How Do You Handle Your First EB-5? Five Points to Consider in a Co-Counsel Relationship
by Fredrick Voigtmann
As immigration practitioners, we serve the best interests of our clients. Many experienced immigration attorneys say that EB-5 should be a last resort for high-net-worth immigration clients.
Wise immigration attorneys carefully screen their potential clients to determine all immigration options; and using a screening checklist for the initial intake meeting or phone conference helps.
More likely than not, however, one day you will come across a wealthy client who does not have any other viable immigration options. That is when reality sets in, and there is good news and bad news.
The good news is that you have your first EB-5 client, or at least a potential client. The bad, or unsettling news is that you are not sure how to proceed because you have never done an EB-5 case before. Do you refer the client to an “EB-5 expert?”
That is one option. Many immigration attorneys practicing in non-EB-5 matters just refer the business out, but then they lose the client, they lose the legal fee, and they lose the opportunity to learn EB-5 and potentially expand their practice. If you decide that you want to try this EB-5 thing, you need to know how best to “keep it in the family.”
A new EB-5 immigration practitioner should be comforted knowing that every seasoned EB-5 attorney had a first EB-5 case. Everyone has to start somewhere. Whether it was an investor sitting across a desk or conference table asking us, “How many of these have you done before?” or whether it was just staring at a huge pile of documents including source of funds evidence, project paperwork, and a blank I-526 form, each of us who practices EB-5 has had that moment where we ask, “Do I really know what I am doing?”
Before you do anything, you should review the ABA Model Rules on ethics as well as the specific rules for your jurisdiction dealing with the duty of competency that lawyers owe to each client (See ABA Model Rule 1.1). Attorneys know that clients expect competent and professional representation. Nobody wants to be a guinea pig. And this makes it hard to break into EB-5 because it is such a highly-specialized area of immigration law.
One possible solution is to rely on an experienced EB-5 attorney as an advisor or mentor, but this can be problematic because of the competency ethics rules discussed above, as well as for a plethora of other reasons mostly related to the adage, “You get what you pay for.” There are EB-5 attorneys who gladly answer EB-5 questions from non-clients and from other immigration attorneys, but these answers are informational only and are usually explicitly stated not to be construed as legal advice, since there is no formal attorney-client relationship. So how do you do it? What is the best way to proceed with your first EB-5 case?
In my first few EB-5 cases, I was very fortunate to have had two great mentors to rely on: my father was one, and a well-known EB-5 pioneer and former INS general counsel was the other.
These two experienced immigration attorneys had been working together on EB-5 cases since the early 1990s, before the Regional Center Pilot Program existed. So, in 1994, when I first learned about EB-5, I had mentors in place who, even though they were still learning and experimenting with the EB-5 program, were a great resource for me as I began to “get my feet wet” in this area.
So, if you are not going to refer the business out, and you are not going to use an advisor/mentor, your remaining option is to co-counsel with an experienced EB-5 immigration attorney.
Here are five points to consider:
1. Select competent co-counsel.
Since you likely do not work for a law firm with an established EB-5 practice or for an attorney who specializes in EB-5, your first EB-5 case probably will be only as good as the co-counsel you select. You want to co-counsel with someone who has done a fair number of these cases - successfully.
In choosing a co-counsel, you should put yourself in the client’s position. If you were a foreign investor, would you retain this attorney to represent you? It certainly is appropriate to ask questions and conduct due diligence; and do not assume that because the attorney is experienced in other immigration areas that he or she is an EB-5 expert. Also, do not assume that a well-known EB-5 attorney is able or willing to enter into a co-counsel relationship. Some are too busy or are just not interested in providing that service.
2. Use well-drafted engagement agreements for both the client and co-counsel.
You should have a well-drafted engagement agreement with your client that both notifies the client of the existence and role of the co-counsel and requests consent to the arrangement.
Also, you should have a clear written agreement with co-counsel spelling out the roles and responsibilities, i.e., who is the lead counsel for the case, who will communicate with the client, how will the G-28 and I-526 be filled out, who is the attorney of record for USCIS notification purposes, who will do what, etc.
3. Map out the division of labor and make sure the fee arrangement makes sense.
Make sure you have a clear division of labor mapped out and reflected in your engagement agreement with your co-counsel. Think of a sliding scale or a balance. Try to get the right mix of how much work you will do and how much the co-counsel will do. For your first case, I recommend that your co-counsel does more than 50 percent of the work. If the work balance is too heavy on your side, co-counsel will spend too much time reviewing, revising, or redoing what you have done. If the balance is too heavy on co-counsel’s side, then you really are not “learning by doing,” and you may be paying too much or giving up too much of your legal fee. Remember that the ABA rules require a division of fees between lawyers that is proportionate to the services performed and the responsibility assumed by each lawyer, and that the total fee is reasonable.
Model Rule 1.5(e) states:
A division of a fee between lawyers who are not in the same firm may be made only if:
- The division is in proportion to the services performed by each lawyer or if each lawyer assumes joint responsibility for the representation;
- The client agrees to the arrangement, including the share each lawyer will receive, and the agreement is confirmed in writing; and
- The total fee is reasonable.
Finally, remember to calendar all deadlines and keep track of important dates, even if co-counsel is doing the same.
4. Not all EB-5 cases will require the same amount of work.
The type of EB-5 case matters greatly in how much work is to be done. The odds are that your first EB-5 case will be a regional center investment, which is nice because, in almost all cases, the regional center will provide you with a project template, including the comprehensive business plan, economist’s report and other project documents. Many regional center investors obtain third-party source of funds reports. So your job as immigration counsel is to compile, organize, and explain these components in your I-526 cover letter or supporting memorandum. Many regional centers provide an I-526 template cover letter as well.
A direct EB-5 case, unless it comes from an EB-5 developer who provides the same type of a package/template as a regional center, will require much more time and energy; hence the need for co-counsel is greater. The EB-5 investor or developer may be relying upon you to coordinate all of the petition components, which include working directly with a business plan writer, an SEC compliance attorney, and other EB-5 industry professionals. This type of case will be much more time-consuming than a regional center EB-5 case.
5. Stay up to date in the EB-5 space and use checklists.
EB-5 practitioners must keep up to date with the latest trends because the goal posts move even on issues that we thought were settled, sometimes on a week-to-week basis. Much of the EB-5 law cannot be found in the regulations and statutes. USCIS seems to be content with revealing its policy through the issuance of RFEs and denials and that means that inexperienced practitioners may not be aware of the latest RFE trends. Therefore, the sharing of information through conferences, EB-5 books and articles, and USCIS stakeholder engagements is vital.
A final point to remember is that a good case-processing checklist that delineates each step of the EB-5 case will be invaluable. Go over this checklist early and often with your co-counsel to keep track of progress.
So, that is how you work on an EB-5 case in a co-counsel relationship. How do you get your first EB-5 investor client? That part is up to you.