The Phoenix Business Journal has an article today about the change in requirements for Arizona in-house counsel who are not licensed to practice law in Arizona. Previously, there was an exception carved out for these attorneys, allowing them to practice in Arizona essentially if they were employed by a single employer and rendered legal services only for that employer (not outside clients). No notice need be given to the Arizona State Bar that they were practicing in the state.
The article gives a pretty good description of the new rules, which are essentially that in-house counsel employed in Arizona who are not licensed in Arizona need to register with the Arizona State Bar and receive certification allowing them to practice as in-house counsel in Arizona. If they don’t, they may be reported to their licensing state bar and subject to sanctions. The requirements to obtain certification are essentially that the attorney must be licensed by another state or country to practice law, must certify they have read and are familiar with the Arizona Rules of Professional Conduct and must pay 75% of the annual Arizona state bar fees charged to other Arizona lawyers (which comes out to about $350 annually). No examinations required.
The article plays a bit little loose with its terminology when it describes these lawyers as being “licensed” to practice in Arizona under the new rules. More accurately, they are being “certified” to practice law in Arizona for a specific employer. As an attorney who just went through the fun of taking the two day Arizona bar exam (my second after taking Illinois’ in 2001) and filling out about 30 pages of bar application materials to obtain my Arizona license (including questions such as “name every employer you have worked for since you were 18” – which for me includes pizza delivery for Papa John’s), I thought I should clear that up. They are just now subject to supervision by the Arizona Supreme Court, the Arizona Rules of Professional Conduct and they have to pay a fee to be employed here in Arizona as in-house counsel.
Notably for these in-house lawyers, the rule appears not to require them to comply with Arizona’s continuing legal education requirements – only requiring them to comply with their licensing state’s requirements. So attorneys from states with no CLE requirements can breathe a sigh of relief – although most states do require CLE these days.
I don’t think this rule change is going to create a flood of new lawyers in Arizona as the article implies because there was already a carve-out for these attorneys to practice here. If it has any unintended effect, it may be to cause more in-house attorneys to stay in their home state and buy a good video-conferencing setup to avoid being classified as “employed within the State of Arizona as in-house counsel” and to avoid those Arizona bar fees and a separate set of ethics rules.
Overall though, it is not a very onerous rule and is a good way for the Arizona State Bar to keep tabs on who is practicing law in the state in what capacity (a complete cynic might say that it is just a way to collect more state bar fees – but I’m not a complete cynic). It will also create equivalence under Arizona Rules of Professional Conduct between in-house and others Arizona lawyers and will give the Arizona Supreme Court some power in regulating their activities. Finally, it will increase participation in interaction between in-house and other Arizona lawyers through the state bar as the article points out (definitely a good thing).
To read the text of the amendment, click here (pdf). I’ll write soon about the other big change coming for out-of-state licensed lawyers - admission by motion.
