The Illinois Supreme Court has announced that, for a limited time, Illinois-based corporate counsel who failed to obtain a required limited law license will now be able to obtain that limited license without the risk of discipline. The program is effective January 1, 2014 and will expire one year later.
Supreme Court Rule 716 requires in-house counsel to be in good disciplinary standing before the highest court of every jurisdiction in which that counsel is admitted, pass a rigorous background check, pay an annual registration fee, submit to the disciplinary authority of the Illinois Attorney Registration & Disciplinary Commission (ARDC), and meet the continuing legal education requirements imposed on all practicing lawyers. Since 2004, the Supreme Court of Illinois has permitted in-house corporate counsel not licensed to practice law in Illinois an opportunity to obtain a limited license in this state. A limited license allows corporate counsel to act on behalf of his or her employer for all purposes as if licensed to practice law in Illinois.
In the nine years since Rule 716 was adopted, 828 corporate counsel have received a limited license. The Association of Corporation Counsel, a global bar association promoting the interests of in-house counsel, estimates that there are more than 9,600 in-house counsel in Illinois. Presumably, a majority of in-house counsel are licensed in Illinois. Nevertheless, given the disparity between the number of Rule 716 licensed lawyers and the total number of in-house lawyers, it is likely that there are many who are neither Illinois-licensed or have a limited corporate license.
Possible reasons for not obtaining a limited license include a lack of awareness of the rule because many attorneys come from jurisdictions that do not require in-house counsel to register with the disciplinary authority or inadvertence in meeting the deadline to file an application to receive a limited license.
Any in-house counsel in violation of Rule 716 is eligible for the amnesty program but has to meet all existing requirements to obtain a limited license.
In-house counsel will not have to pay in arrears for licensing fees or make up Minimum Continuing Legal Education (MCLE) credits.
Significantly, any in-house counsel who takes advantage of the amnesty program will not be prosecuted for the unauthorized practice of law. Any previous failure to obtain a limited license will not be deemed an issue for in-house counsel who seeks an Illinois law license or grounds for attorney discipline. Finally, any attorney who is a co-employee of an in-house counsel seeking amnesty will not be investigated by the ARDC in connection with in-house counsel’s prior failing to be licensed under Rule 716.
In addition to an application fee of $1,250 as required by Rule 716, attorneys availing themselves of this program will be required to pay a late registration penalty of an additional $1,250. All payments will be deposited with the Board of Admissions to the Bar.
The amendments to Rule 716 were the result of a joint proposal of the Illinois Board of Admissions to the Bar and the Attorney Registration and Disciplinary Commission.
Rule 716. Limited Admission Of House Counsel
A person who, as determined by the Board of Admissions to the Bar, has been licensed to practice in the highest court of law in any United States state, territory, or the District of Columbia may receive a limited license to practice law in this state when the lawyer is employed in Illinois as house counsel exclusively for a single corporation, partnership, association or other legal entity (as well as any parent, subsidiary or affiliate thereof), the lawful business of which consists of activities other than the practice of law or the provision of legal services upon the following conditions:
(a) The applicant meets the educational requirements of Rule 703;
(b) The applicant meets Illinois character and fitness requirements and has been certified by the Committee on Character and Fitness;
(c) The applicant licensed to practice law for fewer than 15 years has passed the Multistate Professional Responsibility Exam in Illinois or in any jurisdiction in which it was administered;
(d) The applicant is in good disciplinary standing before the highest court of every jurisdiction in which ever admitted and is at the time of application on active status in at least one such jurisdiction;
(e) The applicant has paid the fee for limited admission of house counsel under Rule 706.
(f) Application requirements. To apply for the limited license, the applicant must file with the Board of Admissions to the Bar the following:
(1) A completed application for the limited license in the form prescribed by the Board;
(2) A duly authorized and executed certification by applicant’s employer that:
(A) The employer is not engaged in the practice of law or the rendering of legal services, whether for a fee or otherwise;
(B) The employer is duly qualified to do business under the laws of its organization and the laws of Illinois;
(C) The applicant works exclusively as an employee of said employer for the purpose of providing legal services to the employer at the date of his or her application for licensure; and
(D) The employer will promptly notify the Clerk of the Supreme Court of the termination of the applicant’s employment.
(3) Such other affidavits, proofs and documents as may be prescribed by the Board.
(g) Authority and Limitations. A lawyer licensed and employed as provided by this Rule has the authority to act on behalf of his or her employer for all purposes as if licensed in Illinois. The lawyer may not act as counsel for the employer until the application is accepted and approved by the Court. A lawyer licensed under this rule shall not offer legal services or advice to the public or in any manner hold himself or herself out to be engaged or authorized to engage in the practice of law, except such lawyer may provide voluntary pro bono public services as defined in Rule 756(f).
(h) Duration and Termination of License. The license and authorization to perform legal services under this rule shall terminate upon the earliest of the following events:
(1) The lawyer is admitted to the general practice of law under any other rule of this Court.
(2) The lawyer ceases to be employed as house counsel for the employer listed on his or her initial application for licensure under this rule; provided, however, that if such lawyer, within 120 days of ceasing to be so employed, becomes employed by another employer and such employment meets all requirements of this Rule, his or her license shall remain in effect, if within said 120-day period there is filed with the Clerk of the Supreme Court: (A) written notification by the lawyer stating the date on which the prior employment terminated, identification of the new employer and the date on which the new employment commenced; (B) certification by the former employer that the termination of the employment was not based upon the lawyers character and fitness or failure to comply with this rule; and (C) the certification specified in subparagraph (f)(2) of this rule duly executed by the new employer. If the employment of the lawyer shall cease with no subsequent employment within 120 days thereafter, the lawyer shall promptly notify the Clerk of the Supreme Court in writing of the date of termination of the employment, and shall not be authorized to represent any single corporation, partnership, association or other legal entity (or any parent, subsidiary or affiliate thereof).
(3) The lawyer is suspended or disbarred from practice in any jurisdiction or any court or agency before which the lawyer is admitted.
(4) The lawyer fails to maintain active status in at least one jurisdiction.
(i) Annual Registration and MCLE. Beginning with the year in which a limited license to practice law under this rule is granted and continuing for each subsequent year in which house counsel continues to practice law in Illinois under the limited license, house counsel must register with the Attorney Registration and Disciplinary Commission and pay the fee for active lawyers set forth in Rule 756 and fully comply with all MCLE requirements for active lawyers set forth in Rule 790 et seq.
(j) Discipline. A lawyer licensed under this rule shall be subject to the jurisdiction of the Court for disciplinary purposes to the same extent as all other lawyers licensed to practice law in this state.
(k) Credit toward Admission on Motion. The period of time a lawyer practices law while licensed under this rule may be counted toward eligibility for admission on motion, provided all other requirements of Rule 705 are met.
(l) Newly Employed House Counsel. A lawyer who is newly employed as house counsel in Illinois shall not be deemed to have engaged in the unauthorized practice of law in Illinois prior to licensure under this rule if application for the license is made within 90 days of the commencement of such employment. Adopted February 11, 2004, effective July 1, 2004; amended March 26, 2008, effective July 1, 2008; amended October 1, 2010, effective January 1, 2011; amended December 9, 2011, effective July 1, 2012; amended Apr. 8, 2013, effective immediately; amended Nov. 26, 2013, effective immediately.