CABAR 1997

When California lawyers share office space, staff, or facilities without forming a law firm, what must they do to comply with their ethics duties regarding the public and client confidentiality?

Short answer: Per California Formal Opinion 1997-150, office-sharing or staff-sharing attorneys must take reasonable steps under the circumstances to ensure clients and potential clients are not deceived, misled, or confused about the nature of their relationship, and must take reasonable steps to protect each client's confidences and secrets. Inadequate safeguards may violate former Rule 1-400 (advertising/communications), Rule 3-110 (competence), and Business and Professions Code section 6068(e).

Disclaimer: Advisory only. Not binding precedent.

About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official ethics opinion. The original opinion (linked at the bottom of this page) is the authoritative source for any reliance.

State Bar of California COPRAC Formal Opinion 1997-150: Office-Sharing Arrangements, Public Confusion, and Confidentiality

Short answer: The opinion concluded that lawyers who share office space, staff, or services without forming a law firm must take reasonable steps under the circumstances to (1) ensure that clients and potential clients are not deceived, misled, or confused about the nature of the lawyers' relationship to one another and (2) protect each client's confidences and secrets. Inadequate safeguards may violate former Rule 1-400 (communications and solicitation), former Rule 3-110 (competence, including supervision), and Business and Professions Code section 6068(e) (confidentiality).

Currency note

This opinion was issued in 1997, before the State Bar of California's adoption of the November 1, 2018 revisions to the Rules of Professional Conduct. The opinion interprets former Rules 1-100, 1-320, 1-400, 1-600, 3-110, and 3-310, together with Business and Professions Code sections 6068(e) and 6106. The substance is now distributed across current Rules 1.6, 5.1, 5.3, 7.1, 7.3, and 7.5, but the opinion's analysis is rooted in the former framework. Subsequent rule amendments and later opinions may have changed parts of the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule reference.

Disclaimer: This is an advisory ethics opinion. Advisory opinions are not binding; they interpret the State Bar of California's 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. The opinion text is reproduced at the bottom; the official source (linked) controls.

View original opinion

Plain-English summary

The opinion took up a familiar arrangement: two lawyers who have not formed a law firm but share reception, library, and conference facilities, listed separately in the building directory, with their own stationery, business cards, retainer agreements, and bank accounts, considering hiring a paralegal and a secretary. The committee identified two main risk areas: communications to the public, and protection of client confidential information.

On communications to the public, the committee opined that former Rule 1-400(D)(2) prohibits any communication that is "false, deceptive, or which tends to confuse, deceive, or mislead the public." Lawyers who share facilities or staff must take reasonable steps to ensure the public is not confused about whether a law firm, partnership, corporate, "of counsel," or other relationship exists when it does not. The opinion identified separate business cards and letterhead, or other clear identification of separate practices, as a way to avoid the appearance of affiliation where none exists. Using a firm name, trade name, fictitious name, or designation that states or implies a professional relationship that does not exist is presumed to violate former Rule 1-400 under standards (7) and (8). Anchored in California State Bar Formal Opinion 1986-90, the committee opined that separate sole practitioners may not advertise jointly under a group trade name without each affirmatively disclosing sole-practitioner status; the touchstone is "what a client knows or reasonably should know, not what the lawyers privately intend." The committee opined that conduct in front of clients also matters. The committee opined that affirmative disclosure of the shared-arrangement nature is required when the arrangement tends to mislead the public. Business and Professions Code section 6106 (purposeful client misleading) was identified as a parallel exposure. The committee added (in a footnote) that fee-sharing between unaffiliated office-sharing lawyers requires compliance with former Rules 1-100 and 2-200.

On confidentiality, the committee opined that each office-sharing lawyer must maintain inviolate client confidences and secrets under Business and Professions Code section 6068(e), citing California State Bar Formal Opinion 1979-50, ABA EC 4-4, and DR 4-101(D)'s requirement to use reasonable care to prevent employees and others from disclosing or using client confidences. The duty continues after termination of employment (Yorn v. Superior Court). The nature of the required protective steps is context-dependent and turns on factors such as the identity of the client, the nature of the information, the ease of others' access, the apparent professionalism of other lawyers and staff, the need to communicate particular information to shared personnel, and the existence of known conflicts among clients of different lawyers (citing In re Complex Asbestos Litigation).

The committee opined that inadequate safeguards may violate not only section 6068(e) but also former Rule 3-110(A)'s competence duty, because the duty includes supervising subordinate attorneys and non-attorney employees. Serious and inexcusable office-procedure lapses resulting in fiduciary violations may be deemed wilful for disciplinary purposes (Palomo v. State Bar; Trousil v. State Bar). The committee opined that careful supervision and proper office procedures, and clear delineation of responsibility for correspondence, calendaring, filing, client communications, and handling of funds, help fulfill both the confidentiality and competence duties (Gadda v. State Bar).

The committee concluded that lawyers may ethically share space and staff so long as they take reasonable steps to protect against (1) misleading the public or clients regarding the nature of their relationship, and (2) disclosure of clients' confidential information to other attorneys or staff in the office. The committee expressly declined to address how former Rule 3-310 (adverse-interest conflicts) might apply to shared-office or shared-staff arrangements, noting only that conflict-of-interest issues might arise, particularly where the attorneys have created a partnership by estoppel or where receipt of confidential information from another lawyer's client could itself give rise to a duty.

Common questions

Q: Can two sole practitioners share an office?

A: Per the opinion, yes, if they take reasonable steps to ensure no public confusion about whether a firm relationship exists and to protect each lawyer's clients' confidential information. The committee identified separate business cards, letterhead, or other clear identification of separate practices as means to avoid the appearance of affiliation where none exists.

Q: Can office-sharing lawyers use a joint trade name?

A: Per the opinion, using a firm name, trade name, fictitious name, or designation that states or implies a professional relationship that does not exist is presumed to violate former Rule 1-400. Separate sole practitioners may not advertise their sole practices jointly under a group trade name unless each affirmatively discloses sole-practitioner status (citing California State Bar Formal Opinion 1986-90).

Q: What confidentiality steps does the rule require?

A: Per the opinion, the required steps turn on the circumstances, including the identity of the client and the nature of the information, the ease of access others would have, the apparent professionalism of the other lawyers and staff, the need to communicate particular information to shared personnel, and the existence of known conflicts. The opinion did not prescribe a checklist; it required reasonable steps tied to the facts.

Q: What if the lawyers share a paralegal or secretary?

A: Per the opinion, sharing personnel does not by itself violate the rules, but each lawyer must supervise the work of subordinate attorneys and non-attorney employees under former Rule 3-110, and must agree with the other lawyer on a clear delineation of responsibility for correspondence, calendaring, filing, client communications, and funds handling, all with due regard for client confidentiality.

Q: Does the opinion address conflicts of interest?

A: Per the opinion, the committee expressly did not address how former Rule 3-310 (adverse-interest conflicts) applies to shared-office or shared-staff arrangements, but flagged that conflicts may arise where attorneys have created a partnership by estoppel by holding themselves out as a partnership, or where receipt of confidential information from another lawyer's client triggers a duty.

Background and rules framework

The opinion interprets former California Rules 1-100 (definitions, including the law firm definition in 1-100(B)(1)(a)), 1-320 (financial and similar arrangements with non-lawyers), 1-400 (advertising and solicitation, including the deceptive-communication prohibition in 1-400(D)(2) and the firm-name standards (7) and (8) under 1-400(E)), 1-600 (third-party interference with judgment), 3-110 (competence and supervision), and 3-310 (avoiding the representation of adverse interests). The opinion also interprets Business and Professions Code sections 6068(e) (confidentiality) and 6106 (purposely misleading a client). The substance is now distributed across current California Rules 1.6, 5.1, 5.3, 7.1, 7.3, and 7.5, but the opinion's analysis is rooted in the former framework.

Citations and references

Rules of Professional Conduct (former, in effect at time of opinion):

Former California Rule 1-100, particularly 1-100(B)(1)(a)
Former California Rule 1-320
Former California Rule 1-400, particularly 1-400(A), (D)(2), (E) stds. 7 and 8
Former California Rule 1-600
Former California Rule 2-200
Former California Rule 3-110, particularly 3-110(A) and Discussion

Statutes:

California Business and Professions Code section 6068(e)
California Business and Professions Code section 6106

Cases:

Stevens v. State Bar (1990) 51 Cal.3d 283, attorney misled client about case status
Yorn v. Superior Court (1979) 90 Cal.App.3d 669, confidentiality continues post-termination
In re Complex Asbestos Litigation (1991) 232 Cal.App.3d 572, protection of confidentiality
Spindell v. State Bar (1975) 13 Cal.3d 253, supervision obligation
Palomo v. State Bar (1984) 36 Cal.3d 785; Trousil v. State Bar (1985) 38 Cal.3d 337, office-procedure lapses
Gadda v. State Bar (1990) 50 Cal.3d 344, confidence issues
William H. Raley Co. v. Superior Court (1983) 149 Cal.App.3d 1042
Allen v. Academic Games Leagues of America (C.D. Cal. 1993) 831 F. Supp. 785, duties to non-clients
People v. Pastrano (1997) 52 Cal.App.4th 610, no per se conflict from shared services

Other opinions cited:

ABA Model Code of Professional Responsibility EC 4-4 and DR 4-101(D)
California State Bar Formal Opinion 1979-50: confidentiality and supervised personnel
California State Bar Formal Opinion 1986-90: separate sole practitioners and trade name use
California State Bar Formal Opinion 1981-63: confidential information shared in office arrangements

Source

Landing page: https://www.calbar.ca.gov/legal-professionals/ethics-compliance-practice-resources/ethics/ethics-opinions
Original HTML: https://www.calbar.org/ethics/Opinions/1997-150.htm

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

THE STATE BAR OF CALIFORNIA

STANDING COMMITTEE ON

PROFESSIONAL RESPONSIBILITY AND CONDUCT

FORMAL OPINION NO. 1997-150

ISSUE:

What ethical issues arise when attorneys enter into arrangements to share office space or services, such as reception and library facilities, maintenance staff, secretarial staff, or paralegal staff, without forming a law firm?

DIGEST:

Attorneys sharing space or staff must take reasonable steps under the circumstances to ensure that their clients and potential clients are not deceived, misled or confused regarding the nature of their relationship. Attorneys who share office space or services also must take reasonable steps under the circumstances to protect each client's confidence and secrets. If attorneys do not address these issues sufficiently, they may violate their obligation to maintain clients' confidential information.

AUTHORITIES INTERPRETED:

Rules 1-400 and 3-110 of the California Rules of Professional Conduct.

Business and Professions Code sections 6068(e) and 6106.

STATEMENT OF FACTS

The Committee has been requested to opine on the following facts. Attorney A and Attorney B enter into a space-sharing agreement. They have not formed a law firm, but they share a receptionist and reception area, and common library and conference room facilitates. Their names are listed separately in the building directory and each has her own stationery, business cards, retainer agreements and bank accounts. Each attorney only works on matters for her own clients. They are considering hiring a paralegal and a secretary.

DISCUSSION

Many attorneys practice law in shared office suites, and many attorneys share office staff. These arrangements vary greatly with respect to the kind of space or staff shared by the attorneys. Some attorneys locate their practices in "executive suite" complexes; some attorneys and smaller law firms share office suites; many law firms sublease unused offices within their office suites to reduce their overhead. The attorneys can thereby manage their offices with greater economy or obtain library or other shared resources that individual attorneys or small firms could not afford alone. Such arrangements, however, must be planned carefully and designed in such a manner to avoid any interference with each attorney's obligations to her clients and potential clients. Two main areas in which problems may arise are: (1) communications by attorneys to the public; and (2) protection of client confidential information.

Communications By Attorneys To The Public

Attorneys who share facilities or staff must take reasonable steps under the circumstances to ensure that the public is not confused, deceived or mislead concerning their relationships with one another. Rule 1-400(D)(2) of the California Rules of Professional Conduct provides that a communication made by an attorney shall not "[c]ontain any matter, or present or arrange any matter in a manner or format which is false, deceptive, or which tends to confuse, deceive, or mislead the public." A communication includes a firm name, written material, advertisements and correspondence made by or on behalf of a member concerning the availability for employment of a member or law firm directed to any former, present, or prospective client. (Rule 1-400(A).) Attorneys must ensure that in any communications they make, the public is not confused, deceived or misled that there is any law firm, partnership, corporate, "of counsel," or other relationship between the attorneys when no such relationship exists. For example, attorneys sharing space are well advised to have separate business cards and letterhead or otherwise clearly identify their separate practices in order to avoid any confusion that they are affiliated when they are not. (Compare Cal. State Bar Formal Opn. No. 1986-90.) It can be a violation of Business and Professions Code section 6106 for an attorney to mislead his or her client purposely. (See Stevens v. State Bar (1990) 51 Cal. 3d 283, 289 [272 Cal. Rptr. 167] (attorney misled his client about the status of her case).)

The terms used to describe the sharing arrangement also should be carefully considered. Attorneys sharing space who use a firm name, trade name, fictitious name or other professional designation which states or implies that they have a professional relationship with one another such as associate, partner, officer, shareholder or "of counsel," when they do not, will be presumed to be in violation of rule 1-400. (See rule 1-400(E), stds. (7) and (8).) Consistent with this presumption, this Committee previously has opined that separate sole practitioners are not allowed to use a group trade name to advertise their sole practices jointly unless, in each usage, each attorney discloses affirmatively that he or she is a sole practitioner. As stated in California State Bar Formal Opinion Number 1986-90 at page 3, "[t]he crucial concern, both as a matter of legal ethics and of professional liability, is what a client knows or reasonably should know, not what the lawyers privately intend or agree among themselves but fail to communicate."

Not only should attorneys who share space be concerned about verbal or written communications that may mislead clients concerning their relationship, they must also monitor their own conduct to ensure that they are not indirectly misleading their clients. In many instances actions can speak louder than words. For example, attorneys should be careful when interacting in front of clients so that clients are not led to believe that the attorneys are in the same firm.

Attorneys sharing facilities or staff must affirmatively disclose to the public and to clients the nature of their shared arrangement when the arrangement tends to confuse, deceive, or mislead the public. (Rule 1-400(D)(2).) This disclosure should include the fact that they maintain separate practices and whatever other disclosures are necessary to avoid any implication that a relationship exists between the attorneys when it does not.

Protection Of Clients' Confidential Information

Each attorney who shares facilities or staff with other attorneys must remain aware of the obligation to "maintain inviolate the confidence, and at every peril to himself or herself to preserve the secrets, of his or her client." (Bus. & Prof. Code, § 6068 (e).) This duty forms the basis of the attorney client relationship. As previously stated by this Committee in California State Bar Formal Opinion Number 1979-50 at page 1:

A primary obligation in the attorney-client relationship is the duty to preserve the confidences and secrets of one's client. This obligation is mandated by California Business and Professions Code section 6068, subdivision (e), and Canon 4 of the American Bar Association Code of Professional Responsibility. Disciplinary Rule 4-101(D) specifically extends this duty by requiring that the attorney "exercise reasonable care to prevent his employees, associates, and others whose services are utilized by him from disclosing or using confidences or secrets of a client . . . ."

This duty continues even after termination of employment. (See Yorn v. Superior Court (1979) 90 Cal App.3d 669 [153 Cal. Rptr. 295].)

The nature of the protective steps which must be undertaken to maintain the clients' confidential information will depend on all of the circumstances including, for example: the identity of the client and the nature of the confidential information; the ease of access others would have to that information; the experience and apparent professionalism of the other attorneys and staff and their demonstrated sensitivity to the confidence and secrets of their own clients; the need to communicate particular information to shared personnel; and the existence of known conflicts between clients of different attorneys. (See generally In re Complex Asbestos Litigation (1991) 232 Cal. App. 3d 572, 587-596 [283 Cal. Rptr. 732] (discussing protection of confidentiality).)

If the attorneys do not implement safeguards and structure their practices in a way that under the circumstances reasonably ensures the maintenance of their clients' confidential information, they may violate not only their duty to protect their clients' confidential information, but also their obligation to perform their duties competently. Under rule 3-110(A),

"[a] member shall not intentionally, recklessly, or repeatedly fail to perform legal services with competence." Serious and inexcusable lapses in office procedure resulting in fiduciary violations may be deemed wilful for disciplinary purposes. (Compare Palomo v. State Bar (1984) 36 Cal.3d 785, 795 [205 Cal. Rptr. 834] and Trousil v. State Bar (1985) 38 Cal.3d 337, 342 [211 Cal. Rptr. 525] (both involving misapplication of client funds).)

As in any law office, careful supervision of office personnel and maintenance of proper office procedures help fulfill the attorney's obligation to maintain the clients' confidential information and duty to represent the client competently. Attorneys who share personnel or space should agree upon a clear delineation of responsibility for tracking correspondence, calendaring, filing, client communications and the handling of funds, separately, and with due regard for clients' confidential information. Each attorney has the obligation to supervise his or her subordinates and employees. "The duties set forth in rule 3-110 include the duty to supervise the work of subordinate attorneys and non-attorney employees or agents" (rule 3-110, Discussion). (See Gadda v. State Bar (1990) 50 Cal. 3d 344, 354-356 [267 Cal. Rptr. 114] (dealing with confidence issues), In re Complex Asbestos Litigation, supra, 232 Cal. App. 3d at p. 588 ("The obligation to maintain the client's confidences traditionally and properly has been placed on the attorney representing the client.").)

CONCLUSION

Attorneys may ethically share space and staff so long as they take reasonable steps under the circumstances to protect against: (1) misleading the public or clients regarding the nature of their relationship; and (2) the disclosure of clients' confidential information to other attorneys or staff in the office.

This opinion is issued by the Standing Committee on Professional Responsibility and Conduct of the State Bar of California. It is advisory only. It is not binding upon the courts, the State Bar of California, its Board of Governors, any persons or tribunals charged with regulatory responsibilities, or any member of the State Bar.