Can salaried employees or in-house insurance defense lawyers, who are not partners, have their names appear in a law firm's name on the letterhead?

Plain-English summary

The Committee took up three inquiries about how a law office may designate itself on its letterhead. Two came from offices staffed entirely by lawyers on an insurance carrier's payroll who represent only that carrier's insureds: one group of three senior employees wanted to use a firm name made of their three names, and another office wanted to list all of its employees with the qualifier "An organization of attorneys, not a partnership." The third came from a sole practitioner who wanted to add his salaried employees' names to the office letterhead; those employees received salaries plus percentages of fees and participated in firm decisions, but he conceded they were "technically" not partners.

The Committee held that in none of the three cases were the lawyers organized as partners sharing expenses, income, and responsibility. The insurance-carrier lawyers lacked the independence that characterizes a law partnership, and the sole practitioner's employees likewise could not function as independent practitioners. By custom and tradition, using two or more surnames in an office name implies a partnership, so including the employees' names would not meet the requirements of RPC 7.5. The Committee relied on its Opinions 479, 224, and 497, the last holding that attorneys who are not partners may not hold themselves out as practicing in partnership form, and it compared RPC 7.5(d) to the ABA Model Rule, noting the New Jersey rule states the prohibition more stringently. The mirror text ends as the Committee turns to whether disclaiming language could cure the misrepresentation.

Currency note

This opinion was issued in 1986, before New Jersey's adoption of the 2004 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 Treat this page as historical context, not current guidance.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 salaried employees who are not partners be named in the firm's name?

A: Per the opinion, no. The Committee held that including non-partner employees' names implies a partnership and does not meet the requirements of RPC 7.5.

Q: Does it matter that the lawyers all work for a single insurance carrier?

A: Yes, and against listing them as a firm. The opinion found that lawyers who are fully paid employees of one carrier lack the independence that characterizes a law partnership.

Q: Why does listing several names imply a partnership?

A: The opinion explains that, by custom and tradition, the use of two or more last names to identify a law office implies that those named are organized as a partnership.

Background and rules framework

The opinion applies RPC 7.5, which governs firm names and letterheads, in particular RPC 7.5(d), under which lawyers may state or imply that they practice in a partnership or other organization only when that is the fact. The Committee compared the New Jersey rule to the ABA's Model Rule 7.5(d) and its comment, concluding the New Jersey version states the rule more stringently.

Citations and references

Rules of Professional Conduct:

• MR 7.5(d) / NJ RPC 7.5(a), (d) (firm names; holding out as a partnership only when true)

Other opinions cited:

• ACPE Opinion 479, 107 N.J.L.J. 329 (1981)
• ACPE Opinion 224, 94 N.J.L.J. 1206 (1971)
• ACPE Opinion 497, 109 N.J.L.J. 393 (1982) (non-partners may not hold themselves out as a partnership)

See also

• NJ ACPE Op. 637: Division of Fees and Partnership With Out-of-State Attorneys
• NJ ACPE Op. 704: A Wholly Owned Subsidiary Law Firm

Source

• Full text (Justia mirror): https://law.justia.com/cases/new-jersey/advisory-committee-on-professional-ethics/2004/acp593-1.html
• Issuing authority: New Jersey Supreme Court Advisory Committee on Professional Ethics, via the NJ Courts Supreme Court Committees page

Original opinion text

Reproduced from a full-text mirror of the official opinion for research purposes. The linked official source controls.

118 N.J.L.J. 580, October 30, 1986

OPINION 593

Limitations on Firm Names - Associates, Employees, and In-House Counsel Appearing in a Law Firm's Name

We have three inquiries dealing with the proper designation of a law firm on its letterhead. Two of them concern attorneys who are employed by insurance companies on salary to represent the assureds of each carrier exclusively:

1. The first office is formed of a number of attorneys each of them full-time employees of an insurance carrier. The senior in that office is in charge of internal management and case coordination with some trial work. He is the Regional Manager for Legal Services in New Jersey for that company. In that role he plans budgets, personnel management, procedures, hires, and fires. Another attorney acts as senior trial attorney and runs a trial team for a particular area. A third attorney supervises a trial team for defense work in a different geographical area and assumes some of the management functions of the senior during the latter's absence. These three attorneys and the other employees working under them limit their work to one insurance carrier except that each may undertake representation for close family members. The three seniors claim they conduct the office in partnership form because of the manner in which the three seniors share responsibilities and cover each other's work. There is no written agreement. The carrier pays all expenses.

The proposal of these three senior employees of this office is that they be permitted to use a firm name consisting of their three names, even though they are in fact employees of their single client.

2. The second inquiry is from an office that also works exclusively for one insurance carrier. The office name presently has only one title name - that of the senior of the group. All attorneys are on the payroll of the insurance carrier. All office expenses and overhead are paid by the carrier.

Here again there is no partnership agreement. Although all employees share the legal work, they do not share expenses or income. This inquiry asks whether or not that office may use an office name consisting of all of the employees along with the qualification: "An organization of attorneys, not a partnership."

The reasons given for this request are: to consolidate the efforts of the staff; to make staff function more as a unified force; to recognize past efforts of staff by including staff names on the letterhead and to enhance the prestige of the office in general.

3. The third inquiry does not concern "in-house" counsel: A sole practitioner seeks to include the names of his employees in his office letterhead in order to recognize their achievements in the firm. They work full time with no outside practice. He admits that "... technically (they) are not partners." They are paid salaries plus percentages of the fees produced by their work as well as a percentage of fees on matters brought to the office by them but performed by others. In addition these employees "... participate in decisions made by the firm... " It is urged that because of the participation in fees earned by the office, and because of the participation in decisions, these employees should be considered partners or members of the firm under RPC 7.5(a).

In the first two inquiries, the lawyers are fully paid employees of a single client. In effect they constitute the legal defense department for the client's insureds in specific geographic areas.

In the last case, the staff are employees of a sole practitioner with a general practice. While each group is organized so an attorney's work is covered by a fellow-employee, there is no partnership in the legal sense. As employees of insurance carriers, the first two law offices lack the quality of independence - an important characteristic of a law partnership. The staff of the sole practitioner in their capacity as his employees similarly lack the ability to function as independent practitioners.

In all three cases, the organization is not that of partners sharing expenses, income, responsibility and otherwise.

By custom and tradition, the use of two or more last names on a letterhead to identify a law office implies that the persons so named are organized as a partnership.

Hence, the proposed inclusion of employees' names in the office names does not meet the requirements of RPC 7.5. See our Opinion 479, 107 N.J.L.J. 329 (1981); Opinion 224, 94 N.J.L.J. 1206, (1971); and particularly, Opinion 497, 109 N.J.L.J. 393 (1982) where we held that attorneys who are not partners may not hold themselves out as practicing in partnership form.

Our RPC 7.5(d) may be compared to Rule 7.5(d) proposed in the A.B.A. Model Rules of Professional Conduct, May 20, 1981:

"(d) Lawyers shall not hold themselves out as practicing in a law firm unless the association is in fact a firm."

In 1983, the A.B.A. adopted Rule 7.5(d) which is identical to the New Jersey Rule:

"(d) Lawyers may state or imply that they practice in a partnership or other organization only when that is the fact."

The A.B.A. Comment on (d) says:

... lawyers sharing office facilities, but who are not, in fact, partners may not denominate themselves as, for example, "Smith and Jones" for that title suggests partnership in the practice of law.

RPC 7.5(d) as finally adopted follows the sense of the comparable provision of the A.B.A. Model Code above; the reference to "... partnership... " clearly states the rule more stringently, and leaves no doubt that in RPC 7.5, a law firm listing the names of individuals implies the existence of a partnership.

There arises the question whether or not to approve a qualifying set of words by way of disclaiming partnership organization and to avoid the misrepresentation; for example, by adding such words as: