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ASSOCIATION OF THE BAR OF THE CITY OF NEW YORK COMMITTEE ON PROFESSIONAL AND JUDICIAL ETHICS

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THE ASSOCIATION OF THE BAR OF THE CITY OF NEW YORK

FORMAL OPINION 1995-8

COMMITTEE ON PROFESSIONAL AND JUDICIAL ETHICS

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May 31, 1995

ACTION: FORMAL OPINION

OPINION:

TOPIC: Lawyer and Law Firm Affiliations; "Of Counsel" Relationships Between Lawyers and Law Firms; Group Advertising; Firm Names; Letterhead.

DIGEST: Unaffiliated group of lawyers may not advertise themselves collectively as "The Law Offices at X Square." A law firm may be "of counsel" to another law firm or to individual lawyers. Lawyers or law firms may state in advertisements or on letterhead that they are "associated" or "affiliated" with each other, so long as their relationship is akin to an "of counsel" relationship and the precise nature of the relationship is fully disclosed in communications with specific prospective clients whenever such disclosure could be relevant to the clients.

CODE: DRs 2-102(A)(4); 2-102(B); 2-102(C); 2-102(D); 2- 101(K); ECs 2-11, 2-13.

NOTE: Modifies N.Y. City 891, 81-3, 81-71, 81-102, 82-28.

QUESTIONS

1. May an otherwise unaffiliated group of lawyers or law firms use letterhead identifying themselves as "a member firm of the Law Offices at X Square?"

2. May an otherwise unaffiliated group of lawyers and law firms advertise their services as a group by describing themselves as part of "an association of independent lawyers and law partnerships" operating under the name of "The Law Offices at X Square?"

3. May a law firm act as "of counsel" to another law firm or to individuals?

4. May a law firm describe itself as "associated" or "affiliated" with another law firm or individual?

OPINION

The scope and meaning of the designation of a lawyer or group of lawyers as "of counsel" to others, or of one group of lawyers as "associated" with another group when the two groups are not in partnership, raises numerous questions of interpretation and raises the fundamental issue of whether clients understand what they are getting when they retain counsel. The following fact pattern illustrates ways that designations respecting these types of affiliations may and should not be used as a matter of professional ethics.

Law firm F subleases office space to two independent attorneys (L and M) who concentrate in fields of law in which firm F does not have expertise. Firm F has offered the services of attorneys L and M to clients in the past, while disclosing their independent status. L and M work in Firm F's law offices, share electronic research facilities, and engage in joint consultation with clients, joint investigatory efforts and joint litigation efforts with F, but they have separate telephone numbers and practice under different names. Firm F and attorneys L and M wish to reflect their capacity for joint effort on their letterhead and in local advertising. They propose a letterhead reading:

[FIRM F, or L, or M]

A Member Firm of the Law Offices at X Square

Each attorney or firm would use the same letterhead format while inserting the firm's or the individual attorney's name on the first line.

In addition, the attorneys propose to describe themselves in advertisements as follows:

The Law Offices at X Square

An Association of Independent Lawyers and Law Partnerships

[list of attorneys]

I.

The proposed use of the name "The Law Offices at [X Square]" is governed by EC 2-11, EC 2-13 and DR 2-102(A)(4), (B) and (C). EC 2-11 provides, in pertinent part:

The name under which a lawyer practices may be a factor in the selection process. The use of a trade name or an assumed name could mislead non-lawyers concerning the identity, responsibility, and status of those practicing thereunder. Accordingly, a lawyer in private practice should practice only under a designation containing the lawyer's own name, the name of an employing lawyer, the name of one or more of the lawyers practicing in partnership, or, if permitted by law, in the name of a professional corporation for the practice of law, which should be clearly designated as such....

Likewise, DR 2-102(B) provides, in part:

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 names other than those of one or more of the lawyers in the firm, except that the name of a professional corporation may contain "P.C." or such symbols permitted by law, and, if otherwise lawful, a firm may use as, or continue to include in its name the name or names of one or more deceased or retired members of the firm or of a predecessor firm in a continuing line of succession.

Both the proposed letterhead and the proposed advertisement use the "trade name" of "The Law Offices at X Square." As such, they directly contravene the provisions just quoted. Although use of a trade name based on location alone would appear less likely to mislead than other trade names, the Code on its face prohibits all forms of trade names, and opinions construing the Code have applied that prohibition to locational trade names as well as other types of trade names. See, e.g., N.Y. City 82-44 (it is improper for a group of attorneys who share offices and services to engage in a law practice under the name "The 777 Lawyers Group"); N.Y. City 82-20 (use of term "store" declared an improper trade name); N.Y. City 82-36 (use of name "A.B. & Company" or "A.B. Associates" declared improper).

The inclusion of the names of specific attorneys below the law firm name does not alter the prohibited nature of the trade name. The rules against use of trade names are by their terms absolute, not providing room for remediation through further disclosure. In addition, the names of the attorneys listed below the name "The Law Offices at X Square" on the letterhead and in the advertisement are not an integral part of the firm name. On the letterhead, the identities of the attorneys appearing immediately under "The Law Offices at X Square" are different for each different lawyer or law firm practicing from that suite of offices, and in the advertisement the text does not make clear how the lawyers are affiliated with each other. These approaches do not eliminate the problems with lack of clarity and capacity to mislead associated with use of a trade name.*

* The proposed advertisement might also violate EC 2-11 and DR 2-101(K), which requires that advertising include the name, office address and telephone number of the attorney and law firm whose services are being offered, insofar as it does not clearly provide this information for each of the separate service providers identified in the single grouping.

In providing the foregoing views, we are opining only on matters of ethics. Questions of law are outside the jurisdiction of this committee, and we offer no view on the issues of law the proposed descriptions may raise, including, for example, whether those proposed descriptions constitute protected speech under the First Amendment of the United States Constitution. See generally N.Y. City 81-56 (1982).

II.

An alternative possible approach for law firm F and attorneys L and M, depending on the precise nature of their relationship, might be to enter into mutual "of counsel" relationships that are expressly denominated as such. Firm F may become "of counsel" to attorneys L or M and attorneys L or M may become "of counsel" to firm F, so long as the parties maintain the requisite ties to support the "of counsel" relationship. Such an arrangement would permit the group to advertise their affiliation with the requisite degree of specificity, and to list each other on their individual stationery while using a label with a known and therefore acceptable clear meaning.

The Use Of The "Of Counsel" Designation

Pursuant to DR 2-102(A)(4) of the Code of Professional Responsibility:

A. A lawyer or law firm may use. . . letterheads or similar professional notices or devices, provided the same do not violate any statute or court rule, and are in accordance with DR 2-101, including the following:

* * *

A lawyer may be designated "Of Counsel" on a letterhead if there is a continuing relationship with a lawyer or law firm, other than as a partner or associate....

(Emphasis supplied.)

A "continuing relationship" has been characterized for purposes of this provision as a "'close, regular, personal relationship'; but a relationship which is neither that of a partner (or its equivalent, a principal of a professional corporation) nor,... on the other hand, the status ordinarily conveyed by the term 'associate,' which is to say a junior non-partner lawyer, regularly employed by the firm." ABA 90-357 (footnote omitted) (quoting ABA 330 (1974)). See also N.Y. City 81-3 (1982) ("of counsel" designation permitted only where there is a close, continuing, regular and personal relationship or there is a "present day-to-day working familiarity with the affairs of the law firm in question").

The "of counsel" relationship may not, however, be used to designate a relationship that arises "by the mere referral of business between firms or an occasional consulting relationship," N.Y. City 891 (1977); see also ABA 90-357; ABA 330 (1974); or as a result of consultation on one case, N.Y. State 262 (1972). Significantly, also, an "of counsel" designation must mean something more than merely "a relationship involving only occasional collaborative efforts among otherwise unrelated lawyers or firms." See ABA 90-357.

These broad definitions provide incomplete guidance about the precise circumstances in which a relationship will be considered only " occasionally collaborative" as opposed to "close, continuing, regular and personal." The validity of describing any arrangement between Firm F and attorneys L and M by use of the "of counsel" label would depend on their relationships being of the latter character. Such characteristics of the relationship as the sharing of space and availability for consultation on a regular basis are strongly indicative of the requisite closeness of relationship, id., but not conclusive absent closeness, regularity and a personal dimension in the relationship. See, e.g., N.Y. City 81-109 (1982) (a relationship that consists primarily of office-sharing or of forwarding or receiving legal business is not on those facts alone sufficient to permit the representation that a lawyer is "counsel").

Because the range of relationships that may permissibly fall within the "of counsel" rubric is extremely broad, the potential for confusion exists. Clients dealing with lawyers holding themselves as "of counsel" to one another may reach unwarranted conclusions regarding the nature of the relationship between the affiliated lawyers, and correspondingly of the existence of attorney-client relationship itself. Ordinarily, any ambiguity will be dispelled through the use of written retainer agreements or letters, or through the billing process. Lawyers in "of counsel" relationships should nevertheless be aware of the potential for confusion and should take whatever action is necessary to prevent or rectify any misimpressions that clients may have about precisely who is representing them.

A Law Firm As "Of Counsel" To Individuals or Another Law Firm

Historically, the ABA had opined that a law firm may not be "of counsel" to individuals or to another law firm because the continuing relationship required under DR 2-102(A)(4) was personal in nature. ABA 330 (1974); ABA Inf. 1173 (1971). This Committee had previously followed that view, citing the ABA opinions without further discussion or analysis. N.Y. City 891 (1977); N.Y. City 81-3. If that view continued to prevail, it would prevent any identification of Firm F as counsel to attorneys L and M.

In 1990, however, the ABA revisited this issue and withdrew its prior opinions. See ABA 90-357. As the ABA explained:

Semantics aside, the Committee's prior opinions do not suggest, and the Committee does not now perceive, any reason that a firm should not be of counsel to another firm. Moreover, the Committee held in Formal Opinion 84-351 (1984) that two law firms could ethically present themselves as "affiliated" or "associated" with each other, and in Informal Opinion 1315 (1975), the Committee gave its approval to arrangements whereby two firms effectively became "of counsel" to each other, by each designating a partner of the other firm as "of counsel" to itself.

We agree with the ABA in its suggestion that, where a firm sharing space will be actively involved in the cases and day-to-day affairs of another firm and is available for consultation and advice on a regular and continuing basis, the firm can establish the requisite "continuing relationship with a lawyer or law firm" to support a "counsel" designation under DR 2-102(A)(4). The logic of this position equally dictates that an individual lawyer may list a law firm, or even a law firm and another individual, as "of counsel" (so long as the criteria for use of this designation are met in each instance). In this narrow respect, this opinion supports a departure from N.Y. City 81-3 and 891. We adhere, though, to prior opinions which state that where the relationship is one of mere referral it is not a "continuing relationship" under DR 2-102(A)(4).

If Firm F and attorneys L and M maintain the requisite "continuing relationship," with each other, their use of the term "of counsel" would constitute appropriate disclosure that could communicate to current or prospective clients that they have a formal professional linkage. Even with this label, "the Law Offices at X Square" would remain an impermissible trade name.

If the "of counsel" designation is employed, the attorneys will need to keep in mind that for purposes of analyzing conflicts of interest, "of counsel" relationships are treated as if the "counsel" and the firm are one unit. "In consequence there is attribution to the lawyer who is of counsel of all of the disqualifications of each firm, and, correspondingly, attribution from the of counsel lawyer to each firm, of each of those disqualifications. In consequence, the effect of two or more firms sharing an of counsel lawyer is to make them all effectively a single firm, for purposes of attribution of disqualifications." ABA 90-357. See also Nemet v. Nemet, 112 A.D.2d 359 (2d Dept. 1985), appeal dismissed, 66 N.Y.2d 602 (1986). This principle would suggest that any conflicts applicable individually to either firm F or attorneys L and M would be applicable to all.

III.

In the past, this committee has rejected the use of terms like "member" (used here in the letterhead) and "association" (used here in the advertisement) in descriptions of relationships between law firms that are not part of a single partnership, because of those terms' lack of clarity respecting the nature of the various attorneys' relationships. See, e.g., N.Y. City 81-71 (the use of the word "association" in describing lawyers' relationship is improper "because such listings do not convey a sufficiently precise description of the lawyer's relationship to the listing lawyer or law firm and thus are misleading"); N.Y. City 82-28 (listing another firm as "affiliated" declared misleading despite the listing firm's inclusion of a lengthy disclaimer); N.Y. State 538 (1981) (same); cf. DR 2-102(C).

The ABA has taken a different approach. Construing both the Model Rules and the Model Code, the ABA has considered the term "associated" to be susceptible of a particular meaning understandable by potential clients, and that the use of the term in firm advertising and letterhead is appropriate when such use conforms to the general meaning of the term. ABA 84-351. According to the ABA, the type of relationship that is implied by designating another firm as "associated" is analogous to the ongoing relationship required by the Model Code (DR 2-102(A)(4)) when using the designation "of counsel."

Thus, under the ABA's reasoning, a lawyer or law firm may list another lawyer or law firm as an "associate" or "affiliate" in its advertising and letterhead provided the lawyer or law firms maintain a relationship that is "close and regular, continuing and semi-permanent, and not merely that of forwarder-receiver of business. The 'affiliated' or 'associated' firm must be available to the other firm and its clients for consultation and advice." Id. Moreover, the "associated" firms are to be treated as one unit for purposes of conflicts of interest and confidentiality. Id.

The ABA has addressed the possibility that clients might incompletely understand the nature of firms' associations or affiliations by requiring more detailed disclosure in communications with individual prospective clients (including retention letters), at least when such disclosure could be relevant to the particular client. In those circumstances, the firm must provide full information concerning the nature of the relationship between the associated or affiliated firms, including (a) whether personnel from the associated law firm may be involved in providing the client with services, (b) whether the law firm intends to share any of its fees with the associated law firm, (c) whether the firm intends to share any of its profits with the associated law firm, (d) whether the associated law firms engage in common training or share strategies and (e) whether the associated firms engage in common operations or simply use their association as a marketing device. ABA 94-388.

We find the ABA's position to be persuasive. The basic requirement regarding lawyer advertising under the Model Code is that communications by a lawyer concerning legal services must not be false, deceptive or misleading. Id.; DR 2-101(A). So long as the lawyers advertising themselves as "associated" maintain a relationship analogous to an "of counsel" relationship, and provide clients with disclosure as to the nature of their association when individual client circumstances make that information relevant, we believe that the use of a term other than "counsel" but similarly conveying accurately the fact of lawyers' affiliation with each other is not misleading. In this respect, this opinion supports a departure from N.Y. City 81-71, 82-28, and 81-102.

CONCLUSION

Firm F and attorneys L and M may not advertise or employ letterhead using the trade name "the Law Offices at X Square." However, if Firm F becomes "of counsel" to L and M and vice versa, and the group maintains the requisite relationship to support that designation, the three entities will be able to advertise jointly and indicate an "of counsel" affiliation with each other. Those entities will also be able to identify themselves as "associated" or "affiliated" with each other, provided that the requisites for an "of counsel" relationship are met. Accordingly, we answer Questions 1 and 2 in the negative and Questions 3 and 4 in the affirmative, subject to the limitations set forth above.


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