Multistate Licensing Issues: Challenges and Solutions

Multistate licensing presents challenges in all professions. Not only do licensing laws and regulations restrict where professionals can practice, but when maintaining licenses in multiple states, professionals must ensure that they continuously meet all applicable licensing requirements and adhere to all applicable professional standards.

Even if you are a federal employee, failure to abide by the relevant rules so can have significant consequences. Not only can mistakes and oversights lead to loss of licensure (among other consequences), but practicing without a state license can have consequences of its own. As a result, professionals need to take a proactive approach to multistate licensing compliance, and they must engage experienced professional license defense counsel promptly if they face allegations of engaging in unlicensed practice or committing other professional license violations.

5 Challenges with Multistate Professional Licensing

While multistate licensing is growing in popularity, it continues to present a variety of challenges for professionals in all disciplines. These challenges include (but are not limited to):

1. Multistate Licensure

In some professions, there are multistate licensing systems that facilitate simultaneous licensing in multiple states. The Interstate Medical Licensure Compact is one of the more commonly used examples. But, while these multistate licensure systems help streamline the process to an extent, there are still some significant limitations—both with regard to these programs themselves and with regard to the requirements for using these programs to obtain professional licenses in multiple states. For example, under the Interstate Medical Licensure Compact, the eligibility requirements include (but are by no means limited to):

• The professional’s primary residence must be in the professional’s state of principal licensure (SPL);
• The professional’s employer must be located in the SPL;
• At least 25 percent of the professional’s practice must be in the SPL, and,
• The professional must use the SPL as his or her state of residence for federal tax purposes.

Additionally, the Interstate Medical Licensure Compact and other similar multistate licensure programs have their own rules and requirements. Thus, not only must professionals comply with the professional rules of conduct in all pertinent states, but they must comply with these programs’ rules and requirements as well.

2. Reciprocity

Reciprocity rules allow licensed professionals to practice in multiple states without going through each state’s full licensing procedures. For example, reciprocity rules allow lawyers to practice in multiple states without taking each state’s bar exam, and the rules for other professions are typically similar.

However, reciprocity is not automatic—there are still steps professionals need to take to secure a license in each state in which they wish to practice. Additionally, not all states have reciprocity, so before deciding where to seek licensure, professionals should ensure that they have a clear understanding of each state’s specific requirements.

3. Renewal

To avoid engaging in unlicensed practice, professionals must renew their licenses in every state in which they are licensed to provide their professional services. Even if a nonrenewal is inadvertent, practicing under an expired license can lead to professional discipline.

While professional licensing associations may send renewal notices, professionals should not rely on receiving these notices in their mail or email. If they don’t come (or if professionals overlook them), this is not an excuse for practicing under an expired license. Instead, professionals should docket their renewal deadlines, and they should be sure to file their renewal forms or applications well in advance so that they can address any issues or concerns before their license in a state expires.

4. Rules of Professional Conduct and Professional Discipline

Just as each state has its own professional licensing requirements, each state also has its own rules of professional conduct and professional discipline. Professionals must familiarize themselves with all relevant rules, and when rules vary across jurisdictions, they must structure and manage their practices accordingly. Additionally, rules of professional conduct often require that professionals report any alleged violations or disciplinary proceedings in other states, and failure to report can trigger disciplinary action.

5. Online Marketing (Firm Websites and Social Media)

When professionals are licensed to practice in some states and not others, they must be very careful to ensure that their online marketing activities comply with all pertinent rules. Among other things, this means ensuring that they do not hold themselves out as licensed to practice in jurisdictions where they have not successfully applied for licensure. This applies not only to professionals’ firm websites but to social media as well. Online marketing compliance can present a variety of challenges, and licensed professionals must address these challenges proactively in order to avoid running afoul of any applicable rules.

Effectively Managing Multistate Professional Licensing

With these challenges in mind, how can professionals effectively manage multistate licensing? Here are some key considerations:

• Licensing in All Necessary States – Professionals who intend to practice across state lines must ensure that they obtain all necessary licenses—whether through a multistate licensure compact, reciprocity or separate licensing applications.
• Licensing Only Where Necessary – To minimize the financial and administrative burdens of multistate professional licensing compliance, professionals should generally only seek licensure where necessary.
• Understanding All Applicable Professional Responsibilities – Before practicing in any state, licensed professionals should ensure that they have a clear and comprehensive understanding of that state’s rules of professional responsibility.
• Knowing When Renewals and Reports Are Required – As discussed above, licensed professionals should take a proactive approach to managing their multistate license renewals. Licensed professionals should ensure that they know when any other reports or forms are required as well.
• Seeking Advice Promptly When You Have Questions or Concerns – Finally, professionals who have questions or concerns related to any aspect of multistate licensing should seek advice promptly. This applies across the board—from meeting state-specific licensing requirements to marketing a multistate professional practice online.

Schedule a Consultation with a Professional Licensing Attorney Today

Are you a federal employee who has questions or concerns about multistate licensing compliance? If so, we can help, and we invite you to contact us. To schedule a consultation with a professional licensing attorney at The Law Firm of J.W. Stafford, please call 410-514-6099 or tell us how we can reach you online today.