May a lawyer who is a partner in one law firm also become a partner or 'of counsel' at a second firm while keeping the first partnership?

Plain-English summary

A lawyer who is a partner in firm A considered becoming either a partner in firm B or "of counsel" to firm B while keeping his partnership in firm A. The inquiry asked whether a lawyer may continue practicing in one partnership while joining or becoming "of counsel" to another firm.

The committee concluded there is no impropriety in the arrangement, with caveats. The Rules of Professional Conduct do not prohibit a lawyer from being a partner in two firms or a partner in one and "of counsel" to another; the committee cited its Opinion 95-15 (1995) and ABA Formal Opinion 357 (1990) and Informal Opinion 1315 (1975) for the proposition that working for two firms is not improper. The central consequence is that the two firms effectively become a single firm for conflict-of-interest and imputed-disqualification purposes: clients and former clients of each firm must be treated as clients and former clients of the other under Rules 1.7, 1.8, 1.9, and 1.10.

Because conflict checking (or the of-counsel agreement itself) may require disclosing client information to the other firm, the committee said each client's consent to that disclosure must be obtained under Rule 1.6, and representation letters should inform clients and seek permission to share names and necessary information for conflict checks. The committee distinguished present-client conflicts (analyzed through the conflict-checking process since the firms are one) from former-client conflicts (evaluated on substantial relationship and adverse interest, with no hard-and-fast rule). It also addressed communication: under Rule 7.1, the affiliated lawyer must truthfully acknowledge the relationship with each firm when asked and when necessary, and under Rule 7.5 affiliated firms and of-counsel arrangements may list each other so long as the letterhead is not misleading. The committee cited its prior letterhead opinions (07-05, 98-31, 96-28, 92-08) and pointed to the ABA publication The Of Counsel Agreement as a resource.

In practice

The opinion holds that, under the South Carolina rules, a lawyer may be a partner in one firm and a partner or "of counsel" at a second firm, but the two firms are treated as a single firm so that all clients and former clients of each are imputed to the other for conflict analysis under Rules 1.7, 1.8, 1.9, and 1.10. The opinion holds that, because conflict checking may require disclosing client information to the other firm, each client's consent under Rule 1.6 must be obtained, and that under Rules 7.1 and 7.5 the lawyer must acknowledge the dual relationship truthfully and use only non-misleading letterhead and designations.

Common questions

Q: Can a lawyer be a partner at two different firms at once?

A: Yes. The committee concluded the rules do not prohibit a lawyer from being a partner in two firms or a partner in one and "of counsel" to another, citing its Opinion 95-15 and ABA opinions.

Q: What happens to conflicts when one lawyer works at two firms?

A: The two firms are treated as a single firm. The committee said clients and former clients of each firm must be treated as clients and former clients of the other under Rules 1.7, 1.8, 1.9, and 1.10.

Q: Can the lawyer share client information between the firms to run conflict checks?

A: Only with consent. The committee said each client's permission under Rule 1.6 must be obtained, and representation letters should seek permission to disclose names and necessary information for conflict checking.

Q: How must the dual relationship be reflected on letterhead?

A: Truthfully and without misleading clients. The committee said under Rules 7.1 and 7.5 affiliated firms and of-counsel arrangements may list each other only if the letterhead is not misleading.

Background and rules framework

The opinion interprets South Carolina Rules 1.6 (confidentiality and client consent to disclosure), 1.7, 1.8, 1.9, and 1.10 (conflicts of interest and imputation within a firm), and 7.1 and 7.5 (communications and firm names/letterheads), which correspond to the like-numbered Model Rule provisions. The analysis turns on treating two affiliated firms as one firm for conflict purposes and on obtaining client consent before sharing information needed for conflict checks.

Citations and references

Rules of Professional Conduct:

• MR 1.6 / SC Rule 1.6 (confidentiality; client consent to disclosure for conflict checks)
• MR 1.7, 1.8, 1.9 / SC Rules 1.7, 1.8, 1.9 (conflicts of interest, current and former clients)
• MR 1.10 / SC Rule 1.10 (imputed disqualification within a firm)
• MR 7.1 / SC Rule 7.1 (no false or misleading communications)
• MR 7.5 / SC Rule 7.5 (firm names and letterheads)

Other opinions cited:

• S.C. Bar Ethics Advisory Opinion 95-15 (1995): working for two law firms is not improper
• ABA Formal Opinion 357 (1990) and ABA Informal Opinion 1315 (1975): dual firm practice
• Ohio Opinion 99-7 (1999); Missouri Informal Advisory Opinion 980143; Philadelphia Opinion 2001-5: client consent for conflict-check disclosure
• S.C. Bar Ethics Advisory Opinions 07-05, 98-31, 96-28, 92-08: letterhead for affiliated and of-counsel arrangements

See also

• SC Bar Ethics Op. 04-06: Descriptive Law Firm Web URLs
• SC Bar Ethics Op. 08-11: Office-Sharing Opposing Counsel

Source

• Landing page: https://www.scbar.org/for-lawyers/quicklinks/legal-resources/ethics-advisory-opinions/ethics-advisory-opinion-10-06/
• Original PDF: https://www.scbar.org/media/4grld5vy/10-06.pdf

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 Opinions 10-06

SC Rules of Professional Conduct:1.6; 1.7; 1.10; 7.1; 7.5

Facts

A lawyer who is a partner in firm A is considering becoming either a partner in firm B or “Of Counsel” for firm B while maintaining his partnership in firm A.

Question

May a lawyer who is a partner in a law firm continue to practice in that partnership if he becomes either a partner or “Of Counsel” in another firm?

Summary

Yes, with certain caveats. A lawyer who is a partner in a law firm in South Carolina is not prohibited from practicing as a lawyer in another firm in South Carolina or being “of counsel” to that other firm.

Opinion

There is no impropriety in a partner in one firm practicing as a partner in another firm or as “of counsel” to that other firm. There are ethical issues to keep in mind in such an arrangement.

The Rules of Professional Conduct do not prohibit a lawyer from being a partner in two firms or from being a partner in one firm and affiliated with another firm through an “of counsel” arrangement. Such an arrangement invokes several of the Rules, particularly Rules 1.7, 1.8, 1.9, and 1.10, along with Rules 7.1 and 7.5.

Ethics opinions of the American Bar Association (ABA) and the South Carolina Ethics Advisory Committee agree that it is not improper for a lawyer to work for two law firms. See South Carolina Bar Ethics Advisory Committee Opinion No. 95-15 (1995), ABA Formal Opinion 357 (1990), and ABA Informal Opinion No. 1315 (1975).

The two firms effectively become a single firm for purposes of conflict-of-interest and imputed disqualification rules. Clients and former clients of each of the two firms must be considered clients and former clients, respectively, of the other firm for purposes of evaluating conflicts of interest under Rules 1.7, 1.8, 1.9, and 1.10.

Several state bar ethics advisory agencies have also held that pursuant to Rule 1.6 each firm must obtain the permission of every client to disclose enough information to the other firm to allow it to perform appropriate conflict checks. See Supreme Court of Ohio Board of Commissioners on Grievances and Discipline, Opinion No. 99-7 (1999); Missouri Bar Informal Advisory Opinion No. 980143; Philadelphia Bar Association Ethics Opinion No. 2001-5.

The procedure for checking conflicts (or the Of Counsel agreement itself) may require disclosure of client information to the firm with which the lawyer intends to enter such a relationship. Thus, consent to this disclosure must be obtained from each client. Assuming that best practices would involve conflict checking with both firms, representation letters should inform clients and seek permission to disclose names and other necessary information to each firm for such conflict checking purposes.

The issue of conflicts raises the question of present client versus former clients. Obviously, possible conflicts with present clients must be analyzed through the conflict checking process, inasmuch as the affiliated firms are considered one firm. The question of possible conflicts with prior clients must be evaluated on two levels: substantial relationship and adverse interest. There is no hard and fast rule, but a lawyer entering into an “of counsel” relationship or other affiliation with another firm must carefully examine the relationship with former clients. See The Of Counsel Agreement, Wren and Glascock, Third Edition, 2005, published by the American Bar Association.

Avoiding misleading communication in accordance with Rule 7.1 is another concern in a situation where one lawyer is working in two firms (or two firms being affiliated). (“A lawyer shall not make false, misleading, deceptive, or unfair communications about the lawyer or the lawyer's services.”) Rule 7.1 will require the affiliated lawyer to truthfully acknowledge his relationship with each firm when asked and whenever necessary, for example, to comply with Rule 1.6.

Rule 7.5 speaks to Firm Names and Letterheads:

(a) A lawyer shall not use a firm name, letterhead or other professional designation that violates Rule 7.1.

. . . And . . .

(d) Lawyers may state or imply that they practice in a partnership or other organization only when that is the fact.

This Committee has previously opined that affiliated firms and “Of Counsel” arrangements may list each other, along with other indications, so long as the letterhead is not misleading. For other letterhead discussions in this vein, see Ethics Advisory Opinions 07-05, 98-31, 96-28, and 92-08, inter alia.

A valuable resource in devising and managing “Of Counsel” arrangements is the ABA publication The Of Counsel Agreement. This publication and others can be found in the Lending Library at the South Carolina Bar.