These summaries were prepared by McGuireWoods LLP lawyer Thomas E. Spahn. They are based on the letter opinions issued by the Virginia State Bar. Any editorial comments reflect Mr. Spahn's current personal views, and not the opinions of the Virginia State Bar, McGuireWoods or its clients. 
 
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  Topic: 45 - Law Firms - Miscellaneous
LEO NumTopicsSummaryDate
1600

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28-Law Firm Staff

39-Miscellaneous

45-Law Firms - Miscellaneous

[WITHDRAWN 9/16] A lawyer should not open up a branch office to be staffed entirely by non-lawyers (with the lawyer expecting to visit the branch office two days each month), because a lawyer's supervision over non-lawyer staff "should be significant, rigorous and efficient."6/14/1994
1380

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38-Fee Splitting

42-Payments to Solicit Recommendations

45-Law Firms - Miscellaneous

55-Firm Names and Letterhead

[WITHDRAWN 9/16] Although the Bar cannot determine if two affiliated professional corporations are a single entity for purposes of the ethics rules, a determination that they are two separate entities might mean that they are violating: the fee-splitting rules; the prohibition on paying compensation to recommend employment; the ban on using the name of a lawyer who has left the firm and is engaged in business elsewhere.11/30/1990
1370

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5-Lawyers Changing Jobs

8-Bills and Fees

38-Fee Splitting

45-Law Firms - Miscellaneous

A client paid a retainer to a law firm that later dissolved. The client retained one of the withdrawing lawyers. The Bar held that the former firm must return the unused portion of the retainer. 7/24/1990
1478

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5-Lawyers Changing Jobs

10-Former Government Lawyer Conflicts

45-Law Firms - Miscellaneous

A federal judge's former law clerk may not work on a case that represented a re-filing of a matter on which the clerk worked, but the disqualification did not extend to the entire firm (DR 9-101 contains no imputed disqualification provision). Furthermore, the firm need not formally screen the clerk (this LEO overruled LEO 1334). [Rule 1.11(b) probably would require that the law clerk be screened.]8/24/1992
0844

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38-Fee Splitting

45-Law Firms - Miscellaneous

A group of law firms may incorporate to share their expertise. A fee-sharing arrangement does not have to be proportional to the different firms' effort as long as the client consents after full disclosure and both lawyers are responsible for the client. [This LEO was partially overruled by Rule 1.5(e), which does not require that a lawyer sharing in fees also share responsibility, thus allowing "referral fees" if the client consents after full disclosure.]9/2/1986
ABA-420

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8-Bills and Fees

45-Law Firms - Miscellaneous

A law firm hiring a contract lawyer may either bill his or her time as: (1) fees, in which case the client would have a "reasonable expectation" that the contract lawyer has been supervised, and the law firm can add a surcharge without disclosure to the client (although some state bars and courts require disclosure of both the hiring and the surcharge); or (2) costs, in which case the law firm can only bill the actual cost incurred “plus those costs that are associated directly with the provision of services” (as explained in ABA LEO 379). 11/29/2000
1735

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8-Bills and Fees

11-"Of Counsel" Relationship

38-Fee Splitting

42-Payments to Solicit Recommendations

45-Law Firms - Miscellaneous

A law firm may employ independent contractor lawyers under the following conditions: whether acting as independent contractors, contract attorneys or "of counsel," the lawyers must be treated as part of the law firm for confidentiality and conflicts of interest purposes; the firm must advise clients of any "mark-up" between the amount billed for the independent contractor lawyers' services and the amount paid to them if "the firm bills the amount paid to the Attorney as an out-of-pocket expense or disbursement," but need not make such disclosure to the clients if the firm bills for the lawyers' work "in the same manner as it would for any other associate in the Firm" and the independent contractor lawyer works under another lawyer's "direct supervision" or the firm "adopts the work product as its own;" the independent contractor lawyers may be designated as "of counsel" to the firm if they have a "close, continuing relationship with the Firm and direct contact with the firm and its clients" and avoid holding themselves out as being partners or associates of the firm; the firm must disclose to clients that an independent contractor lawyer is working on the client's matter if the lawyers "will work independently, without close supervision by an attorney associated with the Firm," but need not make such disclosure (and obtain consent)if the "temporary or contract attorney works directly under the supervision of an attorney in the Firm;" the firm may pay a "forwarding" or "referral" fee to the independent contractor lawyers for bringing in a client under the new Rules.10/20/1999
1659

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45-Law Firms - Miscellaneous

55-Firm Names and Letterhead

A law firm may hire an associate who also maintains a separate law practice; the firm may include the associate's name on its letterhead but should disclose the associate's separate office address "to avoid the possibility of misleading the public regarding the associate's relationship with the law firm." 1/23/1996
1450

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21-Reporting Another Lawyer's Unethical Conduct

45-Law Firms - Miscellaneous

A law firm may not require or prevent one of its lawyers from filing an ethical complaint against a lawyer in another firm. 3/23/1992
0956

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12-Withdrawing Lawyers (Including Non-Compete Issues)

14-Ownership of Files and Attorney Lien Issues

45-Law Firms - Miscellaneous

A law firm may not sell its name or goodwill, but may sell physical assets. A lawyer taking over a practice should notify clients of their right to select another lawyer and give direction about the disposition of their files (which should not be transferred without disclosure to the clients). [Rule 1.17 permits the purchase or sale of a law firm's practice, including good will, under certain circumstances.]8/21/1987
1438

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16-Lawyer's Personal Interests

28-Law Firm Staff

38-Fee Splitting

45-Law Firms - Miscellaneous

50-Lawyer-Owned Businesses

A law firm may not share profits with an advertising agency unless its employees are bona fide and regular employees of the law firm. [Approved by the Supreme Court of Virginia 11/2/16].10/21/1991
ABA-351

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13-Marketing - Miscellaneous

45-Law Firms - Miscellaneous

A law firm may use terms such as "affiliated" and "associated" in describing other firms as long as the terms are not misleading. [Overruled in ABA LEO 388.] 10/20/1984
0652

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4-Witness-Advocate Rule

5-Lawyers Changing Jobs

45-Law Firms - Miscellaneous

A law firm that is the product of a merger may not represent one of its predecessors in a malpractice action when one of its partners will have to testify as a witness. [Under Rule 3.7(c), this disqualification is not imputed to the lawyer's firm unless there is an actual conflict of interest.]1/16/1985
1430

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5-Lawyers Changing Jobs

10-Former Government Lawyer Conflicts

45-Law Firms - Miscellaneous

A law firm wants to hire a local government attorney with whom the firm is working on behalf of the local government entity. It would be a per se ethical violation for the former government attorney to personally participate in matters on which the lawyer worked while a public employee, "although adverse representation is not involved." However, because Canon 9 has no imputed disqualification rule, the firm may continue to represent the entity as long as the new lawyer is not personally involved. If a former government lawyer intends to be adverse to a former client, the lawyer's personal disqualification would result in the firm's imputed disqualification under DR 5-105(E). [Rule 1.11 allows a law firm to avoid disqualification in certain circumstances if it screens the former government lawyer.]2/22/1992
0469

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13-Marketing - Miscellaneous

45-Law Firms - Miscellaneous

55-Firm Names and Letterhead

A law practice may indicate the absence of a partnership by using the term "affiliated law offices." 9/20/1982
1234

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19-Judge Conflicts

45-Law Firms - Miscellaneous

A lawyer becoming a judge may sell the physical assets of a law firm but not its goodwill, active client files or work in progress. It is improper to inflate the value of the assets to disguise the sale of the practice as a going business. [Rule 1.17 permits the purchase or sale of a law firm's practice, including good will, under certain circumstances.]4/19/1989
1113

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12-Withdrawing Lawyers (Including Non-Compete Issues)

45-Law Firms - Miscellaneous

A lawyer fulfills the ethic Rules' obligations by sending notices to all of a law firm's clients that the law firm is disbanding. A lawyer has fewer obligations to clients that have been retained by the lawyer' partner before the partnership began and who therefore never engaged the partnership to represent them. 8/24/1988
0356

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45-Law Firms - Miscellaneous

A lawyer handling a petty cash account for the lawyer's client/employer is not required to prepare an accounting when the attorney-client relationship ends; a lawyer admitted to practice in Virginia by examination is not required to maintain an office in Virginia. 3/10/1980
0802

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5-Lawyers Changing Jobs

45-Law Firms - Miscellaneous

A lawyer may be a member of two law firms. 5/27/1986
0527

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2-Adversity to Former Clients

5-Lawyers Changing Jobs

45-Law Firms - Miscellaneous

A lawyer may not represent the plaintiff in an accident case when a former partner in a now-dissolved firm investigated the accident, even if the lawyer may not have been privy to all of the facts uncovered by the investigation; the "partnership relationship imputes knowledge to the other partners". [Rule 1.9(b) analyzes a lawyer's actual knowledge rather than imputed knowledge when the lawyer moves to another firm.]9/13/1983
0934

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28-Law Firm Staff

38-Fee Splitting

45-Law Firms - Miscellaneous

59-Disbarred and Suspended Lawyers

A lawyer may not: pay a lump sum to a disbarred lawyer to take over the practice; pay for the disbarred lawyer's yellow page advertisement; divide a contingent fee with the disbarred lawyer; employ the disbarred lawyer as a legal assistant on a set salary; and take over the disbarred lawyer's phone number and answer the telephone as "law offices." [To the extent it is inconsistent, this LEO was overruled by LEO 1218.]6/16/1987
1318

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8-Bills and Fees

16-Lawyer's Personal Interests

45-Law Firms - Miscellaneous

50-Lawyer-Owned Businesses

A lawyer may practice law and operate a consulting firm out of the same office as long as the activities are kept separate and clients consent after full disclosure. The lawyer may send out one bill for both services as long as the bill fully discloses the separate services. 2/1/1990
0255

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2-Adversity to Former Clients

45-Law Firms - Miscellaneous

A lawyer representing a party in a partition suit may form a partnership with a lawyer who had previously represented the party's opponent in the partition suit, as long as the party consents after full disclosure. 12/13/1974
0286

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45-Law Firms - Miscellaneous

A lawyer who has taken over the practice of a deceased lawyer may notify the clients and ask for their direction about disposition of files. 1/30/1978
0744

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2-Adversity to Former Clients

3-Multiple Representations on the Same Matter

5-Lawyers Changing Jobs

45-Law Firms - Miscellaneous

58-Real Estate Lawyers

64-Lawyers Acting as Deed of Trust Trustees

A lawyer who represented both the buyer and seller in a real estate transaction may not initiate foreclosure proceedings as trustee. A lawyer with whom the lawyer later merged must likewise withdraw from representing the buyer or seller in their dispute. 4/17/1986
1551

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3-Multiple Representations on the Same Matter

7-Family Conflicts

45-Law Firms - Miscellaneous

71-Representing Corporations

A lawyer who represents companies that compete with a company employing the lawyer's non-lawyer fiancé may continue to represent the clients as long as they are only adverse "in a business setting" to the fiancé's employer and "unless and until any two or more clients become adverse to each other in legal matters." Any disqualification of the lawyer based on the engagement is not imputed to the other lawyers in the firm. 10/20/1993
0393

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41-Non-Virginia Lawyers

45-Law Firms - Miscellaneous

A non-Virginia lawyer may own and operate a legal clinic in Virginia as long as the corporation is domesticated and all legal services are performed by Virginia lawyers. 12/15/1980
0388

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41-Non-Virginia Lawyers

45-Law Firms - Miscellaneous

A non-Virginia lawyer who is a registered patent lawyer may practice trademark law in Virginia and create a partnership with Virginia lawyers as long as the partnership only practices before the Patent & Trademark Office. [USPTO ethics rules preempt any Virginia ethics rules, and would allow such a partnership; Va. LEO 1843 (4/16/08)]8/7/1980
1584

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28-Law Firm Staff

39-Miscellaneous

45-Law Firms - Miscellaneous

A Virginia lawyer may enter into a partnership with a non-lawyer in the District of Columbia, because its ethics rules permit such partnerships (Virginia's DR 1-102(B) acts "as a conflicts of rules provision" allowing the more permissive DC rule to apply). Although the partnership (through a Virginia lawyer) may conduct activities in DC benefiting Virginia clients, it may not engage in the practice of law in Virginia, and the Virginia lawyer may not conduct any of the lawyer's practice in Virginia through the partnership. [Rule 8.5(a) now indicates that Virginia lawyers must comply with the Rules regardless of where they practice, and Rule 8.5(b) now provides a "choice of law" rule for lawyers licensed in more than one jurisdiction.] [Approved by the Supreme Court of Virginia 11/2/16].4/11/1994
0460

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45-Law Firms - Miscellaneous

A Virginia lawyer may practice in the state without maintaining an office here. 7/21/1982
ABA-468

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5-Lawyers Changing Jobs

8-Bills and Fees

45-Law Firms - Miscellaneous

Although ABA Model Rule 1.17 allows lawyers to sell their law firms as long as they "cease to engage in the practice of law," "it seems reasonable to conclude that the transition of pending or active client matters from a selling lawyer or firm to a purchasing lawyer or firm need not be immediate or abrupt." Lawyers may assist in the transition of "active client matters for a reasonable period of time after the closing of a sale," but "neither the selling lawyer or law firm nor the purchasing lawyer or law firm may bill clients for time spent only on the transition of matters."10/8/2014
1774

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1-Adversity to Current Clients

21-Reporting Another Lawyer's Unethical Conduct

45-Law Firms - Miscellaneous

An associate may not (absent consent) prepare a patent opinion seeking to invalidate a patent held by another firm client (which the associate’s law firm represents in different technologies). The supervising partner who knowingly directed the associate’s action violated Rule 5.1, because the partner ordered and ratified inappropriate conduct by a subordinate lawyer. 2/10/2003
0694

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45-Law Firms - Miscellaneous

59-Disbarred and Suspended Lawyers

An associate may not continue a firm's practice if the partners have lost their licenses, although the associate may maintain an independent practice as long as there is no misrepresentation and the clients understand the situation.5/10/1985
ABA-388

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11-"Of Counsel" Relationship

13-Marketing - Miscellaneous

45-Law Firms - Miscellaneous

Describing relationships between law firms using terms like "network", "alliance", "correspondent", "affiliate" or "associate", without more, tends to mislead. If such a relationship would be relevant to a prospective client, the lawyer could include such a description in a retainer letter with such a client. Clients must be advised of relationships among firms (such as "of counsel" relationships) that might create a conflict of interests. 12/5/1994
1082

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5-Lawyers Changing Jobs

45-Law Firms - Miscellaneous

Firm A is considering merging with Firm B, but discovers that it represents a major creditor of one of Firm B's clients. The lawyer in Firm B who represents the client-debtor practices in a satellite office and is the only lawyer at the firm who has ever represented the debtor. The lawyer has never shared any information about the debtor with any other lawyers in Firm B, and played no role in the merger negotiations. If this lawyer leaves Firm B, the remaining lawyers may merge with Firm A and continue to represent the creditor (without obtaining the debtor's consent). "Generally, lawyers associated in a firm with a lawyer who directly represents a client are presumed to have access to confidential information about that client . . . this presumption however is rebuttable." 5/2/1988
ABA-453

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21-Reporting Another Lawyer's Unethical Conduct

31-Protecting and Disclosing Confidences and Secrets

43-Conflicts of Interest - Miscellaneous

45-Law Firms - Miscellaneous

57-In-House Lawyers

Law firms' in house ethics counsel: may disclose and receive client confidences to and from other firm lawyers, because "unless a client has expressly instructed that information be confined to specific lawyers within the firm, the lawyer handling the matter does not violate the duty of confidentiality by consulting within the firm about the client's matter."; may but is not required to disclose to clients that the lawyer has discussed with other firm lawyers ethics issues involving that client; does not face a per se conflict in discussing with other firm lawyers possible conflicts of interest involving the client, but may face a conflict if the communications involve protecting the interests of the law firm or its lawyers rather than the client; should explain to the firm lawyer requesting advice whether the in house ethics counsel represents the law firm, the individual lawyer or both; must comply with Rule 1.13's requirement to disclose any wrongdoing up the law firm's chain of command; should consider a possible duty to disclose a colleague's unethical conduct, recognizing that "reporting under this rule is required only when the conduct in question is egregious and 'of a type that a self-regulating profession must vigorously endeavor to prevent.'"; should remember that any duty of disclosure is trumped by the duty of confidentiality to clients (either the law firm or the individual lawyer); recognize that he might have to withdraw from representing the law firm and the individual lawyer if they disagree about whether he should report wrongdoing; realize that other lawyers in the firm may have a duty to report a colleague's wrongdoing, because they do not have an attorney-client relationship with the law firm or the individual lawyer (but may have a duty of confidentiality to firm clients whose information is involved).10/17/2008
ABA-451

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8-Bills and Fees

28-Law Firm Staff

45-Law Firms - Miscellaneous

50-Lawyer-Owned Businesses

Lawyers may outsource "legal or non-legal support" services as long as they bear various ethics requirements in mind -- mentioning outsourcing to foreign lawyers as only one example of outsourcing, along with "the use of a local photocopy shop" to copy documents, retaining a "document management company" in litigation, using third party vendors "to provide and maintain a law firm's computer system" and reliance on a "legal research service" to conduct research. Lawyers arranging for such outsourcing must ultimately assure competent service by anyone assisting in the lawyer's work for the client. Lawyers' duties under ABA Model Rule 5.1 and 5.3 "apply regardless of whether the other lawyer or the nonlawyer is directly affiliated with the supervising lawyer's firm" -- despite the reference to "a firm" in ABA Model Rule 5.1 Comment [1]. Lawyers arranging for the outsourcing must adequately investigate the people who will be conducting the outsourced work (including even such issues of confidentiality as "recycling and refuse disposal procedures." Lawyers arranging for overseas outsourcing should assess such issues as: the foreign lawyers' legal training and dedication to "core ethical principles" similar to U.S. lawyers, the possibility of confidential materials being seized in "judicial or administrative proceeding" and other threats to confidentiality. Lawyers arranging for outsourcing may have to alert their clients, if the outsourcing services will be performed independently of the lawyer (referring to ABA LEO 356, which deals with temporary lawyers). Because "ordinarily" the lawyer will not exercise a "high degree of supervision and control" over the work that is being performed, the lawyer generally will have to provide notice to their clients. Lawyers providing confidential client information to a third party may do so only with the client's consent, and the "implied authorization" to reveal client confidences in performing legal services "does not extend to outside entities or to individuals over whom the firm lacks effective supervision and control." Lawyers must be very careful to assure confidentiality, and "[w]ritten confidentiality agreements are . . . strongly advisable in outsourcing relationships." In fulfilling their duty to "minimize the risk of potentially wrongful disclosure," lawyers arranging for the outsourcing "should verify that the outside service provider does not also do work for adversaries of their clients on the same or substantially related matters." In charging fees for the outsourced work, lawyers should comply with the standards articulated in ABA LEO 420. Lawyers may generally add a surcharge to the cost paid to those performing outsourced work (without notice to the client), as long as the total fee is reasonable. Lawyers deciding to pass the cost along to the client as a disbursement may not mark up the cost, but may only bill the client the actual cost "plus a reasonable allocation of associated overhead, such as the amount the lawyers spent on any office space, support staff, equipment, and supplies for the individuals under contract." In the case of outsourced services, the overhead cost may include "a reasonable allocation of the cost of supervising those services if not otherwise covered by the fees being charged for legal services." Lawyers arranging for outsourcing must avoid assisting anyone in the unauthorized practice of law, although generally there should be no UPL problem if lawyers performing the outsourced work assist the lawyers (who remain ultimately responsible for the work) and do not hold themselves out as being admitted in the jurisdiction.7/9/2008
ABA-401

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34-Limiting Liability to Clients

45-Law Firms - Miscellaneous

Lawyers may practice in limited liability partnerships if they meet legal requirements, accurately describe the entity in communication and assure that "the lawyer rendering the legal services to the client must be personally responsible to the client." 8/2/1996
1872

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31-Protecting and Disclosing Confidences and Secrets

45-Law Firms - Miscellaneous

53-Office Sharing with Non-Lawyers

82-Advertising

Lawyers must be mindful of their confidentiality, supervision and marketing responsibilities, among other things, if they practice "virtually," or if they combine a virtual practice with an "executive office suite" for meetings and other activities requiring a physical office. Lawyers sharing a space with nonlawyers must take reasonable steps to protect client confidences. Lawyers must also take reasonable steps to protect their clients' confidential information when dealing with technology, including examining "the third party provider's use of technology and terms of service" before using such provider's cloud computing or other services (lawyers unable to assess these factors on their own "will have to consult with someone qualified to make that determination"). Lawyer might also have an obligation to explain to their clients the risk of using certain methods of communication and storage. A lawyer not physically present with colleagues and staff must nevertheless comply with the normal duties of supervising subordinate lawyers and nonlawyers. Lawyers may not use misleading marketing by listing as an office a place where the lawyer does not actually practice (analyzing the situation using such factors as the frequency with which the lawyer uses the space, whether nonlawyers also use the space, signage, etc.). Under the current Virginia regulations (which are the subject of proposed amendments), lawyers admitted by motion to practice in Virginia must maintain an office where they can see clients (which does not include a "virtual office or shared occupancy arrangements").3/29/2013
1886

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21-Reporting Another Lawyer's Unethical Conduct

36-Withdrawal from Representations

45-Law Firms - Miscellaneous

Lawyers must report an impaired colleague if the colleague engages in sufficiently serious misconduct (under Rule 8.3), but also must "take precautionary measures before" a colleague's impairment reaches that level; such lawyers: (1) must "take reasonable steps to prevent the impaired from violating the Rules" (including considering whether the lawyer must withdraw from a representation under Rule 1.16); (2) may be able to "work around or accommodate" the impairment by reducing the impaired colleague's workload, arranging for a supervisor until the impairment dissipates, restrict the impaired colleague's scope of practice, etc.; (3) should suggest that the impaired colleague seek appropriate help. If the impaired colleague has committed sufficiently egregious misconduct that requires reporting under Rule 8.3, arranging for the impaired lawyer to participate with Lawyers Helping Lawyers does not eliminate the reporting obligation. [Approved by the Supreme Court of Virginia 12/15/16]12/15/2016
ABA-429

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12-Withdrawing Lawyers (Including Non-Compete Issues)

21-Reporting Another Lawyer's Unethical Conduct

45-Law Firms - Miscellaneous

Lawyers practicing in law firms, law departments or similar organizations must establish policies and procedures assuring that all lawyers in the organization fulfill their ethical requirements and protect their clients -- even if a lawyer becomes impaired by substance abuse, mental illness, etc. Lawyers learning of ethics violations by an impaired lawyer may have an obligation to report the violation. Even if not obligated to report violations, lawyers may choose to reveal information about violations or the impairment -- unless confidentiality duties to clients or some other rules prohibit the disclosure. Lawyers in a firm or other organization from which an impaired lawyer has withdrawn may have an obligation to reveal the impairment if clients are deciding whether to retain the now departed impaired lawyer. The law firm or other organization does not have a duty to reveal the impairment if a client has already shifted its relationship to the departed lawyer, but must avoid any endorsement of the departed lawyer’s ability to represent the client (such as a joint letter from the law firm and the departed lawyer regarding the transaction, which "could be seen as an implicit endorsement by the firm of the departed lawyer's competence"). 6/11/2003
0631

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1-Adversity to Current Clients

5-Lawyers Changing Jobs

45-Law Firms - Miscellaneous

Lawyers representing clients with adverse interests may continue to do so after merging, as long as the clients consent. 11/20/1984
ABA-356

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45-Law Firms - Miscellaneous

49-Lawyers - Miscellaneous

Temporary lawyers must comply with all ethics rules arising from a lawyer's representation of a client, but depending on the facts (such as whether the temporary lawyer "has access to information relating to the representation of firm clients other than the clients on whose matters the lawyer is working") may not be considered "associated" with law firms for purposes of the imputed disqualification rules (the firm should screen such temporary lawyers from other representations). Lawyers hiring temporary lawyers to perform "independent work for a client without the close supervision of a lawyer associated with the law firm" must obtain the client's consent after full disclosure. Lawyers need not obtain the client's consent to having temporary lawyers working on the client matters if the temporary lawyers are "working under the direct supervision of a lawyer associated with the firm." Lawyers need not advise clients of the compensation arrangement for temporary lawyers "assuming that a law firm simply pays the temporary lawyer reasonable compensation for the services performed for the firm and does not charge the payments thereafter to the client as a disbursement."12/16/1988
1576

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16-Lawyer's Personal Interests

45-Law Firms - Miscellaneous

73-Family Law Lawyers

The Bar declines to indicate whether a commissioner in chancery may order a lawyer to issue stock in the lawyer's law firm and give it to the lawyer's ex-spouse as part of a divorce settlement. 2/8/1994
1818

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14-Ownership of Files and Attorney Lien Issues

39-Miscellaneous

45-Law Firms - Miscellaneous

There is no per se prohibition on lawyers keeping all of their files in electronic form, but lawyers must: (1) retain paper documents that might be required (such as "testamentary documents, marriage certificates, or handwriting exemplars"); (2) recognize that although the rules "do not specify the form of file maintenance," a lawyer considering destroying a client's paper file "should review that file to make sure that any documents that may be of continued use or benefit to the client only if they are maintained in paper form are not destroyed."9/30/2005
1850

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8-Bills and Fees

45-Law Firms - Miscellaneous

This compendium opinion provides advice about lawyers outsourcing, defined as follows: "[o]utsourcing takes many forms: reproduction of materials, document retention database creation, conducting legal research, drafting legal memoranda or briefs, reviewing discovery materials, conducting patent searches, and drafting contracts, for example." Among other things, a lawyer engaging in such outsourcing must: (1) "exercise due diligence in the selection of lawyers or nonlawyers."; (2) avoid the unauthorized practice of law (explaining that the Rules: "do not permit a nonlawyer to counsel clients about legal matters or to engage in the unauthorized practice of law, and they require that the delegated work shall merge into the lawyer's completed work product" and direct that "the initial and continuing relationship with the client is the responsibility of the employing lawyer," ultimately concluding that "in order to avoid the unauthorized practice of law, the lawyer must accept complete responsibility for the nonlawyer's work. In short, the lawyer must, by applying professional skill and judgment, first set the appropriate scope for the nonlawyer's work and then vet the nonlawyer's work and ensure its quality."); (3) "obtain the client's informed consent to engage lawyers or nonlawyers who are not directly associated with or under the direct supervision of the lawyer or law firm that the client retained"; (4) assure client confidentiality. "[I]f payment is billed to the client as a disbursement," the lawyer must pass along any cost without mark up unless the client consents (although the lawyer may also pass along any overhead costs which in the case of outsourced services "may be minimal or nonexistent"). "[I]f the firm plans to bill the client on a basis other than the actual cost which can include a reasonable allocation of overhead charges associated with the work," the client must consent to such a billing arrangement "in cases where the nonlawyer is working independently and outside the direct supervision of a lawyer in the firm." A lawyer contemplating outsourcing at the start of an engagement "should" obtain "client consent to the arrangement" and provide "a reasonable explanation of the fees and costs associated with the outsourced project." [The remainder of the opinion appears to allow a law firm hiring outsourced service providers working under the direct supervision of a lawyer associated with the firm to treat them as if they were lawyers in the firm both for client disclosure and consent purposes, as well as for billing purposes.] A lawyer can treat as inside the firm for disclosure and billing purposes an outsourced service provider who handles "specific legal tasks for the firm while working out of her home" (although not meeting clients there), who has "complete access to firm files and matters as needed" and "who works directly with and under the direct supervision" of a firm lawyer. In contrast, the law firm may not treat (for consent and billing purposes) outsourced service providers as if they are in the firm who are working in India and, who conduct patent searches and prepare applications for firm clients, but who "will not have access to any clients confidences with the exception of confidential information that is necessary to perform the patent searches and prepare the patent applications." The same is true of lawyers whom the law firm occasionally hires, but who also work "for several firms on an as needed contract basis." A lawyer does not need to inform the client when a lawyer outsources "truly tangential, clerical or administrative" legal support services, or "basic legal research or writing" services (such as arranging for a "legal research 'think tank' to produce work product that is then incorporated into the work product" of the firm). [The Bar's hypotheticals do not include the possibility of an overseas lawyer or a lawyer working for several U.S. law firms on an "as needed contract basis" but who work under the "direct supervision" of a lawyer associated with the firm.] Lawyers "must advise the client of the outsourcing of legal services and must obtain client consent anytime there is disclosure of client confidential information to a nonlawyer who is working independently and outside the direct supervision of a lawyer in the firm, thereby superseding any exception allowing the lawyer to avoid discussing the legal fees and specific costs associated with the outsourcing of legal services."12/28/2010
1712

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5-Lawyers Changing Jobs

8-Bills and Fees

18-Consent and Prospective Waivers

31-Protecting and Disclosing Confidences and Secrets

38-Fee Splitting

45-Law Firms - Miscellaneous

This is a comprehensive opinion dealing with temporary lawyers ("lawyer temps"). A lawyer temp is treated like a lateral hire for conflicts purposes (although lawyer temps who are not given "broad access to client files and client communications" could more easily argue that they had not obtained confidences from firm clients for which they had not directly worked). As with lateral hires, screening lawyer temps does not cure conflicts. Lawyer temps may reveal the identity of other clients for which they have worked unless the clients request otherwise or the disclosure would be embarrassing or detrimental to the former clients.Paying a staffing agency (which in turn pays the lawyer temp) does not amount to fee-splitting because the agency has no attorney-client relationship with the client and is not practicing law (the New York Bar took a different approach, suggesting that the client separately pay the lawyer temp and agency). If a firm lawyer closely supervises the lawyer temp, the hiring of lawyer temps need not be disclosed to the client. A lawyer must inform the client before assigning work to a lawyer other than one designated by the client.Because "a law firm's mark-up of or surcharge on actual costs paid the staffing agency is a fee," the firm must disclose it to the client if "payment made to the staffing agency is billed to the client as a disbursement, or cost advanced on the client's behalf." On the other hand, the firm "may simply bill the client for services rendered in an amount reflecting its charge for the Lawyer Temp's time and services" without disclosing the firm's cost, just as firms bill a client at a certain rate for associates without disclosing their salaries. In that case, the "spread" between the salary and the fees generated "is a function of the cost of doing business including fixed and variable overhead expenses, as well as a component for profit."Because the relationship between a lawyer temp and a client is a traditional attorney-client relationship, the agency "must not attempt to limit or in any way control the amount of time a lawyer may spend on a particular matter, nor attempt to control the types of legal matters which the Lawyer Temp may handle." Agencies may not assign lawyer temps to jobs for which they are not competent.7/22/1998
ABA-347

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45-Law Firms - Miscellaneous

This Opinion offers guidance for lawyers whose offices lose legal services funding. 12/1/1981
0971

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45-Law Firms - Miscellaneous

Three lawyers in a twelve-lawyer firm may create a wholly owned subsidiary of the firm to handle personal injury work. 9/30/1987
0945

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11-"Of Counsel" Relationship

38-Fee Splitting

45-Law Firms - Miscellaneous

Two firms may not characterize themselves as "of counsel" to each other when the firms in essence have created only a referral relationship. Among other things, the firms may not agree to a 10% "referral fee" between themselves. [Rule 1.5(e) does not require that a lawyer sharing in fees also share responsibility, thus allowing "referral fees" if the client consents after full disclosure.] 6/10/1987
ABA-423

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41-Non-Virginia Lawyers

45-Law Firms - Miscellaneous

U.S. law firms may include partners who are foreign lawyers, as long as the arrangement complies with U.S. and foreign law, and the foreigners are "members of a recognized legal profession in the foreign jurisdiction" (examples include lawyers in European Union countries, Great Britain, Japan, and Sweden); U.S. lawyers must avoid assisting in the unauthorized practice of law by foreign lawyers in the U.S., and should remember that many countries recognize only a narrow attorney-client privilege (for example, most civil law countries do not protect communications with in-house corporate counsel).9/22/2001
ABA-444

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5-Lawyers Changing Jobs

12-Withdrawing Lawyers (Including Non-Compete Issues)

45-Law Firms - Miscellaneous

Under Rule 5.6(a), lawyers and their employers have "significant latitude" in restricting lawyers' rights to engage in the practice of law if the restrictions are tied to a legitimate "retirement benefit." To constitute a legitimate "retirement benefit," "the benefit must be one that is available only to lawyers who are in fact retiring and thereby terminating or winding down their legal careers." Normally, the benefit should be payable upon the satisfaction of some minimum age and minimum years of service, and include such indicia as "(i) the presence of benefit calculation formulas, (ii) benefits that increase as the years of service to a firm increase, and (iii) benefits that are payable over the lifetime of a retired partner," or interrelationship with other retirement or Social Security benefits. Other indicia include a separate partnership or other employment provision dealing with the benefit, and an extended pay out period. The term does not include a partner's capital account or previously earned income. If they are tied to a legitimate "retirement benefit," the restrictions can range from a permanent cessation of practicing law to geographic, temporal or practice limitations. Lawyers willing to forfeit their retirement benefit will not be bound by the restrictions, although permissible arrangements could include forfeiture of future benefits or the disgorgement of previous benefits if a lawyer violates the restrictions.9/13/2006
1856

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41-Non-Virginia Lawyers

45-Law Firms - Miscellaneous

Under Virginia Rule 5.5, non Virginia lawyers "may not practice Virginia law on a 'systematic and continuous' basis," unless they (1) limit their practice to the "law of the jurisdiction/s where they are licensed"; (2) practice "exclusively federal law" under the federal supremacy clause (such as "lawyers with practices limited to immigration or military law or who practice before the Internal Revenue Service, the United States Tax Court, or the United States Patent and Trademark Office," although lawyers such as bankruptcy, patent or federal procurement lawyers must abide by courts' possible limitation of practice before the courts to members of the Virginia Bar, and may provide advice "such as the debtor's homestead exemption and status or priority of claims or liens" or "the assignment of the patent to a third party or the organization of a corporate entity to market or franchise the invention" only under the conditions mentioned immediately below; (3) "provide advice about Virginia law or matters peripheral to federal law (described immediately above) only if they do so on a "temporary and occasional" basis and (as stated in UPL Opinion 195) "under the direct supervision of a Virginia licensed lawyer before any of the [non Virginia] lawyer's work product is delivered to the client" or if they "associate with an active member of the Virginia State Bar." Rule 5.5 overrules an earlier UPL Opinion about which law applies to a non Virginia lawyer's practice of another state's law while physically in Virginia; thus, "New York law should govern whether a foreign lawyer not authorized to practice in New York may advise New York clients on matters involving New York law. The [non Virginia] lawyer's physical presence in Virginia may not be a sufficient basis to apply Virginia's rules over New York's rules governing foreign lawyer practice." Contract lawyers hired to "work on a matter involving Virginia law" must either "be licensed in Virginia or work in association with a Virginia licensed lawyer in the firm on a temporary basis" although such a lawyer's practice "could be regarded as 'continuous and systematic'" if the non Virginia contract lawyer is hired "to work on several and various Virginia matters/cases over a period of time." Such contract lawyers need not be licensed in Virginia if the lawyer is "hired to work only on matters involving federal law or the law of the jurisdiction in which the [non Virginia] contract lawyer is admitted." [Approved by the Supreme Court of Virginia 11/2/16].9/11/2011
1887

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21-Reporting Another Lawyer's Unethical Conduct

45-Law Firms - Miscellaneous

Unlike supervisory lawyers (whose duties to supervise and to report other lawyers' misconduct was addressed in Virginia LEO 1886 (12/15/16)), lawyers not playing a supervisory role are governed only by Rule 8.3's reporting obligation – which is sometimes triggered by Rule 1.16's requirement that lawyers withdraw from representing clients if their "physical or mental condition materially impairs" their ability to represent a client. This reporting obligation arises only if the other lawyer violates an ethics rule, so "a lawyer's impairment, on its own, does not necessarily violate the RPCs at all." This means that lawyers without a supervisory role have no duty to "proactively address the impairment of other lawyers." However, lawyers must report another lawyer whose "material impairment" requires the other lawyer's withdrawal from a representation under Rule 1.16. Although the reporting obligation remains subject to lawyers' confidentiality duty, "in many cases a report may be accomplished without disclosing information that would be embarrassing or detrimental to the firm's clients." Lawyers must also remember that "reporting a lawyer's impairment to both the Bar and to LHL [Lawyers Helping Lawyers] is important, and each report serves different purposes."6/28/2017

Copyright 2000, Thomas E. Spahn