Birbrower, Montalbano, Condon & Frank v. Superior Court

In Birbrower, Montalbano, Condon & Frank v. Superior Court (1998) 17 Cal.4th 119, the Supreme Court concluded that an out-of-state law firm could not recover its fees to the extent those fees were generated for legal services performed "in California" because neither the firm nor its lawyers were authorized to practice law in this state. (Birbrower, supra, at pp. 124, 135-136.). In Birbrower, a New York law firm entered into an agreement with a client in California to provide legal services pertaining to the investigation and prosecution of claims arising out of a software development and marketing agreement with a corporation having its principal place of business in California. (Id. at pp. 124-125.) None of the attorneys with the New York law firm was licensed to practice law in California during the period of representation. (Id. at p. 124.) Attorneys from the New York law firm made trips to California, where they discussed matters related to the legal dispute, provided legal advice, and made strategic recommendations. (Id. at p. 125.) The dispute settled and never went to arbitration. (Ibid.) A dispute arose between the New York law firm and the client: The client sued for legal malpractice, and the law firm sued to recover fees. (Id. at p. 126.) The trial court concluded the fee agreement was unenforceable because the New York law firm had provided legal services in California without having been admitted to practice in the state. (Birbrower, supra, 17 Cal.4th at p. 126.) The Court of Appeal denied the New York law firm's petition for a writ of mandate and affirmed the trial court's order. (Id. at p. 127.) The Court of Appeal held the New York law firm had violated section 6125. (Birbrower, supra, at p. 127.) The California Supreme Court addressed the as yet unresolved issue of the meaning of the term "practice law in California" (italics added) under section 6125. (Birbrower, supra, 17 Cal.4th at p. 128.) The court rejected the proposition that the term "practice law in California" is limited to the situation in which an attorney is physically present in the state when legal services are rendered. (Id. at pp. 128-129.) Instead, the court adopted this definition: "In our view, the practice of law 'in California' entails sufficient contact with the California client to render the nature of the legal service a clear legal representation. In addition to a quantitative analysis, we must consider the nature of the unlicensed lawyer's activities in the state. Mere fortuitous or attenuated contacts will not sustain a finding that the unlicensed lawyer practiced law 'in California.' The primary inquiry is whether the unlicensed lawyer engaged in sufficient activities in the state, or created a continuing relationship with the California client that included legal duties and obligations." (Id. at p. 128.) The court explained its definition did not "necessarily depend on or require the unlicensed lawyer's physical presence in the state." (Birbrower, supra, 17 Cal.4th at p. 128.) Rather, physical presence in California is one factor to consider in deciding whether the unlicensed lawyer has violated section 6125. (Birbrower, supra, at p. 128.) "For example, one may practice law in the state in violation of section 6125 although not physically present here by advising a California client on California law in connection with a California legal dispute by telephone, fax, computer, or other modern technological means. Conversely, although we decline to provide a comprehensive list of what activities constitute sufficient contact with the state, we do reject the notion that a person automatically practices law 'in California' whenever that person practices California law anywhere, or 'virtually' enters the state by telephone, fax, e-mail, or satellite." (Id. at pp. 128-129.) The California Supreme Court held that, under its definition, the New York law firm had practiced law in California in violation of section 6125. (Birbrower, supra, 17 Cal.4th at pp. 131-135, 140.) The New York law firm had not been admitted pro hac vice and did not come within any exception that would permit recovery of fees. (Id. at pp. 135-137.) As a consequence, the New York law firm could not receive compensation under the fee agreement for any services performed in California. (Id. at p. 137.) "Enforcing the fee agreement in its entirety would include payment for the unauthorized practice of law in California and would allow the New York law firm to enforce an illegal contract." (Ibid.) The court concluded the fee agreement was enforceable "to the extent it is possible to sever the portions of the consideration attributable to the New York law firm's services illegally rendered in California from those attributable to the New York law firm's New York services." (Id. at p. 140.)