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The Task Force on Corporate Responsibility (the "Task Force") of the New York County Lawyers' Association ("NYCLA") submits this letter in response to the request of the Securities and Exchange Commission (the "Commission") for comments on proposed rules (the "Proposal") under Section 307 of the Sarbanes-Oxley Act of 2002 (the "Act") relating to the Implementation of Standards of Professional Conduct. The Proposal is for amending Rule 205.3 of Title 17, Chapter II of the Code of Federal Regulations, establishing standards for professional conduct for attorneys who appear and practice before the Commission in the representation of issuers under the Securities Act of 1933, the Securities Exchange Act of 1934, Investment Company Act of 1940, the Investment Advisers Act of 1940, and the Sarbanes-Oxley Act of 2002. On December 18, 2000, the Task Force submitted its comments to the Commission regarding the initial proposal of new Part 205 of Title 17, Chapter II of the Code of Federal Regulations, establishing standards for professional conduct for attorneys who appear and practice before the Commission in the representation of issuers. Those comments are not repeated here.

The lawyers in a law firm are not collectively "admitted" or "licensed" to "practice law" as a "law firm"; however, by operation of New York law, the "law firm" itself is "qualified to practice" law in as much as it is statutorily "authorized" to practice law and, in fact, does engage in the practice of law. Consequently, a "law firm" may be within Rule 205.2(c)'s definition of "attorney" unless (1) the Rule's use of the term "person" really is limited to "natural persons" or "individuals" or (2) the Rule's use of the word "qualified" means something other than "authorized.

Many of these same problems (on a different scale) are posed in scenarios where the word "attorney" includes an entire law firm. In those scenarios, an issuer would seek to minimize the disruptive consequences of any disagreement with outside counsel that might trigger a reporting obligation under the proposal. Clearly, interpreting "attorney" to include a "law firm" would provide significant incentives for an issuer to retain numerous outside law firms and lawyers whose engagements are limited to discrete projects. By diversifying its outside legal service providers, issuers could thereby better insulate themselves from any disruptive impact occasioned by the forced withdrawal of a law firm that was rendering a variety of services to the issuer. Alternatively, issuers may decide to minimize the risk of disruptive withdrawals by performing that legal work in-house.

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