Prospecting in the Silver State: Nevada Offers Plenty of Opportunity

February 6, 2008

San Francisco and Los Angeles Daily Journals

The Silver State beckons California lawyers. Nevada ‘s population has boomed in recent decades, outpacing every other state. The state has positioned itself as the business-friendly ” Delaware of the West.” It ranks second after Delaware in the number of corporate filings per capita and lures businesses and individuals seeking to avoid corporate and personal income tax.

Meanwhile, the Nevada Bar remains relatively small. The Boyd School of Law at University of Nevada, Las Vegas is the only ABA-accredited school in the state. There are approximately 7,200 active (nonjudicial) members of the Nevada Bar, compared with California ‘s 158,000. The number of lawyers per capita in California is about 50 percent higher than in Nevada.

Why haven’t more lawyers joined the silver rush? To gain admission to the Nevada Bar, applicants must pass a three-day exam that includes essay questions and the Multistate Bar Examination. Unfortunately, gaming law is not one of the exam topics. Nevada does not admit by reciprocity, so veteran lawyers must pass the same test as recent law graduates.

For out-of-state lawyers who shudder at the prospect of another exam, opportunities exist for a limited practice in Nevada.

Although it once had unusually restrictive rules on multijurisdictional practice, the landscape changed in 2002, when the Nevada Supreme Court adopted a more tolerant approach. The rules clarified and expanded law practice by out-of-state counsel while reaffirming that Nevada lawyers should bear primary responsibility for legal services performed within the state.

In general, out-of-staters seeking to appear in litigated matters must apply for admission pro hac vice, while those who represent clients in nonlitigated matters might have to submit paperwork to the Nevada Bar, depending on the nature and scope of their work. Lawyers who comply with the various rules can find opportunity in Nevada, while those who leap before they look may fall into the unauthorized practice of law.

Lawyers licensed in other states may appear pro hac vice in state courts or before state agencies in the discretion of the adjudicatory body. Nevada Supreme Court Rule 42 specifies the process.

Applicants must first apply to the Nevada State Bar. The application requires the identification of a State Bar member who will appear as an attorney of record. In 2006, 630 such applications were processed.

While California does not place any quota on pro hac vice admissions under Rule of Court 9.40, Nevada Supreme Court Rule 42 creates a numerical guideline. Out-of-state lawyers may not make more than five appearances in state proceedings every three years. This rule applies firmwide and thus has a greater potential impact on larger firms. A firm that applies to admit five out-of-state lawyers in a major lawsuit in February 2008 will have to wait until February 2011 to admit additional lawyers in other Nevada litigation, unless the firm can show special circumstances.

Once the State Bar processes the out-of-state application, Nevada counsel must file a motion to associate with the state court or agency. The grant or denial of the motion is discretionary and revocable.

If the motion is granted, out-of-state and local counsel must work in tandem. The Nevada attorney of record must actively participate in the representation and must be present at all hearings unless otherwise ordered. Out-of-state counsel may sign motions and other documents, but such papers either must be hand served on opposing parties or mailed from within Nevada. The Nevada Rules of Civil Procedure obligate counsel to meet in person for an early case conference, which must occur in the county where the action was filed, unless the parties agree otherwise.

Out-of-state counsel who are experienced with the Federal Rules of Civil Procedure will be pleased to learn that the Nevada rules are very similar. Guidance from Nevada counsel will reveal the key departures from the federal rules, as well as the nuances of local practice. For example, the seven-hour rule for depositions in federal court does not exist under the Nevada rules.

With regard to federal court litigation, the Local Rules of the U.S. District Court for the District of Nevada govern admission of out-of-state counsel, both in the District Court and in Bankruptcy Court.

Under Local Rule IA 10-2, out-of-state counsel must file a “verified petition” for permission to practice in a particular case on a form furnished by the clerk. A onetime fee of $175 must be paid, which is a relative bargain compared with the $500 per year fee required of lawyers who appear pro hac vice in state court proceedings.

Pro hac vice admission in federal court, like in state court, is limited to attorneys who do not reside in Nevada and are not regularly employed or engaged in “substantial business, professional, or other activities” in Nevada. Although unclear, the limitation presumably does not exclude lawyers who visit for recreation.

In the verified petition, counsel must identify any applications for admission under Local Rule IA 10-2 made within the prior three years. This includes applications submitted by the attorney and by other members of his or her firm who are based in the same office. The federal rule presumptively limits the number of pro hac vice applications per attorney and firm to five every three years in U.S. District Court. Out-of-state lawyers and firms are allowed up to 10 admissions per year in the Bankruptcy Court. Because Rule 10-2 requires firms to report on an office-by-office basis, as opposed to a firmwide basis, large firms have more latitude to practice in Nevada federal courts than in state courts.

While the petition is pending in federal court, the attorney shall take no action in the case beyond filing the first pleading or motion. In civil matters, attorneys have 45 calendar days after their first appearance to comply with the rule. In criminal and bankruptcy cases, attorneys have only 10 court days to comply.

Most important, the out-of-state attorney must associate with a resident member of the District Court bar as co-counsel. This does not simply involve listing a Nevada attorney on the form – rather, local counsel must have the authority to sign binding stipulations in the case. Unless ordered by the court, however, the Nevada attorney does not need to attend all proceedings.

Litigators are not the only out-of-state lawyers who must register to lawfully practice in Nevada.

Lawyers who provide service to a Nevada client in connection with transactional or other extrajudicial matters pending in or substantially related to Nevada must register under Nevada Rule of Professional Conduct 5.5A. A “Nevada client” refers to a natural person residing in the state, a business entity doing business in the state or a Nevada governmental entity. Lawyers subject to this rule must file an annual report with the Nevada State Bar by Jan. 31 following the year in which the work was performed. The reports need not name the clients, however, and they are not accessible to the public.

In addition, Nevada Supreme Court Rule 49.10 allows for limited practice by lawyers not licensed in Nevada who work for a single governmental entity or as in-house counsel for a business entity situated or qualified to do business in Nevada. Such lawyers may render legal advice and services to their employers, and may negotiate with third parties, but cannot appear as counsel of record in state court or agency proceedings. A lawyer who seeks to practice under Rule 49.10 must apply to the Nevada Bar and include a supporting affidavit from his or her employer.

Some Nevada-related legal activities do not require membership in the Nevada Bar or the filing of any report or application. The safe harbors are detailed in Nevada Rule of Professional Conduct 5.5(b). Among them are preparations for a Nevada court proceeding in which the lawyer reasonably expects to be authorized to appear, participation in investigation or discovery incident to litigation that has been or will be instituted outside Nevada and occasional work by in-house counsel. Out-of-state lawyers may also give occasional advice in areas governed primarily by federal law, international law or foreign law, and may act as a neutral in alternative dispute resolution.