EU-US legal services breakthrough

A very significant step was taken a few days ago in the ongoing negotiations between the US and EU legal professions on opening markets in legal services between the two blocs. The US Conference of Chief Justices passed a resolution on the subject at its meeting in San Antonio, Texas. To give it its full title, the resolution was ‘in support of regulations permitting limited practice by foreign lawyers in the United States to address issues arising from legal market globalization and cross-border legal practice’. Let me explain the background.

The legal services trade negotiations have been continuing in one form or another for many years. English solicitors have an obvious interest in their outcome, given the lively trade in legal services between the UK and US. The impetus for the current resolution has come from the discussions taking place around the Transatlantic Trade and Investment Partnership (TTIP).

Legal services talks between the European and American legal professions have repeated the following plot-line over the years, as drafted by Samuel Beckett:

EU: We would like our lawyers to have access to all your states.

US: We have state-by-state regulation of lawyers, and so there can be no US-wide commitments made, as a result of the concept of states’ rights in our constitution (the federal government cannot bind the states in an international trade agreement if the state has the right to regulate).

EU: Then what is the point of continuing this dialogue?

US: The procedure is that you will need to speak to the states individually.

EU: But we do not have the resources to conduct 50 separate trade negotiations.

US: And we cannot overturn our constitutional doctrine of over 200 years.

[An awkward silence follows as the participants shuffle their papers.]

US: What about telling us which states you are interested in, so that we can focus our energies on them?

EU: We would like our lawyers to have access to all your states.

US: We have state-by-state regulation of lawyers …

[And the above dialogue repeats itself for two hours until the play ends]

Now the Conference of Chief Justices has made a bold and welcome move towards breaking the stalemate. Its resolution ‘strongly encourages its members to adopt explicit policies that permit the following qualified activities by foreign lawyers as a means to increase available legal services and to facilitate movement of goods and services between the United States and foreign nations’. I have underlined three parts. First, its members are the Chief Justices of the state supreme courts of all the US states, and so effectively (there are minor variations between the states) the chief regulators of legal services across the US, since US lawyers are nearly wholly regulated by the courts at state level. Second, the resolution asks for explicit policies to be adopted, since in a number of states there is no policy and those states have sometimes felt that they need do nothing further, on the basis that what is not forbidden is permitted. And, finally, the resolution applies to all foreign lawyers to which various ABA resolutions quoted below also apply.

As for the content, the resolution encourages the states to adopt explicit policies in 7 different areas, as supported by existing American Bar Association (ABA) model rules:

1) Temporary practice by foreign lawyers (ABA Model Rule for Temporary Practice by Foreign Lawyers);

2) Licensing and practice of foreign legal consultants (ABA Model Rule for the Licensing and Practice of Foreign Legal Consultants);

3) Registration of foreign-licensed in-house counsel (ABA Model Rule of Professional Conduct 5.5);

4) Pro hac vice appearance in pending litigation in a court or agency by licensed foreign lawyers (ABA Model Rule for Pro Hac Vice Admission);

5) Foreign lawyer participation in international arbitration or mediation, as counsel, arbitrator, or mediator (ABA Model Rule for Temporary Practice by Foreign Lawyers and ABA Policy Favoring Recognition of Party Freedom to Choose Representatives Not Admitted to Practice Law);

6) Formal professional association between foreign and United States lawyers who are duly licensed in their home country (ABA Model Rule of Professional Conduct 5.4 and ABA Model Rule for the Licensing and Practice of Foreign Legal Consultants allow such association); and

7) Foreign lawyer employment of United States lawyers and United States lawyer employment of foreign lawyers who are duly licensed in the United States as a foreign legal consultant or in their home country (ABA Model Rule for the Licensing and Practice of Foreign Legal Consultants provides that locally licensed lawyers may be employed by a law firm based in another country (or lawyer based in another country)).

Foreign lawyers can be grateful to the Conference of Chief Justices for passing such a comprehensive package. Of course, it will not solve existing problems overnight, since those states which do not have them should now adopt explicit policies. In the light of previous model templates urged on them, that may take some time. But the resolution provides a welcome policy framework for moving forward in all states.