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Multijurisdictional Practice - Rapid Change and Creative Destruction

At a recent gathering I attended, the question was asked why the rules of professional conduct were so slow to adapt to changes in practice and technology. The first and most obvious conclusion was that the world was changing at an ever increasing rate, making it harder and harder to craft a response to those changes.

A more subtle conclusion reflected the discussions in an exceptional book by Daron Acemoglu and James A. Robinson, Why Nations Fail [Crown Business: 2012]. This book investigates the global issues of the origins of power, prosperity and poverty. One of the authors’ major premises – creative destruction - has particular applicability to legal ethics. The authors state:

“Economic growth and technological change are accompanied by … creative destruction. They replace the old with the new. New sectors attract resources away from the old ones. New firms take business away from established ones. New technologies make existing skills and machines obsolete. … Fear of creative destruction is often at the root of the opposition to [change].”

Furthermore: “Technological innovation makes human societies prosperous, but also involves the replacement of the old with the new, and the destruction of the economic privileges and political power of certain people.” The slow evolution of our codes of professional responsibility is an example of this concept.

A good illustration of this slow evolution is the Rules respecting the multijurisdictional practice of law. After a series of cases and opinions that broadly defined the unauthorized practice of law and restricted the multijurisdictional practice [see especially Birbrower et al v Superior Court of Santa Clara County, 949 P. 2d 1 (Cal. 1998)], the ABA’s Commission on Multijurisdictional Practice proposed loosening the restrictions and allowing a certain degree of multijurisdictional practice.

The report of the Commission (adopted by the ABA on August 12, 2002) stated that the study was undertaken in light of “the dynamic change and evolution in nature and scope of legal practice during the past century, facilitated by a transformation on communications, transportation and technology.” The Report continued: “[a]lthough client needs and legal practices have evolved, lawyer regulation has not yet responded effectively to that evolution.” (Note that in the eleven years since the Report was adopted, technology has made even greater advances. For example, it is now possible using a smart phone or tablet to research the law of almost any jurisdiction from almost any location.)

Following the adoption of the Report, the ABA modified Model Rules 5.5 and 8.5 to permit limited multijurisdictional practice of law. Since then, most states, including Illinois, have adopted some form of the new Model Rules. (See this column of January 2010.) While the adoption of the Commission’s recommendations is noteworthy, the story is far from over. A dip into academic literature and the blogoshere reveals a wide divergence of opinion on the drawbacks and benefits of broadening multijurisdictional practice. Concern with the speed of change and creative destruction continue to be issues within the legal profession.