Non-Illinois Licensed Lawyer Advising Illinois Businesses on Illinois Law

Facts

A lawyer not licensed in Illinois offers six-month retainer packages to small businesses. The lawyer anticipates the retainer package will provide transactional, not litigation services. The lawyer advertises the retainer package on a podcast.¹

Following a podcast, the lawyer was contacted by a “business registered in Illinois, but operating 100% virtually with clients all over the U.S. and contractors (soon to include employees) all over the world[.]” The lawyer anticipates providing the following services:

• Drafting contract templates to be used “worldwide”;
• Providing the Illinois business with risk analysis;
• Providing the Illinois business with strategy to allow independent contractors and/or employees to implement the contract templates created by the lawyer and make necessary adjustments;
• Creating strategy and documents to protect copyrightable material generated by the business;
• Creating strategy and documents to protect trademarkable material generated by the business.

The lawyer asks whether, to the extent any of the above services may constitute the unauthorized practice of law (also referred to as “UPL”) in Illinois, associating with a lawyer admitted to practice in Illinois would remedy the unauthorized practice. If so, the lawyer asks if the Illinois lawyer must receive a portion of the fee and whether the non-Illinois lawyer is required to disclose to the client that another lawyer, presumably not within the same firm, also represents the client. The lawyer also asks if they may work remotely outside of Illinois.

Questions

1. Can a lawyer not licensed in Illinois represent an Illinois business?
2. Can a lawyer not licensed in Illinois draft contract templates to be used by an Illinois business in a multijurisdictional/transnational setting?
3. If such representation would be the unauthorized practice of law in Illinois, would associating with an Illinois lawyer allow the non-Illinois lawyer to engage in the representation?
4. Can a lawyer not licensed in Illinois represent an Illinois business if the lawyer is physically located outside of Illinois?

Opinion

The Committee assumes that the non-Illinois lawyer is admitted to practice law and is in good standing in another U.S. jurisdiction. (See Ill. Sup. Ct. R. Prof’l Conduct, R 5.5(c)(d).) For purposes of this opinion, the Committee also assumes that the business is a citizen only of Illinois.

Rule 5.5 governs the unauthorized practice of law and multijurisdictional practice. The Rule states:

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.

The Rule goes on to state that certain services may be provided on a temporary basis 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 or order 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 admission; or
4. are not within 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.

Rule 5.5(c)(1) allows a non-Illinois lawyer to engage in the practice of law on a temporary² basis if representation is undertaken in association with a lawyer who is admitted to practice in Illinois and who actively participates in the matter.

Therefore, associating with an Illinois lawyer would allow the non-Illinois lawyer to represent the Illinois business if such representation would otherwise constitute the unauthorized practice of law as long as the Illinois-licensed lawyer actively participates in, and shares responsibility for, the matter. Rule 5.5, Cmt. 8. Although there is no requirement that the Illinois-licensed lawyer receive compensation, the client must provide informed consent to the association with the Illinois-licensed lawyer, as well as to the division of any fee. See, e.g., Rule 1.2(e) (After accepting employment on behalf of a client, a lawyer shall not thereafter delegate to another lawyer not in the lawyer’s firm the responsibility for performing or completing that employment, without the client’s informed consent), Rule 1.4; ISBA Opinion No. 23-01; see also, ISBA Opinion No. 19-04; Rule 1.5(f) regarding fee sharing.

Based on the facts as set forth above, the exceptions in Rules 5.5(c)(2) and 5.5(c)(3) do not appear to apply because the non-Illinois lawyer states that no litigation services will be provided, nor is there any indication that any other dispute resolution services are anticipated.

It is unclear whether the exception set forth in Rule 5.5(c)(4) applies because there is no indication that the services the lawyer will provide to the Illinois business arise out of or are reasonably related to the lawyer’s practice in the jurisdiction in which the lawyer is admitted to practice.

Some examples of when the non-Illinois licensed lawyer’s proposed services might arise out of or reasonably relate to the lawyer’s practice in the jurisdiction in which the lawyer is licensed include: if the lawyer’s client may have been previously represented by the lawyer, or may be resident in or have substantial contacts with the jurisdiction in which the lawyer is admitted; if the matter has a significant connection with that jurisdiction; significant aspects of the lawyer’s work might be conducted in that jurisdiction; or if a significant aspect of the matter may involve the law of that jurisdiction. Rule 5.5, Cmt. 14.

The necessary relationship might also arise when the client’s activities or the legal issues involve multiple jurisdictions, such as when the officers of a multi-national corporation survey potential business sites and seek the services of their lawyer in assessing the relative merits of each. Rule 5.5, Cmt. 14.

In addition, the services may draw on the lawyer’s recognized expertise developed through the regular practice of law on behalf of clients in matters involving a particular body of federal, nationally uniform, foreign, or international law. Rule 5.5, Cmt. 14.

Addressing a separate UPL hypothetical involving a “national law firm’s” inquiry into providing legal services in Ohio when none of the firm’s lawyers were licensed in Ohio, Ohio Supreme Court Ethics Op. 2011-2 stated in relevant part that Cmt. 14 to [Ohio] Rule 5.5 “contains substantial guidance for determining whether an out-of-state lawyer’s nonlitigation activities ‘arise out of’ or are ‘reasonably related’ to the lawyer’s home state practice.”

Ohio Opinion 2011-2 emphasized the 7 factors of Cmt 14 which determine whether an out-of-state lawyer’s nonlitigation activities “arise out of” or are “reasonably related” to the lawyer’s home state practice:

1. The client was previously represented by the lawyer;
2. The client is a resident in or has substantial contacts with the lawyer’s state of admission;
3. The matter at issue has a significant connection with the lawyer’s state of admission;
4. A significant portion of the lawyer’s work is conducted in the state of the lawyer’s admission;
5. A significant aspect of the matter at issue involves the law of the lawyer’s state of admission;
6. The client’s activities or the legal issues involve multiple jurisdictions;
7. The lawyer has a recognized expertise in “matters involving a particular body of federal, nationally-uniform, foreign, or international law.”

Applying [Ohio] Cmt. 14, the Ohio Ethics Op. 2011-2 opinion concluded that debt settlement lawyers not licensed in Ohio were not authorized by Rule 5.5(c)(4) to provide services in Ohio under the Rule 5.5(c)(4) safe harbor. Ohio Supreme Court Ethics Op. 2011-2 explained:

“The Ohio clients became aware of the out-of-state lawyers for the first time through an internet search, and had no prior contact or relationship with the lawyers. The clients are not residents of the lawyers’ home jurisdictions of licensure, and the work done for the clients crosses into a number of jurisdictions where the creditors are located. The lawyers may be physically located in their state of licensure, but a significant portion of the work done for the clients is not centrally located in that home state. The debt settlement work performed by the out-of-state lawyer is likely not governed by the law of the lawyers’ home state, as the Ohio clients may be facing state law collection actions and presumably have Ohio assets as well as income and debt incurred in Ohio.”

The Ohio opinion further explained:

“Even though some federal statutes may come into play, such as the Fair Debt Collection Practices Act, all of these areas implicate state law in Ohio. In addition, an internet search for ‘debt settlement law firms,’ similar to the search probably conducted by the Ohio clients, produces approximately two million results. Facing this many website options, a typical consumer could not realistically identify lawyers with a ‘recognized expertise’ in an area of nationally-uniform law that may justify temporary practice in Ohio.”

Here, the Committee believes that if the 6-month proposal reasonably related to the lawyer’s practice in a jurisdiction in which the lawyer is admitted to practice, such a proposal may fall within the exception. However, the Committee does not have enough information.

However, the inquiry does not end with Rule 5.5(c) analysis. A non-Illinois lawyer authorized to practice pursuant to federal or other law or rule may also represent an Illinois business if the representation relates to that authorized practice. See Rule 5.5(d).

Rule 5.5(d)(2) states, in relevant part:

A lawyer admitted in another United States jurisdiction or admitted or otherwise authorized to practice in a foreign jurisdiction, and not disbarred or suspended from practice in any jurisdiction or the equivalent thereof, may provide legal services through an office or other systematic and continuance presence in this jurisdiction that are services that the lawyer is authorized to by federal or other law or rule to provide in this jurisdiction.

Therefore, pursuant to Rule 5.5(d)(2), a non-Illinois lawyer may represent a client as authorized by federal or other law or rule in this jurisdiction without engaging in the unauthorized practice of law.

In this case, the lawyer proposes to offer only transactional services. To the extent the lawyer intends to draft contracts governed by federal law, and not Illinois law, the lawyer would be permitted to do so under this provision. More specifically, the lawyer’s proposed work involving copyright and trademark law would also be authorized. See, e.g., Sperry v. Florida Bar, 373 U.S. 379 (1963). Associating with an Illinois licensed lawyer is not required under this provision.

To the extent that a lawyer who is not licensed to practice law in Illinois is permitted to represent an Illinois client pursuant to one of the exceptions enumerated in Rule 5.5, the Rule does not require the lawyer to be physically present in Illinois to do so. However, the lawyer practicing outside of Illinois may wish to consult the applicable rules governing lawyers in the jurisdiction in which the lawyer is physically located to ensure compliance with the local Rules of Professional Conduct.

Conclusion

A lawyer not admitted to practice law in Illinois cannot represent a client with respect to Illinois matters or advise a client on Illinois matters unless one of the exceptions set forth in Rule 5.5(c) applies. However, a non-Illinois lawyer may represent an Illinois client as authorized by federal or other law or rule in this jurisdiction pursuant to Rule 5.5(d).

Footnotes

1. Although not the subject of this inquiry, lawyers not licensed to practice law in Illinois, but permitted to provide services in Illinois pursuant to Rule 5.5 as described below, must ensure that any advertising is compliant with Illinois’ advertising rules. See, Ill. Sup. Ct. R. Prof’l Conduct R 7.1-7.5; see also, ISBA Op. No. 23-01; Ill. Sup. Ct. R. Prof’l Conduct R 5.5, Cmt. 21.
2. As stated in Cmt 6 to Rule 5.5: There is no single test to determine whether a lawyer’s services are provided on a “temporary basis” in this jurisdiction, and may therefore be permissible under paragraph (c). Services may be “temporary” even though the lawyer provides services in this jurisdiction on a recurring basis, or for an extended period of time, as when the lawyer is representing a client in a single lengthy negotiation or litigation. Ill. Sup. Ct. R. Prof’l Conduct, R 5.5.

References

• Ill. Sup. Ct. R. Prof’l Conduct R 7.1-7.5
• ISBA Opinion No. 23-01
• Ill. Sup. Ct. R. Prof’l Conduct, R 5.5
• Ill. Sup. Ct. R. Prof’l Conduct, R 1.2
• Ill. Sup. Ct. R. Prof’l Conduct, R 1.4
• ISBA Opinion No. 19-04
• Ill. Sup. Ct. R. Prof’l Conduct, R 1.5(f)
• Ohio Supreme Court Ethics Op. 2011-2
• Sperry v. Florida Bar, 373 U.S. 379 (1963)