NEW YORK COUNTY LAWYERS’ ASSOCIATION
Committee on Professional Ethics
QUESTION NO. 680
TOPIC: OFFICE SHARING.
DIGEST: Lawyers who merely share office space and who do not share joint responsibility and liability for their cases may not practice under a firm name. They must comply with the provisions of DR 2-107(A) with respect to division of fees from client referrals. Nevertheless, they may be considered as if they were a firm for some purposes, such as conflicts of interest and vicarious disqualification.
CODE: DR 2-102(B); DR 2-102(C); EC 2-11; EC 2-13; DR 2-107; DR 5-I05(A); DR 5-105(D).
May a group of lawyers who practice individually in a single office building form a “lawyers’ cooperative”, using the “logo” “Able, Baker & Charles”? What rules govern lawyers who share office space?
Several lawyers maintain individual practices in a single office building. They wish to know whether they may ethically form a “lawyers’ cooperative” in which each would continue to practice alone and bill his or her clients separately, but would use the same stationery and practice under the name of “Able, Baker & Charles”, which are the names of three members of the “cooperative”. They do not want to form a firm or have professional liability for the other members of the “cooperative”. If work were done for a client by more than one attorney in the office, it would be done pursuant to a retainer agreement in which the client would acknowledge that the attorneys are being retained separately in connection with the matter.
Use of a Unifying Name
The Code of Professional Responsibility does not recognize law practice in the form of a “lawyer’s cooperative”. In general, the form of a law practice is a matter of law, not ethics. We note, however, that Section 492 of the Judiciary Law makes it a misdemeanor for an attorney to permit any person who is not the lawyer’s partner or clerk to prosecute or defend an action in the name of the lawyer.
DR 2-102(B) prohibits a lawyer from practicing under a trade name or a name containing names other than those of one or more of the lawyers in the firm. As we noted in N.Y. County 677 (1990), a trade name is a word or phrase other than the lawyer’s name that might mislead the public as to the identity of the lawyers practicing in the firm. See Friedman v. Rogers, 440 U.S. 1 (1979); In re Shapiro, 90 A.D.2d 22 (1st Dep’t 19821; In re Conduct of Shannon, 638 P.2d 482 (Or. 1982). See also EC 2-11. Since the lawyers in the “cooperative” are not partners and do not wish to become partners, it would be misleading for them to use letterhead with a firm name that looks like a partnership name. See DR 2-102(C) (“A lawyer shall not hold himself or herself out as having a partnership with one or more other lawyers unless they are in fact partners”); EC 2-13 (“A lawyer should not hold himself or herself out as . . . being a partner or associate if the lawyer only shares offices with another lawyer”); ABA 310 (1963) (where there is no sharing of responsibility and liability, “Jones & Smith, Attorneys and Counselors at Law” would be misleading).
Sharing of Fees
Although lawyers who share office space but are not partners may not use a name that looks like a partnership name, in certain cases they may share legal fees. Before September 1, 1990, the payment of a referral fee was prohibited by the Code, Lawyers who were not partners or associates in a firm could split the fees for legal work only in proportion to the work done and responsibility assumed on the matter. However, as of September 1, 1990, DR 2-107(A) of the Code was amended to authorize the payment of a referral fee, as long as (l) the client consents to the employment of the second lawyer after full disclosure that a division of fees will be made, (2) the total fees of the lawyers do not exceed “reasonable compensation” for all legal services that the lawyers rendered to the client, and (3) either the division of fees is in proportion to the work performed by each lawyer, or, by a writing given to the client, each lawyer assumes joint responsibility for the representation.
Conflicts of Interest; Imputed Disqualification
Even though lawyers who share office space are not partners, they may be treated as if they were partners for some purposes under the Code (particularly the provisions for vicarious disqualification in the event of a conflict of interest) if their office sharing arrangements give them access to each other’s files and, thus, to the confidences and secrets of each other’s clients. See, e.g. DR 5-105(D), N.Y. City 80-63 (1980). In N.Y. City 80-63, the New York City Bar Association Committee on Professional Ethics applied this vicarious disqualification principle to two law firms who shared a suite of offices and had a close working relationship. The firms acted as co-counsel on some cases, referred cases to each other, shared a telephone system and the secretaries of both law firms covered for one another. While walking through the office, a lawyer from one firm could see papers of a client of the second firm. The Committee held that it would be improper for the two firms to represent opposing sides in the same litigation, since there was a strong likelihood that confidences and secrets of their respective clients could not be maintained. See also N.Y. County 655 (1978); N.Y. County 461 (1957); N.Y. State 437 (1976); N.Y. State 15 (1965); ABA Inf. 995 (1967).
Lawyers who merely share office space and who do not share joint responsibility and liability for their cases are not partners and may not practice under a firm name. They must comply with the provisions of DR 2-107(A) with respect to division of fees from client referrals. Nevertheless, they may be treated as if they Were a firm for some purposes, such as conflicts of interest and vicarious disqualification.
September 14, 1990