Advisory Opinion 2020-002
February 18, 2020
- AO-2020-002—Ongoing Monitoring of Part 1604 Outside Practice of Law (PDF)
- Return to LSC Advisory Opinions
When a grantee permits a full-time staff attorney to engage in the outside practice of law under 45 C.F.R. Part 1604, what are the grantee’s monitoring obligations for continued compliance with Part 1604?
Grantees must reasonably monitor and document the permitted outside practice of law for full-time staff attorneys under Part 1604 to ensure continued compliance with the Part 1604 requirements throughout the permitted work. In particular, grantees must have sufficient information to reasonably determine that, at all times, the “representation in such case or matter is consistent with the attorney's responsibilities to the [grant] recipient's clients . . . .” 45 C.F.R. § 1604.4(a).
LSC’s regulations do not prescribe the exact timing and nature of the monitoring. Those things may vary depending on the circumstances of the permitted outside work, for example, the nature of any outside organizations with which the outside practice of law is being conducted and what clients are being served in that practice. In any event, grantees should periodically check to ensure that the authorized practice remains in compliance with the Part 1604 requirements. Grantees may contact the LSC Office of Compliance and Enforcement for recommendations about how to design and conduct that monitoring.
Part 1604 prohibits full-time staff attorneys at LSC grantees from engaging in any outside practice of law except for court appointments under § 1604.7 and four specific situations in which the attorney is:
(1) Newly employed and has a professional responsibility to close cases from a previous law practice, and does so on the attorney's own time as expeditiously as possible; or
(2) Acting on behalf of him or herself, a close friend, family member or another member of the recipient's staff; or
(3) Acting on behalf of a religious, community, or charitable group; or
(4) Participating in a voluntary pro bono or legal referral program affiliated with or sponsored by a bar association, other legal organization or religious, community or charitable group.
45 C.F.R. § 1604.4(c). The rule does not restrict the outside practice of law for part-time attorneys.
Additionally, the grantee must determine “that representation in such case or matter is consistent with the attorney's responsibilities to the [grant] recipient's clients . . . .” Id. at § 1604.4(a) and .7(a)(1) (“Such [court] appointment is consistent with the recipient's primary responsibility to provide legal assistance to eligible clients in civil matters.”). Furthermore, the grantee must “adopt written policies governing the outside practice of law by full-time attorneys” consistent with the LSC requirements and applicable rules of professional responsibility. Id. at 1604.3(a)
Part 1604 also sets forth requirements and limits on permitted outside practice of law. For example:
- Section 4(b) prohibits the attorney from intentionally identifying the case or matter with LSC or the grantee, except for court appointments;
- Section 1604.5(a) prohibits compensation to the attorney except for wrapping up cases from a prior law practice;
- Section 1604.7 requires the attorney in court appointments to remit any compensation to the grantee;
- Section 1604.6 permits grantees to allow attorneys to use de minimis or limited amounts of the grantee’s resources for the outside practice (other than court appointments), but only in compliance with other restrictions;
- Section 1604.7(b) permits grantees to allow attorneys to use program resources to undertake representation pursuant to a court appointment.
LSC has not issued any additional guidance about these requirements. The Office of Compliance and Enforcement discovered during an oversight review in 2019 that a grantee did not monitor permissible outside practice of law under Part 1604 by staff attorneys after granting the initial approval. Some attorneys were conducting outside practice based upon approvals that were several years old. In one case, an attorney received approval nearly twenty years previously to volunteer at a legal clinic separate from the grantee. That attorney continues to volunteer at that clinic based solely on that twenty-year old approval.
LSC grantees have a continuing obligation to comply with LSC’s governing statutes, regulations, and other requirements. Grantees must monitor and document their activities to demonstrate compliance. E.g., 45 C.F.R. Part 1630—Cost Standards (grantees “shall have the burden of proof” for all charges to the LSC grant, which must be “[a]dequately and contemporaneously documented in business records . . . .” §§ 1630.4 and .5(a)(8)).
Part 1604 contains some requirements that continue throughout any permitted outside practice of law. In all cases, the grantee must determine “that representation in such case or matter is consistent with the attorney's responsibilities to the recipient's clients . . . .” 45 C.F.R. § 1604.4(a). The grantee must make this determination before providing the initial approval and then reasonably monitor the ongoing outside practice of law to determine if the situation changes.
Although LSC’s regulations do not prescribe the exact timing and nature of the monitoring, grantees must have monitoring practices that are sufficient to ensure that the authorized practice remains in compliance with the Part 1604 requirements. For example, a grantee could determine that no conflicts exist for an attorney to volunteer to take cases through a legal clinic separate from the grantee. Five years later, another office of the grantee might enter an agreement for that clinic to take clients for whom the grantee has a conflict of interest. At that time, the grantee would need to reevaluate the situation to determine if the attorney can still volunteer at that clinic “consistent with the attorney's responsibilities to the recipient's clients . . . .” 45 C.F.R. § 1604.4(a). Grantees should have some reasonable means to periodically monitor any ongoing outside practice of law by staff attorneys to determine whether they need to reevaluate the original § 1604.4(a) determination. For example, a grantee with an attorney engaging in the ongoing outside practice of law could annually request whether there were any changes in the practice that might affect the attorney’s responsibilities to the grantee’s clients.
As described above, Part 1604 has other requirements regarding use of the grantees resources, compensation, and identification of the grantee with the outside practice. The grantee must have a means for monitoring and documenting outside practice to ensure compliance with these requirements as well.
Grantees must maintain records to demonstrate compliance with Part 1604 consistent with their other LSC documentation requirements. Each grantee should adopt practices that work well with the varied nature of outside practice of law situations.
Additionally, the LSC Office of Inspector General issued Fraud Alert 18-0073-A-FA on July 31, 2018, regarding unauthorized outside practice of law by staff attorneys. The fraud alert included recommendations regarding policies and practices for educating staff and documenting approvals and follow-up monitoring. https://oig.lsc.gov/images/pdfs/AR/Fraud_Alert_18-0073-A-FA.pdf
Grantees may contact the LSC Office of Compliance and Enforcement for recommendations about policies and practices to monitor and document approved outside practice of law by staff attorneys in order to demonstrate ongoing compliance with Part 1604. Grantees can contact their state liaison in Compliance and Enforcement or the Director of Compliance and Enforcement, Lora Rath, at email@example.com or 202-295-1524.
Part 1604 permits grantees to allow full-time staff attorneys to engage in the outside practice of law in specific situations. The regulation sets forth ongoing requirements for these situations. Grantees must reasonably monitor and document of the permitted outside practice of law to demonstrate compliance with Part 1604.
BRADLEY S. O’NEIL