In-House, Outside Bar

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A recent rule adopted by the state Supreme Court means non-resident attorneys serving as in-house counsel in Wisconsin will not have to become members of the State Bar.

The provision is part of the court’s tentative approval of changes to SCR 20:5.5, which blends aspects of a State Bar of Wisconsin “limited-license” proposal with the American Bar Association Model Rule 5.5.

While some view the court’s adoption as a compromise between the broad ABA Model Rule and a more regulated State Bar proposal, others raise concerns about out-of-state attorneys providing legal services in the state without a Wisconsin license.

“Anyone granted the privilege of practicing law in Wisconsin should have the same obligations to the legal system as all other Wisconsin lawyers,” said attorney Nicholas C. Zales of Zales Law Office in Milwaukee.

Some say the Supreme Court’s move simply establishes a rule based on what has been the norm.

Wisconsin Association of Corporate Counsel (WACC) board member Michael G. McCarty said the adoption essentially codifies a practice that businesses in the state have engaged in for years and the court recognized the need to clarify the procedure in a rule.

“We could hire someone out-of-state and not worry about them not practicing immediately,” said McCarty. “If that attorney was brought in and had to wait six months to take the bar, that might be an incentive not to hire them if they cannot work from day one.”

Some Regulation

Zales questioned the reasoning behind giving attorneys all the rights of those licensed in Wisconsin, without the having to assume the same responsibilities.

“It makes no sense to grant licenses to a special class of lawyers who have failed to demonstrate why they should be granted special treatment,” said Zales, who is a member of the State Bar Board of Governors.

McCarty said that in-house lawyers differ from general practitioners in that they are practicing for a single employer-client, and not holding themselves out to the public.

“If a company wants to move an attorney from another state to Wisconsin because of talent, experience or a simple need to relocate, it shouldn’t matter where he sits, as long as the attorney is admitted in good standing somewhere,” said McCarty, who is senior counsel at Bucyrus International. “It’s the right result for business.”

Attorneys coming into the state to serve as in-house counsel will need to register that they are not suspended or disbarred in their native state, according to the adopted rule.

However, the court has yet to determine whether those attorneys have to pay fees similar to those of Wisconsin lawyers.

Counsel Must Register

Attorney Dean R. Dietrich, who was chair of the Special Committee on In-House Counsel, said the court’s decision to include a registration provision was a good compromise.

“The fact that there’s a registration so that the Board of Bar Examiners has some understanding of who’s out there providing those services is a logical compromise that accomplishes some of the goals that the state bar had,” said Dietrich.

Office of Lawyer Regulation Director Keith Sellen said the number of problems
arising from non-resident attorneys serving as in-house counsel in Wisconsin has been “very small.”

“The ABA rule recognized it as an exception to the unauthorized practice of law and truth be told, most of the work done by in-house counsel is not heavily dependant on state law,” said McCarty, who is a State Bar member. “Most in-house counsel are doing at least national practice, if not international.”

Zales contended that regardless of where the practice is focused, the attorney is still working out of Wisconsin.

“By any objective test they are (practicing law in Wisconsin) even if they are practicing federal or international law,” said Zales. “Wisconsin lawyers practice in those areas too.”

Membership Opportunity

Attorney James C. Boll, who was a member of the State Bar’s Special Committee on In-House Counsel, said it was never their objective to promote in-house counsel to become members of bar.

However, the committee did recommend a provision allowing in-house counsel to earn credit towards licensure in Wisconsin for their time practicing with an employer in the state. The recommendation was well-received by the Supreme Court, but not initially adopted.

“The committee never felt any desire to compel people to become members of the state bar,” said Boll, who is in-house counsel for Madison Gas & Electric. “Our tactic was to allow them the opportunity to become members.”

McCarty said the possible inclusion in the rule is an incentive for non-resident attorneys to eventually apply for full-licensure in Wisconsin. Currently, time that non-resident attorneys spend as in-house counsel does not count toward full-licensure in Wisconsin.

Boll indicated that the majority of feedback that the committee received on the limited license proposal had to do with in-house attorneys asking for a provision to allow for time served to be counted toward becoming a member of the state bar.

“We talked to some attorneys who have practiced in Wisconsin for 25 years and are not members of the bar, but want to be,” said Boll, a member of the State Bar Board of Governors. “With so much of law being multijurisdictional nowadays, I don’t think it’s feasible, nor should the State Bar be compelling those people to become members of the bar.”