Are lawyers who provide arbitration and mediation services through a separate business subject to the Rules of Professional Conduct?

Plain-English summary

The Committee addressed lawyers in a single firm who wanted to create a separate, for-profit entity, under a trade name unlike the firm's, to provide arbitration and mediation services to the public using both lawyers and nonlawyers. Two questions were asked: whether performing mediation or arbitration is practicing law, and whether the advertising and feeder-business constraints of the Rules apply.

On the first question, the opinion concludes that mediation and arbitration are not, at present, considered the practice of law per se, but that lawyers who provide those services are still subject to the Rules of Professional Conduct because the services are "law related." It draws on the Iowa Supreme Court Board of Professional Ethics and Conduct (Opinion No. 96-08) for the principle that law-related services performed by nonlawyers become the practice of law when performed by lawyers, and on the New York State Bar Association (Opinion No. 687) for the reasoning that a lawyer-mediator may be called on to offer legal opinions given greater weight, and that parties may give greater credence to a lawyer-mediator's advice, so the lawyer remains subject to the rules.

On the second question, the opinion concludes that because lawyers who provide mediation and arbitration services are subject to the Rules, they are also subject to the advertising and feeder constraints of the Rules.

In practice

The opinion holds that, under the Mississippi rules as they stood at the time of the opinion, a lawyer who provides arbitration or mediation services, including through a separate trade-named entity, remains subject to the Mississippi Rules of Professional Conduct, and the Rules' advertising and feeder-business constraints apply to that activity. The opinion treats mediation and arbitration as not the practice of law per se while still bringing the lawyer-provider within the Rules as law-related services.

Common questions

Q: Is serving as a mediator or arbitrator considered the practice of law in Mississippi?

A: The opinion concludes that mediation and arbitration are not considered the practice of law per se, but that does not exempt lawyers who provide those services from the Rules of Professional Conduct.

Q: If a lawyer provides these services through a separate company, do the ethics rules still apply?

A: Yes. The opinion concludes that because the services are law-related, lawyers who provide them, including through a separate for-profit entity, are subject to the Mississippi Rules of Professional Conduct.

Q: Do the advertising rules apply to the new entity?

A: The opinion concludes that because the lawyers providing the services are subject to the Rules, they are also subject to the advertising and feeder constraints of the Rules.

Background and rules framework

The opinion addresses the responsibilities of lawyers who provide law-related services such as arbitration and mediation (the subject of Model Rule 5.7). It applies the Mississippi Rules of Professional Conduct as a whole, including their advertising and feeder-business constraints, and relies on the Committee's prior Opinion No. 15, Iowa Opinion No. 96-08, and New York State Bar Association Opinion No. 687.

Citations and references

Rules of Professional Conduct:

• The opinion does not cite specific numbered rules; it applies the Mississippi Rules of Professional Conduct as a whole, including their advertising and feeder-business constraints, to law-related services (the subject of Model Rule 5.7).

Other opinions cited:

• Mississippi Opinion No. 15
• Iowa Supreme Court Board of Professional Ethics and Conduct Opinion No. 96-08 (1996)
• New York State Bar Association Opinion No. 687 (1996)

See also

• ABA Formal Op. 02-425: Arbitration of Fee Disputes and Malpractice Claims
• ABA Formal Op. 06-439: Truthfulness in Negotiation and Mediation

Source

• Landing page: https://www.msbar.org/ethics-discipline/ethics-opinions/formal-opinions/241/
• Original PDF: https://www.msbar.org/media/1066/et_op_241-amended.pdf

Original opinion text

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

ETHICS OPINION NO. 241

OF THE MISSISSIPPI BAR

RENDERED November 20, 1997

AMENDED April 06, 2013

BUSINESS ACTIVITIES: Lawyers who provide arbitration and mediation services are subject to the Mississippi Rules of Professional Conduct when performing such services.

The Ethics Committee of The Mississippi Bar has been asked to render an opinion involving the following facts:

Certain lawyers within a single law firm want to create a separate, for profit entity to provide arbitration and mediation services to the public. The new entity would advertise its services using a trade name or corporate name which will not be similar to the law firm's name. The new entity will use lawyers as well as nonlawyers to provide the services.

Two questions have been asked. Taking them in reverse order, the first question is whether performing mediation or arbitration services is considered practicing law under the Mississippi Rules of Professional Conduct (MRPC).

At the present time mediation and arbitration are not considered the practice of law per se. This does not mean, however, that lawyers who provide mediation and arbitration services are not subject to the MRPC. They are. This is because arbitration and mediation are "law related" services. As noted by the Iowa Supreme Court of Board of Professional Ethics and Conduct in Opinion No. 96-08, rendered August 29, 1996:

Law related services which may be performed by nonlawyers, such as those performed by a CPA, become the practice of law when performed by lawyers. The Mississippi Bar has followed this principle in Opinions No. 15.

With reference to arbitration and mediation services, the Ethics Committee of the New York State Bar Association has analyzed the question of whether divorce mediation should be considered "lawyer's services" and, therefore, subject to the bar's disciplinary rules. (See Opinion No. 687, rendered January 10, 1996). The Committee noted that some businesses, such as providing piano lessons, would be completely unrelated to the practice of law and, therefore, the lawyer's conduct would not be subject to the Bar's rules, while other businesses are related and are subject to the rules. The Committee in New York ultimately concluded that lawyers who serve as mediators are subject to the rules of professional conduct because the mediator may be called upon to offer legal opinions (which would be given greater weight than if they were given by a nonlawyer) and because the parties may give greater credence to a lawyer/mediator's advice than a nonlawyer/mediator's advice. The New York Committee thus concluded that, while the service may be performed by a nonlawyer, when the service is provided by a lawyer, the lawyer is subject to the rules of professional conduct.

The Ethics Committee is of the opinion that lawyers who engage in mediation and arbitration services are subject to the MRPC.

The second question asked is whether any advertising constraints or feeder business constraints of the MRPC apply to lawyers involved in the new entity. Since the lawyers who provide mediation and arbitration services are subject to the MRPC, it follows that they are subject to the advertising and feeder constraints of the MRPC.