Can one lawyer become a partner in two separate law firms in different cities, with his name added to both firm names, while each firm keeps its own separate operations and fee-splitting formula?

Currency note

This opinion was issued in 1981, before Tennessee's adoption of the 2003 Rules of Professional Conduct, which replaced the former Code of Professional Responsibility. Subsequent rule amendments or later opinions (including Formal Ethics Opinion 84-F-64) revisited related firm-naming questions. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Plain-English summary

Two law firms, a professional corporation in one city and a professional association in another, proposed an intrastate affiliation under which one lawyer, B, would become a partner, shareholder, and practicing attorney in both firms. B's name would remain part of the first firm's name and would also become part of the second firm's name.

The firms structured their arrangement so each would continue to operate separately, keeping its own benefit plans, office procedures, hiring policies, and profit distribution. They also set a fee allocation formula: fees generated solely by, and worked on exclusively by, members of the first firm (including B) would go entirely to that firm, and fees generated solely by, and worked on exclusively by, members of the second firm (excluding B) would go entirely to that firm. Fees generated or worked on partly by members of each firm, with B counted as a member of the first firm, would be divided under a production formula crediting 30% of the gross fee to the attorney who generated the business, with the remainder allocated based on each attorney's time and billing rate. B would divide his time between the two firms.

The Board concluded the Code of Professional Responsibility does not prohibit the proposed affiliation, and there is no impropriety in B becoming a partner in both firms or in using his name in both firm names, as long as no conflicts of interest arise between the firms. The Board expressed no opinion on whether information available to one firm would be imparted to the other for purposes of conflict-of-interest disqualification. It cautioned that careful attention must ensure clients and the public know the exact nature of the affiliation, with no confusion created by letterheads, shingles, or listings about who shares responsibility and liability for each firm's acts. Finally, the production formula could not function as a forwarding fee between the firms; a firm may share in a fee only if it performed legal services for the client, though that rule does not limit how a single firm's own members divide income among themselves.

Common questions

Q: Can one lawyer be a partner in two separate firms in different cities at the same time?

A: Yes, on these facts. The opinion states "the Code of Professional Responsibility does not prohibit the affiliation proposed, and there is no impropriety in B becoming a partner in the two firms."

Q: Can both firms use the shared partner's name in their firm names?

A: Yes, with a condition. The opinion states "there is no impropriety in the use of B's name in both firms as long as there are no conflicts of interest between the firms."

Q: Can the two firms split fees under a production formula even when only one firm's members did the work?

A: No. The opinion states "in order for a firm to share in a fee, it must have performed legal services to the client," and warns the "production formula may not be applied between the two firms so as to function as a forwarding fee from one firm to the other."

Q: What must the firms do to avoid misleading clients about the affiliation?

A: Make the true relationship clear. The opinion requires "careful attention and special care" so "there should be no confusion created in the use of letterheads, shingles and listings as to the individuals who share in the responsibility and liability for the acts of each firm."

Background and rules framework

The opinion applied the Code of Professional Responsibility's general prohibitions on fee division with those who did not perform legal services and on firm names or communications that mislead the public about firm structure. The modern correlates are Model Rule 5.4 (professional independence, including fee-sharing limits) and Model Rule 7.1 (communications about a lawyer's services), noted here as navigational cross-references rather than rules the opinion itself applied.

Citations and references

Rules of Professional Conduct:

• Model Rule 5.4 (professional independence of a lawyer; fee division) and Model Rule 7.1 (communications about a lawyer's services), modern correlates

See also

• Tenn. Ethics Op. 84-F-64: Firm Naming (Vacated)

Source

• Landing page: https://www.tbpr.org/ethic_opinions/81-f-8

Original opinion text

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

81-F-8 - Intrastate Affiliation of Law Firms

BOARD OF PROFESSIONAL RESPONSIBILITY OF THE SUPREME COURT OF TENNESSEE

FORMAL ETHICS OPINION 81-F-8

A request has been made for an opinion regarding a proposed intrastate affiliation between two law firms. The firm of A, B, C, D, E and F, a professional corporation in City I and the firm of G, H, I and J, a professional association in City II propose to affiliate whereby B is to become a partner, shareholder and practicing attorney in both firms. The name of B will remain a part of the name of A.B.C. firm and his name will also become a part of the G firm such as B, G, H, I and J or some similar combination of surnames.

The firms have structured a proposed mode of operation so that each firm can continue to operate as a separate firm, maintain existing benefit plans, office procedures, hiring policies and distribute profits in accordance with existing practices of each firm. They have also structured a fee allocation formula and a production formula whereby fees generated solely by and worked on exclusively by members of A.B.C. firm, including B, will be fully allocated to A.B.C. firm. Fees generated solely by and worked on exclusively by members of G firm, excluding B, will be fully allocated to G firm. Fees generated partly by members of each firm or worked on by members of each firm, with B deemed a member of A.B.C. firm, will be divided between the two firms in accordance with a production formula. The production formula provides that 30% of the gross fee is credited to the attorney who generated the business and the balance is allocated to the attorneys doing the work based on the amount of time worked by each in accordance with the billing rate of each attorney.

B will divide his time between providing legal services for A.B.C. firm in City I and G firm in City II.

The Code of Professional Responsibility does not prohibit the affiliation proposed, and there is no impropriety in B becoming a partner in the two firms. Further, there is no impropriety in the use of B's name in both firms as long as there are no conflicts of interest between the firms.

No opinion is expressed as to whether information available to one firm will be imparted to the other, for the purpose of determining whether either firm is disqualified by a conflict of interest.

Careful attention and special care should be taken to insure that the exact nature of the affiliation is known to the clients of each firm and to the public. There should be no confusion created in the use of letterheads, shingles and listings as to the individuals who share in the responsibility and liability for the acts of each firm.

The production formula may not be applied between the two firms so as to function as a forwarding fee from one firm to the other. In order for a firm to share in a fee, it must have performed legal services to the client. However, that rule does not apply within a single law firm, where the income may be distributed in any manner desired by the members of the firm.

This 9th day of June, 1981.

ETHICS COMMITTEE:

Randall Burcham

W. H. Lassiter

George E. Morrow

APPROVED AND ADOPTED BY THE BOARD