass’n, Formal Op. 504, 9.

^[xxi] Am. Bar Ass’n, Formal Op. 504, 9.

^[xxii] Am. Bar Ass’n, Formal Op. 504, 9.

^[xxiii] Am. Bar Ass’n, Formal Op. 504, 10. ^[xxiv] Am. Bar Ass’n, Formal Op. 504, 10.