Can a professional corporation made up of lawyers be a partner in a Colorado law partnership, and how must the firm describe it?
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Plain-English summary
Opinion 55 (undated; addendum issued 1995) addressed whether a professional corporation consisting of one or more lawyers may practice law as a partner in a law partnership, in two scenarios: an existing law partnership merging with a professional corporation, and a lawyer forming a professional corporation to be substituted as a general partner. The Code of Professional Responsibility did not address this directly. The Committee reviewed ABA Informal Opinion 1383 (1977), which noted the practice had been ruled unethical in Florida but permitted in an Oregon Attorney General opinion, and the Committee rejected the reasoning that would forbid it.
The Committee concluded that nothing in the arrangement is inconsistent with the Code if proper disclosures are made. Professional service corporations are authorized under C.R.C.P. 265, which safeguards the attorney-client relationship; that relationship does not change merely because lawyers practice as shareholder-employees of a professional corporation. Reading DR 2-102(C) (a lawyer shall not hold out a partnership that does not in fact exist) and EC 2-11 (a lawyer should practice only under permitted names, including a professional legal corporation's name), the Committee took the view that "other lawyers" includes professional legal corporations, so the rule does not prohibit this kind of partnership.
To comply with EC 2-11, the Committee concluded the partnership must designate on its letterhead, cards, and announcements which listed partners have formed a professional corporation; every usage of the partnership name that identifies individual partners must show the corporate status to avoid misleading the public about the lawyers' relationship. A professional corporation electing to carry professional liability insurance under C.R.C.P. 265 should maintain it in the same amount as the other partnership members. Having met these criteria, such a partnership does not differ from a traditional partnership and is ethically proper.
Currency note
This opinion was issued under the former Colorado Code of Professional Responsibility (the opinion itself is undated), 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 directed lawyers to Rule 7.5 (firm names and letterheads) and noted the amendment to C.R.C.P. 265 to include limited liability companies. 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 or requirement mentioned here.
Common questions
Q: Could a professional corporation of lawyers be a partner in a Colorado law firm?
A: Yes. The opinion concluded it is ethically proper for a professional corporation consisting of one or more lawyers to practice in partnership with individual lawyers or other professional corporations, rejecting authorities that would forbid it.
Q: Did the firm have to disclose a partner's corporate status?
A: Yes. The opinion concluded the partnership must designate the corporate status of any professional-corporation partner wherever partners are listed (letterhead, cards, announcements, signs), so the public is not misled about the lawyers' relationship.
Q: Were there other conditions?
A: Yes. The opinion concluded the corporation must comply with C.R.C.P. 265, and a corporation electing to maintain professional liability insurance under that rule should carry it in the same amount as the other partnership members.
Background and rules framework
The opinion interpreted the then-governing Colorado Code of Professional Responsibility, principally DR 2-102(C) (no holding out of a partnership that does not exist) and EC 2-11 (permissible practice names, including a professional legal corporation), together with C.R.C.P. 265 (authorizing professional service corporations and safeguarding the attorney-client relationship). The 1995 addendum and the modern Model Rules analogs are Rule 7.5 (firm names and letterheads) and Rule 7.1 (communications about a lawyer's services).
Citations and references
Rules of Professional Conduct:
- Colo. Code of Professional Responsibility DR 2-102(C); EC 2-11 (governing rules at issuance)
- Colo. RPC 7.5 / Model Rule 7.5 (firm names and letterheads; current analog)
- Colo. RPC 7.1 / Model Rule 7.1 (communications about a lawyer's services)
Other authorities:
- C.R.C.P. 265 (professional service corporations; malpractice-insurance requirement)
- ABA Informal Op. 1383 (1977): professional corporation as a partner in a law partnership
See also
- CBA Formal Op. 89: Office Sharing and Virtual Offices
- ABA Formal Op. 90-357: Use of 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_55_2011.pdf
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