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: 50 - Lawyer-Owned Businesses
LEO NumTopicsSummaryDate
1343

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16-Lawyer's Personal Interests

48-Criminal Defense Lawyers

50-Lawyer-Owned Businesses

A criminal defense lawyer may not represent a criminal defendant for whom the lawyer's bail bond business has written a bond. Such a representation is per se unethical regardless of disclosure and consent.5/8/1990
1658

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13-Marketing - Miscellaneous

16-Lawyer's Personal Interests

31-Protecting and Disclosing Confidences and Secrets

32-Lawyers Acting in Other Roles (Miscellaneous)

38-Fee Splitting

50-Lawyer-Owned Businesses

53-Office Sharing with Non-Lawyers

A law firm may establish a non-legal consulting firm (to provide human resource advice) and share common directors, use similar logos and letterheads, share overhead expenses (such as secretarial support, library resources and lobby space), engage in joint marketing and refer clients to each other, as long as: the public would not be confused by any advertising; the joint marketing does not result in any misperceptions; the firms avoid sharing any confidential client information; the firms do not split fees or pay one another a referral fee; the firms advise their clients of other available referral options; the firms adopt "adequate conflicts screening procedures"; any lawyers involved in the consulting firm "comply at all times with applicable rules of the Code of Professional Responsibility, whether or not the attorney is acting in a professional capacity as a lawyer." 12/6/1995
1083

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16-Lawyer's Personal Interests

50-Lawyer-Owned Businesses

A law firm may form and invest in a non-legal services subsidiary (which the firm would also represent). There is nothing per se improper about this action, but the law firm must be cautious. 11/3/1988
1131

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16-Lawyer's Personal Interests

50-Lawyer-Owned Businesses

A law firm may invest in a realty corporation and continue to represent clients of the corporation if the clients consent after full disclosure. [Under Rule 1.8(a), a lawyer may not enter into a "business transaction" with a client unless the client is given an opportunity to seek independent advice, and there has been full disclosure and consent in writing.]9/1/1988
1632

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13-Marketing - Miscellaneous

17-Fraud on the Tribunal

21-Reporting Another Lawyer's Unethical Conduct

31-Protecting and Disclosing Confidences and Secrets

42-Payments to Solicit Recommendations

50-Lawyer-Owned Businesses

A law firm may not pay a service fee to a so-called "lender service bureau" in return for obtaining legal work from the bureau. Because the bureau apparently is not engaging in fraud against a tribunal, however, the law firm is not obligated to disclose the bureau's operations to the proper authorities. If the law firm determines that the possible misconduct of lawyers holding an "ownership or management interest" in the bureau meets the proper standards, the misconduct would have to be reported. 2/7/1995
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
0914

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16-Lawyer's Personal Interests

50-Lawyer-Owned Businesses

A law firm may sell a computer software package under an agreement in which the law firm maintains the exclusive right to use the software for a certain period of time. 4/30/1987
1198

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16-Lawyer's Personal Interests

50-Lawyer-Owned Businesses

A law firm may use a court reporting service in which it has an ownership interest as long as the client consents after full disclosure. [Under Rule 1.8(a), a lawyer may not enter into a "business transaction" with a client unless the client is given an opportunity to seek independent advice, and there has been full disclosure and consent in writing.]2/22/1989
0869

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16-Lawyer's Personal Interests

50-Lawyer-Owned Businesses

A lawyer employed by a law firm may also be employed as a part-time life insurance agent. 12/19/1986
1152

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16-Lawyer's Personal Interests

50-Lawyer-Owned Businesses

58-Real Estate Lawyers

A lawyer may arrange for title insurance for a client through a company of which the lawyer is part owner, as long as the client consents. [This LEO was further explained in LEO 1564.] [Under Rule 1.8(a), a lawyer may not enter into a "business transaction" with a client unless the client is given an opportunity to seek independent advice, and there has been full disclosure and consent in writing.]11/16/1988
0532

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50-Lawyer-Owned Businesses

A lawyer may conduct a title insurance business in any corporate form. 12/16/1983
1097

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16-Lawyer's Personal Interests

50-Lawyer-Owned Businesses

58-Real Estate Lawyers

A lawyer may issue title binders on behalf of a client as long as the client consents after full disclosure. [Under Rule 1.8(a), a lawyer may not enter into a "business transaction" with a client unless the client is given an opportunity to seek independent advice, and there has been full disclosure and consent in writing.]7/11/1988
1329

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38-Fee Splitting

50-Lawyer-Owned Businesses

A lawyer may not assist a title agency in preparing documents (with a single fee for both services submitted to the client) because it would involve sharing of legal fees with a non-lawyer and may also involve the lawyer helping a non-lawyer in the unauthorized practice of law. [Approved by the Supreme Court of Virginia 11/2/16].4/20/1990
1170

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50-Lawyer-Owned Businesses

A lawyer may not steer a client to a separate corporation handling real estate settlements and retain the interest earned on the client's funds unless the client has been given the choice of using other corporations as well (or is no longer using the lawyer's services as a client). In any event, the client must consent after full disclosure to using a corporation owned by the lawyer. [Under Rule 1.8(a), a lawyer may not enter into a "business transaction" with a client unless the client is given an opportunity to seek independent advice, and there has been full disclosure and consent in writing.]1/30/1989
1072

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16-Lawyer's Personal Interests

50-Lawyer-Owned Businesses

58-Real Estate Lawyers

A lawyer may obtain title insurance for clients through a company in which the lawyer has an interest as long as the client consents after full disclosure. [This LEO was further explained in LEO 1564.] [Under Rule 1.8(a), a lawyer may not enter into a "business transaction" with a client unless the client is given an opportunity to seek independent advice, and there has been full disclosure and consent in writing.]5/31/1988
0591

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16-Lawyer's Personal Interests

50-Lawyer-Owned Businesses

A lawyer may offer the services of a title insurance agency in which the lawyer is a shareholder as long as there is full disclosure. [This LEO was further explained in LEO 1564.] [Under Rule 1.8(a), a lawyer may not enter into a "business transaction" with a client unless the client is given an opportunity to seek independent advice, and there has been full disclosure and consent in writing.]7/5/1984
0545

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50-Lawyer-Owned Businesses

A lawyer may own shares in a title insurance agency in which shareholders receive profits rather than specific payments of commissions. 3/1/1984
1138

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50-Lawyer-Owned Businesses

58-Real Estate Lawyers

A lawyer may own stock in a title company and receive consulting fees that are tied to the number of policies the lawyer arranges for. [This LEO was overruled in LEO 1402.] [Under Rule 1.8(a), a lawyer may not enter into a "business transaction" with a client unless the client is given an opportunity to seek independent advice, and there has been full disclosure and consent in writing.]8/18/1988
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
1254

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16-Lawyer's Personal Interests

48-Criminal Defense Lawyers

50-Lawyer-Owned Businesses

A lawyer may refer clients to a bail bond business the lawyer partially owns if there is full disclosure. [LEO 1343 indicates that the lawyer may not represent the criminal in the matter on which the bonding company has supplied the bond.] [Under Rule 1.8(a), a lawyer may not enter into a "business transaction" with a client unless the client is given an opportunity to seek independent advice, and there has been full disclosure and consent in writing.]7/25/1989
1027

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16-Lawyer's Personal Interests

50-Lawyer-Owned Businesses

A lawyer may represent a business in which the lawyer has a personal or financial interest as long as the lawyer's judgment will not be affected and the client consents after full disclosure. 2/1/1988
1521

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4-Witness-Advocate Rule

16-Lawyer's Personal Interests

50-Lawyer-Owned Businesses

58-Real Estate Lawyers

A lawyer may represent a developer in litigation in which an employee of a title company (of which the lawyer is part-owner) may have to testify, because the witness-advocate rule applies only when a lawyer must testify. 5/11/1993
1535

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16-Lawyer's Personal Interests

50-Lawyer-Owned Businesses

58-Real Estate Lawyers

A lawyer may represent a home builder in an action brought by a home buyer even though the buyer had paid a settlement or closing fee to the title corporation of which the lawyer was president. [The Bar indicated that the lawyer did not have an attorney-client relationship with the home buyer, although both the Opinion itself and the summary indicate that the lawyer "represented" the home buyer.] 6/2/1993
1345

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7-Family Conflicts

16-Lawyer's Personal Interests

50-Lawyer-Owned Businesses

A lawyer may use the lawyer's spouse as a court reporter if there is disclosure and consent. The disclosure must include a description of the fees received by the spouse. Another lawyer in the firm could use the spouse as a court reporter without disclosure and consent. Any lawyer in the firm could use another reporter at the spouse's reporting company without disclosure and consent unless the spouse is an owner of the reporting company. 5/18/1990
1754

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50-Lawyer-Owned Businesses

A lawyer who also sells insurance may recommend that a legal client purchase insurance from the lawyer, with the lawyer receiving part of the commission on the sale of the insurance policy, as long as there is full disclosure and consent (under Rule 1.8) and the lawyer's judgment is not affected by the conflict.5/17/2001
1612

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16-Lawyer's Personal Interests

32-Lawyers Acting in Other Roles (Miscellaneous)

50-Lawyer-Owned Businesses

A lawyer who also sells insurance may represent plaintiffs against insurance companies or their insureds for which the lawyer has written insurance policies, as long as the client consents. In fact, the lawyer may pursue such cases even if the lawyer wrote the policy for the defendant insured. [The Bar did not discuss the possibility that as an insurance agent the lawyer might have acquired confidential information about the defendant.]9/21/1994
1819

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32-Lawyers Acting in Other Roles (Miscellaneous)

50-Lawyer-Owned Businesses

A lawyer who co-owns (with other non-lawyers) a lobbying firm must comply with certain ethics rules (such as the prohibition on criminal or wrongful conduct), although not rules that apply only when a lawyer is "representing a client," such as the ex parte contact rule. This lawyer's references to his expertise as a lawyer, etc. could create confusion about whether he is providing legal advice lawyers providing such services have "an affirmative duty to clarify the boundaries of the business relationship," including whether any legal services are included. Lawyers not clarifying their role could find themselves bound by the confidentiality and conflicts rules governing lawyers representing clients although a lawyer providing legal services through a lobbying firm could be guilty of a misdemeanor for unauthorized practice of law. If this lawyer was simultaneously engaged in a law practice, the lawyer's "responsibilities to . . . a third person" (client of the lobbying firm) might prevent the lawyer from representing clients adverse to lobbying firm clients (a disqualification which would be imputed to all lawyers in the lawyer's law firm). The ethics rules governing conflicts do not apply to a lawyer/lobbyist's pure lobbying work. For instance, a lawyer who is acting only as a lobbyist can lobby against a former lobbying client for whom the lawyer previously lobbied. If the lawyer must follow the conflicts rules because a lobbying client reasonably believes that the lawyer is supplying legal advice (and thus must comply with the conflicts rules), the individual lawyer's disqualification would not be imputed to the entire lobbying firm (because it is not a law firm).9/19/2005
1469

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40-Trust Accounts

50-Lawyer-Owned Businesses

58-Real Estate Lawyers

A lawyer who is operating a title company to conduct residential settlements: is subject to the UPL rules if the title company prepares legal documents such as notes and deeds; must comply with the trust account rules if an attorney-client relationship exists by reason of preparation of such documents (including the prohibition on the lawyer or law firm earning interest on client funds held in trust); must obtain clients' consent before retaining any interest earned by client money held by the title company. 6/22/1992
1759

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7-Family Conflicts

11-"Of Counsel" Relationship

18-Consent and Prospective Waivers

50-Lawyer-Owned Businesses

68-Lawyers Acting as Mediators

73-Family Law Lawyers

A lawyer who owns a mediation company is "of counsel" to a law firm in which his/her spouse is a partner. After mediation of a domestic dispute, one of the parties asks an associate in the law firm to file for divorce on behalf of that party. The Bar holds that lawyers/mediators may not represent either party after they handle a mediation, even with the clients' consent (overruling earlier LEOs 1684, 590, 544 and 511). Because this specific disqualification applies only to the lawyer/mediator, an associate in the firm would not be disqualified based on the mediator's disqualification. However, the lawyer/mediator's duty of confidentiality arising from the mediation also disqualifies that lawyer, and is imputed to the firm to which the lawyer/mediator is "of counsel" (although client consent can cure this conflict). If there were no connection between the lawyer/mediator and the law firm, lawyers practicing in the firm would not be disqualified from representing the party in the divorce as a result of the spousal relationship to the mediator. [Rule 1.10 now imputes the individual's disqualification to the entire law firm, as explained in Virginia LEO 1826.]2/4/2002
0886

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16-Lawyer's Personal Interests

50-Lawyer-Owned Businesses

58-Real Estate Lawyers

A lawyer who owns an interest in a title insurance company may purchase insurance from the company for the lawyer's clients as long as they consent. [This LEO was further explained in LEO 1564.] [Under Rule 1.8(a), a lawyer may not enter into a "business transaction" with a client unless the client is given an opportunity to seek independent advice, and there has been full disclosure and consent in writing.]4/1/1987
0375

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20-Government Official Conflicts

50-Lawyer-Owned Businesses

A lawyer whose partner is on the City Council may not seek a franchise for a corporation in which both the lawyer and the partner are shareholders. 7/15/1980
1311

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16-Lawyer's Personal Interests

50-Lawyer-Owned Businesses

A lawyer wishes to sell insurance to other law firms representing a clients' adversaries. The clients must consent to this arrangement. 11/21/1989
1564

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16-Lawyer's Personal Interests

18-Consent and Prospective Waivers

31-Protecting and Disclosing Confidences and Secrets

40-Trust Accounts

50-Lawyer-Owned Businesses

58-Real Estate Lawyers

A lawyer's ownership interest in a title insurance agency is not per se improper, but the lawyer must: follow all conflicts rules; completely separate the lawyer's law practice from any title insurance agency; and avoid any revelation of client confidences. The lawyer may not: be compensated by the title insurance agency based on the referrals of clients to the agency; receive a fixed salary unless it is related to the work performed for the agency; receive any interest earned on funds deposited in the agency's trust account; or arrange for the agency to pay for any law firm salaries, services or advertisements.It is per se improper for the lawyer to represent a party in a transaction if the lawyer "directly or indirectly performs the function of a Title Insurance Agent" for the transaction, or holds a license as a Title Insurance Agent. A lawyer may arrange for title insurance through the agency to one of the lawyer's clients only: with consent after full disclosure; and if the transaction is not "unconscionable, unfair or inequitable when made." The Bar indicates that "all doubts regarding the sufficiency of the disclosure must be resolved in favor of the client, and against the attorney." The disclosure should be in writing and accepted by the client in writing, and should include an explanation of the cost and the availability of alternatives. (Revised 2/15/95) [Under Rule 1.8(a), a lawyer may not enter into a "business transaction" with a client unless the client is given an opportunity to seek independent advice, and there has been full disclosure and consent in writing.]2/15/1995
1356

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16-Lawyer's Personal Interests

50-Lawyer-Owned Businesses

55-Firm Names and Letterhead

A professional corporation may establish a subsidiary for collections practice, as long as there is disclosure to prospective clients, and nothing in the law firm's or new professional corporation's name was misleading. 1/22/1990
1405

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16-Lawyer's Personal Interests

50-Lawyer-Owned Businesses

53-Office Sharing with Non-Lawyers

58-Real Estate Lawyers

82-Advertising

A title insurance company owned by a lawyer and sharing office space with the lawyer's firm may not pay for the firm's salaries or advertisements. [This LEO was further explained in LEO 1564.] 9/17/1991
ABA-432

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16-Lawyer's Personal Interests

18-Consent and Prospective Waivers

29-Advancing Fees and Costs

50-Lawyer-Owned Businesses

Although some states totally prohibit lawyers from posting bail bonds for their clients, such conduct is sometimes permissible as long as clients consent after full disclosure. Lawyers should recognize that: (1) there is a possibility of conflicts because someone posting a bail bond has a financial incentive to apprehend a fugitive client or otherwise assure that the client appears in court; (2) some states consider the posting of bail bonds to be a form of impermissible financial assistance to a client; and (3) obtaining the necessary consent from a client would be extremely difficult if the client were incarcerated. Posting such bail bonds is more likely to be permissible if there is an immaterial amount of money at stake, or if there is a family or friendship relationship between the lawyer and client. 1/14/2004
1742

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32-Lawyers Acting in Other Roles (Miscellaneous)

50-Lawyer-Owned Businesses

58-Real Estate Lawyers

As indicated in earlier Opinions, a lawyer representing a real estate purchaser cannot impose fees on the seller absent an agreement or some forewarning. A lawyer designated in a real estate contract as settlement agent may not comply with a title company’s instructions that would involve the title company preparing documents and undertaking other activities that would constitute the unauthorized practice of law (a lawyer who owns a title company may perform legal work for a client, but may not undertake the same activities if working on behalf of the title company -- because “only an attorney engaged in private practice specifically retained by the seller may undertake legal representation of the seller).” [Approved by the Supreme Court of Virginia 11/2/16].6/26/2000
1647

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16-Lawyer's Personal Interests

50-Lawyer-Owned Businesses

58-Real Estate Lawyers

As long as it does not violate some federal or state law, lawyers may own a title insurance agency with share ownership percentages based upon past premiums paid by each lawyer's client. [Under Rule 1.8(a), a lawyer may not enter into a "business transaction" with a client unless the client is given an opportunity to seek independent advice, and there has been full disclosure and consent in writing.]12/15/1995
0939

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16-Lawyer's Personal Interests

50-Lawyer-Owned Businesses

58-Real Estate Lawyers

As long as the client consents after full disclosure, a lawyer may purchase title insurance from a company in which the lawyer has an interest. [This LEO was further explained in LEO 1564.] [Under Rule 1.8(a), a lawyer may not enter into a "business transaction" with a client unless the client is given an opportunity to seek independent advice, and there has been full disclosure and consent in writing.]6/11/1987
0603

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16-Lawyer's Personal Interests

50-Lawyer-Owned Businesses

As long as the client consents, a law firm may obtain title insurance from a business in which the law firm or its members have a business interest. [This LEO was further explained in LEO 1564.] [Under Rule 1.8(a), a lawyer may not enter into a "business transaction" with a client unless the client is given an opportunity to seek independent advice, and there has been full disclosure and consent in writing.]6/24/1985
0712

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16-Lawyer's Personal Interests

50-Lawyer-Owned Businesses

As long as the client consents, a law firm's client may use a title agency in which the law firm has an interest. [This LEO was further explained in LEO 1564.] [Under Rule 1.8(a), a lawyer may not enter into a "business transaction" with a client unless the client is given an opportunity to seek independent advice, and there has been full disclosure and consent in writing.]8/30/1985
0690

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16-Lawyer's Personal Interests

50-Lawyer-Owned Businesses

58-Real Estate Lawyers

Even with full disclosure, a lawyer may not execute title binders issued by an agency in which the lawyer is an officer, director or stockholder. [This LEO was further explained in LEO 1564.]5/10/1985
0825

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16-Lawyer's Personal Interests

50-Lawyer-Owned Businesses

It is not improper per se for a law firm to own and represent a non-legal corporate entity. 10/9/1986
1016

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8-Bills and Fees

16-Lawyer's Personal Interests

50-Lawyer-Owned Businesses

It is not per se unethical for a lawyer and bookkeeper to set up a company that handles law firms' billings, but they must be careful not to violate the ethics rules. 12/21/1987
1884

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20-Government Official Conflicts

32-Lawyers Acting in Other Roles (Miscellaneous)

50-Lawyer-Owned Businesses

Lawyers in a law firm or in a consulting firm that the law firm owns "may not represent clients or otherwise lobby before the General Assembly" or any other public body on which lawyer's colleague sits – even if that colleague recuses herself. This prohibition applies to all lawyers in the law firm and the consulting firm, and also extends to non-lawyers in the consulting firm, "regardless of whether the lawyers have any managerial or supervisory authority over the non-lawyer employees."9/30/2016
1368

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16-Lawyer's Personal Interests

50-Lawyer-Owned Businesses

66-Lawyers Acting as "Scriveners"

Lawyers may be shareholders of a corporation providing mediation and arbitration services, but the lawyers must comply with the ethics code. Among other things, a mediator "engaged by the parties as a scrivener of the agreement reached during the mediation process" is not engaged in the practice of law, but any services "beyond those of a scrivener" might constitute the practice of law [superseded in LEO 1803, which held that the existence of an attorney client relationship depends on the lawyer's action rather than a mere title, and holding that the attorney client relationship would arise between prisoners and lawyers practicing at a state prison if the lawyers did anything more than simply typing up what the prisoner wrote].12/12/1990
1740

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29-Advancing Fees and Costs

48-Criminal Defense Lawyers

50-Lawyer-Owned Businesses

Lawyers may guarantee a de minimis appeal bond as long as the client remains ultimately liable for the expense. A criminal defense lawyer may not represent a defendant for whom the lawyer's bail bond business posted a bond.4/13/2000
1846

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31-Protecting and Disclosing Confidences and Secrets

47-Lawyer Referral Services

50-Lawyer-Owned Businesses

Lawyers may not join a lead-sharing organization in which membership "is often dependent on the number of leads a member passes," because: such "reciprocal" referrals amounts to a "quid pro quo payment for services" in violation of the prohibition on providing something of value in return for a referral (and possibly in violation of § 54.1-3939's and § 54.1-3941's ban on "running and capping," as explained in a 12/7/10 letter from Virginia's Attorney General); such participation puts the client's interest at risk because the lawyer "may be obligated to refer a client to a particular member specialist when a non-member specialist may be better suited to meet the client's needs"; the lawyer faces a personal conflict of interest because the lawyer may not feel free "to choose the most appropriate specialty provider for a client"; "[t]he mere disclosure of a client's name and specific need in certain circumstances may be enough to violate the Rule without consent of the client." A lawyer may own an interest in a company that is such a lead-sharing organization "as long as the lawyer is not a member." Lawyers may also engage in voluntary referrals to other lawyers and professionals, but may not join "a hypothetical organization which bases membership on the commitment to provide referrals." (2/2/09; revised 12/29/10)12/29/2010
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
0187

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50-Lawyer-Owned Businesses

Rules governing title search or insurance companies owned by lawyers.10/29/1980
1402

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16-Lawyer's Personal Interests

50-Lawyer-Owned Businesses

58-Real Estate Lawyers

The Bar rescinded LEO 1138, which permitted a lawyer who owned stock in a title insurance company to receive consulting fees varying with the number of policies the lawyer's clients obtained through the company. [This LEO was further explained in LEO 1564.]10/21/1991
0772

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16-Lawyer's Personal Interests

50-Lawyer-Owned Businesses

71-Representing Corporations

There is no per se rule against a lawyer representing a company in which the lawyer owns stock. [Under Rule 1.8(a), a lawyer may not enter into a "business transaction" with a client unless the client is given an opportunity to seek independent advice, and there has been full disclosure and consent in writing.]3/11/1986
1826

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2-Adversity to Former Clients

13-Marketing - Miscellaneous

50-Lawyer-Owned Businesses

68-Lawyers Acting as Mediators

Under Rule 2.10(e), a lawyer who acts as a mediator in a dispute may not later represent any party in that dispute (this conflict cannot be cured with consent). Although the conflict is imputed to all the lawyers in the law firm, another lawyer in the firm may represent a party in the dispute with consent. Although a "screen" (which is the proper term for "fire wall," "Chinese wall," etc.) cannot take the place of such consent, it frequently is used as an inducement for obtaining the consent. Lawyers serving together in a mediation firm do not face imputed disqualification, because the mediation firm is not considered a "firm" under Rule 1.10. Lawyers practicing in a law firm and also acting as independent contractors or directors of a mediation firm (and who refer mediation firm clients to their law firm) must consider whether the "personal interest" they have by virtue of participating in the mediation firm creates a conflict under Rule 1.7 -- requiring disclosure and consent. Any lawyer acting as a mediator must also comply with the Virginia statute requiring confidentiality of all mediation material. Lawyers owning an interest in a mediation firm must comply with the ancillary business rules. Lawyers referring cases between law firms and mediation firms must comply with Rule 7.3, which prohibits giving anything of value in return for a recommendation.3/28/2006

Copyright 2000, Thomas E. Spahn