May lawyers co-own a public-relations and lobbying corporation with non-lawyers if the corporation employs no lawyers and the lawyers perform none of its services?

Plain-English summary

The partners of law firm ABC and public-relations firm XYZ wished to form a new corporation, PAG, to provide a broad array of public-relations services, including legislative lobbying. The law-firm partners would have only partial ownership and serve as corporate directors; neither they nor the firm's associates would provide any of PAG's services, and PAG itself would employ no lawyers. The firm asked whether this violates Bar Rule 3.2(a)(2).

The Commission concluded it does not. Rule 3.2(a)(2) bars a lawyer from forming a partnership or business corporation with a non-lawyer if any of the entity's activities consist of the practice of law. Citing Opinion No. 79, the Commission noted that "practice of law" has typically been read to include services performed by lawyers whenever the entity represents that a lawyer will perform the service, even if non-lawyers can perform the same service. The rule thus prohibits lawyer-nonlawyer corporations that will offer those lawyers' legal services. Here, by contrast, PAG would employ no lawyers and the ABC lawyers would perform no work for it; PAG's clients would be told that if legal work is needed, law firm ABC is available to do it. That arrangement does not violate the letter or spirit of Rule 3.2(a)(2), a principal purpose of which is avoiding public confusion over the nature of the services the new corporation provides. So long as none of ABC's lawyers are involved in PAG's activities, the rule is not violated even if some of PAG's activities, such as lobbying, are sometimes performed by lawyers.

The Commission distinguished Opinion No. 79, where a corporation jointly owned by two lawyers and an accountant proposed to offer the attorneys' and accountant's services to "provide total legal and financial services" with a named lawyer on the "team of experts." There the lawyer-owners would be involved in the entity's activities, blurring the distinction the rule requires between lawyers providing legal services and non-lawyers providing services sometimes provided by lawyers.

Currency note

This opinion was issued in 1991, before Maine's replacement of the former Maine Bar Rules with the Maine Rules of Professional Conduct (effective August 1, 2009). 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 lawyers co-own a non-legal business with non-lawyers?

A: The opinion concluded yes where the business offers no legal services. It held Rule 3.2(a)(2) bars lawyer-nonlawyer entities only where the entity offers the lawyers' legal services.

Q: Does it matter that lobbying is sometimes done by lawyers?

A: The opinion held it does not, so long as none of the firm's lawyers are involved in the corporation's activities and the corporation employs no lawyers.

Q: How is this different from Opinion No. 79?

A: The opinion distinguished Opinion No. 79, where lawyer-owners would be involved in a multi-purpose entity offering "total legal and financial services," blurring the line between legal and non-legal services that the rule requires.

Q: What is the rule's main concern?

A: The opinion identified avoiding public confusion over the nature of the services the new corporation provides as a principal purpose of Rule 3.2(a)(2).

Background and rules framework

The opinion interprets Maine Bar Rule 3.2(a)(2), which bars a lawyer from forming a partnership or business corporation with a non-lawyer if any of the entity's activities consist of the practice of law. The Commission read the rule to turn on whether the entity offers the lawyers' legal services. This corresponds to ABA Model Rule 5.4 (professional independence; nonlawyer ownership) and Model Rule 5.7 (responsibilities regarding law-related services).

Citations and references

Rules of Professional Conduct:

• Model Rule 5.4 (professional independence; nonlawyer ownership); Model Rule 5.7 (law-related services)
• Maine Bar Rule 3.2(a)(2)

Other opinions cited:

• Maine Professional Ethics Commission Op. 79: lawyer-accountant venture offering "total legal and financial services"

See also

• Maine Ethics Op. 158: Lawyer-Nonlawyer Lobbying Firm
• Maine Ethics Op. 128: Lawyer Serving on a Nonprofit Legal-Services Board
• Maine Ethics Op. 79: Lawyer-Accountant Business Venture

Source

• Landing page: https://mebaroverseers.org/attorney_services/opinion.html?id=89877

Original opinion text

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

Issued by the Professional Ethics Commission

Date Issued: September 13, 1991

Facts

The individual partners of law firm ABC and public relations firm XYZ wish to form a new corporation, PAG. The corporation will provide a broad array of public relations services, including legislative lobbying. The role of the partners of law firm ABC will be limited to that of partial ownership; they will serve as corporate directors, but will not provide any of the services of the new corporation themselves nor will any of the law firm's associates. In addition, the new corporation itself will employ no lawyers. The law firm has requested the Commission's opinion whether this arrangement violates Bar Rule 3.2(a)(2). For the reasons which follow, it is the Opinion of the Commission that the rule is not violated.

Opinion

Bar Rule 3.2(a)(2) provides:

A lawyer shall not form a partnership or business corporation with a person not licensed to practice law if any of the activities of the partnership or corporation consist of the practice of law.

In Opinion No. 79, the Commission indicated that the phrase "practice of law" in this Rule

. . . has typically been interpreted as including services in fact performed by lawyers, whenever the business entity in question represents that a lawyer will be performing the service, even though nonlawyers may and do perform the same service.

The rule thus prohibits the formation of corporations by lawyers and non-lawyers if the corporation will be offering the legal services of those lawyers. The question presented here, however, is whether the rule is violated if the corporation uses non-lawyers to provide services, such as lobbying, which are sometimes performed by lawyers.

In the opinion of the Commission, the rule would not be violated by this arrangement. As set forth above, the new corporation, PAG, will employ no lawyers, nor will the lawyer partners or associates of law firm ABC perform any work for PAG. Rather, PAG's clients will be advised that if legal work is necessary, law firm ABC is available to do it. This arrangement does not violate either the letter or spirit of Rule 3.2(a)(2), one of the principal purposes of which is the avoidance of public confusion over the nature of the services provided by the new corporation. See Reporter's Notes to Maine Bar Rule 3.2(a)(2). So long as none of the lawyers of law firm ABC are involved in the activities of corporation PAG, the Rule is not violated, even if some of the activities of the corporation, such as lobbying, are those which are sometimes performed by lawyers.

This conclusion is not inconsistent with that reached in Opinion No. 79. In that case, the inquiring lawyer indicated that the new corporation owned jointly by two lawyers and an accountant proposed to offer the services of the attorneys and the accountant, who would jointly "provide total legal and financial services," and that "a named lawyer will be a member of the `team of experts.'" In Opinion No. 79, therefore, it was clear that lawyer-owners would be involved in the activities of the new multi-purpose entity, thereby blurring the clear distinction required by the Rule between lawyers providing legal services and non-lawyers providing services which are sometimes provided by lawyers.