May unaffiliated Louisiana lawyers share office space without being treated as one firm?

Plain-English summary

The opinion permits unaffiliated lawyers to share office space and resources. It explains, however, that the arrangement can create malpractice exposure, imputed conflicts, and confidentiality problems when the lawyers' conduct or public presentation resembles a law firm.

The Committee discusses Gravois v. New England Insurance Co., where shared names on letterhead, the office door, directories, and malpractice insurance supported a partnership-by-estoppel claim, although the court found no partnership or detrimental reliance. It contrasts United States v. Cheshire, where lawyers who maintained separate practices but used stationery describing an association were treated as a firm for Rule 1.10 and both were disqualified.

The opinion identifies measures that distinguish separate practices. The lawyers may not share a trust account and are directed to avoid communal bank accounts. Fee divisions must comply with Rule 1.5(e). Separate letterhead, business cards, telephone listings, and directory listings avoid implying a nonexistent firm under Rule 7.5(d), and a shared receptionist may use a generic greeting. Mere office mates do not have the close, regular relationship required for an "Of Counsel" designation.

Client confidences remain separate. The opinion calls for restricted access to files, appropriate controls on shared computer systems, and protection of telephone conversations from office mates. It also notes that joint malpractice insurance and other outward signs of association may support a finding that the lawyers practice together.

In practice

Under this 2007 opinion, office sharing remains separate from firm practice when the lawyers' finances, public identities, client information, and professional relationships remain distinct. Whether the line has been crossed is described as a fact-specific inquiry that weighs indications of separateness against indications of a traditional firm.

Common questions

Q: May unaffiliated Louisiana lawyers share office space and equipment?

A: Yes. The opinion permits office sharing but conditions that conclusion on preserving client confidences and avoiding any appearance that the lawyers are members of one firm.

Q: Can office-sharing lawyers use joint letterhead or a shared firm-style name?

A: No. The opinion concludes that stationery, signs, listings, or greetings implying a firm where none exists violate Rule 7.5(d) and can support imputed conflicts or vicarious liability.

Q: May the lawyers share a trust account or divide fees informally?

A: The opinion states that office-sharing lawyers cannot use the same trust account and should avoid communal bank accounts. Any division of fees between lawyers outside the same firm must comply with Rule 1.5(e), including the written client disclosures and consent quoted in the opinion.

Q: What confidentiality measures does the opinion identify?

A: It identifies restricted access to client files, controls on shared computer systems, and arrangements preventing office mates from overhearing client telephone conversations.

Q: Can office-sharing lawyers call one another "Of Counsel"?

A: Not merely because they share space. The opinion states that the designation requires a close, regular, personal relationship involving frequent and continuing contact.

Background and rules framework

The opinion applies Louisiana Rules 1.5(e), 1.10(a), and 7.5(d) to office-sharing arrangements. It uses two Louisiana cases to show how common branding or outward association can affect malpractice liability and imputed disqualification even when the lawyers otherwise maintain separate practices.

Citations and references

Rules of Professional Conduct:

• Louisiana Rule 1.5(e), division of fees between lawyers outside the same firm
• Louisiana Rule 1.10(a), imputed conflicts among lawyers associated in a firm
• Louisiana Rule 7.5(d), claims or implications that lawyers practice together

Cases:

• Gravois v. New England Insurance Co., 553 So. 2d 1034 (La. App. 4th Cir. 1989), office sharing and partnership by estoppel
• United States v. Cheshire, 707 F. Supp. 235 (M.D. La. 1989), office-sharing lawyers treated as a firm for imputed disqualification

Other opinions cited:

• ABA Formal Opinion 90-357, requirements for an "Of Counsel" relationship

See also

• DC Bar Ethics Op. 303: Unaffiliated Lawyers Sharing Office Space
• ABA Formal Op. 507: Office-Sharing Arrangements
• OSB Ethics Op. 2005-44: Shared Nonlawyer for Adverse Firms

Source

• Landing page: LSBA Ethics Advisory Service and Opinions
• Original PDF: Public Opinion 07-RPCC-013

Original opinion text

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

Louisiana State Bar Association
Rules of Professional Conduct Committee

PUBLIC Opinion 07-RPCC-0131
August 9, 2007

Sharing Office Space Without Sharing Liabilities and Conflicts

The practice of sharing office space with fellow lawyers is permissible and does not bring with it any “associational” hazards, provided it is done correctly. Special care must be exercised to ensure that client confidences are preserved and that the public is not left with the impression that a law firm exists where there is none. Should such safeguarding measures fail, the lawyer may be deemed to be sharing not only office space with his or her colleagues, but malpractice liability and conflicts of interest as well.

Many lawyers, especially solo practitioners and those just beginning their careers, find it an attractive option to share office space with others. The advantages of office-sharing – both financial and professional – are apparent.
By dividing rent and making common use of equipment, personnel, and other resources, the costs of maintaining a practice are kept to a minimum. Less experienced lawyers who wish to practice on their own, moreover, may look to their office-mates for guidance that otherwise may not be available to them. However, the same aspects of communal offices that make them convenient and beneficial also could give rise to serious ethical risks. Although such arrangements are allowable under the Louisiana Rules of

1
The comments and opinions of the Committee—public or private—are not binding on any person or tribunal, including—but not limited to—the Office of Disciplinary Counsel and the Louisiana Attorney Disciplinary Board. Public opinions are those which the Committee has published—specifically designated thereon as “PUBLIC”—and may be cited. Private opinions are those that have not been published by the Committee— specifically designated thereon as “NOT FOR PUBLICATION”—and are intended to be advice for the originally- inquiring lawyer only and are not intended to be made available for public use or for citation. Neither the LSBA, the members of the Committee or its Ethics Counsel assume any legal liability or responsibility for the advice and opinions expressed in this process.

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© 2007 by the Louisiana State Bar Association. All rights reserved.
Professional Conduct, office-sharing, when implemented haphazardly, can compromise confidentiality, create unexpected conflicts of interests and engender vicarious professional liability among the participating lawyers.

With an eye toward assisting practitioners in maximizing the utility of office-sharing without becoming ensnared in unintended adverse consequences, the approach of this opinion is pragmatic. The first part of the opinion illustrates the folly of office-sharing gone awry, with reference to two Louisiana cases, Gravois v. New England Ins. Co., 553 So. 2d 1034 (La. App. 4th Cir. 1989) and United States v. Cheshire, 707 F. Supp. 235 (M.D. La. 1989). Against the backdrop of that case study, the second part offers a variety of suggestions that may be used to keep separate the practices of office-sharing lawyers.

A. The Potential Problems
Due to the nature of the office-sharing arrangement, i.e., working in close physical proximity among other lawyers with unaffiliated practices, the most pronounced hazards are the inadvertent sharing of malpractice liability and conflicts. Malpractice liability was the subject of Gravois. In that case, a lawyer uninvolved with a representation was sued based on the wrongdoing of another lawyer with whom he shared office space.2 In defense, the lawyer maintained that no partnership existed, explaining that the two shared an office, but not fees or business losses. On the other hand, the court noted that the lawyers’ letterhead, office door, and telephone and legal directory listings bore both lawyers’ names, “Wegmann and Longenecker.”
Malpractice insurance was obtained under the same title. Nonetheless, the court ultimately determined that no partnership existed.

2
At the behest of his office mate, the lawyer allegedly notarized a procuration unauthorized by the client.
That accusation is immaterial for purposes of this discussion.

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© 2007 by the Louisiana State Bar Association. All rights reserved.
Whether there was a partnership by estoppel appeared to be a closer question. In the final analysis, however, the Gravois court once again sided with the office-sharing lawyer. Primarily based on the fact that profits and losses were not shared and the client’s inability to prove detrimental reliance on the appearances of a partnership, the court held that the lawyer was not vicariously liable for any malpractice his colleague may have committed.

The lawyers in Cheshire were not as fortunate. There, a lawyer represented a criminal defendant after having represented the government’s key witness in a substantially related matter and was disqualified as a result. Also at issue was whether the other defendant’s counsel, who shared an office with the conflicted lawyer, should be similarly disqualified pursuant to Rule 1.10, the rule governing “imputed” conflicts for lawyers associated in the same law firm.3 As in Gravois, there was little question that the lawyers in fact practiced independently from one another, maintaining separate bank accounts, files, clients, secretaries and office staff. But also as in Gravois, the lawyers additionally shared common stationary labeled “Marabella, Fournet, and Hardlcka, an Association of Attorneys at Law.” Notwithstanding the similarities between the facts of the cases, the Cheshire court (possibly because the requirements for a claim predicated on partnership by estoppel were not in play) ruled differently. The association was treated as a law firm for purposes of Rule 1.10 and the second lawyer was disqualified as well.

B. The Solutions
As the analyses in these cases suggest, determining whether the line separating mere office- sharing from other types of associations has been crossed is a fact-laden inquiry, one of degree

3
Rule 1.10(a) of the Louisiana Rules of Professional Conduct reads: “While lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rule 1.7 or 1.9, unless the prohibition is based on a personal interest of the prohibited lawyer and does not present a significant risk of materially limiting the representation of the client by the remaining lawyers in the firm.”

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PUBLIC Opinion 07-RPCC-013
© 2007 by the Louisiana State Bar Association. All rights reserved. that balances the factors indicative of separateness against those indicative of a traditional law firm. Several measures protective of both lawyer and client are commonly recommended to better the odds that nothing more than mere office-sharing will be found to have occurred:

• Avoid financial entanglements. Perhaps most importantly, lawyers sharing office space cannot use the same trust account and should avoid maintaining communal bank accounts of any kind. By the same token, and precisely because they are not practicing together in the same law firm, any agreement between the lawyers to share fees must comport with Rule 1.5(e), which, among other things, requires the client to consent in writing to a joint representation and to be advised in writing of each lawyer’s share in the fee.4 The terms of how expenses will be divided and shared among the lawyers should also preferably be reduced to writing, with all third-party contracts and other agreements for services, supplies, equipment, staff, etc., executed using only an individual lawyer’s name, rather than jointly using the names of two or more of the office-sharing lawyers.

• Labels matter. Rule 7.5(d) instructs that “…Lawyers may state or imply that they practice in a partnership or other organization only when that is the fact…”5 It is the opinion of the Committee that having stationery, office signs, letterhead, etc., that give the appearance of a law firm where there is none would be prohibited by Rule 7.5.
Likewise, the tests for vicarious malpractice liability and imputed disqualification, in part, turn upon whether the lawyers have held themselves out to the public as a single law firm. For these reasons, the office-sharing lawyers should make arrangements for their

4
Rule 1.5(e) of the Louisiana Rules of Professional Conduct: “…(e) A division of fee between lawyers who are not in the same firm may be made only if:…(1) the client agrees in writing to the representation by all of the lawyers involved and is advised in writing as to the share of the fee that each lawyer will receive;…(2) the total fee is reasonable; and…(3) each lawyer renders meaningful legal services for the client in the matter…” 5
Rule 7.5(d) of the Louisiana Rules of Professional Conduct.

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PUBLIC Opinion 07-RPCC-013
© 2007 by the Louisiana State Bar Association. All rights reserved. own separate letterhead, business cards, telephone listings, and building-directory listings. If a receptionist and telephone number are to be shared, the receptionist should be instructed to answer the telephone with a generic greeting, such as “law office.” Any designation or title that could be reasonably construed to imply that the lawyers practice together should be rejected and avoided.6

Along these same lines, it should be noted that “Of Counsel” is a broad term used to describe an array of relationships, including lawyers who: (1) practice with a firm on a basis different from the firm’s other lawyers; (2) are retired but remain part of the firm for limited and/or periodic consultation; or (3) have migrated laterally with the expectation of being made a partner in short order. Regardless of the nature of the relationship, any lawyer designated “Of Counsel” must have a “close, regular, personal” relationship “entailing frequent and continuing” contact with the law firm.7 Lawyers simply sharing office space fall short of satisfying this requirement and, accordingly, should not bestow the title on one another.

• Protect Client Confidences. Aside from creating unanticipated malpractice exposure and conflicts, office-sharing also can endanger client confidences. To reduce the danger, lawyers sharing office space should restrict access to client files, avoid sharing computer systems without appropriate security and policies in place, and ensure office mates cannot access others’ telephone conversations.

6
By way example, the following designations, some of which evidence the lawyers’ intention to disclaim a partnership, have been declared misleading: “A Legal Association”; “Association of Solo Practitioners” or “Independent Practitioners”; and “X, Y, and Z, Law Offices of Independent Practitioners.”
See ABA/BNA Lawyer’s Manual on Professional Conduct Reference Manual, Sharing Office Space, ABA-BNA-MOPC 91:601 (2003).
7
See, e.g., ABA Formal Op. 90-357 (1990).

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© 2007 by the Louisiana State Bar Association. All rights reserved.
 • Other Measures. Generally speaking, aside from the suggestions listed above, office- sharing lawyers should use common sense to take any other action, appropriate to their particular circumstances, to dispel the notion that a law firm has been formed by virtue of the arrangement. For instance, carrying joint malpractice insurance likely will support a presumption that the lawyers are in partnership. Additionally, if at all possible, a lawyer seeking to share office space may wish to do so only with those who practice in different areas of the law. Provided measures like these are instituted, lawyers should be able to accomplish office-sharing without inviting unintended ethical problems.

C. Conclusion

The Committee believes that the practice of sharing office space with fellow lawyers is permissible and does not bring with it any “associational” hazards, provided it is done correctly. Special care must be exercised to ensure that client confidences are preserved and that the public is not left with the impression that a law firm exists where there is none.
Should such safeguarding measures fail, the lawyer may be deemed to be sharing not only office space with his or her colleagues, but malpractice liability and conflicts of interest as well.

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PUBLIC Opinion 07-RPCC-013
© 2007 by the Louisiana State Bar Association. All rights reserved.