LOWENSTEIN SANDLER PC CLIENT ALERT ADR LITIGATION Attorney Advertising April 2007 OPINION 43 TO AFFECT OUT OF STATE ATTORNEYS SEEKING TO APPEAR IN ALTERNATIVE DISPUTE PROCEEDINGS (ADR) IN NEW JERSEY David G. Tomeo, Esq. IN THIS ISSUE Questions on whether non-state Background licensed attorneys can appear in The question of whether out of state New Jersey Alternative Dispute Opinion 43 To Affect Out of attorneys could participate in arbitra- Resolution (“ADR”) proceedings State Attorneys Seeking to tion and mediation proceedings in were answered in a recent ruling Appear in Alternative New Jersey was first addressed by the handed by the New Jersey Com- Dispute Proceedings (ADR) Committee in 1994. In Opinion 28, mittee on the Unauthorized Prac- in New Jersey the Committee considered whether an tice of Law (“Committee”). In David G. Tomeo, Esq. out of state attorney could appear be- Opinion 43, the Committee ruled fore a panel of the AAA in New Jersey that out of state attorneys who in the same capacity as any duly admit- seek to practice in ADR pro- The Road Not Taken: ted New Jersey attorney to “present ceedings — both arbitrations Avoiding Waiver of evidence and argue questions of sub- and mediations — in New Jersey Arbitration Rights stantive law....” Based on its review of must be in compliance with the the AAA rules and other precedent, Stefan B. Kalina, Esq . New Jersey Rule of Professional the Committee ruled that an out of Conduct (“RPC”) 5.5. The Com- state attorney could participate in an mittee also “recommended” that Location Is Everything: ADR matter in New Jersey. ADR providers, such as the Enforcing Forum Selection Ten years later — in 2004 — the RPC’s American Arbitration Association In Arbitration were amended to address the issue of (“AAA”), “require” as part of Stefan B. Kalina, Esq. multi-jurisdictional practice. Under their initial filing process, that RPC 5.5(b), a lawyer not admitted in out of state attorneys submit New Jersey can practice law in this proof of their compliance with state only if the lawyer is admitted pro RPC 5.5 in connection with their hac vice and is associated with local representation. Out of state at- counsel, the lawyer is an in-house at- torneys who act in accordance with these rules under RPC 5.5, may collect fees for participation in arbitrations and mediations in New Jersey.
LOWENSTEIN SANDLER PC CLIENT ALERT ADR Litigation “ Opinion 43 not only imposes obligations on out torney in compliance with Court Rule 1:27-2, or the lawyer meets one of of state lawyers, but also on New Jersey attorneys the following circumstances: serving as local counsel in arbitration or mediation • the lawyer is involved in a transac- ” matters. tion which originates in, or is otherwise related to, a jurisdiction in New Jersey attorneys. It was with this the last question in the affirmative — which the lawyer is admitted; backdrop that the Committee decided allowing out of state attorneys in to revisit Opinion 28. compliance with RPC 5.5 to be com- • the lawyer engages in representa- pensated for their services in connec- tion of a party in an ADR proceed- tion with arbitration and mediation ing and the dispute originates in or Requirements matters. The Committee noted that, is otherwise related to the jurisdic- for Practice in addition to the new requirements tion in which the lawyer is admitted; of Opinion 43, as well as those of Opinion 43 begins its analysis by sum- • the lawyer engages in discovery or Opinion 28 and RPC 5.5, attorneys marizing Opinion 28 and then review- similar conduct in New Jersey in a looking to be compensated must also ing the amendments to RPC 5.5. The proceeding in a jurisdiction in follow any applicable New Jersey Committee concluded that all the cri- which the lawyer is admitted to statutes and rules of court concerning teria in RPC 5.5 must be met by attor- practice; or the recovery of attorneys fees. neys seeking to practice in an ADR • the lawyer’s practice is on behalf of proceeding in New Jersey. The Com- At the end of its opinion, the Commit- an existing client of the jurisdiction mittee held that the most important tee indicated its belief that compliance in which the lawyer is admitted, of these requirements is that the Clerk with Opinion 43 would be difficult to provided that practice in New Jersey of the Supreme Court be authorized monitor. Accordingly, the Committee is occasional and is undertaken only to accept service of process on the at- “recommended” that AAA and other when the prejudice to the client torney’s behalf and that the attorney arbitration and mediation providers would be substantial if the lawyer is comply with New Jersey’s rules regard- “require, as part of [their] initial filing not involved in the case. ing registration and fees. process,” the submission of proof of compliance with RPC 5.5, particularly Lawyers meeting any of these criteria the requirement of registration with then must satisfy RPC 5.5(c) which re- The Committee went on to consider the Clerk and the payment of the quires that the attorney be licensed two additional issues: whether a required fees. and in good standing in all jurisdic- lawyer admitted in another state may tions in which admitted, be subject to participate in a mediation in New Jer- the RPC’s as well as the disciplinary sey, and whether out of state attor- Conclusions authority of New Jersey Supreme neys may be compensated for their and Ramifications Court, consent to the appointment of services in an arbitration or mediation the Clerk of the Superior Court of proceeding in New Jersey. Without Although Opinion 43 is short in overall New Jersey for service or process, not any analysis or commentary whatso- length, the importance and the impact hold herself/himself out to be admit- ever, the Committee found that medi- of this Opinion cannot be underesti- ted in New Jersey, maintain a bona ation “is akin to arbitration” and such mated. Before Opinion 43 was prom- fide office in New Jersey, or use the required out of state attorneys partici- ulgated, most attorneys gave little office of local counsel as a bona fide pating in mediation in New Jersey to thought to whether they would be al- office, and annually pay the required likewise satisfy the requirements of lowed to participate in an ADR pro- fees and registration costs assessed to RPC 5.5. The Committee answered ceeding in another state — most 2
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