Can a law firm keep its offices inside the premises of a financial-institution client when a firm member is also an executive of the institution?

Plain-English summary

Opinion 24 (adopted July 20, 1962; addendum issued 1995) addressed a law firm with offices in a financial institution's premises, where one or more firm members held important executive positions in the institution and the firm served as its legal representative, examining titles, preparing conveyance and security instruments, and closing loans.

The Committee concluded the arrangement was not automatically unethical, but that it carried a heavy duty to avoid indirect solicitation under Canon 27. Quoting ABA Opinion 57 (also quoted in its own Opinion 7), the Committee observed that it is not necessarily improper for a lawyer to engage in a business, but impropriety arises when the business readily lends itself to procuring professional employment or serves as a cloak for indirect solicitation. The close physical arrangement could cause the institution to act as a "feeder" of employment in violation of Canon 27, and a heavy duty rested on all firm members, especially the lawyer-executive, to prevent that. The opinion drew a practical distinction: a ground-floor office in a bank or savings and loan visited by the public, with signs identifying the lawyers, would create a dangerous possibility of solicitation (borrowers might infer that hiring the firm was necessary to obtain loans), and the firm should move; an upstairs office in an entity like a life insurance company, not visited by large numbers of the public, presented a remote risk. The Committee concluded the relationship did not of itself produce unethical conduct, but stressed the lawyers' duty to conduct their practice so that violations of Canon 27 are avoided.

Currency note

This opinion was issued in 1962 under the former Canons of Professional Ethics, before the Colorado Rules of Professional Conduct took effect on January 1, 1993, and before Colorado's 2008 revisions to those rules. A 1995 addendum mapped the analysis to Rule 5.4(a) (division of fees with nonlawyers), Rule 7.2 (advertising), Rule 7.2(c) (giving value for recommending a lawyer's services), and Rule 7.3 (direct contact with prospective clients). The Colorado advertising and solicitation rules have been amended substantially since then. Treat this page as historical context, not current guidance.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: Can a law firm office inside a bank or other financial institution it represents?

A: Yes, under this opinion, but with care. The Committee concluded the arrangement was not automatically unethical, while warning that the close connection must not be used, directly or indirectly, to solicit professional employment in violation of Canon 27.

Q: What made some arrangements riskier than others?

A: The opinion concluded that a public-facing, ground-floor office with signs identifying the lawyers created a dangerous possibility that borrowers would infer they had to hire the firm to get a loan, while an upstairs office not visited by the public presented a remote risk.

Q: Who bears the duty to prevent improper solicitation?

A: The opinion concluded that a heavy duty rested on all members of the firm, and particularly on the lawyer who held an executive position or controlled the institution, to ensure the proximity was not used as a feeder of legal business.

Background and rules framework

The opinion applied Canon 27 of the Canons of Professional Ethics (solicitation), drawing on ABA Opinions 31, 35, 57, and 225 and the firm's own Opinion 7. The 1995 addendum restates the analysis under the Colorado Rules of Professional Conduct, citing Rule 5.4(a) (Model Rule 5.4, fee division with nonlawyers), Rule 7.2 (Model Rule 7.2, advertising), and Rule 7.3 (Model Rule 7.3, solicitation of clients).

Citations and references

Rules of Professional Conduct:

• Colo. RPC 5.4(a) / Model Rule 5.4 (division of fees with nonlawyers; per the 1995 addendum)
• Colo. RPC 7.2, 7.2(c) / Model Rule 7.2 (advertising; value for recommending services; per the 1995 addendum)
• Colo. RPC 7.3 / Model Rule 7.3 (direct contact with prospective clients; per the 1995 addendum)

Other opinions cited:

• ABA Committee on Professional Ethics Opinions 31, 35, 57, and 225 (indirect solicitation through a lay agency)
• CBA Formal Opinion 7 (relationship between lawyers and lay agencies)

See also

• CBA Formal Op. 29: Lender's Lawyer Representing the Buyer, Seller, or Borrower
• CBA Formal Op. 12: Title Opinion Sold to a Lender's Borrower

Source

• Landing page: https://www.cobar.org/ethicsopinions
• Original PDF: https://www.cobar.org/Portals/COBAR/repository/ethicsOpinions/FormalEthicsOpinion_24_2011.pdf