RI-326
August 24, 2001
SYLLABUS
An existing law firm organized as a professional limited liability company may be a member of another professional limited liability company provided it does not violate MRPC 7.1 and MRPC 7.5.
The indication PLLC or PLC may not be used in a firm name unless the lawyers practicing under the name have, in fact, formed a professional limited liability company.
An existing law firm organized as a professional limited liability company may operate under a trade name or assumed name provided it does not violate MRPC 7.1 and MRPC 7.5.
A law firm may limit its representation of clients so long as the clients are informed and consent to the limited representation in compliance with MRPC 1.2.
A lawyer may charge a fixed fee providing the fee is reasonable and the client is informed.
References: MRPC 1.2, 1.5, 7.1, 7.5; R-17, RI-45, RI-221, RI-246.
TEXT
An existing law firm that is a professional limited liability company inquires whether it can use a trade name to provide a specific service, estate planning to individuals who are not concerned with minimizing federal estate and gift taxes. Clients will accept a fee agreement letter that will specifically state the documents and services to be provided and which will further provide for a fixed fee. The lawyers rendering the legal services will be from the original firm, but not all members of the original firm will offer services under the trade name. The trade name will be either in the form of "John Doe and Smith, PLC" or a descriptive name, such as "XYZ Estate Planning Services." The inquirer asks if it can provide services in this manner.
An existing firm that is a professional limited liability company can select a trade name so long as the form of ownership under the trade name is not prohibited by law and the firm complies with the requirements of MRPC 7.5 and 7.1
MRPC 7.5(a) and (d) are applicable to this inquiry and states:
"(a) A lawyer shall not use a firm name, letterhead or other professional designation that violates Rule 7.1. A trade name may be used by a lawyer in private practice if it does not imply a connection with a government agency or with a public or charitable legal services organization and it is not otherwise in violation of Rule 7.1.
". . .
"(d) Lawyers may state or imply that they practice in a partnership or other organization only when that is the fact."
MRPC 7.1 states:
"A lawyer may, on the lawyer's own behalf, on behalf of a partner or associate, or on behalf of any other lawyer affiliated with the lawyer or the lawyer's law firm, use or participate in the use of any form of public communication that is not false, fraudulent, misleading, or deceptive. A communication shall not:
"(a) contain a material misrepresentation of fact or law, or omit a fact necessary to make the statement considered as a whole not materially misleading;
"(b) be likely to create an unjustified expectation about results the lawyer can achieve, or state or imply that the lawyer can achieve results by means that violate the Rules of Professional Conduct or other law; or
"(c) compare the lawyers' services with other lawyers' services, unless the comparison can be factually substantiated."
One name suggested is that of a professional limited liability company. The selection of this form of operating is allowed so long as the name contains the abbreviation P.L.L.C or P.L.C. that has been suggested by the inquirer. See opinion R-17 (1993), citing MRPC 7.1 and 7.5. However, the lawyers who are practicing under this name must have, in fact, formed a professional limited liability company. See MRPC 7.5(d) and RI-45. Therefore, in order to use the abbreviation "PLC" as suggested, the original firm or the lawyers would have to form a new professional limited liability company. An existing professional limited liability company can be a member of another professional limited liability company so long as both companies perform the same professional service. MCL 450.4902 and 450.4907(2). There is nothing to prevent the firm from forming a second professional limited liability company, in which the original company is the sole member or a member. As opined in R-17, Michigan law does not affect the liability of the lawyer rendering the service to the client, a lawyer charged with supervisory responsibilities in reference to the rendition of services, or the firm.
The other suggestion for a name would be a trade name such as "XYZ Estate Planning Services." A professional limited liability company is allowed to adopt and operate under an assumed name. MCL 450.4206. The use of a trade name is allowed so long as it does not imply a connection with a government agency or with a public or charitable legal services organization and it is not in violation of MRPC 7.1. See MRPC 7.5(a). Whether this particular name is in violation of MRPC 7.5(a) or MRPC 7.1 is based on facts and the Committee is not a fact-finder. See RI-221. On its face, this name would appear to meet the requirements of MRPC 7.5 and not to be in violation of MRPC 7.1, however, the Committee has not received any information regarding government agencies, public or charitable legal services organization in the community in which the law firm exists.
The names of the lawyers do not need to appear in the name. See MRPC 7.5 and RI-221.
The name does not indicate that the services to be rendered are limited only to non-taxable estates as the inquirer has indicated will be the case. One might say that the name is misleading because it implies that services will be rendered to all desiring estate planning. In RI-246, it was opined that the use of the term "legal services" in a name was not objectionable because rendering legal services is what lawyers do, even though the lawyer was practicing at a reduced level. Further, in this case, the firm will be using a fee agreement letter that will specifically state the estate planning documents that will be prepared and the estate planning services that will be rendered. It is essential that the client not be misled into believing that he or she is getting tax planning when that is not the case.
The second issue of the inquiry relates to whether the lawyer may limit his or her representation of clients. MRPC 1.2 allows a lawyer to limit his or her representation if the client consents after consultation. The inquirer has indicated that the client will accept a fee agreement letter that specifically defines the limited scope of the estate planning services and the specific documents that will be drafted. So long as the lawyer ensures that the client is aware that he or she is not receiving estate and gift tax minimizing advice and planning, there is no violation in limiting the services to this particular category of clients.
Finally, the inquirer indicates that there will be a fixed fee for the services rendered. There is nothing prohibiting a fixed fee. The lawyer must always be guided by the determining factor of whether the fee is reasonable under MRPC 1.5. A written fee agreement is not required under MRPC 1.5 but may be recommended in the situation where the representation is limited and the fee is fixed.