Can a law firm share office space and a receptionist with a non-lawyer such as a CPA?

Plain-English summary

The Board addressed two related inquiries (Formal Opinions 18 and 22), now consolidated and updated to the current Hawaii Rules of Professional Conduct. In the first, a law firm wished to sublet part of its offices to two non-lawyers, sharing the reception and conference rooms and possibly secretarial services on a shared-cost basis, with the non-lawyers on a separate phone line and instructed not to create any impression they were soliciting legal business. In the second, an attorney wished to share offices with a certified public accountant under a separate lease for each half, with a shared reception area and receptionist, for economy only.

The opinion identifies two ethical issues. The first is whether the arrangement creates a "feeder" situation: sharing space with a non-lawyer is not improper in itself, but it becomes improper if the non-lawyer solicits clients for the attorney or consistently recommends the attorney to handle the non-lawyer's clients' legal problems. The second is whether the attorney and non-lawyer conduct business so as to function as, or appear to be, a partnership; under HRPC 5.4(b) a lawyer may not form a partnership with a non-lawyer if any of its activities consist of the practice of law, and under HRPC 5.4(a) there must be no division of fees, although nothing prohibits employing non-lawyers on a strict salary or fee basis.

The opinion concludes that it must be clear to clients of both that two separate businesses exist, effected by signs on the door showing the separate businesses, a reception area set up so visitors do not feel they are only in a law office, and, where a phone line is shared, an answering practice that does not signal that a caller has reached the law office or the other business. The Board's ultimate ruling: a law firm or attorney may sublet part of its offices to non-lawyers provided the non-lawyers do not solicit or "feed" potential clients to the firm and there is a clear, non-misleading distinction to visitors between the law and business offices.

In practice

Under this opinion, as updated to the current Hawaii rules, an office-and-expense-sharing arrangement between a lawyer and a non-lawyer (including a CPA) is permitted where it stays a genuine cost-sharing arrangement rather than a referral pipeline or a disguised partnership. The opinion holds that the controlling lines are HRPC 5.4(a) (no fee division with a non-lawyer) and HRPC 5.4(b) (no non-lawyer partnership in the practice of law), plus the requirement that signage, the reception area, and phone-answering keep the businesses distinct so the public is not misled. The opinion does not bar employing non-lawyers on a salary or fee basis.

Common questions

Q: Can a lawyer share an office and receptionist with a CPA?

A: The opinion concludes yes, where the arrangement is for economy, the businesses are kept clearly distinct to visitors and callers, and there is no client feeding or fee sharing.

Q: What makes office sharing with a non-lawyer improper?

A: Per the opinion, it becomes improper if the non-lawyer solicits clients for the lawyer or consistently feeds the lawyer legal business, or if the arrangement involves fee splitting or functions as a non-lawyer partnership in the practice of law.

Q: How should the offices be set up to stay compliant?

A: The opinion calls for signs showing the separate businesses, a reception area arranged so visitors do not feel they are only in a law office, and, if a phone line is shared, an answering method that does not misrepresent which business a caller reached.

Background and rules framework

The opinion interprets HRPC 5.4(a) and 5.4(b) (professional independence; no fee sharing with or partnership with a non-lawyer in the practice of law), HRPC 7.2(b) (giving value for recommending the lawyer's services), and HRPC 7.3(a) (in-person solicitation). These correspond to Model Rules 5.4, 7.2, and 7.3. The opinion cites Illinois Opinion 203.

Citations and references

Rules of Professional Conduct (Hawaii; cf. Model Rules):

• HRPC 5.4(a), 5.4(b) (no fee sharing or non-lawyer partnership in law) (cf. Model Rule 5.4)
• HRPC 7.2(b) (giving value for recommendations) (cf. Model Rule 7.2)
• HRPC 7.3(a) (in-person solicitation) (cf. Model Rule 7.3)

Other opinions cited:

• Illinois Opinion 203 (2/10/61): separate identities in shared lawyer/non-lawyer offices

See also

• Alaska Ethics Op. 68-1: Sharing Office Space With a Non-Lawyer
• Alaska Ethics Op. 79-3: Law Firm Employing an Accountant
• Alabama Ethics Op. 1992-13: Fee Splitting With a Non-Lawyer

Source

• Landing page: https://dbhawaii.org/legal-ethics-advice-for-hawaii-lawyers/
• Original PDF: https://dbhawaii.org/wp-content/uploads/FO_18_and_22.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.
Disciplinary Board of the Hawai#i Supreme Court
201 Merchant Street, Suite 1600
Honolulu, Hawai#i 96813
Telephone (808) 599-1909
www.odchawaii.com
Chairperson

Hon. Clifford L. Nakea (Ret.)
Vice Chairperson

Hon. Leslie A. Hayashi
Secretary

Nathan J. Sult, Esq.
Treasurer

Joy M . M iyasaki, Esq.
Filing Clerk

Board M embers
James L. Branham, Esq.
Gary M . Farkas, Ph.D., M BA
Diane D. Hastert, Esq.
Philip D. Hellreich, M .D.
Shelton G.W. Jim On, Esq.
Harrilynn K. Kame#enui, Esq.
Hon. Evelyn B. Lance (Ret.)
Philip H. Lowenthal, Esq.
Jeffrey P. M iller, Esq.
Carolene N. Kawano Neely, M .S.W., M .Ed.
Jeffrey S. Portnoy, Esq.
Irwin J. Schatz, M .D.
Judith A. Schevtchuk, Esq.
Asst. Chief Eugene Uemura, (Ret.), M A.Ed.

Faye F. Hee
Board Counsel

Bradley R. Tamm, Esq.

FORMAL OPINION NOS. 18 and 22
SHARING OFFICE SPACE
Where a law firm sublets part of its offices to nonlawyers
and agrees to make available secretarial services on a cost sharing
basis, the arrangement is permissible as long as each of the
parties maintains a separate identity and there is neither
"feeding" of clients to the lawyers nor nonlawyer influence over
the lawyers, or sharing of fees. (No. 18).
It is not improper for an attorney to enter into an office and
expense sharing arrangement with a nonlawyer so long as the
separate business entities are distinct to callers and visitors and
the nonlawyer does not solicit for or feed cases to the lawyer.
(No. 22).
REQUESTING PARTY'S SUMMARY STATEMENT OF FACTS,
PROBLEM(S), AND QUESTION(S):
A law firm wishes to sublet part of its offices to two
nonlawyers. The law firm will allow the nonlawyers to use the
reception and conference rooms, and possibly avail themselves of
secretarial services on a shared cost basis. The nonlawyers have
a separate phone line, number, and ring. The law firm’s attorneys
have advised the nonlawyers not to in any way create an impression
they are soliciting legal business for the attorneys. (No. 18).
An attorney wishes to share his offices with a Certified
Public Accountant. The attorney and the accountant will sign a
separate lease for their respective halves of the office . Each
will have separate offices. They will share a common reception
area. It is to be assumed that they will share the services of the
same receptionist and secretary. The arrangement is for economical
purpose only. (No. 22).

The Disciplinary Board’s mission is to maintain the integrity of the legal profession
and protect the public from professional misconduct by attorneys.

ISSUE(S) AND RELEVANT SECTIONS OF
HAWAI#I RULES OF PROFESSIONAL CONDUCT:
Would such an arrangement violate:
HRPC 7.3(a)

A lawyer shall not by in-person, live
telephone or real-time electronic contact
solicit professional employment when a
significant motive for the lawyer’s doing so
is the lawyer’s pecuniary gain, unless the
person contacted has a family, close personal,
or prior professional relationship with the
lawyer.

HRPC 7.2(b)

A lawyer shall not give anything of value to a
person for recommending the lawyer's services
except that a lawyer may:

HRPC 5.4(b)

(1)

pay
the
reasonable
costs
of
advertisements
or
communications
permitted by this Rule;

(2)

pay the usual charges of a not-for-profit
lawyer referral service or qualified
legal assistance organization, which
charges, in addition to any referral fee,
may include a fee calculated as a
percentage of legal fees earned by the
lawyer
to
whom
the
service
or
organization has referred a matter,
provided that any such percentage fee
shall be used only to pay the reasonable
operating expenses of the service or
organization and to fund public service
activities
of
the
service
or
organization, including the delivery of
pro bono legal services; and

(3)

pay for the purchase of a law practice in
accordance with Rule 1.17 of these Rules.

A lawyer shall not form a partnership with a
nonlawyer if any of the activities of the
partnership consist of the practice of law.

(Nos. 18 and 22)
DISCUSSION
Two ethical issues are posed by this fact situation. The
first is whether or not the arrangement creates a feeder situation
for the attorney. The situation whereby a law firm shares space
with a nonlawyer, in itself, is not improper. It becomes improper
only if the nonlawyer solicits clients for the attorney or
consistently recommends the attorney to handle the nonlawyer's
client's legal problems.

The second problem arises if the attorney and nonlawyer
conduct business in such a way as to function as or create the
impression of being a partnership. Clearly, under the disciplinary
rules, a lawyer may not form a partnership with a nonlawyer if even
part of the function of the partnership is rendering legal
services. HRPC 5.4(b). Therefore, there must be no division of
fees. HRPC 5.4(a). Nothing prohibits the law firm from employing
services of nonlawyers on a strict salary or fee basis. It must be
clear to clients of both the attorney and the non lawyer there
exist two separate businesses. Ill. Op. 203 (2/10/61). This can be
effected by signs on the door clearly showing the separate
businesses and members of each. The reception area should be set up
so that visitors do not feel they are only in a law office. Again,
a sign or divider designating the separation is helpful. Separate
telephone lines are desirable; however, if the phone line is
shared, the secretary or receptionist must not answer the phone in
a way to indicate to clients of the attorney that they are calling
a non lawyer's office, or vice versa. This may be achieved by
answering simply giving a telephone number. (No. 22).
OPINION
A law firm, or attorney, may sublet part of its offices to
nonlawyers provided the latter do not serve to solicit or “feed”
potential clients to the law firm, and there is a clear
nonmisleading distinction to visitors between the law and business
offices (Nos. 18 and 22).
DATED:

Honolulu, Hawai#i, March 10, 1978 (No. 18)
Honolulu, Hawai#i, October 13, 1978 (No. 22)

UPDATED:

Honolulu, Hawai#i, June 28, 2001
Carroll S. Taylor
Chairperson, Disciplinary Board

UPDATED:

Honolulu, Hawai#i, March 19, 2015

Hon. Clifford L. Nakea (Ret.)
Chairperson, Disciplinary Board