RI-355
October 26, 2012
SYLLABUS
Maintaining a part-time presence at an alternate law office, which is not staffed during normal business hours on a regular basis and occupies office space not reserved for use solely by the lawyer and shared with nonlawyers, raises a number of ethical issues—communication, confidentiality, safeguarding client property, competent and diligent representation, advertising, impermissible multidisciplinary practice, and facilitation of the unauthorized practice of law. The potential for the concern may be heightened by the fact that the lawyer's presence in the location is sporadic, rendering what transpires in the lawyer's absence largely unobserved.
Lawyers seeking to add an alternate law office to their law practice must comply with the applicable Rules of Professional Conduct, which includes disseminating any information about their practice in a manner that is not false, fraudulent, misleading, or deceptive contrary to MRPC 7.1. A lawyer cannot communicate the existence of a physical office location unless the lawyer maintains dedicated office space, appropriately separate and distinct from other businesses.
Lawyers are not precluded from meeting with clients or prospective clients at locations other than a permanent office maintained during normal business hours. However, in communications governed by MRPC 7.1, a lawyer cannot identify a physical location as a law office without having a dedicated office space that has the necessary separation from other businesses.
References: MRPC 1.1, 1.3, 1.4, 1.6, 1.15(b), 5.3, 5.4(b), 5.5, and 7.1; RI-118, RI-246, RI-249, RI-313, and RI-347.
TEXT
A Michigan lawyer contemplates having a law office address in a county other than the county where her principal law firm office is located, in an office suite that would be shared with nonlawyers and not staffed during normal business hours. The office suite contains a main reception area and office space, some of which is leased and some of which is available for short-term rental. The conference rooms near the main reception area are not dedicated to any single user but can be rented on an as-needed basis. A telephone number for the office suite with a local area code would ring to the lawyer's principal law firm office situated in a different area code. The fax number would remain the same. The inquiring lawyer indicates that, although the physical address would have mail service, and the distinct local telephone number would be regularly utilized, the lawyer's access to and usage of office space and conference rooms would be sporadic, facilitated by short-term rental on an as-needed basis.
No signage indicating the lawyer's office would be affixed to the building's exterior or interior, nor would the address be listed on law firm letterhead. Mail received at the location would be sorted unopened and placed in a mailbox designated for the lawyer's principal office. Upon request, the mail would be opened, scanned, and emailed. Any materials, such as business cards, that advertise the location and local telephone number for the secondary office would indicate "By Appointment Only." For discussion purposes in this opinion, this office arrangement will be referred to as an "alternate law office arrangement."
In the facts as presented, the lawyer maintains a principal law firm office in a Michigan county and is exploring the alternate law office arrangement as a way of testing whether sufficient business can be generated to warrant opening a fully staffed law office in the county where the alternate law office would be located.1 Essentially, the inquiry presents the issue of whether a lawyer can ethically share office space with nonlawyers when the lawyer's alternate law office is not staffed during normal business hours on a regular basis and the physical office space to be used by the lawyer is not reserved for use solely by the lawyer.
The Committee, in previous ethics opinions, has discussed lawyers sharing office space with nonlawyers in a conventional office setting. In Informal Opinion RI-313 (June 18, 1999), the Committee was asked whether a lawyer could share office space with an accounting firm with which it had no professional affiliation. The office space that was to be used by the two businesses would be separate with the exception of a common entrance, interior hallway, conference room, receptionist cubicle, and receptionist. Clients of the accounting firm would be required to enter the lobby space of the law firm and would then be directed by a sign to enter the accounting firm's lobby through an interior doorway. The two businesses had separate telephone lines, signage, mail sorting, and distribution. The Committee concluded that "[g]enerally, lawyers may share office space with nonlawyers so long as 'the businesses are segregated, client confidences are protected, and public communications about each business entity are clear and do not create unjustified expectations about the results which can be achieved.'" In reaching its decision, the Committee embraced guidelines set forth in a prior opinion addressing an office sharing arrangement as follows:
Common areas must be physically arranged so that the two businesses remain separate and distinct in a manner that prevents the public's misconstruction of the affiliation of the lawyer(s) and nonlawyer(s) . . . Conference rooms may be shared so long as they are located in neutral areas; i.e., so long as it is not necessary to pass through a nonlawyer's tenant space to get to such conference rooms, or vice-versa. Moreover, the common areas should not be used by the lawyers as law libraries, etc. whereby the working papers and research tools are intermingled creating the appearance of a professional affiliation. [citing CI-106 (August 14, 1984).]
With these requirements in mind, the proposed alternate law office arrangement appears to provide both the neutrality required regarding common areas, such as the conference rooms and the receptionist area, and the necessary separation as it relates to a dedicated phone line. However, the necessary separation required of her law practice from other businesses, as discussed later in this opinion, is not present.
Similarly, in RI-118 (February 28, 1992),2 the Committee opined that separation of business operations was critical when it considered the home office sharing arrangement proposed by the lawyer with his spouse, who was a certified financial planner. The Committee explained that these shared arrangements could cause ethical issues because they raise questions of preserving confidentiality, misleading advertisement about legal services, impermissible multidisciplinary practice, sharing fees with nonlawyers, or the facilitation of the unauthorized practice of law by officemates who may be perceived by members of the public as themselves lawyers because of their proximity to the lawyer.
The potential for the concerns discussed in RI-118 to arise in an alternative law office arrangement may be heightened by the fact that the lawyer's presence in the location is sporadic, rendering what transpires in her absence largely unobserved. The fact that no signage is planned by the inquirer may offset the possibility that members of the public will misidentify persons who share office space with the lawyer as affiliated with her law firm; however, other businesses sharing the suite may advertise the location by exterior signage and other means not within the inquirer's control, thereby creating the possibility or perhaps even likelihood that the lawyer's affiliation with the other businesses is misconstrued. The potential for that signage, coupled with the fact that the office space the inquirer intends to use for meetings with clients is not dedicated for use solely by the lawyer may be problematic. Potential clients or clients could be misled into thinking that the lawyer is affiliated with nonlawyers based on the items stored in the office space, internal signage, and intermittent use of the office space by nonlawyers.
Maintaining a part-time presence at the alternate law office shared with nonlawyers raises a number of ethical issues—communication, confidentiality, safeguarding client property, competent and diligent representation, advertising, impermissible multidisciplinary practice, and facilitation of the unauthorized practice of law.3
MRPC 1.4 requires lawyers to keep their clients reasonably informed about the representation and comply promptly with their clients' reasonable requests for information. One challenge posed by an alternate law office arrangement is whether this free flow of communication is possible. The answer may depend in part on the kind of advice or assistance involved and in part on the needs and capabilities of the clients. Commentary to MRPC 1.4 notes: "The guiding principle is that the lawyer should fulfill reasonable client expectations for information consistent with the duty to act in the client's best interests and consistent with the client's overall requirements as to the character of representation."
Lawyers have an ethical duty to engage in forms of communication that afford the client sufficient information to participate intelligently in decisions concerning the objectives of the representation and the means by which they are to be pursued to the extent the client is willing and able to do so.4 Facilitating face-to-face interaction would not require the maintenance of a dedicated office during business hours five days a week if other arrangements can be made that afford secure communications between lawyer and client. Lawyers must also be vigilant in ensuring that sufficient communication takes place to keep the client reasonably informed consistent with their duties under MRPC 1.4.
Beyond a description of how mail, phone calls, and facsimiles will be handled, the facts as presented by the inquirer do not indicate how files created as a result of work performed for clients at the alternate law office will be maintained or stored. The lawyer's duty to maintain confidentiality in accordance with MRPC 1.6 and to safeguard client property pursuant to MRPC 1.15 does not articulate any particular mode of handling confidential information; nor does it prohibit the employment of vendors that may handle documents or data containing client information as long as appropriate measures are taken to minimize the risk of inadvertent or unauthorized disclosure of confidential client information and protect client property, including file information, from the risk of loss.5 The fact that an office location is open to clients only periodically does not preclude the lawyer from appropriately safeguarding client files and information at an alternate law office location nor would it necessarily restrict a client's timely access to information as needed.
Since the inquiring lawyer proposes to rent office space only as needed, the Committee must assume that the particular office space utilized by the lawyer may be random based on availability at the time and that both nonlawyers and lawyers not associated with the inquiring lawyer may utilize the same office space when available and as needed by them. Such an arrangement necessarily heightens the duty of the inquiring lawyer to ensure that file retention comports with Rules 1.6 and 1.15 (b) and also raises Rules 5.4(b) and 5.5 concerns as discussed later in this opinion.
It appears that the inquiring lawyer intends to use the mail sorting services in lieu of the mail-opening services also available at the alternate law office. It is unclear whether the receptionist or other clerical personnel located at the secondary office location would perform clerical tasks regarding the lawyer's files in common areas that may expose the contents to other businesses sharing the office space or their customers and clients. If the mail-opening services were utilized by the inquiring lawyer, the same concern would apply to these clerical duties. As stated in RI-313, performance of clerical duties involving file handling and other client administrative matters in a common area is improper when a lawyer shares office space with nonlawyers or other lawyers not associated with her law firm.
Under MRPC 5.3, lawyers must take reasonable efforts to ensure that the conduct of nonlawyers retained or associated with the lawyer are compatible with the professional obligations of the lawyer. Since it appears that the lawyer would be infrequently at the alternate law office, the "reasonable efforts" prong of Rule 5.3 should be carefully considered regarding law firm administration at the alternate law office. The multiple businesses' shared usage of the receptionist or other personnel to sort and deliver the incoming mail and perform other administrative tasks for the alternate law office requires the lawyer to ensure the administrative staff is informed of and abides by the lawyer's ethical duties in the handling of communications and information. In addition to effectively communicating the obligations of confidentiality, the lawyer may want to consider routine audits and reminders to confirm compliance.
The Committee's consideration of this inquiry must also include whether a lawyer with an alternate law office arrangement can provide competent and diligent representation as required by MRPC 1.1 and MRPC 1.3. The answer depends on the particular facts and circumstances in a given case. For example, when a lawyer is hired to do transactional work, there may be little or no need for face-to-face contact between client and lawyer, so long as sufficient communication can be facilitated through other means and appropriate arrangements can be made for the execution and, when necessary, filing of documents. Similarly, when the lawyer is providing unbundled legal services in connection with litigation that are limited to drafting pleadings the client will file unassisted,6 the lawyer may be able to obtain all necessary information from the client through electronic or other means that do not involve regular or routine face-to-face communications. Irrespective of the legal services being provided by the inquiring lawyer, the lawyer must be available and willing to schedule face-to-face meetings as needed to ensure competent and diligent representation. Understanding that the location of the alternate law office may be a factor in a client's decision to hire the lawyer, the lawyer should be cognizant of its importance as a place to meet upon request of the client.
MRPC 7.1 declares that a lawyer's marketing may not be false, fraudulent, misleading, or deceptive. In the facts as presented, the lawyer indicates that the physical location of the alternate office space will be advertised on business cards listing the location and telephone number, labeled "by appointment only." The question posed is whether communication regarding a physical address at an office not staffed during normal business hours five days a week and the specific office space to be used by the lawyer is rented as needed violates Rule 7.1.
There may be prospective clients for whom the physical location would play no role in a decision to contact or hire a particular lawyer. For those persons, the fact that the identified address of the lawyer's office is only open by appointment rather than five days a week might be immaterial. However, there may be other clients for whom face-to-face contact with the lawyer in that particular locality will be important. If so, the materials communicating that in-person meetings at the alternate law office are by appointment only may provide sufficient initial information for consideration by prospective clients with this priority. Even so, it would be important for lawyers having this kind of alternate law office arrangement to discuss their availability for appointments at the alternate law office with prospective clients to further avoid misleading or deceptive communication about their legal services contrary to MRPC 7.1. In addition, if prospective clients prefer a lawyer having a constant presence at the alternate office location, the "by appointment only" communication in advertising materials may sufficiently communicate that the alternate law office does not operate in this manner. Similarly, if the lawyer's communication deceptively suggests a familiarity with local businesses, procedures, and court personnel that does not in fact exist, the advertisement would run afoul of MRPC 7.1 (a) and (b). In RI-246 (December 6, 1995), the Committee opined that a solo practitioner who performed legal services in his home office and rented a room in a small office building for rare client conferences as necessary in his particular practice could not ethically use the term "Law Offices" to describe his law practice because of the potential of misleading prospective clients into believing that the lawyer had a more geographically diverse practice and more firm resources that did not exist. Similarly, a lawyer opting to incorporate an alternate law office into her practice must ensure that all communications accurately depict legal services available at the secondary location.
The fact that the inquiring lawyer does not intend to lease specific space within the office suite but rather plans to rent any available office space on an as-needed basis while surrounded by other businesses with more permanent signage and utilization poses the risk that the arrangement might facilitate an impermissible multidisciplinary practice or the unauthorized practice of law, in derogation of MRPC 5.4(b) and MRPC 5.5, respectively. The inquiring lawyer's usage of office space within the office suite on a short-term rental basis in common with nonlawyers renders the critical separation of business operations as espoused in RI-313 and RI-118 more challenging. Clients and prospective clients meeting with the inquiring lawyer in an office adjacent to a nonlawyer's office, rather than in a neutral conference room, appropriately separate from the nonlawyer businesses, may believe that the nonlawyers are involved in the delivery of legal services or that the inquiring lawyer's law practice offers legal services and non-legal services at the alternate law office. While the inquiring lawyer can control her arrangements for client meetings and limit the storage of law-related items in office space, signage, and other specific law business related items, she is not able to place her limitations on the other businesses sharing specific office space on a short-term rental basis. The fact that the inquiring lawyer would be infrequently present at the alternate law office compounds these concerns. For these reasons, the proposed short-term rental arrangement is ethically impermissible. Clearly, lawyers are not precluded from meeting with clients or prospective clients at locations other than a permanent office maintained during normal business hours. However, in communications governed by MRPC 7.1, a lawyer cannot identify a physical location as a law office without having a dedicated office space that has the necessary separation from other businesses as discussed in RI-118 and RI-313, relying on MRPC 5.4, 5.5, and 7.1.
In conclusion, lawyers seeking to add an alternate law office to their law practice must comply with the applicable Rules of Professional Conduct, which includes disseminating any information about their practice in a manner that is not false, fraudulent, misleading, or deceptive contrary to MRPC 7.1. A lawyer cannot communicate the existence of a physical office location unless the lawyer maintains dedicated office space, appropriately separate and distinct from other businesses. In addition, lawyers must ensure the alternate law office arrangement does not violate MRPC 5.4(b) and MRPC 5.5 by facilitating the unauthorized practice of law or the appearance of impermissible multidisciplinary practice. Lawyers having an alternate law office are held to the same ethical standards as lawyers who maintain one or more permanent physical locations, including but not limited to obligations with regard to competence (MRPC 1.1), diligence (MRPC 1.3), communication (MRPC 1.4), and confidentiality (MRPC 1.6).
1 Unlike some other states, such as New Jersey, there is no general physical office requirement to remain qualified and licensed to practice law in Michigan; so, the question of whether a lawyer must maintain a "permanent" physical office is not germane to the facts as presented.
2 Implicit in a discussion of whether conflicts of interest analysis would apply to lawyers who do not practice as a law firm but share common office space and support staff in RI-249 (March 1, 1996) is the propriety of the concept of such office sharing arrangements.
3 Similar issues are considerations with both mobile offices and primarily electronic offices, where all or nearly all communication between lawyer and client takes place through electronic means. Beyond noting that similar issues apply, this opinion does not otherwise address those types of practices.
4 Commentary to MRPC 1.4
5 A relatively recent development in file storage is called "cloud computing." The acronym for one such service presently available is SaaS, which stands for "Software as a Service." Rather than installing software on the lawyer's or law firm's server which is then used to store data, data is stored and accessed by connecting through a web browser to a vendor's data center. The lawyer pays a subscription fee to the service. This Committee believes that "cloud computing," like any other electronic data storage device may be used by lawyers. However, when using SaaS based technology, the lawyer must ensure that she retains ownership and has ability to access the file materials upon termination of the vendor relationship. In addition, the lawyer must exercise reasonable care, as required by MRPC 1.6(d), to prevent employees, associates, and others whose services are utilized by the lawyer from disclosing or using confidences or secrets of a client. Other technology commonly used by law firms that supports the ability of lawyers to engage in alternative law office arrangements by enabling lawyers to log into law firm dedicated servers to retrieve and access documents from any location with an internet connection, such as laptops or other mobile devices, poses the same concerns and requires the same exercise of care.
6 See Informal Opinion RI-347 (April 23, 2010) for a discussion of unbundled legal services.