Can a newspaper fund and house a for-profit legal clinic named after the community without owning it?

Plain-English summary

A community newspaper wished to establish a community legal clinic as a public service, staffed by a South Carolina lawyer. The newspaper would provide space and start-up costs but have no interest in or control over clients or fees; a sublet agreement would cover rent and supplies and provide for repayment of the initial costs, with no sharing of fees directly or indirectly. The questions were whether the clinic could call itself the "[Community Name] Legal Clinic" and whether the arrangement was permitted if operated independently and not based on revenue generated.

On the name, the committee concluded a clinic may operate under a trade name under Rule 7.5(a) as long as the name is not false, misleading, or deceptive under Rule 7.1. The Comment to Rule 7.5 contemplates a private clinic using its locality's name but suggests an express disclaimer that the clinic is not "a public legal aid agency" may be required to avoid misleading the public; because this clinic, though offering low-cost services, would operate for profit rather than as a legal aid agency, the disclaimer was appropriate.

On the structure, the committee concluded a private firm may borrow money and rent office space, and the fact that a business corporation rather than a bank is lender and landlord does not affect the propriety, so long as the business has no control over the lawyer's services and no share in legal fees. Rule 5.4(a) bars sharing fees with a nonlawyer, but because the newspaper would not share fees directly or indirectly, there was no apparent violation; the committee stressed that any payment or repayment must not be based on a percentage of legal fees. Rule 5.4(b) and (d) bar a nonlawyer partnership or ownership interest in the practice, so the newspaper could have no equity or partnership interest, but the facts showed it would serve only as lender (to be repaid) and landlord, which would not run afoul of Rule 5.4(b). The committee flagged that if the newspaper publicized its connection with the clinic, that advertising could mislead the public about the newspaper's involvement and control, so the lawyer may be best served by an express agreement addressing the issue.

Currency note

This opinion was issued in 1998, before the South Carolina Bar's adoption of the 2005 revisions to the Rules of Professional Conduct. Subsequent rule amendments or later opinions may have changed the analysis. 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 a for-profit clinic use the community's name?

A: The committee concluded yes under Rules 7.5(a) and 7.1, provided it carries an express disclaimer that it is not a public legal aid agency.

Q: Can a newspaper fund and house the clinic without violating the fee-sharing and ownership rules?

A: The committee concluded yes, so long as the newspaper has no ownership or partnership interest under Rule 5.4(b) and (d) and no share in fees under Rule 5.4(a); repayment must not be tied to a percentage of legal fees.

Q: Is there any concern about the newspaper publicizing the clinic?

A: The committee cautioned that advertising connecting the newspaper to the clinic could mislead the public about the newspaper's control, so the lawyer may want an express agreement on the issue.

Background and rules framework

The opinion interpreted South Carolina RPC 7.5(a) and 7.1 (firm trade names; no misleading communications) and RPC 5.4(a), (b), and (d) (sharing fees with, partnering with, or being owned by nonlawyers), corresponding to the like-numbered Model Rules.

Citations and references

Rules of Professional Conduct:

• South Carolina RPC 7.5(a), 7.1 / Model Rules 7.5, 7.1: firm trade names; no misleading communications.
• South Carolina RPC 5.4(a), (b), (d) / Model Rule 5.4: professional independence; fee sharing, partnership, and ownership by nonlawyers.

See also

• SC Bar Ethics Op. 00-10: Online Attorney-Matching Service
• SC Bar Ethics Op. 98-31: Of Counsel on Letterhead

Source

• Landing page: https://www.scbar.org/for-lawyers/quicklinks/legal-resources/ethics-advisory-opinions/ethics-advisory-opinion-98-35/

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 98-35

A community newspaper is interested in establishing a community legal clinic as a public service. The clinic will be staffed by a lawyer admitted to practice in South Carolina. The newspaper will provide space and start-up costs for the clinic, but will not have any interest in or control over the clients or fees received. A sublet agreement will address issues of rent, supplies, etc. The agreement will provide for the repayment of the initial costs, but there will be no sharing of fees, directly or indirectly.

QUESTIONS:

1. May the clinic call itself the "[Community Name] Legal Clinic?
2. If the clinic is operated independently in the manner described, and if the relationship between the clinic and the newspaper is not based upon revenue generated, is the proposed arrangement permitted under the South Carolina Rules of Professional Conduct and other rules, regulations or statutes?

SUMMARY:
The name proposed is permissible if accompanied by a disclaimer that the clinic is not a public legal aid office. The role of the newspaper as a lender and landlord does not violate disciplinary rules, as long as the newspaper is not a partner in or partial owner of the law practice, has no control over the rendering of professional services and does not share in legal fees received from clients of the clinic.

OPINION:

1. A law firm or clinic may operate under a trade name, S.C.R. Prof. Cond. 7.5(a), as long as the name is not false, misleading or deceptive as prohibited by Rule 7.1. The Comment to Rule 7.5 contemplates that a private clinic may use the name of its locality as proposed here, but suggests that in that situation, to avoid misleading the public, an express disclaimer may be required indicating that the clinic is not "a public legal aid agency." While the purpose of the proposed clinic appears to offer low-cost legal services, it apparently will be operated on a for-profit basis and not as a legal aid agency, thus rendering the disclaimer appropriate.
2. A private law firm may borrow money for a variety of business purposes. A law firm may also rent office space from a commercial landlord. The mere fact that a business corporation, rather than a commercial bank, is the lender and landlord should not affect the propriety of the transaction, as long as the business, a newspaper in this case, has no control over the lawyer's rendering of professional services and does not share in the legal fees received by the lawyer.

Rule 5.4(a) bars a lawyer from sharing legal fees with any nonlawyer. The facts presented indicate that the newspaper will not share in legal fees directly or indirectly. In that case, there does not appear to be a violation of Rule 5.4. It is important that the relationship between the law clinic and the newspaper not include any payment or repayment agreement based upon a percentage of legal fees received by the clinic.

Rule 5.4(b) prohibits a law firm from forming a partnership with a nonlawyer for the practice of law. Rule 5.4(d) prohibits a lawyer from practicing in a professional corporation or association of a nonlawyer owns any interest in the entity. It would be inappropriate, therefore, for the newspaper to have any equity or partnership interest in the legal clinic. The facts presented, however, do not indicate that the newspaper will have any ownership interest in the law clinic, but will serve merely as the lender of start-up costs, which will be repaid by the clinic, and as a landlord. These arrangements would not appear to run afoul of Rule 5.4(b).

One possible issue not addressed directly in the facts presented is whether the newspaper intends to publicize its connection with the clinic for public relations purposes. An advertising effort to connect the newspaper with the clinic could mislead the public as to the newspaper's involvement in and control over the legal practice. Although any such advertising would be by the newspaper and not by the lawyer, because of the close business relationship between the lawyer and the newspaper, it may be best for the lawyer to have an appropriate express agreement with the newspaper regarding this issues.

This Opinion addresses only the ethical propriety of the proposed conduct as governed by the Rules of Professional Conduct, and the Committee offers no opinion as to whether any other laws or statutes may apply to the transaction proposed.