Can a one-lawyer professional corporation form a partnership with an individual attorney and keep a firm name that reads as individuals' names?

Plain-English summary

The inquirer, A, proposed to form a professional corporation under the New Jersey Professional Service Corporation Act (N.J.S.A. 14A:17-1 et seq.) and to have that corporation become a partner with another individual lawyer, B, who was not incorporated, continuing the firm name "A & B" without reflecting the corporate status of one partner.

The Committee distinguished its earlier Opinion 397, which had held it unethical to form a partnership of two or more professional corporations that kept their separate identities and reflected the separate corporations in the new firm's name, because no provision allowed a name consisting of two professional corporations in partnership. Here, by contrast, the proposed name would reflect individuals' names, consistent with the spirit of the disciplinary rules and the traditional naming of New Jersey law firms, so Opinion 397 did not apply and did not conflict with the result.

The Committee concluded that a one-attorney professional corporation operating within a partnership made up of a corporation and individual lawyers does not violate any ethical principle (citing ABA Informal Opinion 1471, which rescinded ABA Informal Opinion 1383). It emphasized, relying on N.J.S.A. 14A:17-8, that the Professional Service Corporation Act does not change the professional relationship or the contract, tort, and other legal liabilities between the lawyer furnishing services and the client: any employee of a professional corporation remains personally and fully liable for his own or his subordinates' negligent or wrongful acts in rendering professional service. The existence of the one-attorney professional corporation as a partner therefore did not change the obligations the lawyers owed their clients, and the formation of such a partnership, under a firm name consistent with the disciplinary rules, was ethical.

Currency note

This opinion was issued in 1982, before New Jersey's adoption of the 2004 revisions to the Rules of Professional Conduct, and predates the 1984 replacement of the Disciplinary Rules by the RPCs. 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 Treat this page as historical context, not current guidance.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: Could a one-lawyer professional corporation be a partner in a law firm with an individual attorney?

A: Yes. The opinion concluded such a partnership was ethical and violated no principle governing attorney conduct.

Q: Did the firm name have to disclose that one partner was a professional corporation?

A: No. The opinion approved a firm name reflecting individuals' names, distinguishing Opinion 397, which had barred a name composed of two professional corporations.

Q: Did incorporating limit the lawyers' liability to clients?

A: No. The opinion stressed that, under N.J.S.A. 14A:17-8, the professional-corporation form did not change the lawyers' personal liability for negligent or wrongful acts in rendering professional services.

Background and rules framework

The opinion was decided under the firm-name and professional-corporation principles then governing New Jersey lawyers, before the 1984 adoption of the Rules of Professional Conduct, applying the Professional Service Corporation Act and the Committee's firm-name opinions. In current terms the analysis maps onto RPC 7.5 (firm names and letterheads) and RPC 5.4 (professional independence and the form in which a lawyer may practice).

Citations and references

Rules of Professional Conduct:

• MR 7.5 / NJ RPC 7.5 (firm names and letterheads)
• MR 5.4 / NJ RPC 5.4 (professional independence; permissible practice forms)

Statutes:

• N.J.S.A. 14A:17-1 et seq. (New Jersey Professional Service Corporation Act)
• N.J.S.A. 14A:17-8 (professional liability unchanged by incorporation)

Other opinions cited:

• NJ ACPE Opinion 397, 101 N.J.L.J. 578 (1978) (distinguished; firm name composed of two professional corporations not permitted)
• ABA Informal Opinion 1471 (1981) (rescinding ABA Informal Opinion 1383 (1977))

See also

• NJ ACPE Op. 497: Attorneys Holding Out as Partners Where No Real Partnership
• NJ ACPE Op. 512: Naming an Affiliated Out-of-State Firm on Letterhead

Source

• Full text (Justia mirror): https://law.justia.com/cases/new-jersey/advisory-committee-on-professional-ethics/2004/acp491-1.html
• Issuing authority: New Jersey Supreme Court Advisory Committee on Professional Ethics, via the NJ Courts Supreme Court Committees page

Original opinion text

Full opinion text unavailable from the official source; see the linked source above for the complete text.