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We’re all Delaware lawyers now

Over my years of teaching corporate law at Illinois and UCLA, I’ve frequently had students complain “you’re teaching me to be a Delaware lawyer not an [insert state here] lawyer.” My response is that a bar prep course can train you to be an [insert state here] lawyer better than I can, but any corporate lawyer in any state needs a working familiarity with Delaware law. Not only is Delaware law highly influential with other state courts, but any legal practice that represents public corporations will be dealing with Delaware corporations. Every once in a while, such a student will get in touch years later and say “you were right,” which is always rewarding.

But a recent Delaware Chancery Court decision makes clear that we really are all Delaware lawyers when it comes to that sort of practice, as Francis Pileggi reports:

In Sample v. Morgan, 2007 WL 4207790 (Del. Ch., Nov. 27, 2007), read opinion here, the Chancery Court provides a thorough analysis of Delaware’s long-arm statute, and determines that a non-Delaware lawyer and a non-Delaware law firm who provided advice on Delaware law to a Delaware corporation, and who caused various documents to be filed with the Delaware Secretary of State, are both subject to personal jurisdiction in Delaware courts. See Sections 3104 (c)(1) and 3104(c)(3) of Title 10 of the Delaware Code. This decision should be of great interest to the many lawyers all over the country who give advice on a daily basis about Delaware corporate law. (It is often noted that there are more lawyers on Park Avenue in New York City who give advice on Delaware corporate law than all the lawyers in the State of Delaware who do so).

Larry Ribstein’s cynical side was nudged by this case:

I can’t avoid a sneaking suspicion that this may also have a little to do with Delaware’s protecting its lawyers’ franchise and not just its reputation. The problem is that although Delaware lawyers do the hard work of developing Delaware’s law, any lawyer can advise on Delaware, and even advertise its expertise. As Mr. Pileggi observes, “there are more lawyers on Park Avenue in New York City who give advice on Delaware corporate law than all the lawyers in the State of Delaware who do so.” Erin O’Hare and I argue (Corporations and the Market for Law), Delaware lawyers do get some sort of exclusivity for their efforts – only they can practice in Delaware courts. But it can’t hurt the Delaware lawyers’ interest in getting exclusive access to their law to serve this warning shot to non-Delaware lawyers who want to get in on the Delaware game.

Having something of a cynical streak myself, I can’t help but suspect that Larry’s on to something here.