CI-554

October 10, 1980

SYLLABUS

An attorney may lease space in the building in which his law offices are situated to an unrelated real estate concern, but the physical arrangement and use of the office space of each must be such that the operations and customers of the tenant remain separate and distinct, and do not become intermingled with the space and operations of the law office.

TEXT

You state that you propose to purchase a small commercial building on land contract from a real estate concern, the real estate concern being the actual seller rather than a broker; that you propose to lease an office in the building to that concern for its use as an office; that you would occupy the balance of the building for the conduct of your law practice; that you and the tenant would have separate outside signs, but share a common entrance; that the tenant would have use of the conference room, bathroom and some storage space in the basement; and that the secretarial and reception area would be used only in conjunction with your law practice. The physical arrangement is to be as set out on the floor plan submitted with the request, a copy of which is attached. You enquire whether the proposed arrangement is proper ethically.

The canons do not address such situations in specific terms. The issue is generally seen as one of solicitation, i.e., "Is such an arrangement in fact a means whereby business is fed to the attorney?" There is little authority on the question.

In informal opinion CI-221 this committee held that "It is proper for a law firm and a real estate firm to share a common closing room so long as the facilities are separate and are not used for the purpose of solicitation of clients." We point out, however, that in that case ". . . the offices are independent of each other with a common wall and separate entry-ways into the common room."

There is certainly no ethical prohibition on your leasing space to the real estate concern, nor is there any difficulty in occupying a common building, as the latter situation exists routinely in large office buildings.

The difficulty, if any, would seem to lie in the fact that you and the tenant would share a common entrance to the building, that you would chare a common entrance to the conference room, and that your secretarial-reception area opens into the entryway hall in such a way that the two areas are very much one, with the result that persons arriving at the office of the real estate concern find themselves to some extent in your reception room. As stated in our previous informal opinion 1170, dated December 4, 1970, and cited with approval in informal opinion CI-221:

"What is desired is that the two operations be kept so distinct that there can be no suspicion that one is serving as a feeder for the other, or that potential clients arrive in the law office in response to real estate prospects."

While the fact situation there involved the conduct of the two operations by the same person, the principal stated the above applies equally to your situation. We believe that the physical arrangement proposed would result in an impermissible intermingling of the tenant's activities and customers with the operations and space of your law office.

We believe the spirit of the canons and prior opinions would best be observed by having a separate door connecting the conference room with the tenant's office, and by some arrangement whereby persons coming to the tenant's office do not pass through or find themselves in effect in your reception area. This could be accomplished by use of a separate outside entrance to the tenant's office, or by so separating your reception-secretarial area from the entryway that the two areas are in fact and practical effect separate. That would best seem to be accomplished by use of a wall, with a door providing access from the entry hall to your reception-secretarial area, as would typically be the case in a larger office building.

We also note that if the conference room is to be used by you and the tenant it would be well not to use it as a law library, or to keep law books and other legal materials there, as such uses would suggest a connection between you and the tenant, or the tenant and the practice of law, which does not exist.

We thank you for your inquiry. Although this is the opinion of the undersigned, it has been circulated to the other members of the Ethics Committee for their approval prior to its release to you.