NY Senate OKs Bill Nixing Atty In-State Office Requirement

By Marco Poggio
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Law360 (May 13, 2021, 12:29 PM EDT) -- The New York Senate on Wednesday overwhelmingly passed a bill that would allow attorneys to practice in the state without keeping a physical office there and while living elsewhere, reflecting a paradigm shift in a profession that has largely gone remote due to the pandemic.

The bill, passed with a nearly unanimous vote, seeks to repeal a rule in Section 470 of New York's judiciary law, which attorney groups in the Empire State see as "antiquated" and too rigid at a time when many lawyers have embraced remote work and are not looking to go back.

"New York's laws ought to reflect the technological advancements of the last century, which make it possible for licensed attorneys to fully perform their services from outside of New York," bill sponsor Sen. Brad Hoylman, D-Manhattan, told Law360 in an email.

The bill now heads to the state Assembly.

"The New York State Bar Association enthusiastically supports the repeal of this antiquated law," said Scott M. Karson, the president of the attorney group. "In our rapidly modernizing legal world, the profession has adapted with electronic filing of documents in the courts, virtual conferences and court proceedings, along with already established standards for perfecting service. Our laws must continue to adapt with the times too."

Karson said the current rule places an "onerous burden" on rural and underserved communities and limits the availability of legal services.

About 25% of state bar members live outside the state, a figure that includes attorneys living abroad. The association has played a leading role in crafting the Senate bill.

Even before the COVID-19 pandemic disrupted the traditional face-to-face model in which attorneys provided services to clients, the rule was subject to criticism and calls to rescind it.

In 2016, to address concerns from its members, the state bar association formed a working group on Section 470 that issued reports and recommendations on how to phase it out. In January 2019, the bar's House of Delegates approved a resolution calling for the outright repeal of the law.

The pandemic provided a unique opportunity to intensify those calls, a spokesperson for the state bar told Law360. In March, the attorney group issued a memorandum in support of the bill, saying the rule, enacted in 1909, had outlived its original purpose: requiring attorneys to be physically present in the state to make sure they could be served papers.

"The law was passed at a time when there was fear that it would be too difficult to serve papers on attorneys who lived out-of-state," said Susan DeSantis, a spokeswoman for the state bar association.

In 1979, the New York State Court of Appeals ruled that attorneys were no longer required to live in the state, saying the requirement violated the Fourteenth Amendment of the U.S. Constitution, but the physical office provision survived the ruling.

Only 4% of New York-licensed attorneys serve the state's rural communities, and about 75% of those attorneys are expected to retire within the next three decades. Repealing the rule would allow those communities to access legal representation, the memorandum says.

The shift to a new work reality prompted by the pandemic, which had New York as a global epicenter in 2020, presents a compelling reason to scrap the rule, the association said.

"Attorneys who had no issue with maintaining a physical office location are now experiencing disruptions to their practices. The office space they use may no longer [be] available, they have restructured to a remote work environment, or they have relocated out of the state for a variety of professional or personal reasons to meet our rapidly evolving world," the group said in the memorandum.

The New York City Bar Association's legal referral service committee said in a March report supporting the bill that state law already allows electronic transmission of legal documents to attorneys living out-of-state, and that the rule serves no purpose.

On the other hand, the rule creates situations in which attorneys might be prevented from filing court papers or are removed from cases if they fail to comply with it, causing clients "unnecessary delays, expense and anxiety," the bar association said.

The costs of maintaining a physical office in the state, already seen as an unnecessary burden on non-resident attorneys, has become even more inconvenient since the pandemic hit because of the additional costs of cleaning and disinfecting. Meanwhile, the virtual office approach has replaced the need for a physical location, the city bar said.

"Office spaces are going unused and have proven to be unnecessary for lawyers to engage with their clients," the group said in its report, adding that abolishing the rule will lower costs to attorneys, and as a consequence, to clients.

"More lawyers may be able to maintain a lower cost and more efficient practice in New York, potentially increase assistance to unrepresented litigants, and lessen the burden of unrepresented parties on the courts," the city bar said.

--Editing by Philip Shea.

For a reprint of this article, please contact reprints@law360.com.

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