Can a lawyer and a non-lawyer run a joint mediation business under a trade name, and how do the fee-sharing and unauthorized-practice rules apply?
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This page answers the general question as of 2022. Ezel answers yours: whether it's allowed on your facts, under the current Oregon Rules of Professional Conduct, with citations.
Plain-English summary
A lawyer and a psychologist want to form a domestic-relations mediation service under the assumed business name "Family Mediation Center." The opinion addresses four questions: whether the lawyer may act as mediator, whether the lawyer may join the psychologist to establish the practice, whether they may use the trade name, and what limits apply to the allocation of work and of fees or profits.
On serving as mediator, the opinion concludes the lawyer may do so consistent with Oregon RPC 2.4. A lawyer-mediator does not represent any party, which is why the multiple-client conflict rules of RPC 1.7 do not apply; the lawyer must clearly inform the parties of and obtain consent to the mediator role, may prepare documents memorializing the agreement, must recommend that each party seek independent legal advice, and may record or file documents only with the parties' consent.
On joining with the psychologist and on fees, the answer turns on whether the venture involves the practice of law. Non-lawyers may lawfully mediate, and lawyers may engage in non-law businesses, so if the mediation service does not involve the practice of law there is no bar to the joint venture and the RPCs do not govern its business form. But drafting settlement agreements for others is the practice of law. If the service involves law practice, Oregon RPC 5.4(b) and (d) bar a partnership, professional corporation, or association in which the psychologist owns an interest; RPC 5.5(a) bars the lawyer from assisting the psychologist in the unauthorized practice of law; and RPC 5.4(a) bars sharing legal fees with the psychologist, though the lawyer could employ the psychologist on salary.
On the trade name, the opinion concludes "Family Mediation Center" appears permissible as a non-misleading trade name. If the service does not involve law practice, the only limit is the general bar on dishonest or misleading conduct under RPC 8.4(a)(3); if it does involve law practice, RPC 7.5(a) and 7.1 (no false or misleading communications, no implied connection with a government or charitable organization) also apply.
In practice
The opinion holds that, under the Oregon rules, a lawyer-non-lawyer mediation venture is permitted, and the unauthorized-practice, fee-sharing, and entity-form restrictions of RPC 5.4 and 5.5 attach only if the venture involves the practice of law. The analysis turns on whether activities like drafting settlement agreements bring the service within the practice of law; if they do, the lawyer may not partner with, share legal fees with, or work as the agent of the non-lawyer in providing legal services, but may employ the non-lawyer on salary. Verify the current text of Oregon RPC 2.4, 5.4, 5.5, and 7.5 before relying on any specific point.
Common questions
Q: Can a lawyer and a non-lawyer run a mediation business together?
A: Yes, qualified. The opinion concludes that if the service does not involve the practice of law they may join freely, but if it does, RPC 5.4 limits the entity form and fee arrangements.
Q: Does serving as a mediator make the parties my clients?
A: No. The opinion concludes that under RPC 2.4 a lawyer-mediator does not represent any party, so the RPC 1.7 multiple-client conflict rules do not apply.
Q: Can I split the mediation fees with my non-lawyer partner?
A: Only if the service does not involve law practice. The opinion concludes that where law practice is involved, RPC 5.4(a) bars sharing legal fees with the non-lawyer, though the lawyer may pay the non-lawyer a salary.
Q: Is "Family Mediation Center" an acceptable name?
A: The opinion concludes it appears permissible as a trade name that is not misleading, subject to RPC 8.4(a)(3) and, where law practice is involved, RPC 7.5(a) and 7.1.
Background and rules framework
The opinion interprets Oregon RPC 2.4 (lawyer serving as a third-party neutral), corresponding to Model Rule 2.4; Oregon RPC 5.4 (professional independence; fee-sharing and entity restrictions) and 5.5(a) (unauthorized practice), corresponding to Model Rules 5.4 and 5.5; Oregon RPC 7.5(a) and 7.1 (firm names and misleading communications), corresponding to Model Rule 7.5; and Oregon RPC 8.4(a)(3) (dishonesty or misrepresentation), corresponding to Model Rule 8.4.
Citations and references
Rules of Professional Conduct:
- Oregon RPC 2.4 / Model Rule 2.4 (lawyer as third-party neutral)
- Oregon RPC 5.4(a), (b), (d) / Model Rule 5.4 (fee-sharing; entity form; independence)
- Oregon RPC 5.5(a) / Model Rule 5.5 (unauthorized practice; assisting another)
- Oregon RPC 7.5(a) / Model Rule 7.5 (firm names and trade names)
- Oregon RPC 8.4(a)(3) / Model Rule 8.4 (dishonesty, fraud, deceit, misrepresentation)
Cases:
- In re Jones, 308 Or 306, 779 P2d 1016 (1989)
- Oregon State Bar v. Security Escrows, Inc., 233 Or 80, 377 P2d 334 (1962)
- In re Shannon, 292 Or 339, 638 P2d 482 (1982)
Other opinions cited:
- OSB Formal Ethics Op. No. 2005-10 (lawyers engaging in ancillary businesses)
- OSB Formal Ethics Op. No. 2005-25 (rev 2022) (fee division with nonlawyers)
- OSB Formal Ethics Op. No. 2005-87 (assisting unauthorized practice)
See also
- OSB Ethics Op. 2005-87: Assisting a Nonlawyer Estate-Planning Service
- OSB Ethics Op. 2005-25: Suspended Lawyer, Fees, and Division
Source
- Landing page: https://www.osbar.org/ethics/toc.html
- Original PDF: https://www.osbar.org/_docs/ethics/2005-101.pdf
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