How do conflict-of-interest, imputation, and fee-division rules apply to a temporary or contract lawyer engaged by a Colorado firm, and to placement agencies?
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This page answers the general question as of 1999. 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
Opinion 105 (adopted May 22, 1999) addressed the ethical issues raised when lawyers offer their services as "temporary" lawyers to other lawyers, firms, or legal departments to work on specific projects, whether engaged directly or through a placement agency. The opinion proceeded from the premise that an attorney-client relationship exists between the temporary lawyer and the engaging firm's client, so the temporary lawyer owes all the usual duties (competence under Rule 1.1, diligence under Rule 1.3, confidentiality under Rule 1.6, and independent judgment under Rule 2.1) regardless of the temporary nature of the engagement.
On conflicts, the opinion concluded that the conflict rules for current and former clients (Rules 1.7 and 1.9) apply to the temporary lawyer for every client the lawyer works or has worked for, regardless of the scope or duration of the work. The harder question was imputation under Rule 1.10(a): whether the temporary lawyer is "associated in a firm" so that the firm's other clients (and conflicts) are imputed to the temporary lawyer and vice versa. Adopting the "functional analysis" of ABA Formal Opinion 88-356, the Committee concluded the key factor is the temporary lawyer's access to information about the firm's other clients; a temporary lawyer with broad access may be treated as associated with the firm as to all its clients, while one screened from other clients' files, networks, and meetings (with accurate records kept) generally is not. How the temporary lawyer is presented to clients and courts (as an "associate" or "employee" versus an independent contractor) is another factor, and the responsibility to check conflicts before the engagement rests on the temporary lawyer and the hiring firm, not the placement agency.
On fees, the opinion concluded that whether the financial arrangement is a "division of fees" under Rule 1.5(d) depends on whether the temporary lawyer's compensation is tied to or dependent on the client's payment of fees. If the temporary lawyer is paid a percentage of, or otherwise dependent on, what the client pays, there is a fee division subject to Rule 1.5(d)'s requirements. If the firm is obligated to pay the temporary lawyer (for example, an hourly, daily, or fixed-project rate) regardless of whether the client pays, there is no fee division; the firm may bill the temporary lawyer's time like an associate's, may mark it up, and need not disclose the markup, though the overall fee must still be reasonable under Rule 1.5(a) and disclosure to the client may be required (Rules 1.2(a), 1.4) where the temporary lawyer works without close supervision or the use is material. Where a placement agency is involved, the arrangement must not result in sharing legal fees with a nonlawyer (Rule 5.4(a)); the Committee also concluded that Rule 5.6(a) does not bar reasonable agency-contract provisions restricting direct hiring, provided they are reasonable in duration and fees, appear in the firm's contract rather than the lawyer's, and place the hiring-fee obligation on the firm. Supervising lawyers must adequately select and supervise temporary lawyers (Rules 1.1, 5.1(b)).
Currency note
This opinion was issued in 1999, before Colorado's 2008 revisions to the Rules of Professional Conduct. Subsequent rule amendments or 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, deadline, or requirement mentioned here.
Common questions
Q: Did a temporary lawyer have to run conflict checks like a regular lawyer?
A: Yes. The opinion concluded that the conflict rules (Rules 1.7 and 1.9) applied to the temporary lawyer for every client the lawyer worked or had worked for, regardless of how short or limited the engagement, and that the temporary lawyer and hiring firm, not the placement agency, had to identify conflicts before the engagement.
Q: Were all of a firm's clients automatically imputed to a temporary lawyer?
A: Not automatically. The opinion adopted a functional analysis under Rule 1.10(a): imputation turned on the temporary lawyer's access to information about the firm's other clients, so a temporary lawyer screened from other clients (with accurate records kept) generally was not treated as associated with the firm as to those clients.
Q: When was paying a temporary lawyer a "division of fees"?
A: When the temporary lawyer's compensation was tied to or dependent on the client's payment. The opinion concluded that a flat or hourly rate the firm owed regardless of client payment was not a fee division, while a percentage of the client's fee was, triggering Rule 1.5(d).
Q: Could a placement-agency contract restrict the firm from directly hiring the temporary lawyer?
A: The opinion concluded that Rule 5.6(a) did not bar such provisions if they were reasonable in duration and fees, appeared in the firm's contract rather than the temporary lawyer's, and made the firm responsible for any hiring fee, and that any agency arrangement had to avoid fee-splitting with a nonlawyer under Rule 5.4(a).
Background and rules framework
The opinion interpreted Colo. RPC 1.10(a) (imputed disqualification and the meaning of "associated in a firm"), Colo. RPC 1.7 and 1.9 (current- and former-client conflicts), Colo. RPC 1.5(d) and 1.5(a) (fee division between firms; reasonable fees), Colo. RPC 5.4(a) (no fee-splitting with nonlawyers), Colo. RPC 5.6(a) (restrictions on the right to practice), and Colo. RPC 1.1, 1.3, 1.6, 2.1, and 5.1(b) (competence, diligence, confidentiality, independent judgment, and supervision). It adopted the functional analysis of ABA Formal Opinion 88-356.
Citations and references
Rules of Professional Conduct:
- Colo. RPC 1.10(a) / Model Rule 1.10 (imputation of conflicts)
- Colo. RPC 1.7, 1.9 / Model Rules 1.7, 1.9 (current- and former-client conflicts)
- Colo. RPC 1.5(d), 1.5(a) / Model Rule 1.5 (fee division; reasonable fees)
- Colo. RPC 5.4(a) / Model Rule 5.4 (no fee-splitting with nonlawyers)
- Colo. RPC 5.6(a) / Model Rule 5.6 (restrictions on the right to practice)
- Colo. RPC 1.6, 2.1, 5.1(b) / Model Rules 1.6, 2.1, 5.1 (confidentiality, judgment, supervision)
Cases:
- People ex rel. Peters v. District Court, 951 P.2d 926 (Colo. 1998), whether office-sharing lawyers are "associated in a firm" depends on factual questions
Other opinions cited:
- ABA Formal Op. 88-356 (1988): functional analysis for temporary lawyers and imputation
- ABA Formal Op. 90-357 (1990): "of counsel" lawyers are associated with the firm under Rule 1.10(a)
- ABA Formal Op. 93-379 (1993): billing for the costs of services and disbursements
See also
- CBA Formal Op. 139: Of Counsel Fee Division
- ABA Formal Op. 90-357: The "Of Counsel" Designation
- ABA Formal Op. 94-388: Relationships Among Law Firms
Source
- Landing page: https://www.cobar.org/ethicsopinions
- Original PDF: https://www.cobar.org/Portals/COBAR/repository/ethicsOpinions/FormalEthicsOpinion_105_2011.pdf
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