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Introduction and Scope
The Colorado Bar Association Ethics Committee ("Committee") has received inquiries concerning ethical issues presented in office sharing situations of lawyers. Sharing office space is a common, time-honored method of association among practicing lawyers. It provides reduced operating costs, collegiality among lawyers and a convenient source of lawyers to fill in for one another when one is sick or on vacation. At the same time, office sharing arrangements allow lawyers to retain the financial independence and control over the practices valued by sole practitioners not sharing offices. While deriving benefits from office sharing arrangements, lawyers should be aware of the potential ethical problems such arrangements may present.
Syllabus
This opinion addresses the following ethical concerns in office sharing arrangements: conflicts of interest and duty of loyalty to clients; preservation of client confidences; and use of letterheads and names. Factual patterns illustrating common problems are included to demonstrate the application of general ethical principles to specific areas of concern.
Attorneys sharing offices may represent clients with conflicting interests only if such representation does not violate the applicable disciplinary rules within Canon 5. For example, the financial, business or operating relationship among the lawyers must not create differing interests of the lawyer which could cause a violation of DR 5-101(A). See also, Rule 1.7. In some situations, office sharing lawyers who represent clients with actual or potential conflicting interests to each other may be prohibited from representing those clients. See, DR 5-105(D); Proposed Model Rule 1.10. Where such representation causes a conflict described by DR 5-105, the office sharing lawyers may nevertheless represent clients with conflicting interests if it is obvious to each lawyer that he or she can adequately represent the interest of the client, and if each client consents to the representation after full disclosure of the possible effects such representation may have on the exercise of the lawyer's independent professional judgment. DR 5-105(C).
In addition to potential conflict problems, office sharing attorneys must take precautions to avoid disclosure of client confidences in all matters. The Code, Canon 4; Proposed Model Rule 1.6. Office sharing lawyers should be particularly attentive when lawyers or their employees have access to each other's file storage and/or have shared reception areas, staff, computer and telephone equipment. Important factors to consider in protecting confidentiality are sharing of staff and equipment and the overlap in the areas of practice between the lawyers. The more shared equipment and staff or the larger the overlap in areas of practice, the greater potential for inadvertent disclosure of client confidences and secrets and that such disclosure will be harmful to the client.
Finally, office sharing lawyers must scrupulously avoid any representation to the public that there is a professional corporation, partnership, associate or other law firm or employment relationship among them when no such relationship exists. DR 2-102(C); Proposed Model Rule 7.5; CBA Formal Opinions 8, 9 and 50. Otherwise, an office sharing attorney misleads the public that the other lawyer in the office bears some additional responsibility for the office sharing attorney's legal services and standards.
Opinion
A. Conflicts of Interest
The Code requires that lawyers have undivided loyalty to their clients and that the lawyers be free from influences which may affect such loyalty. DR 5-101(A) and (B); DR 5-105; Allen v. District Court, 519 P.2d 351 (Colo. 1974); EC 5-1 and EC 5-19. Accordingly, office sharing attorneys should avoid representing clients with actual or potential conflicting interests to each other since this practice is rife with ethical problems.(1) "Except with the consent of his [or her] client after full disclosure, a lawyer shall not accept employment if the exercise of . . . professional judgment on behalf of [the] client will be or reasonably may be affected by his [or her] own financial, business, property or personal interests." DR 5-101(A). DR 5-105 requires a lawyer to decline proffered employment if it would likely involve him or her in representing differing interests, unless this actual or potential conflict is waived by the client after full disclosure. Finally, Canon 9, which requires a lawyer to avoid "even the appearance of professional impropriety," further militates in favor of lawyers in an office sharing situation avoiding conflicts of interest. While the representation of adverse parties in an office sharing situation may not be a per se violation of Canon 9, lawyers should recognize that representation in such circumstances is fraught with ethical pitfalls. See, e.g., CBA Formal Opinion 75, adopted June 20, 1987 (spousal conflicts).
1. Financial Arrangements and the Exercise of Independent Judgment
When lawyers share office space, they usually have financial relationships with each other. Examples of such financial relationships include:
A young lawyer beginning a practice may commit to work a certain number of hours each month for an established attorney who provides free office space and services in exchange;
Office sharing lawyers may be jointly liable on a lease and may share other overhead costs as well; and
One attorney may own or rent offices which he or she rents to a second attorney.
Shared financial arrangements between and among office sharing lawyers can be very advantageous to all of the lawyers involved. However, these financial arrangements can create a potential leverage to be used by one lawyer against the other, especially in situations where the attorneys represent clients with actual or potential conflicting interests. These financial arrangements may require that either or both lawyers decline representing the clients or alternatively, in some such situations, representation may be permitted only after full disclosure to each client, followed by client consent. DR 5-105(A). Even with disclosure and consent, should the lawyers proceed to represent clients with conflicting interests, they must be certain that the common financial arrangements will not interfere with their exercise of independent professional judgment, and will not adversely affect their duty of loyalty. DR 5-105(C). If each lawyer properly determines that his or her independent professional judgment reasonably will not be affected by the financial arrangement, and the other issues regarding conflicts and confidentiality have been satisfactorily addressed, the lawyers may represent the clients.
2. Imputed Disqualification
Although office sharing lawyers generally are not considered "a firm," analysis under DR 5-105(D) and Proposed Model Rule 1.10 is helpful in determining whether a lawyer should disqualify himself or herself by declining the representation of a potential client. The vicarious disqualification provisions of DR 5-105(D) apply to a partner or associate or "any other lawyer affiliated with" the lawyer who is required to decline employment. For purposes of imputed disqualification, this latter phrase reasonably may be interpreted to apply to office sharing attorneys in some circumstances. Similarly, the Comments to Proposed Model Rule 1.10 make clear under the Rules that office sharing attorneys under certain circumstances may be considered to be part of "a firm":
Whether two or more lawyers constitute a firm within this definition can depend on the specific facts. For example, two practitioners who share office space and occasionally consult or assist each other ordinarily would not be regarded as constituting a firm. However, if they present themselves to the public in a way suggesting that they are a firm or conduct themselves as a firm, they should be regarded as a firm for the purposes of the rules. The terms of any formal agreement between associated lawyers are relevant in determining whether they are a firm, as is the fact that they have mutual access to information concerning the clients they serve. Furthermore, it is relevant in doubtful cases to consider the underlying purpose of the rule that is involved. A group of lawyers could be regarded as a firm for purposes of the rule that the same lawyer should not represent opposing parties in litigation, while it may not be so regarded for purposes of the rule that information acquired by one lawyer is attributed to the other.
Ethics opinions issued by other states have relied upon rules of imputed disqualification to disqualify one office sharing lawyer from representing a particular client when the adverse party is represented by another lawyer in the same suite of offices. See, Wisconsin Bar Opinion E-86-2 (3-86); Alabama Bar Opinion 83-178 (12/21/83) (lawyer may not represent a wife in action related to divorce in which lawyer sharing office represented husband); Illinois Bar Opinion 783 (6/28/82) (criminal defense attorneys are precluded from representing defendants being prosecuted by space sharing municipal prosecutor). See generally, Sharing Office Space, ABA/BNA Lawyers Manual on Professional Conduct 91:604-605.
In order to avoid ethically impermissible conflicts of interest, lawyers in office sharing situations may wish to take several precautionary steps. First, they should ascertain, to the extent possible, the nature of the practices of other office sharing attorneys in the same suite to determine whether any actual or potential conflicts are likely to arise. In some office sharing situations, the attorneys represent clients in completely different areas of practice and there is little if any chance of a conflict arising. If the office sharing lawyer determines areas of conflict may exist,(2) the lawyer can either decline employment in all cases of possible conflict or take certain precautions to ensure that his or her office sharing arrangement will not be considered an "affiliation" or "firm" for purposes of imputed disqualification. The more lawyers in an office sharing arrangement present themselves to the public in a way suggesting they are a firm, the more likely the vicarious disqualification rules will apply.
To reduce the likelihood of being viewed as a firm, the office sharing attorney should take various measures to ensure that his or her practice is completely separate and distinct from that of other office sharing attorneys and that there are no unnecessary financial entanglements. A lawyer must restrict access to client files and information from other office sharing lawyers. If, however, the lawyer wants another lawyer in the suite to provide coverage, then the clients should consent to such arrangement and restricted access may not be necessary. See, EC 4-2. Additionally, the lawyers should further protect the client by restricting computer, telephone, fax machine and copier access. When there is a reasonable possibility of a conflict of interest arising, the lawyer may also wish to discuss the office sharing situation with the client and inform the client in writing of specific procedures he or she has taken to ensure there will be no actual conflict of interest.
Notwithstanding these precautions, the lawyer should be aware that there is a substantial risk of disqualification if in fact he or she is "too closely involved with" the other office sharing attorneys or their clients. See, Dean v. American Security Insurance Co., 429 F.Supp. 3 (N.D. Ga. 1976), aff'd mem., 559 F.2d 1214 (5th Cir.), reversed on other grounds, 559 F.2d 1036 (5th Cir. 1977). See also, McMahon v. Seitzinger Bros. Leasing, Inc., 506 F.Supp. 618, 619 (E.D. Pa. 1981) (attorney disqualified from representing plaintiff where attorney shares office space with a law firm which represented defendant in a substantially related matter); CBA Informal Opinion I, October 10, 1972 (inappropriate for attorney to appear before the Board of County Commissioners if he shares office space with County Attorney).
B. Presentation of Confidences and Secrets of a Client
An office sharing attorney, like all lawyers, must take precautions to prevent disclosure of client confidences and secrets on all matters. Canon 4 of the Code. Office sharing arrangements often include situations where attorneys share or have access to one another's file cabinets, reception area, conference room, law library, staff, computers, telephones, and/or fax machines. In each of these situations, there is an opportunity for inadvertent disclosure of client confidences or secrets. To minimize such inadvertent disclosure, each office sharing attorney must assume responsibility for the conduct of his or her staff and ensure that the staff not disclose or use any client confidences or secrets. See, DR 4-101(D). ln addition, "absent consent of the client, the lawyer should not seek counsel from another lawyer if there is a reasonable possibility that the identity of the client or his [or her] confidences or secrets would be revealed to such lawyer." CBA Formal Opinion No. 75, citing EC 4-2. Moreover, the office sharing lawyer should avoid "indiscreet conversations" concerning his or her clients. EC 4-2.
To ensure confidentiality, the office sharing lawyer may need to take certain measures in addition to restricting access to files, such as restricting access between the telephone systems of the separate practices; arranging the reception area such that one lawyer's secretary is not able to overhear confidences from another lawyer's clients; not leaving confidential materials in the copier area or library for inspection by other lawyers; using security devices to restrict access to computers; avoiding sharing of staff to the extent possible, particularly secretaries and paralegals; and informing clients of the space sharing arrangement and of measures undertaken to avoid any compromise of confidentiality. See, Indiana Opinion 8 of 1985 (undated).
The need to ensure confidentiality exists in all cases, but is especially great when office sharing lawyers represent clients with potential or actual conflicting interests, as discussed above.
C. Names and Letterheads
DR 2-102(C) provides that "a lawyer shall not hold himself [or herself] out as having a partnership with one or more other lawyers unless they are in fact partners." Similarly, Proposed Model Rule 7.5(f) states that "lawyers may state or imply that they practice in a partnership or other organization only when that is the fact." The comment to Colorado's Proposed Model Rule 7.5 states:
With regard to paragraph (f), lawyers sharing office facilities, but who are not in fact partners, may not denominate themselves, as for example, "Smith & Jones," for that title suggests partnership in the practice of law.
This Committee has held that "it is improper to use the term 'associates' to describe lawyers, not employees, who share office space and some costs but do not share in responsibility and liability for each other's acts." CBA Formal Opinion No. 50 (adopted November 29, 1972). See also, CBA Formal Opinions 8 and 9 (both adopted June 26, 1959).
Lawyers sharing offices are also prohibited from using a common trade name under the provisions of DR 2-102(B). Similarly, Colorado's Proposed Model Rule 7.5(b) prohibits lawyers from practicing under a trade name. (Note, however, that the ABA Model Rule 7.5(a) allows lawyers to use a trade name, and in this respect Colorado's Proposed Model Rules differ).
Furthermore, any misleading name is prohibited by DR 2-101(B). See, Proposed Model Rule 7.5(b). In some cases, ethics committees have approved a list of attorneys on a sign outside a suite of offices, when the sign states "law offices," followed by the statement "not a partnership, professional corporation, or professional association." See, Dallas Bar Opinion 1983-3 (1/28/83); Indiana Bar Opinion 8, 1980. The Committee believes that such a designation may be helpful in appropriate circumstances to ensure that members of the public do not believe that office sharing attorneys in fact are practicing in a partnership or professional corporation. However, the Committee also believes that lawyers may list their names on a sign outside an office suite under the term "law offices," as long as there is otherwise no indication that the lawyers in that suite are practicing in a partnership or professional corporation.
In addition, DR 2-102(A) and (B) and Proposed Model Rule 7.5(a) extend the prohibition against false and misleading names to letterheads, professional cards, and directory lists. See generally, CBA Formal Opinion 84 (adopted February 26, 1990). As with firm names, office sharing lawyers must take care to ensure that their letterheads, business cards and directory listings do not falsely or misleadingly suggest to the public that a partnership exists. Thus, office sharing lawyers should not use joint letterheads that state, for example, Alice B. Smith, Attorney at Law and Harry R. Jones, Attorney at Law, because the use of such letterheads could easily be interpreted as suggesting the existence of a partnership. The same result should obtain for joint business cards or directory listings. ABA/BNA Lawyers Manual on Professional Conduct, 91: 601-603.
D. Fact Patterns
To facilitate the analysis of the application of these rules to office sharing situations, four scenarios are considered:
Scenario One
The first scenario involves office sharing attorneys who have the same area of practice, namely domestic relations. One attorney is representing the husband, while the other seeks to represent the wife in a divorce. In this scenario, there is a heightened likelihood of conflict of interest arising. The lawyers must disclose the office sharing arrangement to the clients, and allow the clients the opportunity to decide whether to waive an actual or potential conflict. See, Formal Opinion 75. In order for the client to intelligently waive any actual or potential conflict, the client must be informed of all relevant information regarding the conflict and the safeguards for preservation of confidences and secrets.(3) If adequate safeguards are in place, as discussed below, the second office sharing lawyer may be able to exercise independent professional judgment on behalf of the wife. On the other hand, if adequate safeguards are not in place, the office sharing lawyers may be considered "affiliated" or "a firm" for imputed disqualification purposes. In that event, the second office sharing lawyer may be required to refrain from representing the wife, or, indeed, both lawyers might be required to withdraw from representing their clients. If the office sharing lawyers have taken steps to restrict access to each other's client files, telephone calls, and fax transmissions and the lawyers do not share the same staff, there is a reduced likelihood of access to confidential information.
In sum, where office sharing lawyers are practicing in the same or similar areas, the need for avoiding conflict of interest and for maintaining client confidentiality is greatest.
Scenario Two
In this scenario the office sharing lawyers have completely different types of practices, such as criminal defense, workers' compensation, and bankruptcy. There is little if any, likelihood of the office sharing lawyers representing clients with actual or potential conflicts. However, if one of the office sharing lawyers were to discover after the commencement of representation that another attorney in the same suite was representing a client with actual or potential conflicting interests, then this attorney is required to disclose this fact immediately to his or her client. The client then would need to consent to the disclosed actual or potential conflict, or the lawyer would be forced to withdraw. In this situation, it is still important that the lawyers establish procedures to avoid disclosure of client confidences; however, the risk that an inadvertent disclosure of client confidences would be harmful is not as great. See, CBA Formal Opinion 75.
Scenario Three
In this scenario the office sharing lawyers practice in the same or similar areas. Because each is a sole practitioner, they agree to fill in for one another when the other is sick, on vacation, or out of town. The need for conflict checks in this situation is heightened because the agreement among the office sharing lawyers to fill in for one another strongly suggests that at least for some purposes these lawyers are operating as "a firm," and thus are subject to the rules of imputed disqualification in both the Code and the Rules. A conflict check system is advisable to ensure that other lawyers in the suite are not representing clients with actual or potential conflicts.
Moreover, the office sharing attorneys must include a provision in retainer agreements that other office sharing attorneys may substitute for the retained attorney when necessary, and, therefore, client confidences may be revealed. By virtue of such a provision, the client thereby consents to representation by his or her retained lawyer and by the other office sharing lawyers. The effect of such a provision in the retainer agreement would be to extend the notion of "a firm" and to authorize the office sharing lawyer to disclose the client's identity and otherwise share information concerning the client's legal matter with other office sharing attorneys. The requirement for avoiding inadvertent disclosure of confidential client matters through access to case files, fax transmissions and other means would be eliminated, because the client in effect would have consented to representation by more than one office sharing attorney.
Scenario Four
The office sharing lawyer leases space from another office sharing lawyer. The two lawyers represent clients with an actual or potential conflict with the other. In this scenario, as discussed above, if a conflict arises, the office sharing lawyer may be required either to decline employment or to provide full disclosure to the client, accompanied by the client's consent, because either lawyer's independent professional judgment could be compromised by the existence of the landlord tenant relationship. Thus, if the lawyer landlord were to threaten the lawyer tenant, directly or indirectly, with unfavorable treatment under the lease relationship in the event of an unsuccessful outcome for the landlord's client, the lawyer tenant might not be able to exercise his or her professional judgment properly on behalf of the client. Similarly, an attorney landlord might not be able to properly exercise professional judgment on the client's behalf if the lawyer tenant threatened to move out in the event his or her client didn't fare well. Such conduct by the landlord or the tenant attorney also would violate DR l-102(A)(5). In these situations, it is proper for each lawyer to disclose the lease relationship and its implications for the representation to the client so that the client may intelligently decide whether to continue representation and waive any possible Canon 5 violation.
Conclusion
Office sharing is a common way for lawyers to share facilities, to reduce operating overhead and to create collegiality among lawyers. However, lawyers should be aware of the ethical issues inherent in office sharing situations, particularly conflicts of interest, protection of client confidences and secrets, and proper letterheads and names in order not to mislead clients and others. Because of the variety of office sharing relationships, the different client interests at stake in each instance, and the interplay of the several ethical duties, determining the proper course of conduct for the lawyers to follow will depend upon a thorough analysis of the facts in each situation.
1. The Committee recognizes there may be almost an infinite variety of office sharing arrangements. In some situations, such as a large suite of nearly independent lawyers, the office sharing attorneys may be able to avoid potential conflicts and exercise independent professional judgment on behalf of their clients. In more typical, smaller office sharing situations, with shared use of facilities, it may be much more difficult to avoid an actual or potential conflict of interest.
2. It may be difficult for a lawyer to determine in all instances whether an actual conflict or potential conflict exists because even the identity of a client may be confidential. See, e.g., EC 4-2. An office sharing lawyer may wish to seek a waiver of confidential identity from his or her clients so that a conflict check can be made. Given the circumstances of office sharing lawyers, the Committee believes that the practice of doing conflict checks in and of itself should not be construed as making them more like a firm for purposes of imputed disqualification.
3. In order to ascertain whether an actual or potential conflict exists, because the lawyers have the same type of practices, the office sharing attorneys may wish to consider establishing a regular conflict check procedure. If this were done, however, office sharing lawyers should obtain a waiver from their clients of the client's identity so that such a conflict check could be made. See, EC 4-2.
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