If I am licensed in a state that bans law-firm partnerships with nonlawyers and also in D.C., which allows them, can I be a partner in a D.C. firm with nonlawyer partners without violating my home state's rule?
ABA Formal Opinion 91-360: Prohibition of Partnerships With Nonlawyers: Extrajurisdictional Effect
Short answer: The opinion concluded that a lawyer licensed both in a jurisdiction that prohibits law-firm partnerships with nonlawyers (the standard Model Rule 5.4(b)) and in a jurisdiction that permits them, such as the District of Columbia, may belong to the permitting jurisdiction's nonlawyer partnership without being subject to discipline by the prohibiting jurisdiction, provided the lawyer does not practice law in the prohibiting jurisdiction through that partnership; but if the lawyer is engaged in practice in the prohibiting jurisdiction, that jurisdiction's ban must prevail.
Disclaimer: This is an advisory ethics opinion. Advisory opinions are not binding; they interpret the American Bar Association's Model Rules of Professional Conduct and are persuasive authority. This summary is for research purposes only and is not legal advice. Verify current rules before acting on any specific guidance.
About this page: The plain-English summary and Q&A below were written by Ezel based on the official opinion. We do not reproduce the opinion text on this page; follow the linked source for the official text, which controls.
Plain-English summary
The committee addressed a conflict of ethics rules created when the District of Columbia adopted, effective January 1, 1991, a version of Rule 5.4(b) that permits lawyers to share financial interest or managerial authority with nonlawyer professionals in a firm, breaking what had until then been a nationwide prohibition. The question was which rule governs a lawyer admitted both in the District and in a "State X" whose rule tracks the standard Model Rule 5.4(b) prohibition on forming a partnership with a nonlawyer where any of the partnership's activities consist of the practice of law.
The committee distinguished two situations. Where a dually-licensed lawyer belongs to a District firm with nonlawyer partners but practices only in the District, the opinion held that State X's Rule 5.4(b) "should not be so applied as to prohibit what the District of Columbia Rule 5.4(b) permits." Where the same lawyer is engaged in the practice of law in State X, the opinion held that "State X's Rule 5.4(b) must prevail." The committee reached this result by reading State X's rule "not as banning a lawyer from having a partnership with a nonlawyer in a jurisdiction that permits such a partnership, but only as banning the practice of law in State X by such a lawyer whose practice involves the partnership with a nonlawyer."
The committee grounded its analysis in Rule 8.5, which subjects a lawyer to the disciplinary authority of a jurisdiction even when engaged in practice elsewhere, and in a governmental-interest approach that weighs each jurisdiction's interest in regulating its own bar against a lawyer's interest in not facing inconsistent standards. It explained that this "principled compromise" lets each jurisdiction vindicate its policy: State X may still discipline a member who practices law in State X through a nonlawyer partnership, while the District's interest in liberalizing its own bar is not undermined. Practically, the opinion noted the central question is whether a District firm with a nonlawyer partner may open branch offices in State X without running afoul of State X's prohibition.
Currency note
This opinion was issued in 1991, before the American Bar Association's adoption of the 2002 (Ethics 2000) revisions to the Model Rules of Professional Conduct, which substantially rewrote the choice-of-law provisions of Rule 8.5. The Rule 8.5(b) choice-of-law framework now in the Model Rules postdates this opinion and may change the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule mentioned here.
Common questions
Q: Can a lawyer barred from nonlawyer partnerships in one state ever be a partner in a D.C. firm that has nonlawyer partners?
A: Yes. The opinion held that a dually-licensed lawyer who practices only in the District may belong to a District firm with nonlawyer partners without being subject to discipline by the prohibiting jurisdiction.
Q: What if that lawyer wants to practice in the prohibiting state too?
A: The opinion held the prohibiting jurisdiction's Rule 5.4(b) "must prevail" as to practice there; the lawyer may practice in State X only if no part of that State X practice is conducted through a firm with a nonlawyer partner.
Q: Can a D.C. firm with a nonlawyer partner open a branch office in a state that bans such partnerships?
A: The opinion framed this as the practical question and indicated the branch's practice in State X must be conducted through a firm that is fiscally and managerially separate from and independent of the District firm.
Q: What rule provided the starting point for the choice-of-law analysis?
A: Rule 8.5, which provides that a lawyer admitted in a jurisdiction is subject to its disciplinary authority "although engaged in practice elsewhere," together with a governmental-interest weighing of each jurisdiction's regulatory interests.
Background and rules framework
The opinion interpreted Rule 5.4(b), which in its standard Model Rule form prohibits a lawyer from forming a partnership with a nonlawyer if any of the partnership's activities consist of the practice of law, against the variant D.C. Rule 5.4(b) that permits nonlawyer financial interest or managerial authority under stated conditions. It used Rule 8.5 (disciplinary authority over a lawyer engaged in practice elsewhere) as the textual hook for a choice-of-law analysis, noting that the Model Rules then provided "no express rule for resolving multijurisdictional conflict of ethical rules." Because the ABA interprets the Model Rules directly, there is no state-rule analogue.
Citations and references
Rules of Professional Conduct:
- MR 5.4 (professional independence; (b) partnership with a nonlawyer)
- MR 8.5 (disciplinary authority; choice of law)
Cases:
- Middlesex County Ethics Committee v. Garden State Bar Association, 457 U.S. 423 (1982), state interest in regulating bar conduct
Other opinions cited:
- ABA Informal Op. 86-1519 (1986): public interest in lawyers' professional independence
See also
- ABA Formal Op. 91-361: Representation of a partnership
- ABA Formal Op. 95-392: Sharing legal fees with a for-profit corporate employer
Source
- Landing page: ABA Formal Ethics Opinions index
- Original PDF: 91-360.pdf