Can a business owned by lawyers operate as an agency that places temporary lawyers with law firms in Ohio?
Ohio BPC Opinion 90-023: Ethical Guidelines for a Temporary Lawyer Placement Service
Short answer: The Board concluded that a temporary lawyer placement service may operate ethically if it follows guidelines, set out in a written agreement, that prevent fee-splitting and protect each lawyer's independent judgment and client confidences.
Disclaimer: This is an advisory ethics opinion. Advisory opinions are not binding; they interpret the Ohio Board of Professional Conduct's rules of professional conduct and are persuasive authority. This summary is for research purposes only and is not legal advice. Verify current rules before acting on any specific guidance.
About this page: The plain-English summary and Q&A below were written by Ezel based on the official opinion. The opinion text is reproduced at the bottom; the official source (linked) controls.
Plain-English summary
The Board addressed whether an Ohio corporation owned by two licensed attorneys could operate a business placing temporary lawyers with law firms, sole practitioners, and corporate legal departments, where any law practice would be kept separate from the placement business. It noted that several state bar committees and the ABA (Formal Op. 88-356 (1988)) had approved temporary attorney services when operated under guidelines designed to avoid ethical problems, and that, although Ohio did not adopt the Model Code, the Ohio Code addressed similar concerns. The Board set out guidelines to be observed and included in a written agreement.
First, the fee structure must avoid fee-splitting between the agency and the lawyer under DR 3-102(A); the Board drew on New York City Bar Formal Opinions 1989-2 and 1988-3 for the view that an agency's compensation for locating, recruiting, screening, and placing lawyers is not a legal fee, and that paying the lawyer an hourly wage directly while paying the agency a fixed fee avoids fee concerns. Second, the agency must agree not to limit or control the time a lawyer spends or the lawyer's professional judgment, consistent with DR 5-107(C)(3). Third, the agency must not interfere with the lawyer-client relationship or the duty to preserve confidences and secrets under DR 4-101. Fourth, under DR 5-107(B), the agency must agree not to direct or regulate the lawyer's professional judgment.
Fifth, the agency must avoid the conflicts of interest addressed by DR 5-105, with the lawyer declining or withdrawing where another client's interest may impair independent judgment. Sixth, under DR 5-107(A)(1), there is a duty to disclose the temporary nature of the relationship to the client in order to accept compensation. Finally, the agency must comply with DR 6-101 and not require a temporary lawyer to handle a matter for which the lawyer is not competent, with the hiring firm also responsible for ensuring competence. On the agency's plan to advertise to law firms in newspapers, trade journals, and by direct mail with follow-up calls, the Board noted that false, misleading, or deceptive advertising is prohibited, that it is unclear whether advertising aimed at law firms rather than consumers is even regulated by the Code, and that the likelihood of deception is small where the advertising simply informs firms of available temporary legal services. The Board concluded that the placement venture may be established if it follows these guidelines.
Currency note
This opinion issued in 1990 under Ohio's former Code of Professional Responsibility (superseded by the Ohio Rules of Professional Conduct effective February 1, 2007). Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against the current Ohio Rules of Professional Conduct before relying on any specific rule mentioned here.
Common questions
Q: Can a staffing agency place temporary lawyers with Ohio law firms?
A: Under this opinion, yes, if it operates under the guidelines the Board set out in a written agreement, including avoiding fee-splitting and preserving each lawyer's independent judgment.
Q: Does paying the agency a percentage of the lawyer's compensation count as fee-splitting?
A: The Board, following New York City Bar opinions, treated the agency's compensation for locating, screening, and placing lawyers as a non-legal fee, so it does not violate DR 3-102(A); paying the lawyer directly and the agency a fixed fee avoids the concern.
Q: Can the agency tell the temporary lawyer how much time to spend on a matter?
A: No. The Board concluded the agency must agree not to limit or control the lawyer's time or professional judgment, consistent with DR 5-107(B) and (C)(3).
Q: Does the client have to be told the lawyer is temporary?
A: Yes. The Board concluded DR 5-107(A)(1) requires disclosing the temporary nature of the relationship to the client to accept compensation for the legal services.
Background and rules framework
The opinion interprets the former Code of Professional Responsibility: DR 3-102(A) (no fee-sharing with a non-lawyer), DR 4-101 (confidentiality), DR 5-105 (conflicts of interest), DR 5-107(A)(1), (B), and (C)(3) (third-party compensation, protecting professional judgment, and non-lawyer control), and DR 6-101 (competence), with advertising addressed under the Code's general bar on false or misleading communication.
Citations and references
Rules of Professional Responsibility (Ohio, former):
- DR 3-102(A), no fee-sharing with a non-lawyer
- DR 4-101, preservation of client confidences and secrets
- DR 5-105, conflicts of interest
- DR 5-107(A)(1), (B), (C)(3), third-party compensation, professional judgment, and non-lawyer control
- DR 6-101, competence
Other opinions cited:
- ABA Committee on Ethics and Professional Responsibility, Formal Op. 88-356 (1988): temporary lawyer services
- Association of the Bar of the City of New York, Formal Opinions 1989-2 and 1988-3: agency fees and fee structure
See also
- Ohio BPC Op. 1990-022: Lawyer Receiving Part of His Fee From the Client's Trustee Bank
- Ohio BPC Op. 1989-031: Lawyer Employed by a CPA Firm
- Ohio BPC Op. 1989-002: Sharing Fees With a Suspended or Disbarred Lawyer
Source
- Landing page: https://ohioadvop.org/advisory-opinion-index/
- Original PDF: https://www.ohioadvop.org/wp-content/uploads/2017/04/Op-90-023.pdf
Original opinion text
Reproduced from the official source for research purposes. The linked source is authoritative.
The Supreme Court of Ohio
BOARD OF COMMISSIONERS ON GRIEVANCES AND DISCIPLINE
41 SOUTH HIGH STREET-SUITE 3370, COLUMBUS, OH 43215-6105
(614) 644-5800 FAX: (614) 644-5804
OFFICE OF SECRETARY
OPINION 90-23
December 14, 1990
[CPR Opinion-provides advice under the Ohio Code of Professional Responsibility which is superseded by the Ohio Rules of Professional Conduct, eff. 2/1/2007.]
SYLLABUS: It is ethical for a proposed business venture operating as a placement service to provide lawyers or law firms with temporary lawyers so long as the business venture operates within certain narrow, ethical guidelines.
OPINION: We have before us your request for an advisory opinion on whether it is ethical for a proposed business venture to provide lawyers, law firms, sole practitioners, and corporate legal departments with the placement and use of temporary lawyers. According to your request the proposed business venture would be conducted by an Ohio corporation whose shares are owned by two attorneys licensed to practice law in Ohio. Any practice of law would be maintained separately from the business venture and would be completely unrelated to the business of placing temporary lawyers.
Several state bar ethics committees and the ABA Standing Committee on Ethics and Professional Responsibility have considered the issue of temporary attorney services. Such services have been approved by those states and the ABA when the services followed guidelines designed to avoid ethical problems arising under the Model Code. The ABA's approach in Formal Opinion 88-356 (1988) is thorough and well reasoned in its treatments of ethical issues including conflict of interest, confidentiality of client information, disclosure to the client of arrangements between the firm and the lawyer, and arrangements with the lawyer placement agencies. Although Ohio did not adopt the Model Code, the Ohio Code of Professional Responsibility incorporated provisions that address similar ethical concerns. To avoid unethical practices and to enable temporary lawyer placement services to be operated in a manner consistent with the Ohio Code of Professional Responsibility, the following guidelines should be observed and included in a written agreement governing the use and placement of temporary lawyers.
First, a suitable fee structure must be developed that would eliminate fee-splitting between the agency and the lawyer as prohibited by DR 3-102(A). DR 3-102(A) states that a lawyer or law firm shall not share legal fees with a non-lawyer. The placement agency intends to receive compensation directly from the law firms as a fee based on a percentage of the lawyer's compensation. Recently the Committee on Professional Ethics of the Association of the Bar of The City Of New York in Formal Opinion 1989-2 concluded that since the agency unquestionably provides services in locating recruiting, screening, and placing temporary lawyers and those services are not legal services, the compensation paid by the law firm to the agency for those services is not a legal fee within the meaning of DR 3-102 (A). It can therefore be concluded that such a fee arrangement to an agency does not constitute impermissible sharing of fees with non-lawyers. In Formal Opinion 1988-3 the Committee on Professional Ethics of the Association of the Bar of the City of New York suggested an elimination of many of the fee related ethical concerns by requiring the law firm to pay an hourly wage directly to the attorney and pay the agency a fixed fee.
The need to avoid interference by the placement agency with the exercise of a lawyer's judgment sets the stage for the second guideline. The agency must agree not to attempt to limit or in any way to control the amount of time a lawyer may spend on any particular matter or his professional judgments in the matter. Care should be taken not to violate DR 5-107(C)(3). The rule states that a lawyer shall not practice with a professional corporation or association if a non-lawyer has the right to direct or control the professional judgment of a lawyer. The proposed placement agency must agree to execute an agreement with the temporary lawyer that states that the agency will not exert any control or influence over the exercise of professional judgment by the lawyer, including limiting or extending the amount of time the lawyer spends on work for the clients of the employing firm.
Third, the agency must not interfere with the traditional lawyer-client relationship. The agency must agree not to breach the lawyer's duty to preserve client's confidences and secrets as stated in DR 4-101. The shareholders of the proposed agency intend to facilitate the ability of the temporary lawyers to maintain all confidences and secrets for undertaken matters.
Fourth, so as not to violate DR 5-107(B) that states "[a] lawyer shall not permit a person who recommends, employs, or pays him to render legal services for another to direct or regulate his professional judgment in rendering such legal services," the agency must agree not to attempt any such control.
Fifth, the proposed agency must avoid the conflicts of interest set forth in DR 5-105. A lawyer should decline or refuse to continue employment if the interest of another client may impair the independent professional judgment of the lawyer.
Sixth, there is a duty under DR 5-107 (A) (1) to disclose to the client the temporary nature of the relationship in order to accept compensation for the legal services.
Finally, the agency must comply with DR 6-101 and not require a temporary lawyer to handle a legal matter for which he is not competent. The hiring firm also has the ethical responsibility to insure the competence of the temporary lawyer.
The proposed placement agency further intends to advertise its service to law firms in newspapers and trade journals. Direct mail advertising with follow up phone calls is also contemplated. The Code of Professional Responsibility states that methods of advertising that are false, misleading or deceptive are prohibited. Here, where the target is a law firm, not consumers, it is unclear whether the advertising is even regulated by the Code. In any event, the likelihood that such advertising would be deceptive or misleading is small when it simply informs law firms of the availability of temporary legal services.
In conclusion, it is the Board's opinion and you are so advised that a proposed business venture that places and uses temporary lawyers may be established if it follows the ethical guidelines discussed above.
This is an informal, nonbinding advisory opinion, based upon the facts as presented and limited to questions arising under the Code of Professional Responsibility.