Ethics Opinions

 
NASSAU COUNTY BAR ASSOCIATION
COMMITTEE ON PROFESSIONAL ETHICS
Archive of Ethics Opinions
Opinion No.: 1997-6
Topics: For-profit enterprise renting office space to a lawuer concentraded in elder law and no-lawyers offering various other services related to lawyer's area of concentration, with advertising by such enterprise of multi-disciplianry aproach to those fields
Digest: A lawyer may not enter into an arrangement with a for-profit enterprise, including non-lawyer professionals offering services in fields related to the lawyer's area of concentration, pursuant to which the professionals would maintain offices in close proximity to one another and the for-profit enterprise would advertise the various types of services, including the lawyer's services, which are available at that location and its ability to refer clients in need of the services offered by each professional participant.
Code Provisions: DR 2-101(A)
DR 2-101(K)
DR 2-102(B)
DR 2-102(C)
DR 2-103(C)(2)
DR 2-103(D)(l)-(4)
DR 2-105
DR 3-101(A)
DR 3-103(A)
EC 2-11
EC 3-3
EC 3-8
Facts Presented: The inquiring attorney is an elder law practitioner who proposes to enter into arrangement with a for-profit enterprise that would rent office space and provide a receptionist to the inquiring attorney, as well as to an accountant, psychologist, financial planner, geriatric care manager, and hospital clinic. The for-profit enterprise would advertise a "multi-disciplinary approach to gerontology" available through this arrangement and its ability to refer clients to each of these service providers, including the lawyer. The attorney would see clients, both those referred under this arrangement and other clients. The inquiring attorney would charge a customary fee for services rendered to clients, who would pay the attorney directly. The inquiring attorney has no financial interest in the for-profit enterprise, and the proposed arrangement would not involve any fee sharing or referral arrangements.
Inquiry: May an attorney whose practice is concentrated in the particular field of elder law rent office space from a for-profit enterprise that would advertise that its ability to offer services in related fields, including the attorney's, pursuant to an arrangement that would not involve any explicit fee sharing or referral fees?
Determination: No.
Analysis:
In Bates v. State Bar of Arizona, 433 U.S. 350 (1977), the Supreme Court of the United States held that the advertising of legal services was commercial speech entitled to a certain degree of constitutional protection under the First Amendment. The Court permitted the states to implement reasonable regulations to ensure that such advertising was not false or misleading. In New York, an attorney may advertise on behalf of himself or his law firm, provided the lawyer complies with the requirements of Canon 2 and DR 2-101 and DR 2-105. Additionally, a lawyer may share office space with a non-lawyer under certain circumstances that would not violate any ethical rules.

 

The practice of a lawyer sharing office space with a non-lawyer is discouraged, however, because it is fraught with potential ethical violations. See, e.g., BANC No. 96-12. Specifically, where the arrangement involves only cost-sharing, with no other arrangements involving fee sharing, and adequate precautions are taken to preserve client confidentiality, office sharing may be permissible. Where, as here, however, the arrangement among the lawyer and the for-profit enterprise involving non-lawyers involves more than cost-sharing, but also includes the use of common personnel and common advertising placed by the for-profit enterprise, a number of ethical issues arise.

 

It is, of course, unethical for a lawyer to assist a corporation or voluntary association to practice law in violation of any statute or court rule regulating the practice of law. Judiciary Law § 495 forbids a corporation or voluntary association from practicing law, except as specifically authorized by statute. More specifically, Judiciary Law § 495(1)(c) and (d) prohibit a voluntary association from "hold[ing] itself out to the public as being entitled to practice law, or to render legal services [or] furnishing attorneys or counsel." See also, Canon 3, EC 3-3; EC 3-8; DR 3-101(A); DR 3-103(A); BANC No. 93-6.

 

Even assuming that the participants in the proposed arrangement will render services strictly within the confines of their respective fields, and that the lawyer will restrict his or her involvement to practicing law, the lawyer's rendering of legal services as part of the proposed enterprise unavoidably treads perilously close to the for-profit enterprise impermissibly holding itself out as "practicing law." See DR 3-101(A).

 

The inquiry does not disclose the specific form or content of the advertisement contemplated by the proposed arrangement. We note, however, that DR 2-102(B) provides that a "lawyer in private practice shall not practice under a trade name, a name that is misleading as to the identity of the lawyer or lawyers practicing under such name, or a firm name containing other than those of one or more of the lawyers in the firm." See BANC No. 89-7. Similarly, EC 2-11 provides that in order to avoid misleading non-lawyers concerning a lawyer's identity, responsibility, and status, a lawyer in private practice should not use a trade name or assumed name, but should only practice under a description containing the lawyer's own name, the name of the lawyer's employer or the names of one or more lawyers practicing in a partnership or a professional corporation authorized to practice law.1/ See BANC No. 93-32. Moreover, and of particular relevance to this inquiry, we also have noted previously that a lawyer may not practice or advertise under a designation containing the lawyer's name together with any designation involving non-lawyers. BANC No. 88-34; see Judiciary Law § 495(l)(h).

 

DR 2-101(K) requires that "all advertisements of legal services shall include the name, office address and telephone number of the attorney or law firm whose services are being offered." It is further noted, however, that an advertisement that otherwise is in conformity with DR 2-101(K) nonetheless still may be proscribed by DR 2- 101(A). DR 2-101(A) provides, in part, that a lawyer shall not "use or disseminate or participate in the preparation or dissemination of any public communication containing statements or claims that are false, deceptive [or] misleading." DR 2-105 provides that only an attorney who has been certified as a specialist in a particular area of law by the authority having jurisdiction over the subject of specialization may hold himself or herself out as a "specialist." An advertisement identifying various non-lawyer service providers in a particular field, and also identifying an attorney, may be misleading to the public, which may infer that the attorney is a "specialist" in issues relating to those particular areas, or that the association "practices law."

 

To the extent that the advertisement under consideration would explicitly or implicitly characterize the attorney as a "specialist" in an area of law (e.g. rider law) in which the attorney has not been certified as a specialist, the advertisement would be proscribed by DR 2-105. See Matter of Peperone, 201 A.D.2d 75, 615 N.'(.S.2d 212 (4th Dept. 1994); BANC No. 96-12. This Committee previously has determined that the issue of whether an attorney who has been certified by the National Elder Law Foundation, an issue not specifically presented by the current inquiry, can hold herself out as a certified specialist in Elder Law is a question for the courts to decide. BANC No. 96-1 1. For these reasons, the proposed advertisement may be found to be "false, deceptive [and] misleading" within the meaning of DR 2-101(A).

 

Other issues are presented by the proposed space sharing arrangement. For example, building and door signs, letterheads, business cards, professional announcements, telephone listings, and similar items would need to be designed to avoid any implication that any of the non-lawyer service providers are affiliated with the lawyer, so that clients and the public generally can identify the lawyer, and the non-lawyer service providers as separate enterprises. Moreover, the inquiry suggests that each of these participants in the proposed arrangement may share a common receptionist. Any such arrangement, however, also would raise questions concerning the preservation of client confidences arising from the shared personnel and facilities.

 

Finally, DR 2-102(C) provides that, "a lawyer shall not request a person or organization to recommend or promote the use of the lawyer's services ... other than by advertising or publicity not proscribed by DR 2-103," which contains an exception, not applicable here, for referrals emanating from a lawyer referral service operated, sponsored or approved by a Bar Association. See 2-103(C)(2) and (D)(l)-(4) (providing exception for limited, approved referral organizations); Judiciary Law § 479; BANC Nos. 96-4 and 93-2.

 

It cannot be ascertained from the inquiry whether the proposed rent represents the fair market value of the leased premises, or whether the advertising and/or client referral aspects of the proposed arrangement were considerations in the rent to be paid by the inquiring lawyer. The fact that the lawyer would be providing compensation to a third party who is providing advertising on the lawyer's behalf, including, specifically, the ability to refer clients to the attorney, however, is impermissible. See BANC No. 96-2 While individual aspects of the proposed arrangement may not necessarily be proscribed per se, when viewed in isolation, we conclude that under the described facts, the advertising and referral aspects are proscribed by DR 2-102(C) and DR 2-103.

 

Thus, even assuming the lawyer rendered services and charged fees independently of the other participants in the arrangement, did not engage in any form of fee sharing, provided only legal services to clients, that any advertisement concerning the parties' relationship clearly identified the lawyer as the only attorney participating in the arrangement, and that such advertisement otherwise complied with the requirements of DR 2-101(K), we conclude that the proposed activity would nonetheless still be proscribed. Our reason for so concluding is that the lawyer would be permitting the advertising of his or her name and availability of the lawyer's services by a for-profit enterprise acting on the lawyer's behalf in combination with a commercial arrangement under which the lawyer and the for-profit enterprise would be exchanging items of value to each other under a formal or informal agreement or understanding. Such an arrangement would be difficult to distinguish from mutual referral arrangements between lawyers and non-lawyers that we have consistently opined is unethical. See BANC Nos. 96-4; 93-2.

 

[Approved by the Executive Committee on Oct. 21, 1997; approved by the Full Committee on Oct. 29, 1997.]

 


1/ EC 2-11 provides, in pertinent part:
. . . Accordingly, a lawyer in private practice should practice only under a designation containing the lawyer's own name, the name of any employing lawyer, the name of one or more of the lawyer's practicing in a partnership, wake is permitted by law, in the name of a professional corporation for the practice of law, which should clearly be designated as such. Id.
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