Feature Article: Office Sharing in Law Practice
Author: Dr. Michael H. Hoeflich
This article is featured in Volume 4, Number 7 of the Legal Ethics and Malpractice Reporter.
The cost of office space is often one of the most significant expenses for many lawyers. In many markets, commercial real estate costs continue to be high, and many solo practitioners and small law firms find that office sharing with other lawyers can be a cost effective option. However, office sharing can pose a number of ethical risks, which we would do well to note and avoid. This month, the American Bar Association Standing Committee on Ethics and Professional Responsibility released Formal Opinion 507 to provide guidance to lawyers contemplating office-sharing arrangements.
Opinion 507 points out that office-sharing arrangements can take a variety of forms: “lawyers with separate law practices sharing office space, support staff, and equipment; law firms renting unused office space to unaffiliated lawyers; or even lawyers sharing an office suite, receptionist, and conference room as part of a virtual law practice or on a temporary basis.” These various arrangements obviously implicate a number of the Rules of Professional Conduct, including the requirement that lawyers maintain client confidences under Rule 1.6, not mislead the public under Rule 7.1, and avoid conflicts of interest under Rules 1.7 through 1.10. In structuring an office-sharing relationship, it is critical that lawyers consider all of these potential ethical problems.
Rule 7.1 requires that a lawyer not make a “false or misleading communication about the lawyer or the lawyer’s services.” One of the dangers of office sharing is that clients and the public might believe that the lawyers in a shared space are, in fact, associated in some way other than simply sharing space. To prevent this from happening, Opinion 507 advises:
Lawyers in an office sharing arrangement should use separate business cards, letterhead, and directory listings, as well as office signs, firm names, and advertisements that describe their distinct practices and do not suggest a close association between professionals operating within the same space It is desirable for lawyers sharing office space to have separate telephone lines, but a receptionist may answer a common telephone line with a generic salutation such as “Law Offices” to avoid implying that the lawyers are practicing together in the same firm.
Signage in shared office space can also be problematic:
unaffiliated lawyers sharing space must take reasonable measures to ensure that clients are not confused about their associations with the other lawyers practicing in the immediate area. Office sharing lawyers must understand the need to clarify for their clients these distinct professional relationships. Any communications to the public should also signal that the law practices are not affiliated with one another, other than in their resource-sharing arrangement.
Increasingly today, lawyers who work remotely will find themselves using temporary shared office space when in-person meetings are required. The use of such spaces may well pose special problems in terms of distinctive signage, and lawyers might consider using temporary signs or other means of communicating to visitors that they are not affiliated with other professionals in the shared space.
Opinion 507 devotes considerable discussion to a risk of office-sharing of which many lawyers might not be aware—conflicts of interest among office-sharing lawyers’ clients:
Where lawyers in an office sharing arrangement properly shield the confidentiality of their respective clients and do not hold themselves out to the public as members of the same firm, it may be permissible under the Model Rules to represent clients with adverse interests—even in the same lawsuit or transaction. Although this determination will ultimately turn on specifics of the office sharing arrangement and the nature of the proposed representations, Model Rules 1.4 and 1.7 may obligate lawyers to disclose the details of the office sharing arrangement to their respective clients, including their efforts to maintain confidentiality, and to obtain each clients’ informed consent, confirmed in writing.
In addition, any staff shared by the lawyers should not possess or otherwise have access to information from both adverse clients.
The Opinion’s focus on how office sharing is structured is important. It is easy to create a potentially serious conflict in these situations. The use of shared secretaries or paralegals, for instance, may raise conflict issues. Even the use of common office machines, such as copiers, may cause such problems if documents are retained in digital memory.[1]
Opinion 507 also addresses a common practice among office-sharing lawyers, particularly when the lawyers are of different experience levels. One potential advantage for a young lawyer in an office-sharing situation is the presence of lawyers with more experience and expertise. There may be situations in which a younger lawyer would want to consult with a more experienced office neighbor. Indeed, Rule 1.1 on lawyer competence may mandate the less experienced lawyer to seek out a more experienced lawyer for advice. Yet, as Opinion 507 points out, such interchanges among lawyers can lead to ethical problems:
engaging in informal consultations from time to time… does not result in the lawyers being “associated in a firm” under Model Rule 1.10(a). At the same time, lawyers who occasionally consult with other lawyers in shared office arrangements should not disclose “client information that may reveal the identity of a client or privileged information.” Lawyers may instead discuss issues using hypothetical facts. As comment [4] to Model Rule 1.6 explains, “[a] lawyer’s use of a hypothetical to discuss issues relating to the representation is permissible so long as there is no reasonable likelihood that the listener will be able to ascertain the identity of the client or the situation involved.”
Consultations between office-sharing lawyers can also trigger unanticipated conflicts of interest, restricting a consulted lawyer’s ability to represent a current or future client under Model Rule 1.7(a)(2). For instance, if Lawyer A and Lawyer B share office space, and Lawyer A divulges client information to Lawyer B during an informal consultation to help Lawyer A prepare a case for trial, then Lawyer B may assume a responsibility not to use or reveal the information, which could materially limit Lawyer B’s ability to represent a current or future client.
ABA Formal Opinion 507 comes at a fortuitous time. The nature of legal practice has undergone many changes resulting from the COVID-19 pandemic. The uncertain economy and fluctuations in the commercial real estate market have also affected how lawyers, especially younger lawyers, practice. One can find office-sharing arrangements in virtually every city in the United States. They make good sense for many lawyers, but only if they are structured to comply with the Rules of Professional Conduct. Opinion 507 provides a useful guide to accomplishing this.
References:
- See, Opinion 507, n. 25: “The Committee does not believe it is possible for lawyers in an office sharing arrangement to maintain this kind of separation when representing clients with adverse interests if the lawyers together share only one staff member.”
READ THE FULL ISSUE OF LEMR, Vol. 4, No. 7
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