Space for Rent: Ethical Considerations for Office Sharing
December 28, 2015
Starting a law firm partnership is a good way to share responsibilities and expenses, but you also share liability for your partners’ conduct and potential malpractice. Office sharing with other lawyers can be a good alternative, allowing for the shared expense of rent, equipment, and in some cases, support staff, but without the liability of a partnership if set up correctly. However, before you rent that space, consider some of the potential ethical problems related to the office sharing arrangement:
Advertising and Other Communications
A lawyer sharing office space with other lawyers must take steps so that their clients and the public are not misled as to the relationship between the lawyers.
- To help reduce the risk any misunderstandings with clients, your engagement letter can clarify that no partnership exists between the lawyers in the shared space and that only the lawyer who signs the engagement letter will be responsible for the client’s matter.
- Rule 7.5 of the NC Rules of Professional Conduct prohibits lawyers from utilizing a false or misleading name. Thus, lawyers may not imply they are practicing under a partnership, when that is not accurate, in any communication including building signage, advertising and marketing.
- Lawyers in an office sharing situation generally may share a receptionist under certain conditions, but the receptionist cannot imply a partnership where there is none. S/he must answer the phone generically. CPR 265 provides, “While it might be less confusing to have separate telephone lines for each attorney, to have the telephone answered by the words ‘Law Offices’ does not connect the names of [a]ttorneys…in such a way as to suggest the existence of a partnership which does not in fact exist.” In that context, where three lawyers, A, B, and C share an office but do not have a partnership agreement, the receptionist could not answer the phone, “Law Offices of A, B, and C”.
Conflicts of Interest
CPR 274 provides, “It is conceivable that two or more attorneys may maintain an office sharing arrangement and represent conflicting interests if the confidentiality of each attorney’s practice is maintained both in appearance and fact. This confidentiality assumes that each attorney maintains a separate, independent practice. Generally speaking, the sharing of a common library or copying equipment by attorneys representing conflicting interests is acceptable, but the sharing of a common telephone number or personnel by attorneys representing conflicting interests is not acceptable.” Further, it may be difficult to convince adverse parties there is no conflict where the two attorneys share space. Given that, lawyers in an office share likely want to consider conducting conflict checks between the two firms and avoid engaging in adverse representation altogether.
Any fees shared between lawyers sharing office space must comply with Rule 1.5(e) of the Rules of Professional Conduct. Rule 1.5(e) provides that the division of a fee between lawyers who are not in the same firm may only be made if the total fee is reasonable, the division is in proportion to the services performed by each lawyer or each lawyer assumes joint responsibility for the representation, and the client agrees in writing to the arrangement. The Comment to the Rule provides, “Joint responsibility for the representation entails financial and ethical responsibility for the representation as if the lawyers were associated in a partnership.”
While lawyers in a firm must also protect client confidentiality and secure client files, an office sharing arrangement presents a unique situation.
- Client files and other confidential information must not be accessible by other attorneys and their staff sharing the space. Files should be locked where the other lawyer and his/her staff would not have access to it. Your electronic files and data, whether stored onsite or in the cloud, will also need to be separate and secure from other lawyers sharing the space.
- Lawyers may share common spaces, such as conference rooms, but the design must protect client confidentiality so that conversations cannot be overheard.
- One of the great things about sharing space with another attorney, as opposed to a solo office, is having someone to share ideas with. Just make sure you use hypotheticals and leave out identifying information to protect the confidentiality of your clients.