Responding to Foreign Regulator Requests for Law Firm Certificates of Good Standing: Global Regulatory Differences and Their Implications

This article originally appeared in The Bar Examiner print edition, Summer 2024 (Vol. 93, No. 2), pp. 17-22. By Laurel S. Terry

It is common for law firms located in one country to open offices in a foreign country. But differences among US and foreign regulatory systems have created difficulties for outbound US law firms. In these companion articles, Prof. Laurel S. Terry identifies points on which US and foreign regulators might have differing expectations and provides a template that US jurisdictions can use to respond to foreign requests for law firm Certificates of Good Standing.

In the United States, the highest appellate court in each state or territory (hereinafter a “jurisdiction’s highest court”) issues law licenses to individual lawyers. A lawyer who wants to offer legal services in a jurisdiction must be licensed by that court or be “otherwise authorized.”1 A lawyer who is licensed in one US jurisdiction and seeks admission in another must comply with all relevant requirements, which typically include the obligation to obtain a Certificate of Good Standing from every jurisdiction in which that lawyer-applicant is licensed.2

Although jurisdictions’ highest courts license individual lawyers, they do not issue law licenses to law firms and do not require all law firms in the jurisdiction to register or to be admitted to practice.3 As a result, it is uncommon to see such a court or legal services regulator issue a Law Firm Certificate of Good Standing or equivalent document.

Elsewhere in the world, however, the regulatory situation differs. As the International Bar Association (IBA) documented in its 2014 Global Legal Services Report,4 many countries require law firms in their jurisdiction, as well as individual lawyers, to be issued a license to provide legal services. If a US law firm wants to open a branch office in one of these countries, the regulator there may—understandably—want to confirm that the US law firm is admitted to practice law in its home jurisdiction and is in good standing. As a result, foreign regulators may assume that each US jurisdiction’s highest court is prepared to issue a Law Firm Certificate of Good Standing that is comparable to the Certificate of Good Standing that these courts (or their designees) prepare for individual lawyers. If they do not issue such a document or its equivalent to the foreign regulator, a US law firm may lose the opportunity to provide legal services in the foreign branch office.

How should US jurisdictions’ highest courts respond if they receive a request from a foreign jurisdiction (or a US law firm) for a Law Firm Certificate of Good Standing? Some courts may already have developed a form they can submit to foreign regulators, especially if the jurisdiction is one of the handful that requires law firms to register with the supreme court or state bar if the law firm elects to use a limited liability entity structure. Most, however, probably have not done so. When considering this issue, jurisdiction regulators might find it helpful to consult the template used by the State Bar of Georgia to respond to foreign regulator requests.

The first section below sets the stage for this recommendation by providing additional information about global regulatory differences. The second explains why the issue of Law Firm Certificates of Good Standing is topical and why US jurisdiction regulators might receive a request for one from foreign regulators. The final section describes the State Bar of Georgia’s template and argues why it would be useful if additional jurisdictions prepared—and shared online—comparable documents. These documents can aid US lawyers, law firms, and clients, and they also help advance global understanding regarding the US legal services regulatory system. In the accompanying article in this issue, I provide background information for foreign regulators to help them understand the US system of legal services regulation and the regulatory treatment of US law firms. It covers general principles, regulation of individual lawyers, and law firm structure and regulation.

Law Firm Regulation Outside (and Inside) the United States

In the past decade, it has become much easier for legal regulators to learn about legal services regulation systems beyond their borders. Regulator websites typically include links to the relevant rules. Information is often available in English, even for countries where English is not the official language. And, importantly, there has been an explosion of global legal profession networks,5 including the International Conference of Legal Regulators (ICLR), in which NCBE has actively participated.6 Due to these developments, there are now multiple sources of information that enable legal services regulators to compare and contrast regulatory systems across countries.

The IBA has been a leader in assembling and disseminating information about global legal services regulation. Two sets of IBA reports are particularly useful. In 2016, the IBA issued a Directory of Regulators of the Legal Profession that lists the admissions, conduct, and discipline regulators for more than 100 jurisdictions and a synthesis of the report’s findings.7 Among other things, the Directory shows that most countries do not have state-based judicial regulation of lawyers. The Directory’s findings help explain why, when foreign regulators interact with US lawyers, law firms, and regulators, their assumptions and expectations may be quite different from ours.

The second useful IBA report is the IBA Global Regulation and Trade in Legal Services Report 2014.8 The original report and its 2018 and 2019 regional updates are organized by jurisdiction and provide answers to more than 50 questions.9 In each, the ninth question asks:

“Do law firms need to receive a licence (or permission/approval) to practise law?”

Because answers to this question vary in format, it is difficult to definitively state that X number of jurisdictions answered “yes” and Y number of jurisdictions answered “no.” There are some straightforward “yes” and “no” answers in these IBA reports, but many responses are in narrative form and indicate that registration is required, or notice is required, without specifying how extensive the registration process is and whether regulatory approval is required. Despite the ambiguity in some answers to the above question, the IBA reports show that a significant number of foreign jurisdictions require law firms to have licenses or receive approval before they can provide legal services in that jurisdiction.10

The US situation is different. The IBA report did not identify a single US jurisdiction that requires all law firms located there to be licensed or registered before providing legal services in the jurisdiction.11 The IBA report identified seven US jurisdictions in which a law firm must register if that law firm elects to use that jurisdiction’s limited liability entity structure, but none of the highest courts admits law firms to practice or requires all law firms to be issued a license in order for the lawyers in that firm to provide legal services.12

As this brief summary shows, there are significant differences in the global regulation of law firms. The IBA reports discussed in this section can help US stakeholders understand why a foreign regulator might ask a US law firm to provide a Law Firm Certificate of Good Standing before opening a foreign branch office.

Recent Changes in Germany Have Made This Issue Topical

To illustrate the difficulties that can arise due to differing regulatory expectations regarding Law Firm Certificates of Good Standing, consider the example of Germany. Germany has many international law firm offices, which is unsurprising since it is the largest economy in the European Union (EU) and is the seat of important institutions such as the European Patent Office and the European Central Bank. One of the primary sources of German legal services regulation is the Federal Lawyers’ Act, known as the BRAO; implementation of some BRAO functions is delegated to regional bar association regulators.13

BRAO amendments that took effect on August 1, 2022, contained significant changes for both domestic and foreign law firms.14 The BRAO §207a amendments specify the conditions under which foreign (non-EU) law firms can maintain an office in Germany.15 The amendments authorize such firms to offer legal services in Germany if they “ha[ve] been licensed by the [German regional] bar association competent at the place where its German branch office is located.”16 BRAO §207a contains a number of conditions that must be satisfied before the regional bar association issues this license; one of these conditions is the requirement that the foreign law firm “is authorised to provide legal services under the law of its state of establishment.”17

As a result of BRAO §207a, US law firms that want to register in Germany have been asked to submit documentation that would show that they are admitted or otherwise authorized to provide legal services in their home jurisdiction—in other words, they have been asked to produce a document that is analogous to the Certificate of Good Standing that US jurisdiction regulators receive when considering an admission application from a lawyer licensed elsewhere in the United States.

BRAO §207a has created difficulties for US law firms that have sought to register their branch offices in Germany. As noted previously, none of the US jurisdictions’ highest courts requires law licenses for all law firms operating in their jurisdiction, and they typically do not issue Law Firm Certificates of Good Standing. (A handful of states require registration of law firms that elect to use a limited liability entity structure, but none of these states requires all law firms in the state to register.18) Because of this, many US law firms will have difficulty producing an official document when asked for one.

Responding to Requests for a Law Firm Certificate of Good Standing (and Why It Matters)

How should a US jurisdiction’s highest court or legal services regulator respond to a foreign regulator’s request for a Law Firm Certificate of Good Standing or equivalent document? If the court or regulator has not already developed this type of document, it might find it useful to follow the approach developed in Georgia. When US law firms with offices in Georgia reached out to the State Bar of Georgia for assistance in such matters, the State Bar’s General Counsel responded to foreign regulators with these points:

The State Bar of Georgia is the regulatory authority for the legal profession in the State of Georgia (United States) operating under the supervision of the Supreme Court of Georgia.
The State Bar of Georgia admits to its membership and regulates individual lawyers but does not directly regulate law firms.
For example, there is no requirement in Georgia that law firms register with or obtain a license from the State Bar.
Therefore, a Georgia law firm is unable to provide a Law Firm Certificate of Good Standing or similar document.

This language could easily be used as a template by other courts or legal regulators. This kind of communication need not be lengthy, but it is important for two reasons. First, it provides an official answer to a foreign regulator’s request for documentation. Second, it might serve as an “equivalent document” and explain why a Law Firm Certificate of Good Standing is not available.19

Although the State Bar of Georgia has not posted its language online, there are multiple reasons why I would encourage it—and other regulators if they draft similar language—to do so in the future. Posting this kind of communication online preserves institutional knowledge. Some legal services regulators—such as those in Georgia—have been particularly aware of differences in global legal services regulation and have played an active role in building global networks and cooperation in this space.20 But even in jurisdictions such as these, individuals who work for the regulatory bodies can retire, and institutional knowledge can easily be lost.

Also, since some law firms may not have a personal relationship with their legal services regulator or know who to reach out to, posting such language online increases the likelihood that all law firms are aware of the assistance the state regulator can offer. Finally, the more such language is available online, the easier it will be for foreign regulators to understand and accept why a particular US law firm is unable to provide a Law Firm Certificate of Good Standing.

This article advocates action, but some regulators may wonder whether it is worth adding one more task to their already lengthy to-do list. This is especially true if regulators believe that there are few law firms in their jurisdiction that are likely to need this type of correspondence.21 Although this reaction is understandable, I encourage all jurisdictions to do a cost–benefit analysis, and I hope they decide in favor of drafting this type of language—either proactively or on demand.

Because jurisdictions can use the Georgia language as a template for their correspondence, the “cost” of drafting such a letter is relatively minor and is outweighed by the potential benefits, which include expanded choices for domestic and foreign clients and potential economic benefit for the US jurisdiction. In a 2014 Bar Examiner article, I recommended that US jurisdictions adopt rules to allow and regulate inbound foreign lawyers.22 Although the Georgia language concerns outbound US law firms rather than inbound foreign lawyers, the reasoning is similar. In 2024, as in 2014, global trade appears to be a fact of life for the foreseeable future. The volume of global trade and the identity of the largest global trading partners may fluctuate, but global trade has not disappeared and does not seem poised to do so. Both US and foreign business clients are likely to need the services of lawyers licensed in multiple countries in today’s globalized world. Moreover, individual clients, both US and foreign, may sometimes need the services of both domestic and foreign lawyers on family law, inheritance, intellectual property, personal injury, or real estate legal matters, to name just a few issues. In my view, expanding client choice—inside and outside the United States—promotes access to legal services and is in the public interest. In light of this cost–benefit analysis, I encourage US jurisdictions to follow Georgia’s lead and develop language they can send to foreign regulators who request a Certificate of Good Standing for a US law firm.

Notes

For an example of “otherwise authorized,” see ABA Model Rule of Professional Conduct 5.5: Unauthorized Practice of Law; Multijurisdictional Practice of Law. This model rule explains when a lawyer may practice in a jurisdiction in which the lawyer is not licensed. Examples of “otherwise authorized” in Rule 5.5 include temporary practice, services related to pro hac vice court admission, services authorized by federal law, and serving as in-house counsel. Although ABA Rule 5.5 is a model rule and is not binding, all US jurisdictions have adopted a multijurisdictional practice rule. Another example of “otherwise authorized” includes foreign legal consultant (FLC) rules. For additional information about the regulation of legal services in the United States, see the accompanying article in this issue. (Go back)
NCBE’s Comprehensive Guide to Bar Admission Requirements, available at https://reports.ncbex.org/comp-guide/, documents for each US jurisdiction the methods that a lawyer from one jurisdiction can use to be admitted in another. Although the Guide addresses many issues, it does not indicate whether a jurisdiction requires a lawyer-applicant to submit a Certificate of Good Standing from all jurisdictions in which the lawyer already is licensed, likely because most or all jurisdictions have this requirement. This was certainly true of the jurisdictions the author checked. (Go back)
But see infra note 12 and accompanying text (noting that some jurisdictions issue law licenses to limited liability law firms) and paragraph 6 of the accompanying article in this issue (Arizona licenses alternative services provider entities that are co-owned by lawyers and nonlawyers). (Go back)
See infra notes 8–10 for more information about this report and its 2018 and 2019 regional updates. (Go back)
See, e.g., Laurel S. Terry, “Global Networks and the Legal Profession,” 53(1) Akron Law Review 137–175 (2019), available at https://ideas.dickinsonlaw.psu.edu/fac-works/146/; and Laurel S. Terry, “Lawyer Regulation Stakeholder Networks and the Global Diffusion of Ideas,” 33 Georgetown Journal of Legal Ethics 1069–1110 (2020), available at https://ideas.dickinsonlaw.psu.edu/fac-works/221/. (Go back)
See, e.g., Laurel S. Terry, “Creating an International Network of Lawyer Regulators: The 2012 International Conference of Legal Regulators,” 82(2) The Bar Examiner 18–27 (June 2013), available at https://perma.cc/PF9Z-KCLL. NCBE President Judith Gundersen and her predecessor Erica Moeser, as well as individual NCBE members, have been active participants in the ICLR and have worked diligently to promote better global understanding among legal services regulators. (Go back)
International Bar Association, Directory of Regulators of the Legal Profession (2016), available at https://perma.cc/RR9A-BMA8. The Directory, along with the source acknowledgements and a separate “Findings” excerpt, are available at https://perma.cc/XT9J-M39W and https://perma.cc/QT7V-CPSJ. (Go back)
International Bar Association, IBA Global Regulation and Trade in Legal Services Report 2014 (2014), available at https://perma.cc/BCN4-WUF5 [hereinafter 2014 IBA Global Legal Services Report]. The report covers more than 90 countries and 160 jurisdictions and provides, for each jurisdiction, the answers to more than 50 standardized questions. (Go back)
See generally id. The original report covered more than 160 jurisdictions. In 2018 and 2019, the IBA issued eight updated regional reports; these regional reports include updated information about the original jurisdictions, as well as information about new jurisdictions, expanding the number to more than 200. See International Bar Association, Regulation of International Trade in Legal Service, available at https://perma.cc/B2W7-S3SG. (This webpage contains links to the eight regional reports, as well as the original 2014 report). The 2018 and 2019 updated reports are divided into these eight regions: (1) Africa, (2) Asia, (3) Balkan States and the CIS (Commonwealth of Independent States), (4) the EU (European Union) and EFTA (European Free Trade Association), (5) Latin America and the Caribbean, (6) Middle East, (7) North America, and (8) Oceania. See infra note 11 for a link to a 2019 updated report on North America. (Go back)
See generally the 2014 IBA Global Legal Services Report, supra note 8. (To reduce the length of this note, this note cites the 2014 version, rather than the 2018 and 2019 updated regional reports, supra note 9.) The 2014 report includes examples from Africa, Asia, Australia, Europe, the Middle East, and South America. See, e.g., New South Wales, Australia ( at 32: “The Law Society of New South Wales must be informed of a firm’s intention to practise law.”); Austria (id. at 53: “Law firms must register on the list of law firms held at the regional bar association office in whose jurisdiction the firm has its main office. A law firm with earnings above a revenue threshold must also register in the Commercial Register.); Brazil (id. at 76: “Law firms need to register with the OAB [Brazilian Bar Association, Ordem dos Advogados do Brazil] in the relevant state.”); Morocco (id. at 323: “Article 27 of the Advocacy Law permits association, cohabitation and collaboration between Moroccan lawyers. An application to establish a civil company (law firm) must be submitted to the bar association. If the bar does not make a ruling on the application within three months it is deemed approved.”); People’s Republic of China (id. at 360: “Yes. Law firms must apply ‘to the judicial administration department of the people’s government of a city divided into districts or of a district of a municipality directly under the Central Government.”); Singapore (id. at 401: “Yes. SLPs [Singapore law practice] must be established in accordance with requirements stipulated in the LPA [Legal Profession Act]. Requisite approvals need to be obtained from the Law Society, for example in relation to the naming of the law firm etc.”). This list is nonexhaustive. The eight documents cited supra in note 9 include additional jurisdictions that regulate law firms that were not in the 2014 report, including, inter alia, Bolivia, Bosnia and Herzegovina, Cambodia, Cameroon, Denmark, Mauritius, Montenegro, Oman, and Serbia, among others. (Go back)
International Bar Association, The IBA Global Cross Border Legal Services in Northern America Report 2019 (2019), available at https://perma.cc/U7UG-U2S4 [hereinafter 2019 IBA North America Updated Report]. (Go back)
See generally 2019 IBA North America Updated Report, supra note 11 (listing California, Illinois, Indiana, North Carolina, Rhode Island, Virginia, and Wisconsin as US jurisdictions where selected law firms must register with the jurisdiction’s highest court, state bar, or state bar examiner’s office). See at 91: “California does not regulate ‘firms,’ only individuals. But in order to be certified as a law corporation or a limited liability partnership, one has to be registered by the State Bar. Otherwise, firms are not licensed.”; id. at 145: “A certificate of registration, to the extent required by [Illinois] Supreme Court Rule 721.”; id. at 152: “A limited liability partnership, limited liability company, or professional corporation must file their business model status with the Indiana Board of Law Examiners”; id. at 248: “[P]rofessional limited liability companies and professional corporations are required, by N.C. statute, to register with the North Carolina State Bar, the regulatory agency for the legal profession in North Carolina.”; id. at 278: “Yes, attorneys must obtain a license from the Rhode Island Supreme Court if they practice law as a limited liability entity (LLC, LLP or PC).”; id. at 316: “Law firms that are formed as limited liability entities must register biannually with the Virginia State Bar. Part 6.Sec. IV, Para. 14 of the Rules of the Supreme Court of Virginia.”; and id. at 334: “Under SCR 20.5.5 of the Professional Code of Conduct: ‘A lawyer or law firm that is organized as a limited liability organization shall file an annual registration with the state bar of Wisconsin in a form and with a filing fee that shall be determined by the state bar. The annual registration shall be signed by a lawyer who is licensed to practice law in this state and who holds an ownership interest in the organization seeking to register under this rule.’” (Go back)
BRAO is the acronym for Bundesrechtsanwaltsordnung, the federal-level German legislation that regulates legal services. Implementation of the BRAO is handled by the regional bar association regulators. An English translation of the BRAO is provided by Germany’s Federal Ministry of Justice and the Federal Office of Justice at https://www.gesetze-im-internet.de/englisch_brao/. An English pdf version of the current version of the BRAO is available at https://perma.cc/6RJU-T8LL [hereinafter BRAO pdf]. BRAK is the acronym for the umbrella organization that brings together the regional bars that have regulatory authority. See, e.g., “About the BRAK,” available at https://perma.cc/6MYY-AWY8. (“The German Federal Bar (Bundesrechtsanwaltskammer, BRAK) is the umbrella organization of the 28 German regional Bars.”) The BRAK might be analogized to the US Conference of Chief Justices (CCJ), NCBE, and the National Organization of Bar Counsel (NOBC), all of which are umbrella organizations that bring together US jurisdiction regulators. The acronym for Germany’s national-level voluntary “representational bar” is DAV, which stands for Deutscher Anwaltverein, “the German Bar Association.” See “About the DAV,” available at https://perma.cc/XF67-MPQ2. (Go back)
See, e.g., Markus Hartung, “Get Ready for Changes to the German Federal Lawyers’ Act,” Law Society (August 26, 2021), available at https://perma.cc/EP4A-FQUX; Henning Schaloske and Tanja Schramm, “Insights: Professional Regulation of Lawyers and Law Firms in Germany: Comprehensive Reform Comes into Force” (August 1, 2022), available at https://perma.cc/AQ48-U9P4. It is not uncommon for legal services amendments to include both liberalization and accountability provisions, as the BRAO did. For example, in 2002, the ABA revised Rule 5.5 and Rule 8.5 of the ABA Model Rules of Professional Conduct. The changes to Rule 5.5 liberalized multijurisdictional practice. See American Bar Association Commission on Multijurisdictional Practice Report to the House of Delegates, “Report 201B” (August 2002), available at https://perma.cc/SS25-YCCL. The changes to Rule 8.5 expanded accountability when this sentence was added to Rule 8.5(a): “A lawyer not admitted in this jurisdiction is also subject to the disciplinary authority of this jurisdiction if the lawyer provides or offers to provide any legal services in this jurisdiction.” See American Bar Association Commission on Multijurisdictional Practice Report to the House of Delegates, “Report 201C” (August 2002), https://perma.cc/3DYD-YVAY. The ABA also deleted the words “where the lawyer is admitted” from the sentence that followed Rule 8.5’s new sentence: “A lawyer may be subject to the disciplinary authority of both this jurisdiction and another jurisdiction where the lawyer is admitted for the same conduct.” Id. (Go back)
See BRAO pdf, supra note 13, at 77–78. (Go back)
Id. at 78. (Go back)
Id. (Go back)
See supra note 12 and accompanying text. (Go back)
Some have suggested that the ABA Standing Committee on International Trade in Legal Services (ABA ITILS) should prepare a white paper on this topic. Although it may be helpful for it to do so, an official letter from a regulator would likely carry more weight with a foreign regulator than communication from a voluntary bar association such as the ABA. (Go back)
Georgia has been a leader in the United States in understanding and responding to the issues that arise due to clients’ use of global legal services. See, e.g., ABA ITILS, “International Trade in Legal Services and Professional Regulation: A Framework for State Bars Based on the Georgia Experience” (February 2012, updated March 2021), available at https://perma.cc/FJ96-LZH7. (Go back)
Although I don’t know how many law firms in each US jurisdiction might benefit by this type of correspondence, website data “scraped” in 2015 indicated that law firms located in all but three US jurisdictions (Kansas, Oklahoma, and Vermont) also had foreign offices. See Laurel S. Terry, “US Jurisdictions with Law Firms That Also Have Foreign Offices”(April 9, 2015), available at https://perma.cc/PG4K-T6W6. (Go back)
See Laurel S. Terry, “Admitting Foreign-Trained Lawyers in States Other than New York: Why It Matters,”83(4) The Bar Examiner 38–49 (December 2014), available at https://perma.cc/6A7W-STXH. (Go back)

Laurel S. Terry is the H. Laddie Montague Jr. Chair in Law, Emerita and Professor of Law, Emerita, at Penn State Dickinson Law. Professor Terry retired in 2021 but remains active in state, national, and international committees that monitor lawyer regulation issues.