Can a firm describe itself as 'affiliated,' 'associated,' or part of a 'network' with other firms, and what conflict and fee-sharing rules apply to those relationships?
Apply this to your situation
This page answers the general question as of 1994. Ezel answers yours: whether it's allowed on your facts, under the current rules of professional conduct in your state, with citations.
Plain-English summary
The committee addressed the proliferation of inter-firm arrangements: networks of firms under a common name, affiliations, and resource-pooling among otherwise separate firms. It began with the duty not to mislead, holding that lawyers have an obligation "not to mislead prospective clients as to what the lawyer is able to bring to bear on the client's matter in terms of the size of the firm, the resources available to the firm or the relationship between the firm and other law firms." Labels such as "affiliated," "associated," "correspondent," or "network," used "without further explanation," can be misleading, so using them "without a meaningful description of the nature of the relationship, violates Model Rule 7.1."
The opinion then turned to conflicts. Because of the nature of some inter-firm relationships, and regardless of whether the relationship has been disclosed, "it may be necessary for a lawyer to decline a proffered representation because the representation would be materially limited by such a relationship" under Rule 1.7(b). Where the lawyer believes the representation will not be adversely affected, the committee said it may instead be necessary to disclose the relationship to prospective clients so they can decide whether to consent. The opinion treated closely affiliated firms as raising the same loyalty concerns as a single firm.
On structure and fees, the committee held that if a firm licenses its name to other firms, "all firms so licensed must, in fact, operate as a single firm and be treated as part of a single firm for all purposes under the Model Rules," including conflicts imputation. Relationships that result in fee-sharing must comply with Rule 1.5(e): the total fee must be reasonable, the client must be advised of the sharing arrangement, and the division must track the services performed or the responsibility assumed. The committee added that lawyers "must also avoid running afoul of Model Rule 7.2(c)'s prohibition on giving something of value for referrals."
Currency note
This opinion was issued in 1994, before the American Bar Association's adoption of the 2002 (Ethics 2000) revisions to the Model Rules of Professional Conduct, which revised Rules 7.1, 7.2, and 1.5(e). Subsequent rule amendments and later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule or requirement mentioned here.
Common questions
Q: Could a firm advertise that it is part of a "network" of firms?
A: Only with explanation. The committee held that "network," "affiliated," "associated," and similar terms used without a meaningful description of the relationship can mislead clients and violate Rule 7.1.
Q: Did an inter-firm relationship create conflicts?
A: It could. The opinion held some relationships require declining a representation that would be materially limited by the relationship under Rule 1.7(b), or disclosing it so the client can consent.
Q: What happened if firms shared a licensed common name?
A: They had to operate, and be treated, as a single firm for all Model Rules purposes, including imputation of conflicts.
Q: How did the rules treat fee-sharing among separate firms?
A: Under Rule 1.5(e), the total fee had to be reasonable, the client had to be told of the arrangement, and the split had to reflect services or responsibility; Rule 7.2(c) barred paying for referrals.
Background and rules framework
The opinion interpreted Rule 7.1 (false or misleading communications) as the core constraint on inter-firm labels, Rule 7.5 (firm names and designations), Rule 1.7(b) (representation materially limited by responsibilities to others), Rule 1.5(e) (division of fees among lawyers not in the same firm), Rule 7.2(c) (giving something of value for a recommendation), and Rule 5.4 (professional independence). Because the ABA interprets the Model Rules directly, there is no state-rule analogue.
Citations and references
Rules of Professional Conduct:
- MR 7.1 (false or misleading communications)
- MR 7.5 (firm names and professional designations)
- MR 1.7(b) (representation materially limited by responsibilities to others)
- MR 1.5(e) (division of fees among lawyers in different firms)
- MR 7.2(c) (giving something of value for a referral)
Other opinions cited:
- ABA Formal Op. 84-351 (1984): two firms presenting themselves as "affiliated" or "associated"
- ABA Formal Op. 90-357 (1990): use of the "of counsel" designation
See also
- ABA Formal Op. 90-357: Use of the "of counsel" designation
- ABA Formal Op. 464: Fee division with lawyers who may share fees with nonlawyers
Source
- Landing page: ABA Formal Ethics Opinions index
- Original PDF: 94-388.pdf
Get today's answer for your situation
You just read a 1994 opinion on this question. Ezel checks the current rules of professional conduct in your state and answers your specific situation, with citations.
Opens in Ezel Pro. Every answer cites the rules it relies on.