Can a lawyer take assignments from a temporary-lawyer staffing agency that rents lawyers to firms?

Plain-English summary

The inquiring attorney proposed a for-profit corporation that would supply lawyers to other lawyers, firms, and legal departments for temporary assignments, with the agency lawyer employed by the corporation but working under the supervising lawyer's direction, and asked whether the answer would differ if nonlawyers were shareholders, directors, or officers. The committee identified the areas of concern as confidentiality, conflicts of interest, professional independence, unlicensed practice of law, and improper division of fees.

The committee concluded that a placed attorney must preserve client confidences under Rule 4-1.6 and could not disclose confidential information to corporation personnel without client consent, and that contractual recognition of this duty by all parties was a necessity. Placed attorneys remain subject to the conflict rules (Rules 4-1.7 and 4-1.9), so the corporation would need a sophisticated screening mechanism, with the primary burden on the participating attorneys and the corporation; contracts should require competence consistent with Rule 4-1.1 and bar the corporation from controlling the attorney's independent professional judgment under Rule 4-5.4(c). Whether the temporary relationship must be disclosed to the supervising lawyer's client depends on materiality under Rule 4-1.4.

On unlicensed practice, the committee noted that nonlawyer ownership could cause the corporation's activities to constitute the unlicensed practice of law, that lawyers may not assist it under Rule 4-5.5(b), and that such questions are beyond the scope of an ethics opinion; it also flagged that Florida attorneys may practice only through a professional service corporation under Chapter 621. On fees, the committee concluded that if nonlawyers are involved in ownership or management, charging a per-hour amount for the lawyer's services while paying the lawyer only a portion is an improper division of fees with a nonlawyer under Rule 4-5.4(a); the problem could be avoided by a flat agency fee (so the attorney receives 100 percent of the fee for services) or by limiting ownership and management to lawyers, who would be treated as the same firm under Rule 4-1.5(G). Because of these problems, the committee concluded the plan was not ethically permissible in its present form.

Currency note

This opinion was issued in 1988, before The Florida Bar's adoption of the 2006 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: Can a lawyer work for a temporary-lawyer staffing agency?

A: The opinion concluded that accepting assignments from such a service is permissible only if the confidentiality, conflicts, independence, unauthorized-practice, and fee-division concerns it identified are satisfied; the specific plan proposed was not permissible in its present form.

Q: Why was percentage-of-fee billing a problem?

A: The opinion concluded that if nonlawyers own or manage the corporation, charging the client an hourly amount for the lawyer's services while paying the lawyer only a portion is an improper division of legal fees with a nonlawyer under Rule 4-5.4(a).

Q: How could the fee problem be cured?

A: The opinion concluded the problem could be avoided if the corporation charged a flat agency fee (so the attorney received the full fee for services) or if only lawyers owned and managed the corporation.

Q: How are conflicts handled when one lawyer is placed serially at many firms?

A: The opinion concluded the corporation would need a sophisticated screening mechanism, with the primary burden of recognizing and avoiding conflicts borne by the participating attorneys and the corporation under Rules 4-1.7 and 4-1.9.

Background and rules framework

The opinion interprets Rules 4-1.1 (competence), 4-1.4 (communication), 4-1.6 (confidentiality), 4-1.7 and 4-1.9 (conflicts), 4-1.5(G) (fee division among lawyers), 4-5.4(a) and (c) (fee-sharing with and control by nonlawyers), and 4-5.5(b) (unauthorized practice), corresponding to Model Rules 1.1, 1.4, 1.6, 1.7, 1.9, 1.5, 5.4, and 5.5. It treats the unlicensed-practice and corporate-form questions (under Florida Statutes Chapter 621) as beyond the scope of an ethics opinion.

Citations and references

Rules of Professional Conduct:

• Fla. Rules 4-1.1, 4-1.4, 4-1.6, 4-1.7, 4-1.9 / Model Rules 1.1, 1.4, 1.6, 1.7, 1.9
• Fla. Rule 4-1.5(G) / Model Rule 1.5 (fee division among lawyers)
• Fla. Rule 4-5.4(a), (c) / Model Rule 5.4 (fee-sharing with, and control by, nonlawyers)
• Fla. Rule 4-5.5(b) / Model Rule 5.5 (unauthorized practice)

Statutes:

• Fla. Stat. Ch. 621 (professional service corporations)

Cases:

• The Florida Bar v. Consolidated Business and Legal Forms, Inc., 386 So. 2d 797 (Fla. 1980)

Other opinions cited:

• Fla. Ethics Opinion 87-8; Los Angeles Co. 431; Maryland 84-15; New Mexico 1984-13; N.Y. City 1988-3; Virginia 609

See also

• FL Bar Ethics Op. 88-15: Sharing Office Space and Dual Professions
• FL Bar Ethics Op. 17-1: Fee Split, Nonlawyer-Owned Firm
• FL Bar Ethics Op. 95-1: Fee-Sharing in SSD Claims

Source

• Landing page: https://www.floridabar.org/etopinions/etopinion-88-12/
• Original PDF: https://www-media.floridabar.org/uploads/2017/04/FL-Bar-Ethics-Op-88-12-1.pdf

Original opinion text

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

FLORIDA BAR ETHICS OPINION
OPINION 88-12
August 1, 1988
Advisory ethics opinions are not binding.

If certain ethical concerns are satisfied, a lawyer may accept assignments from a service that rents lawyers to law firms and legal departments to fill temporary needs.

Note: Effective July 1, 1996, Rule 4-8.6 of the Rules Regulating the Florida Bar was amended to permit Florida lawyers to practice law in the form of professional limited liability companies or registered limited liability partnerships "organized or qualified under applicable law." Amendments to Rules Regulating The Florida Bar, 677 So. 2d 272 (Fla. 1996). See also, Chapters 621 and 622, Florida Statutes.

RPC: 4-1.1, 4-1.4, 4-l.5(G), 4-1.6, 4-1.7, 4-1.9, 4-5.4(a), 4-5.4(c), 4-5.5(b)
RRTFB: 10-7.1
Statutes: F.S. Ch. 621
Opinions: 87-8; Los Angeles Co. 431, Maryland 84-15, New Mexico 1984-13, N.Y. City 1988-3, Virginia 609
Case: The Florida Bar v. Consolidated Business and Legal Forms, Inc., 386 So. 2d 797 (Fla. 1980)

The inquiring attorney is contemplating involvement in a corporation that would provide attorneys for temporary assignment to other attorneys, law firms, or legal departments on a rental basis. He requests an opinion regarding the propriety of his involvement in his enterprise. The inquirer also asks whether the opinion would differ if nonlawyers are shareholders, directors, or officers of the corporation.

The inquirer describes the proposed enterprises as follows:

It is contemplated that a corporation for profit will do business in Florida as an agency providing the services of lawyers to other lawyers and law firms and departments for temporary assignments as needed by the supervisory lawyer. Although the agency lawyer will be an employee of the corporation which in turn will be responsible for all assignments, compensation and benefits, the legal work will be performed under the direct supervisory authority of the contracting lawyer. The corporation will charge for those services on an hourly or other durational basis as is done by other temporary help services. To protect the confidentiality of client information of the supervisory lawyer and to insure that agency lawyers do not participate in an impermissible conflict of interest because of serial assignments to lawyers with opposing clients, the contracts of the corporation with its employee lawyers and of the corporation with the supervising lawyer, his firm or employer will expressly provide the subordinate position of the agency lawyer to the sole professional authority of the supervising lawyer and of the continuing duty to maintain confidentiality and avoid conflicts.

An attorney's involvement or participation in this type of temporary placement agency raises a number of ethical concerns. The areas of concern include confidentiality, conflicts of interests, professional independence, unlicensed practice of law, and improper division of fees. These concerns, and suggested changes that might help minimize them, are discussed below:

An attorney who is placed by the proposed corporation would be ethically obligated to preserve in confidence any information he or she obtained in the course of a representation. Rule 4-1.6, Rules Regulating The Florida Bar. This obligation would prevent the attorney from disclosing any such confidential information to corporation personnel, absent consent of the affected client.

The inquiring attorney indicates that the corporation plans to explicitly recognize this obligation by including it in the contracts between the corporation and its participating attorneys and in contracts between the corporation and its customers (referred to by the inquirer as "supervising lawyers"). Contractual recognition of this obligation by all parties is a necessity.

Participating attorneys who are placed by the corporation with a supervising lawyer or law firm are subject to all conflict of interest rules, including Rules 4-1.7 (general conflict of interest rule) and 4-1.9 (former client conflict rule). Again, the inquiring attorney indicates that the corporation-participating attorney and corporation-supervising lawyer contracts would expressly acknowledge this ethical obligation. The contracts should provide that the supervising lawyer or firm will not knowingly attempt to rent a particular participating attorney if doing so would place him in conflict position. However, the primary burden of recognizing and avoiding potential conflicts of interest must be borne by the participating attorneys and the corporation. The corporation will need to establish an effective screening mechanism to be used before assigning a participating attorney to a supervising lawyer or law firm. The nature of the corporation's business—the short-term placement of participating attorneys with a variety of lawyers and law firms—necessarily requires that this screening procedure be sophisticated.

The corporation-participating attorney contract should provide that a participating attorney will not be asked to undertake a representation that he or she is not competent to handle. See Rule 4-1.1.

A participating attorney could not ethically allow the corporation to control the attorney's exercise of independent professional judgment in rendering services for clients or to interfere in any way with the attorney-client relationship. Rule 4-5.4(c). (For example, the corporation could not dictate to the participating attorney how much time he or she can or must spend on a particular case). This must be specified in the corporation-participating attorney contract.

If nonlawyers are shareholders, directors, officers, or managing agents of the proposed corporation, it is possible that the corporation's activities could constitute the unlicensed practice of law. See The Florida Bar v. Consolidated Business and Legal Forms, Inc., 386 So. 2d 797 (Fla. 1980). Of course, attorneys are prohibited from assisting nonlawyers in the unlicensed practice of law. Rule 4-5.5(b). Questions regarding the unlicensed practice of law are beyond the scope of an ethics opinion. Therefore, the inquiring attorney is urged either to make his own determination after examining relevant Florida law or to request an advisory opinion on the unlicensed practice of law pursuant to Rule 10-7.1.

A related issue is presented by the corporate form of the corporation. Florida attorneys are not permitted to practice law in a corporate form other than a professional service corporation organized pursuant to Florida Statutes Chapter 621. If the activities of the proposed business corporation are considered the practice of law (and, again, such a question is beyond the scope of an ethics opinion), any attorney employed by or having an ownership interest in the corporation would run afoul of this prohibition.

Whether the temporary nature of the participating attorney-supervising lawyer relationship need be disclosed to the supervising lawyer's client would depend on whether the client would likely consider the information material. See Rule 4-1.4.

Finally, particular problems are presented by the manner in which the proposed corporation plans to charge for its services. The inquiring attorney states that the corporation would charge for the participating attorney's services "on an hourly or other durational basis as is done by other temporary help services." For example, the corporation would charge its customers a certain amount per hour for the participating attorney's services with a portion of this amount going to the participating attorney and the remainder being retained by the corporation.

If nonlawyers are involved in ownership or management of the corporation, this billing system (i.e, charging a certain amount per hour for the lawyer's services, with only a portion of that amount actually being paid to the lawyer) must be considered division of legal fees with a nonlawyer in violation of Rule 4-5.4(a). See Florida Ethics Opinion 87-8; New York City Bar Association Opinion 1988-3. See also Los Angeles County Bar Association Opinion 431; Maryland State Bar Association Opinion 84-15; State Bar of New Mexico Opinion 1984-13; Virginia State Bar Opinion 609.

This problem could be avoided if, instead of receiving a portion or percentage of the fee charged for the participating attorney's services, the corporation charged its customers a flat fee. By handling the matter in this fashion the participating attorneys would receive 100 percent of the fees being charged for their services and the corporation would receive a completely separate fee for arranging the temporary employment placement.

Of course, the problems of fee division with nonlawyers could also be eliminated if nonlawyers are not involved in the corporation's ownership or management. Furthermore, if only attorneys are involved in the corporation's ownership or management, there will be no problems concerning improper division of fees among attorneys. The general rule concerning division of fees among attorneys, Rule 4-1.5 (G), applies only to fee divisions among attorneys not in the same firm. The attorneys involved in the proposed corporation should be considered as being the same firm for purposes of this rule.

In summary, it must be concluded that, because of the problems described above, the plan proposed by the inquiring attorney is not ethically permissible in its present form.