Can one law firm be designated 'of counsel' to another law firm in Ohio?

Plain-English summary

A lawyer asked whether a law firm, rather than an individual lawyer, may be designated "of counsel" to another law firm. The Board built on its earlier opinions: Opinion 2004-11 (a lawyer may be of counsel to an out-of-state lawyer or firm), Opinion 2008-1 (lawyers may hold multiple of-counsel relationships if each is "close, regular, and personal"), and Opinion 2013-1 (a lawyer may practice in more than one firm at once). Given those, the Board found that allowing a firm to be of counsel to another firm follows logically, and that the ABA and most jurisdictions agree (ABA Formal Op. 90-357).

The Board emphasized that firm-to-firm of-counsel relationships multiply the ethical issues. The central one is conflicts of interest: the firms are treated as a single unit, so all conflicts are imputed to every lawyer and firm involved (Prof. Cond. R. 1.8(c), 1.10), and the firms must run comprehensive conflict checks. It noted that at least one jurisdiction holds a screen insufficient to avoid imputation in this setting. Firms should consider obtaining client consent to share enough information for a complete conflict check while protecting client confidences.

The Board added several other considerations. The relationship must stay "close, regular, and personal" and not become a loose marketing alliance. On fees, because Ohio treats of-counsel lawyers as members of the same firm, the fee-division restrictions of Prof. Cond. R. 1.5(e) do not apply between them. Firms should keep active Ohio registration, not put a non-partner of-counsel lawyer in the firm name, state jurisdictional limitations on letterhead, disclose the of-counsel relationship to clients in an engagement letter, and account for fiduciary duties such as which firm takes an engagement.

In practice

The opinion holds that, under the Ohio rules as they stood at the time, a firm-to-firm "of counsel" relationship is permitted when both firms comply with the Rules. Per the opinion, the firms are then treated as one for conflict purposes, so all conflicts impute across both and the firms must run comprehensive conflict checks; the relationship must remain close, regular, and personal rather than a marketing arrangement; and the Rule 1.5(e) fee-division limits do not apply between of-counsel lawyers in Ohio because they are considered the same firm.

Common questions

Q: Can a whole law firm, not just one lawyer, be "of counsel" to another firm?

A: The opinion concluded yes; building on its prior of-counsel and multi-firm opinions and the ABA view, the Board found a firm may be of counsel to another firm if both comply with the Rules.

Q: How are conflicts handled between two of-counsel firms?

A: The opinion concluded the firms are treated as one unit, so all conflicts are imputed across both under Prof. Cond. R. 1.8(c) and 1.10, requiring comprehensive conflict checks.

Q: Do the Rule 1.5(e) fee-splitting limits apply between the two firms?

A: The opinion concluded no; because Ohio treats of-counsel lawyers as in the same firm, the Rule 1.5(e) restrictions on dividing fees do not apply between them.

Q: Can two firms use the of-counsel label just to cross-refer business?

A: The opinion concluded no; the relationship must be close, regular, and personal, not a loose alliance for marketing or referrals.

Background and rules framework

The opinion interprets Ohio Prof. Cond. R. 1.10 (imputation of conflicts), 1.8(c) (imputation of certain conflicts), and 1.5(e) (division of fees between lawyers not in the same firm) (Model Rules 1.10, 1.8, 1.5), along with the definition of "firm" in Prof. Cond. R. 1.0(c). It draws heavily on ABA Formal Op. 90-357 and parallel opinions from other jurisdictions.

Citations and references

Rules of Professional Conduct:

• Ohio Prof. Cond. R. 1.10 (imputation of conflicts) (Model Rule 1.10)
• Ohio Prof. Cond. R. 1.8(c) (imputed conflicts) (Model Rule 1.8)
• Ohio Prof. Cond. R. 1.5(e) (division of fees) (Model Rule 1.5)

Other opinions cited:

• ABA Formal Op. 90-357 (1990): of-counsel relationships, including firm-to-firm
• Ohio BPC Op. 2008-1 (2008): of-counsel relationships generally
• Ohio BPC Op. 2013-1 (2013): practicing in more than one firm at once
• Ohio BPC Op. 2004-11 (2004): of counsel to an out-of-state lawyer or firm

See also

• Ohio BPC Op. 2013-001: Lawyer Practicing in More Than One Firm
• Ohio BPC Op. 2014-002: Conflicts in a Part-Time County Prosecutor's Firm
• Ohio BPC Op. 2012-002: Identifying Nonlawyers on Letterhead, Websites, and Business Cards

Source

• Landing page: https://ohioadvop.org/advisory-opinion-index/
• Original PDF: https://www.ohioadvop.org/wp-content/uploads/2017/04/Op_14-004.pdf

Original opinion text

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

BOARD OF COMMISSIONERS ON GRIEVANCES & DISCIPLINE
65 SOUTH FRONT STREET, 5TH FLOOR, COLUMBUS, OH 43215-3431
Telephone: 614.387.9370 Fax: 614.387.9379
www.supremecourt.ohio.gov

DAVID E. TSCHANTZ RICHARD A. DOVE
CHAIR SECRETARY
PAUL M. DE MARCO D. ALLAN ASBURY
VICE- CHAIR SENIOR COUNSEL

                                                                                HEIDI WAGNER DORN
                                                                                      COUNSEL



                                    OPINION 2014-4
                                Issued December 12, 2014

                       Law Firm In “Of Counsel” Relationship
                              With Another Law Firm

SYLLABUS: It is proper for a law firm to enter an “of counsel” relationship with
another law firm, provided both firms comply with the Ohio Rules of Professional
Conduct.

QUESTION PRESENTED: May a law firm, rather than an individual lawyer, be
designated “of counsel” with another law firm?

OPINION:

    A lawyer seeks the Board’s guidance on whether a law firm may enter into an

“of counsel” relationship with another law firm. In past advisory opinions, the Board
has addressed the “of counsel” relationship between individual lawyers and law firms,
as well as the issue of lawyers practicing simultaneously in multiple law firms.

    In a 2004 opinion, the Board determined that a lawyer may serve “of counsel” to

another lawyer or to a law firm in another state, so long as the disciplinary laws of Ohio
and the other state are not violated. Ohio Sup. Ct., Bd. of Comm’rs on Grievances and
Discipline, Op. 2004-11(October 8, 2004). That opinion also stated that an out-of-state
lawyer, not licensed in Ohio, may be “of counsel” to a lawyer or a law firm in Ohio
provided that the relationship complies with all laws and disciplinary rules in Ohio.
Op. 2014-4 2

   Later, in a 2008 opinion, the Board extensively analyzed the “of counsel”

relationship and determined that lawyers may maintain multiple “of counsel”
relationships with different law firms, provided each of those relationships is “close,
regular, and personal,” and not simply an “occasional collaboration.” Ohio Sup. Ct.,
Bd. of Comm’rs on Grievances and Discipline, Op. 2008-1 (February 8, 2008). The
Board’s opinion reflects the opinion of the ABA and a majority of other jurisdictions.
See ABA Comm. on Ethics and Prof’l Responsibility, Formal Op. 357 (1990).

   Most recently in 2013, the Board determined that a lawyer may simultaneously

practice in more than one law firm if the practice otherwise complies with the Rules of
Professional Conduct. Ohio Sup. Ct., Bd. of Comm’rs on Grievances and Discipline,
Op. 2013-1 (April 4, 2013). This is the prevailing view of the ABA and other
jurisdictions. In rendering that opinion, the Board stated a number of reasons to allow a
lawyer to practice in multiple law firms, including that no Rule of Professional Conduct
or Rule for the Government of the Bar prohibits such practice; lawyers are permitted to
maintain multiple “of counsel” relationships with different firms; the prevailing view in
other jurisdictions is to permit practice in multiple firms; the definition of “firm” and
“law firm” under Prof.Cond.R. 1.0(c) is expansive; and to not allow multi-firm practice
could impede a lawyer’s ability to generate full-time work.

   Based on the Board’s prior opinions which allow for multiple “of counsel”

relationships and for lawyers to simultaneously practice in multiple law firms,
permitting a law firm to become “of counsel” with another law firm is logical.

   The ABA and other jurisdictions have concluded that a law firm may be “of

counsel” with another law firm. ABA Formal Op. 357; Md. State Bar Assn. Commt. on
Ethics, 88-45 (Jan. 13, 1988); Assn. of the Bar of the City of New York, Op. 1995-8 (May
31, 1995); State Bar of Arizona, Op. 87-24 (November 17, 1987); Phila. Bar Assn., Prof’l.
Guidance Commt., Op. 2001-5 (April, 2001); D.C. Bar Op. 338 (February, 2007). In
reversing its prior opinion, the ABA stated that it did not perceive “any reason of policy
why a firm should not be of counsel to another firm.” ABA Formal Op. 90-357.
However, at least one state summarily dismissed a plan to designate one firm “of
counsel” to another firm to cross-refer business, because it determined it was a
marketing scheme. Illinois State Bar Assn. 840 (January 4,1984).
Op. 2014-4 3

   The ABA has recognized certain limitations of firm-to-firm “of counsel”

relationships. ABA Formal Op. 90-357. The ABA found that the “[e]ffect of two or
more firms sharing an of counsel lawyer is to make them all effectively a single firm, for
purposes of attribution of disqualification.” ABA Formal Op. 90-357; see also D.C. Bar
Op. 338; Assn. of the Bar of the City of New York, 1995-8; Phila. Bar Assn., Prof’l.
Guidance Commt., Op. 2001-5. As a result, all conflicts between and among firms are
imputed to each of the firms. Additionally, the “of counsel” designation cannot be used
to designate a relationship that arises “by the mere referral of business between firms or
an occasional consulting relationship.” Assn. of the Bar of the City of New York, Op.
1995-8.

   When law firms become “of counsel” with other law firms, the ethical issues are

multiplied. There are a number of ethical limitations that must be recognized in firm-
to-firm “of counsel” relationships, including fiduciary duties, conflicts of interest, and
fee sharing. Although most of the issues are similar to those found in the more basic “of
counsel” relationships, caution should be exercised.

   Conflict of interest analysis is of primary concern because all of the lawyers in a

firm that is “of counsel” with another firm may be disqualified due to the “of counsel”
relationship. For conflict analysis, the firms are treated as one unit, and conflicts are
imputed to all “of counsel” lawyers and/or firms. See Prof.Cond.R. 1.8(c); 1.10.
Therefore, any conflicts applicable individually to either firm or lawyer apply to all. As
a result, firms in “of counsel” relationships with other firms must conduct
comprehensive conflict checks. In at least one jurisdiction, implementation of a
“screen” is not sufficient to avoid the imputation of conflicts when one firm is “of
counsel” with another firm. N.Y. State Bar Assn., Commt. on Prof’l. Ethics, Op. 793
(March 17, 2006).

   When conducting conflict checks, law firms in “of counsel” relationships should

consider obtaining client or potential client informed consent to disclose sufficient
information to the other firm to perform a complete conflict check. Client confidences
must always be protected. Issues may arise when clients, especially those with trade
secrets or other highly confidential information, may not be willing to allow for such
disclosures. As a result, law firms in “of counsel” relationships should have a detailed
and comprehensive method for conflict analysis and protecting client or potential client
confidentiality.
Op. 2014-4 4

   Law firms also must be cognizant that in order to maintain an “of counsel”

relationship, the firms must maintain the requisite “close, regular, and personal”
relationship. Depending on the size of the two “of counsel” firms, this relationship may
not be feasible. The “of counsel” relationship should not be a loose alliance for
marketing and advertising purposes.

   Division of fees is another ethical consideration. In Ohio, “of counsel” lawyers

are considered to be in the same firm for purposes of the division of fees, so the
restrictions regarding the division of fees under Prof.Cond.R. 1.5(e) do not apply.
Unlike Ohio, some jurisdictions do not recognize “of counsel” lawyers to be members of
the same firm, and require the division of fees with the firm as if they are not all in the
same firm. See Nancy Kaufman, The Of Counsel Relationship,
http://www.mass.gov/obcbbo/ofcounsel.htm (last visited December 9, 2014).

   Additional considerations for law firms entering into “of counsel” relationships

with other law firms, include ensuring that lawyers maintain “active” Ohio registration
status; not including an “of counsel” lawyer in the firm name who is not already a
named partner; and including the jurisdictional limitations of the “of counsel” lawyers
and firms on the letterhead. Finally, firms should also disclose the “of counsel”
relationship to clients in an engagement letter.

   Although not directly addressed in Ohio’s Rules of Professional Conduct,

lawyers’ fiduciary duties must be considered when one firm becomes “of counsel” with
another firm. The firms should have a consistent approach regarding clients and other
business opportunities, including which firm receives the engagement.

CONCLUSION: Although there are multiple ethical considerations involved, law
firms may choose to enter “of counsel” relationships with other law firms for a number
of reasons. First, the prevailing view of the ABA and other jurisdictions is that law
firms may be “of counsel” to other law firms, so long as no ethical rules are violated.
Second, no Rule of Professional Conduct or Rule Governing the Bar of Ohio prohibits
firm-to-firm “of counsel” relationships. In fact, the Board’s prior opinions allow for
multiple “of counsel” relationships with different firms and for lawyers to
simultaneously practice in multiple firms. Therefore, a law firm may be “of counsel”
Op. 2014-4 5

with another law firm, so long as both firms comply with the Rules of Professional
Conduct and do not violate any ethical rules.

Advisory Opinions of the Board of Commissioners on Grievances and Discipline are
informal, nonbinding opinions in response to prospective or hypothetical questions
regarding the application of the Supreme Court Rules for the Government of the Bar
of Ohio, the Supreme Court Rules for the Government of the Judiciary, the Ohio
Rules of Professional Conduct, the Ohio Code of Judicial Conduct, and the
Attorney’s Oath of Office.