Today, anyone with a website can tout themselves as a “California securities arbitration lawyer” or “California securities fraud lawyer” even though the attorney or law firm does not actually have an office located in California. The World Wide Web’s lack of oversight creates an environment where attorneys–and non-attorneys–are able to circumvent California laws that were designed to prevent deceptive legal advertising.
Searching for a securities arbitration attorney is not the same as shopping online for the best deal on a GPS device. Most clients would be better severed by dealing with an attorney that knows the local rules and customs and has an office nearby where they can meet face-to-face. Securities arbitration before the Financial Industry Regulatory Authority (FINRA) is serious business. As any lawyer that regularly handles arbitration cases in San Francisco can attest, the local arbitrators are sometimes hard to please. Currently, I am acting as local counsel for out-of-state attorneys who have California clients with arbitration claims. When handled properly, this type of arrangement works out well for everyone involved.
California does not allow out-of-state attorneys to represent clients in securities arbitration proceedings within the state. California Code of Civil Procedure Section 1282.4, requires non-California lawyers to associate with a California attorney who will serve as the attorney of record. Section 1282.4 was enacted in January 2007 in response to Birbrower, Montalbano, Condon & Frank v. Superior Court, 17 Cal. 4th 119 (1998), which held that non-California attorneys who appear in California arbitration proceedings are engaged in the unauthorized practice of law.
FINRA has also adopted strict guidelines and procedures to ensure that attorneys are in compliance with Section 1282.4. FINRA may deny an out of state attorney’s request for qualification to participate in the arbitration if the non-California attorney has repeatedly appeared in California arbitration cases.