Can a staff lawyer in an organization be supervised by a nonlawyer manager who reviews his substantive legal work and decides his raises and promotions?

Plain-English summary

A staff attorney in an organization performed substantive legal analysis and drafted memoranda for the organization's decision-makers, drawing a fixed salary as his only compensation. His supervising senior attorney delegated the supervisory function to a nonlawyer senior manager, who would review the staff attorney's performance under the standard employee process, including evaluating his substantive legal work, and decide whether to recommend promotions or salary increases. The question was whether a lawyer's employment by an organization and supervision by a nonlawyer violates the Rules.

The committee concluded it does not, on conditions. Rule 5.4(c) bars a lawyer from permitting a person who recommends, employs, or pays the lawyer to direct or regulate the lawyer's professional judgment, and Rule 1.8(f) requires that compensation from someone other than the client not interfere with the lawyer's independent professional judgment or the client-lawyer relationship. Rule 1.2(a) requires abiding by the client's decisions on objectives but does not let the client or a third party direct the lawyer's decisions. It would not be proper for the senior manager to direct the staff attorney's professional judgment in rendering opinions, and the staff attorney would violate Rules 5.4(c) and 1.8(f) if he allowed it. Rule 1.13 (organization as client) contemplates that lawyers may be employed by organizations; Rule 1.13(b) requires a lawyer who knows someone in the organization is acting in a way that violates a legal obligation to the organization or law likely to cause substantial injury to act in the organization's best interest, ordinarily by referring the matter to higher authority. The committee suggested the staff attorney address his concerns with higher authority to ensure they understand who the client is and his obligations.

The committee drew on Opinion 02-04: a distinction exists between general organizational policies identifying the types of cases the organization will handle (permissible) and interference with the objectives, strategy, or tactics of a particular case (impermissible, reserved to client and lawyer). Its view did not change whether the organization is private or governmental, though it cautioned government lawyers to determine carefully who their client is given multiple possible levels. On the unauthorized practice of law, the committee noted the Supreme Court has jurisdiction over the definition, but that here a licensed lawyer renders all legal services, so as long as he maintains his obligations he would not run afoul of Rule 5.5. As long as the staff attorney does not let the senior manager interfere with his professional judgment and no other impermissible activity is involved, the arrangement is permissible.

In practice

Under this opinion, on the facts presented, a staff lawyer may be employed and supervised by a nonlawyer who reviews his legal work and influences his compensation, provided the nonlawyer never directs or regulates the lawyer's professional judgment (Rules 5.4(c), 1.8(f)) and the lawyer does not assist the unauthorized practice of law (Rule 5.5). The committee distinguished permissible general policies about which matters the organization handles from impermissible interference with a particular matter's strategy, suggested the lawyer raise concerns with higher authority under Rule 1.13(b), and cautioned government lawyers to identify their client carefully.

Common questions

Q: Can a nonlawyer manager supervise a lawyer and review the lawyer's legal work?

A: The committee concluded yes, so long as the manager does not direct or regulate the lawyer's professional judgment; otherwise the lawyer violates Rules 5.4(c) and 1.8(f).

Q: Where is the line between proper supervision and improper interference?

A: Drawing on Opinion 02-04, the committee distinguished general policies defining which types of matters the organization will handle (permissible) from interference with the objectives, strategy, or tactics of a particular matter (impermissible).

Q: Does the nonlawyer's role create an unauthorized-practice problem?

A: The committee concluded no on these facts, because a licensed lawyer renders all legal services; as long as the lawyer maintains his obligations, Rule 5.5 is not implicated (the definition of the practice of law being for the Supreme Court).

Q: Does it matter if the organization is governmental?

A: The committee said the analysis is the same, but cautioned government lawyers to determine carefully who their client is, since there may be multiple levels from the agency up to the government as a whole.

Background and rules framework

The opinion applies South Carolina Rule 5.4(c) (no third party directing professional judgment), Rule 1.8(f) (compensation from a non-client without interference), Rule 1.2(a) (client decides objectives), Rule 1.13(b) (organization as client; reporting up), and Rule 5.5 (unauthorized practice of law). These correspond to the like-numbered Model Rules. The analysis turns on preserving the lawyer's independent professional judgment within a nonlawyer-supervised structure.

Citations and references

Rules of Professional Conduct:

• MR 5.4 / SC Rule 5.4(c) (no person who employs or pays the lawyer directing professional judgment)
• MR 1.8 / SC Rule 1.8(f) (compensation from someone other than the client)
• MR 1.2 / SC Rule 1.2(a) (client's decisions on objectives)
• MR 1.13 / SC Rule 1.13(b) (organization as client; referral to higher authority)
• MR 5.5 / SC Rule 5.5 (unauthorized practice of law)

Other opinions cited:

• SC Ethics Advisory Opinion 02-04 (general policies vs. interference with a particular case; nonlawyer supervision)

See also

• SC Bar Ethics Op. 06-05: Supervising a bookkeeper with trust-account access
• SC Bar Ethics Op. 06-09: A lawyer serving as both police officer and city prosecutor

Source

• Landing page: https://www.scbar.org/for-lawyers/quicklinks/legal-resources/ethics-advisory-opinions/ethics-advisory-opinion-06-12/

Original opinion text

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

UPON THE REQUEST OF A MEMBER OF THE SOUTH CAROLINA BAR, THE ETHICS ADVISORY COMMITTEE HAS RENDERED THIS OPINION ON THE ETHICAL PROPRIETY OF THE INQUIRER’S CONTEMPLATED CONDUCT. THIS COMMITTEE HAS NO DISCIPLINARY AUTHORITY. LAWYER DISCIPLINE IS ADMINISTERED SOLELY BY THE SOUTH CAROLINA SUPREME COURT THROUGH ITS COMMISSION ON LAWYER CONDUCT.

Ethics Advisory Opinion 06-12

SC Rules of Professional Conduct: 1.2(a), 1.8(f), 1.13(b), 5.4(c), 5.5

Facts
Staff Attorney in an organization performs substantive legal analysis and drafts memoranda for reliance on and use by decision-makers within the organization. Staff Attorney receives a fixed salary from the organization’s operating budget. This is the only means of compensation. Staff Attorney was supervised by Senior Attorney; however, Senior Attorney has delegated supervisory functions to Senior Manager, a non-lawyer in the organization. Senior Manager will review Staff Attorney’s performance according to the standard performance review for all employees; however, this review will necessarily include an evaluation of the substantive legal work provided by the Staff Attorney. Based on the performance review and evaluation, the Senior Manager will decide whether to recommend promotions or salary increases for Staff Attorney.

Question
Does a lawyer’s employment by an organization and supervision by a non-lawyer violate the S.C. Rules of Professional Conduct?

Summary
A lawyer may be employed by an organization where his immediate supervisor is a non-lawyer and the non-lawyer reviews the lawyer’s substantive legal work so long as the lawyer does not allow the non-lawyer supervisor to direct or regulate the lawyer’s professional judgment in a way that contravenes Rule 5.4 and the lawyer does not assist the non-lawyer in practicing law in contravention of Rule 5.5. This Committee does not have jurisdiction over what constitutes the unauthorized practice of law, but it does note that, from the facts presented, it appears that all legal services are rendered by the lawyers on staff; thus, Rule 5.5 is not implicated.

Opinion
S.C. Rules of Professional Conduct Rule 5.4(c) states “A lawyer shall not permit a person who recommends, employs, or pays the lawyer to render legal services for another to direct or regulate the lawyer’s professional judgment in rendering such legal services.” Similarly, Rule 1.8(f) further impresses upon the lawyer a duty that there be “no interference with the lawyer’s independence of professional judgment or with the client-lawyer relationship” when compensation is received from one other than the client. While Rule 1.2(a) requires the lawyer to abide by a client’s decision regarding the objectives of the representation, it does not suggest that the lawyer should in any way allow the client or any third party to direct the lawyer to make certain decisions.

The inquiry presented to the Committee raises the concern that the Senior Manager may interfere in the substantive legal work prepared for the organization’s decision-makers. It would not be proper for the Senior Manager to direct Staff Attorney’s professional judgment in rendering opinions, and Staff Attorney would run afoul of Rules 5.4(c) and 1.8(f) if he allowed such interference to occur. Rule 1.13 relating to an Organization as a Client contemplates that lawyers may be employed by organizations and have higher authority. Rule 1.13(b) requires a lawyer who knows “an officer, employee or other person associated with the organization is engaged in action, intends to act or refuses to act in a matter related to the representation that is a violation of a legal obligation to the organization, or a violation of law … that is likely to result in substantial injury to the organization,” to act in the best interest of the organization and, unless it is not necessary, to “refer the matter to higher authority in the organization…” The Committee suggests that the Staff Attorney address his concerns with higher authority in the organization to ensure that they are aware of the Staff Attorney’s interpretation of who the client is and his ethical obligations to the client.

Ethics Advisory Opinion 02-04 provides some additional guidance related to the supervision of attorneys by non-lawyers. Of particular interest is the discussion on determining whether there is an attempt to direct the lawyer’s professional judgment:
In determining whether the organization is attempting to direct, regulate, or interfere with the lawyer-client relationship, a distinction should be drawn between general organizational policies that identify the types of cases for which the organization is willing to provide representation and the strategy for handling particular cases. The board may properly establish policies that define the types of cases for which the organization will provide legal services, but once a case is selected and assigned to the lawyer, the organization may not interfere with the objectives, strategy, or tactics for handling the cases. These matters are determined exclusively by the client and lawyer pursuant to the Rules of Professional Conduct.

The Committee’s opinion as to the ethical propriety of the arrangement is not altered whether the organization is a private entity or a governmental entity. However, the Committee would caution lawyers employed by governmental entities to ensure that they properly determine who their client is, since there may be multiple levels of clients ranging from the specific agency and its director or commissioners all the way up to the state or federal government as a whole.

Finally, given the current climate and recent Supreme Court cases related to the unauthorized practice of law, the Committee feels it appropriate to address this potential concern. The Supreme Court has jurisdiction over the definition of the practice of law. However, in this case, a licensed lawyer is involved, and as long as the lawyer maintains his ethical and legal obligations, the Committee believes he would not run afoul of Rule 5.5.

This opinion does not address any ethical obligations of the organization’s Senior Attorney or any duties he may or may not have towards the Staff Attorney.

As long as Staff Attorney does not allow Senior Manager to interfere with Staff Attorney’s professional judgment and no other impermissible activities are involved, the proposed employment arrangement would be permissible under the Rules.