ETHICS DOCKET NO. 2019-01

MARYLAND STATE BAR ASSOCIATION, INC.

COMMITTEE ON ETHICS

ETHICS DOCKET NO. 2019-01

DUTY TO REPORT THE UNAUTHORIZED PRACTICE OF LAW

You have asked for guidance concerning the responsibilities of an attorney licensed to practice law in the State of Maryland to (1) report the unauthorized practice of law by an attorney not licensed in this State to the governing body overseeing attorney misconduct in the jurisdiction where the offending attorney is licensed, and (2) whether an attorney has an ethical responsibility to report another attorney’s refusal to accept service of process as the resident agent for an entity.

With respect to your question concerning the obligation of a Maryland attorney to report the unauthorized practice of law in this State by an attorney not licensed in this State to the governing body overseeing attorney misconduct in the jurisdiction where the offending attorney is licensed, the Committee concludes that a Maryland attorney has an obligation to report the offending conduct to the Maryland Attorney Grievance Commission but there is no such affirmative obligation to report the misconduct to any other jurisdiction.

It is professional misconduct for an attorney to violate or attempt to violate the Maryland Attorneys' Rules of Professional Conduct. (1) An attorney who knows that another attorney has committed a violation of the Rules that raises a substantial question as to that attorney's honesty, trustworthiness or fitness as an attorney in other respects, shall, according to the Rules, inform the appropriate professional authority. (2)

Except as otherwise permitted by the Maryland Attorneys' Rules of Professional Conduct (collectively, the “Rules” and individually, a “Rule”) or law, an attorney who is not admitted to practice in Maryland is prohibited from establishing an office or other systematic and continuous presence in Maryland for the practice of law and from holding out to the public or making other representations that he or she is admitted to practice law in this State. (3) An attorney admitted in another United States jurisdiction, and not disbarred or suspended from practice in any jurisdiction, may provide legal services on a temporary basis in Maryland in certain limited circumstances. (4)

An attorney not admitted to practice in this State is subject to the disciplinary authority of this State if the attorney: (A) provides or offers to provide any legal services in this State, (B) holds himself or herself out as practicing law in this State, or (C) has an obligation to supervise or control another attorney practicing law in this State whose conduct constitutes a violation of these Rules. (5)

Consistent with its policy and practice, the Committee makes no finding of fact with respect to whether the unlicensed attorney has engaged in the unauthorized practice of law in this State or committed a violation of any of Rule. The Committee assumes, for the purposes of this Opinion, that the Maryland attorney has the requisite knowledge that a violation of the Rules has occurred.

As stated above, an attorney may not practice law in Maryland unless he or she is duly licensed by the Maryland Court of Appeals. Subject to the operation of Rule 1.6, an attorney licensed in Maryland who is aware that another attorney is engaged in the unauthorized practice of law in Maryland has an obligation to report the violation to the “appropriate professional authority.” (6) With respect to Rules violations, the Attorney Grievance Commission “has original and complete jurisdiction over attorney discipline proceedings in Maryland” (7) and if the offending conduct occurs in Maryland then the Rules apply. (8) And since “[a]n attorney not admitted to practice in this State is also subject to the disciplinary authority of this State” (9), it follows that a licensed Maryland attorney is obligated to report to the Attorney Grievance Commission known violations of the Rules occurring in this State by attorneys who are not licensed to practice law in this State. Whether a Maryland attorney reports a violation of the Rules to one or more jurisdictions in which the offending attorney is licensed is subject to the discretion of the Maryland attorney. (10) To conclude otherwise (i.e., that a licensed Maryland attorney has an affirmative obligation to report violations of Maryland’s ethical or other professional rules to other jurisdictions) would obligate Maryland attorneys to police the actions of attorneys licensed in foreign jurisdictions with which the Maryland attorney may have no connection. Moreover, if the Court of Appeals enters an order finding the unauthorized practice of law has occurred and suspends or terminates an attorney’s authority to practice in this State, copies of the order are sent to a litany of federal and state agencies, including “the disciplinary authority of every other jurisdiction in which…the attorney is admitted to practice.” (11) Accordingly, the responsibility of notifying the “appropriate professional authority” that is responsible for licensing the offending attorney rests with the Court of Appeals. Upon receiving notice that an attorney has violated the Rules, the foreign jurisdiction may initiate disciplinary proceedings under that jurisdiction’s ethical or professional rules with respect to the violating attorney’s conduct in Maryland. (12)

Prior to reporting the misconduct of the unlicensed attorney, however, Rule 1.6 requires the Maryland attorney to consult with his or her client about the consequences of revealing information learned during the Maryland attorney’s representation of the client. If, after consultation, the client consents, then the Maryland attorney may disclose the information relating to the unlicensed attorney’s misconduct to the Attorney Grievance Commission. If the client withholds consent, then the Maryland attorney, in accordance with Rule 1.6(b),may, but is not required to, report the professional misconduct if doing so falls into one of the exceptions under Rule 1.6(b). (13) In the absence of the client’s consent and in the exercise of his or her discretion to report the misconduct to the Attorney Grievance Commission, the Maryland attorney should consider such factors as “the nature of the lawyer’s relationship with the client and with those who might be injured by the client, the lawyer’s own involvement in the transaction and factors that may extenuate the conduct in question”. (14)

Rule 1.13 must also be considered in the context of the Maryland attorney’s representation of an organizational client. According to the request submitted to the Committee precipitating this Opinion, the organizational client was represented by its former general counsel (a Maryland licensed attorney) at the time the client entered into the contract with the unlicensed lawyer. If possible, the client’s former general counsel should be consulted to better understand the circumstances surrounding the formation of the contract between the client and the unlicensed attorney.

With regard to your question concerning an attorney’s refusal to accept service of process, the Committee believes that the intentional evasion of process by an attorney is conduct that (i) interferes with the judicial system and is prejudicial to the administration of justice, (ii) a lawyer knows is fraudulent, and (iii) has no substantial purpose other than delaying the rights of a third person. (15) In making this determination, the Committee has considered the analysis of the North Carolina State Bar Council in Formal Ethics Opinion 98-2, which concluded that, under the North Carolina Revised Rules of Professional Conduct, an attorney may not counsel a client to evade service for similar reasons. Under the circumstances where an attorney is acting as the resident agent for an entity, the actions of the attorney to evade process constitutes unethical conduct, which another attorney may, consistent with this opinion, report to the Attorney Grievance Commission.

1. MD. RULE 13-308.4
2. MD. RULE 19-308.3(a)
3. MD CODE ANN., BUS. OCC. & PROF. § 10-601(a); MD. RULE 19-305.5(b)
4. See, MD. RULES 19-305.5(c)(1) – (4), (d)(2); see also, Ethics Docket 2016-05.
5. MD. RULE 19-308.5(a)(2)
6. MD. RULE 19-308.3(a).
7. Attorney Grievance Comm'n of Maryland v. Ruddy, 411 Md. 30, 47 (2009) (citing Attorney Grievance Comm'n v. Ugwuonye, 405 Md. 351, 368 (2008).
8. MD. RULE 13.308.5(b)
9. MD. RULE 19-308.5(a)(2)
10. If the Maryland attorney is also licensed in the jurisdiction where the offending attorney is licensed, then the Maryland attorney may, if required by the rules of professional conduct of that jurisdiction, be obligated to report the offending conduct to the appropriate professional authority of that jurisdiction.
11. MD. RULE 19-761(b)(3)(K)(ii). It is worth noting that other jurisdictions have self-reporting requirements for licensed attorneys who are disciplined for violations of rules of professional conduct in other jurisdictions. See, Rule 8.3 of the Virginia Rules of Professional Conduct. Maryland does not impose a similar obligation on its attorneys.
12. See, MD. RULE 13-308.5(a)(3) (providing that an attorney may be subject to the disciplinary authority of both this State and another jurisdiction for the same conduct).
13. MD. RULE 19-301.6(b); Ethics Docket 89-46; Ethics Docket 92-46; Ethics Docket 94-26
14. MD. RULE 19-301.6 cmt. 7; see also, MD CODE ANN., BUS. OCC. &PROF. § 10-601, et seq. (concerning fines and penalties that may be imposed on a person found guilty of the unauthorized practice of law in this State).
15. MD. RULE 19-301.2(d), 19-304.4(a), and 19-308.4(d)