Can a New Jersey law firm hire a second firm to do legal work for its clients, and must it tell the client about the arrangement?

Plain-English summary

Opinion 689 considered whether a law firm may retain a second firm to perform estate-related services for its clients, where the contracting firm's client (likely the executor or administrator of an estate) would not be aware of the contractual relationship between the two firms, there would be no direct contact between the performing firm and the client, and the billing to the client and the applications for court approval of counsel fees would not disclose that the performing firm did any of the work.

The Committee analyzed the performing firm's role as much like that of a temporary lawyer or contract attorney. Citing its Opinions 632 and 469, the Committee restated that there is no legal or ethical prohibition against working for more than one law firm, even simultaneously, provided there are no conflicts of interest and the attorney is not exposed to information in one firm that would be detrimental to the clients of the other.

The Committee added, however, that depending on the nature of the contractual relationship, disclosure of the relationship to the client may be required. RPC 7.1(a)(1) prohibits a lawyer from making false or misleading communications about the lawyer or the lawyer's services, and a communication is misleading if it omits a fact necessary to make the statement, considered as a whole, not materially misleading. The Committee also pointed to RPC 7.5(d), which prohibits lawyers from stating or implying that they practice in a partnership or other organization when they do not; although RPC 7.5 is outside the Committee's jurisdiction under Rule 1:19-2, the Committee noted that the policy underlying the rule is that a client who retains a firm has selected the attorneys it wants and is entitled to know who or what entity is undertaking the representation.

Currency note

This opinion predates New Jersey's 2004 revisions to the Rules of Professional Conduct (the available mirror does not display the opinion's issuance date; by its position in the chronological opinion sequence it falls just before Opinion 690 and Opinion 691 of January 2001). Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance, and verify the current Rules of Professional Conduct before relying on any specific rule or requirement mentioned here.

Common questions

Q: May a firm subcontract client work to another firm?

A: Yes. The opinion concluded a firm may retain a second firm to perform legal services much as it would use a temporary or contract lawyer, so long as there are no conflicts and no improper exposure of one firm's confidential information to the other.

Q: Did the client have to be told about the second firm?

A: The opinion concluded that disclosure may be required depending on the arrangement, because RPC 7.1(a)(1) bars misleading communications (including misleading omissions) and the client is entitled to know who is undertaking the representation.

Q: Why did RPC 7.5(d) matter if it is outside the Committee's jurisdiction?

A: The opinion noted RPC 7.5(d)'s policy, that a lawyer may not imply a partnership that does not exist, to support its point that a client who retains a firm has selected particular attorneys and is entitled to know who is actually representing it.

Background and rules framework

The opinion interpreted RPC 7.1(a)(1) (Model Rule 7.1, communications concerning a lawyer's services, including misleading omissions) and referenced RPC 7.5(d) (Model Rule 7.5, firm names and letterhead; not implying a nonexistent partnership), the latter noted as outside the Committee's jurisdiction under Rule 1:19-2. The analysis treated the performing firm as akin to a contract or temporary lawyer (drawing on Opinions 632 and 469) and turned on conflicts, confidentiality, and the client's entitlement to know who is undertaking the representation.

Citations and references

Rules of Professional Conduct:

• MR 7.1 / NJ RPC 7.1(a)(1) (communications concerning a lawyer's services; misleading omissions)
• MR 7.5 / NJ RPC 7.5(d) (firm names and letterhead; not implying a nonexistent partnership); noted as outside the Committee's jurisdiction

Court Rules:

• N.J. Court Rule 1:19-2 (scope of the Committee's jurisdiction)

Other opinions cited:

• ACPE Opinion 632, 124 N.J.L.J. 926 (1989): no prohibition against working for more than one firm, absent conflicts or detrimental information exposure
• ACPE Opinion 469, 107 N.J.L.J. 113 (1981): temporary/contract lawyer arrangements

See also

• ABA Formal Op. 08-451: Outsourcing Legal and Nonlegal Support Services
• NJ ACPE Op. 696: Attorney's Referral of Estate Real Estate to a Spouse's Agency

Source

• Full text (Justia mirror): https://law.justia.com/cases/new-jersey/advisory-committee-on-professional-ethics/2005/acp689-1.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 mirror does not display a dateline for this opinion; the linked official source controls.

OPINION 689

Law Firm Retaining a Second Firm to Perform Legal Services for its Clients

The Advisory Committee on Professional Ethics has been asked whether a law firm may retain a second firm to perform estate related services for its clients. In the circumstances presented, the contracting firm's client, who would most likely be the executor or administrator of an estate, would not be aware of the contractual relationship between the two firms and there would be no direct contact between the performing firm and the client. Additionally, billing submitted to the client by the contracting firm and applications for court approval of counsel fees would not disclose that legal services were performed, in whole or in part, by the performing firm.

The performing firm's status in the above-described relationship would be much akin to that of a temporary lawyer or contract attorney. As this Committee has previously held, there is no legal or ethical prohibition against working for more than one law firm, even simultaneously, provided there are no conflicts of interests and the attorney is not exposed to information in one firm that would be detrimental to the clients of the other. Opinion 632, 124 N.J.L.J. 926 (1989), citing Opinion 469, 107 N.J.L.J. 113 (1981). Stated another way, an attorney may work as a temporary or contract lawyer for one firm while at the same time or thereafter performing legal services for another law firm provided the contract lawyer and the law firms by which the lawyer is employed comply with the Rules of Professional Conduct.

Depending upon the nature of the contractual relationship between the contracting and performing law firms, disclosure of the relationship may be required. RPC 7.1(a)(1) prohibits a lawyer from making false or misleading communications about the lawyer or the lawyer's services. A communication will be considered false or misleading if it contains a material misrepresentation of fact or law, or omits a fact necessary to make the statement considered as a whole not materially misleading. Id.

Moreover, RPC 7.5(d) prohibits lawyers from stating or implying that they practice in a partnership or other organization when they do not. Although RPC 7.5 is not within this Committee's jurisdiction, R. 1:19-2, the policy underlying the rule is that a client in retaining a firm has selected the attorney or attorneys the client wants to represent him or her and is entitled to know who or what entity is undertaking the representation. Opinion 632, supra, 124 N.J.L.J. 926.