Clipped in my pocket. I too hate having things floating around and falling out of my pocket.
Never had any issue with anyone paying any attention to a visible clip on my pocket. Most people do not notice it at all. Some that do notice the clip, do not even realize it's a knife. Pluss I figure that if you act like a decent, reasonable person who uses knives responsibly, that's a good way to win people over to the acceptance, and usefulness of edc knives.
And there are no legal issues where I live, I've come into contact with many a LEO, and none have had any problem. When the topic has come up, the only comments I've ever received from an officer were to compliment my knife when I willingly offered to show it, and ask me where to find good deals on good knives. Upon realizing I was an enthusiast, I've had a few LEO's and soldiers proudly show me their own pocket knives..... usually a decent tactical styled Benchmade or the like.