My sole proprietorship wants to form a partnership with an out-of-state firm that might include one or more professional corporations. Is that permissible?

Plain-English summary

An attorney whose firm was organized as a sole proprietorship asked the panel whether it could form a partnership with an out-of-state firm organized as a partnership, noting that the out-of-state firm might include one or more professional corporations.

The panel first addressed the partnership-with-a-partnership scenario: it held that a sole proprietorship may form a partnership with an out-of-state partnership, provided the resulting firm conforms to DR 2-102(D), which bars forming or continuing a partnership between lawyers licensed in different jurisdictions unless the firm's letterhead and other listings make clear the jurisdictional limitations of members not licensed in every listed jurisdiction (the same firm name may still be used in each jurisdiction).

The panel then addressed the professional-corporation component: it held that it would not be permissible for the inquiring attorney's firm to partner with an out-of-state firm when any part of that firm is a professional corporation organized under its state of origin's laws. The panel quoted DR 3-101(B) (barring practice where prohibited by that jurisdiction's regulations) and Rhode Island Supreme Court Rule 41(b) (barring an unlicensed professional service corporation from practicing law in Rhode Island). Because such a professional corporation would not be organized under Rhode Island's Professional Service Corporation Law, it could not practice law in the state, and partnering with it would violate DR 3-103(A), which bars a lawyer from forming a partnership with a nonlawyer where any of the partnership's activities consist of the practice of law.

Currency note

This opinion was issued in 1988, before the Rhode Island Supreme Court's adoption of the 2007 revisions to the Rules of Professional Conduct, and it applies the ABA Model Code of Professional Responsibility's Disciplinary Rules then in effect. Subsequent rule amendments or later opinions may have changed the analysis, including Rhode Island's current multijurisdictional practice rules. Treat this page as historical context, not current guidance.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 my sole proprietorship form a partnership with an out-of-state law partnership?

A: Yes, according to this opinion, provided the resulting firm's letterhead and other listings disclose the jurisdictional limitations of members not licensed in every listed jurisdiction, per DR 2-102(D).

Q: What if the out-of-state firm includes a professional corporation rather than being a straight partnership?

A: The opinion holds that partnering with an out-of-state firm any part of which is a professional corporation not licensed in Rhode Island would violate DR 3-101(B) and DR 3-103(A), since the unlicensed corporation could not itself practice law in the state.

Background and rules framework

The opinion applies DR 2-102(D) (jurisdictional-disclosure requirement for interstate partnerships), DR 3-101(B) (barring practice where prohibited by that jurisdiction's regulations), and DR 3-103(A) (barring a lawyer from partnering with a nonlawyer engaged in the practice of law) of the ABA Model Code of Professional Responsibility, then in force in Rhode Island, together with Rhode Island Supreme Court Rule 41(b) governing licensure of professional service corporations.

Citations and references

Rules of Professional Conduct:

• RI DR 2-102(D) (jurisdictional-disclosure requirement for interstate partnerships)
• RI DR 3-101(B) (practicing law where prohibited by that jurisdiction's regulations)
• RI DR 3-103(A) (forming a partnership with a nonlawyer engaged in the practice of law)

Statutes:

• R.I.G.L. 1956 (1985 Reenactment) Section 7-5.1-1 et seq. (Professional Service Corporation Law)
• Rhode Island Supreme Court Rule 41(b) (licensure of professional service corporations)

Cases:

• None cited.

Other opinions cited:

• None cited.

See also

• RI EAP Opinion 88-13: Rhode Island-Admitted Lawyer Staffing an Unlicensed Out-of-State Firm's Rhode Island Branch Office
• RI EAP Opinion 88-17: Rhode Island-Admitted Lawyer Staffing an Out-of-State Professional Corporation's Rhode Island Branch Office
• RI EAP Opinion 88-07: Independent Partnership With an Out-of-State Professional Corporation
• Alaska Bar Opinion 71-3: Firm Names With Lawyers Not Admitted in Alaska: another interpretation of DR 2-102(D)'s jurisdictional-disclosure requirement for interstate firm names.

Source

• Landing page: https://www.courts.ri.gov/attorney-resources/Pages/Ethics-Advisory-Panel-default.aspx
• Original PDF: https://www.courts.ri.gov/Opinions/EAP%2088-20.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain; the linked PDF is authoritative.

DIGEST OF ETHICS ADVISORY PANEL OPINION
OPINION 88-20, REQUEST #36
Issued August 30, 1988

An attorney seeks Panel advice as to whether it is permissible under the Code of Professional Responsibility for his firm to form a partnership with an out-of-state firm under the circumstances he outlines. The attorney advises the Panel that his firm is organized as a sole proprietorship, and that the out-of-state firm in question is a partnership. The attorney adds, however, that the out of state firm might include one or more professional corporations.

The Panel takes the position that it is permissible for a sole proprietorship to form a partnership with an out-of-state firm organized as a partnership provided that the resulting partnership conforms with DR 2-102(D).

Disciplinary Rule 2-102(D) provides:

A partnership shall not be formed or continued between or among lawyers licensed in different jurisdictions unless all enumerations of the members and associates of the firm on its letterhead and in other permissible listings make clear the jurisdictional limitations on those members and associates of the firm not licensed to practice in all listed jurisdictions; however, the same firm name may be used in each jurisdiction.

The Panel takes the position that it is not permissible for the inquiring attorney's firm to form a partnership with an out-of-state law firm when any part of that law firm is a professional corporation organized pursuant to the laws of its state of origin.

Disciplinary Rule 3-101(B) provides:

A lawyer shall not practice law in a jurisdiction where to do so would be in violation of regulations of the profession in that jurisdiction.

Rhode Island Supreme Court Rule 41(b) provides:

A professional service corporation may not engage in the practice of law unless and until it applies to and receives from this court a license to operate under the Professional Service Corporation Law and only so long as such license remains in good standing.

Since the out-of-state law partnership may include as a professional corporation not organized under R.I.G.L. 1956 (1985 Reenactment) Section 7-5.1-1 et seq. it may not practice law in this state. For the inquiring attorney's firm to enter into a partnership with an out-of-state law firm organized in whole

SS -d0

oc in part as a professional corporation under the laws of its state of origin would constitute a violation of DR 3-103(A). This Disciplinary Rule provides:

A lawyer shall not form a partnership with a nonlawyer if any of the activities of the partnership consist of the practice of law.

Ethics Advisory Panel advice is protective in nature. There is no requirement that an attorney abide by a Panel opinion, but if he or she does, he or she is fully protected from any charge of impropriety.