Can a Tennessee law firm lease non-lawyer office staff, such as secretaries or bookkeepers, from a third-party staffing employer instead of hiring them directly?

Plain-English summary

The inquiry concerned a proposed arrangement in which a law firm would lease non-lawyer staff from a third-party lessor under a master lease agreement; the lessor, not the firm, would be the legal employer, entering its own employment agreements with the staff and handling pay, holidays, vacations, performance evaluations, and hiring or dismissal decisions, while the firm paid the lessor an amount covering salaries and benefits. The lessor expected to place personnel for long terms rather than short-term placements.

The opinion walked through the Ethical Considerations under Canon 4. EC 4-1 ties the preservation of client confidences to the full development of facts essential to representation, and the opinion found that leasing office personnel does not detrimentally affect that goal, in fact or in a layperson's eyes, since clients generally have only general awareness of how law offices staff themselves. EC 4-2 recognizes that nonlawyers such as secretaries are commonly exposed to confidential information in normal law office operations, including through short-term placements by temporary employment agencies, and the opinion found that reliance on longer-term personnel from a non-temporary lessor falls squarely within that same consideration. EC 4-3 recognizes that giving limited information to outside agencies for legitimate purposes such as bookkeeping and accounting is not improper, and the opinion noted that leased personnel performing those functions would in fact be more closely associated with the firm than a bookkeeper at an outside agency. EC 4-5 requires a lawyer to be diligent in preventing misuse of client secrets and confidences, and the opinion found the lawyer's duty under the proposed leasing arrangement no greater or lesser than usual, and potentially easier to manage than with temporary or shared personnel given the longer-term relationship. The opinion further noted that mandatory Disciplinary Rule 4-101(D) implicitly allows a lawyer to utilize others besides direct employees in office operations, so long as the lawyer exercises reasonable care to prevent disclosure, and that the Board had already approved, in Formal Ethics Opinion 84-F-70, a lawyer sharing a receptionist/typist with a corporate client. The opinion concluded there is no impropriety in leasing non-lawyer staff from a third-party lessor, provided the firm exercises reasonable care to prevent the leased personnel from disclosing or using client confidences or secrets.

Currency note

This opinion was issued in 1985, 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 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: Is it proper for a law firm to lease secretaries or bookkeepers from a staffing company instead of hiring them as firm employees?

A: Yes. The opinion found no impropriety in leasing non-lawyer staff from a third-party lessor/employer, conditioned on the firm exercising reasonable care to prevent disclosure or misuse of client confidences and secrets by the leased personnel.

Q: Does using long-term leased staff create more confidentiality risk than using a temporary agency?

A: The opinion found the opposite concern unfounded: it treated long-term leased personnel as covered by the same Ethical Consideration (EC 4-2) that already permits exposure of confidential information to short-term temporary agency staff, and noted the lawyer's ability to counsel longer-term personnel about confidentiality may be easier than with temporary or shared staff.

Background and rules framework

The opinion applied Canon 4 of the Code of Professional Responsibility and its Ethical Considerations EC 4-1, EC 4-2, EC 4-3, and EC 4-5, together with the mandatory Disciplinary Rule 4-101(D) (reasonable care to prevent disclosure of client confidences by non-employees the lawyer utilizes). The modern correlates are Model Rule 5.3 (responsibilities regarding nonlawyer assistants) and Model Rule 1.6 (confidentiality of information), cited here as navigational cross-references rather than rules the opinion itself applied.

Citations and references

Other opinions cited:

• Tennessee Formal Ethics Opinion 84-F-70, lawyer sharing a receptionist/typist with a corporate client

See also

• ABA Formal Op. 506: Responsibilities Regarding Nonlawyer Assistants
• No other sibling opinions yet indexed on staff-leasing arrangements specifically.

Source

• Landing page: https://www.tbpr.org/ethic_opinions/85-f-99

Original opinion text

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

85-F-99 - Leasing non-lawyer staff

BOARD OF PROFESSIONAL RESPONSIBILITY OF THE SUPREME COURT OF TENNESSEE

FORMAL ETHICS OPINION 85-F-99

Inquiry is made concerning the propriety of leasing non-lawyer staff personnel from a third party lessor/employer.

The lessor would be the employer and the non-lawyer staff personnel would be the employees of the lessor, and not employees of the law firm. The law firm would enter into a master lease agreement with the lessor/employer, which in turn would enter into an employment agreement with the individual staff members. The law firm would pay the lessor an amount to include salaries, and other benefits. The lessor would have the classical rights and responsibilities of an employer, such as paying the employee, giving holidays and vacations, performing performance evaluations and making employment and dismissal decisions. The lessor expects to place personnel for long terms, rather than short terms.

Under Ethical Consideration 4-1, the preservation of confidences and secrets of clients facilitates the full development of facts essential to proper representation and also encourages laymen to seek early legal assistance. These considerations should not be detrimentally affected by the leasing of office personnel, either in fact, or in the eyes of a layman. Laymen will probably not in fact know if a secretary is a full-time employee of the law firm, or part-time, or temporary, or leased, or shared. This is not to say that the layman has been deceived, but that he or she implicitly has general knowledge of the various arrangements professional people use to staff their offices.

Ethical Consideration 4-2 recognizes the fact that it is common knowledge that certain nonlawyers, such as secretaries, are exposed to confidential professional information in the normal operation of a law office. For instances, it is probably common knowledge that law offices have often, and for a long time, relied on very short term office personnel placed by various temporary service employment agencies. Thus, the fact that a law firm may instead rely on longer term office personnel placed by a non-temporary lessor should fall squarely with this Ethical Consideration.

Ethical Consideration 4-3 recognizes that it is not improper for a lawyer to give limited information to outside agencies for legitimate purposes, including bookkeeping and accounting, two of the very purposes that the proposed lease arrangement might be expected to cover. Leased employees might be expected to perform duties of bookkeeping or accounting, in addition to secretarial or receptionist, for instance.

Although, the individual bookkeeper would still not be a law firm employee, he or she would be much more closely associated with the firm than a bookkeeper at an outside agency, which is ethically appropriate.

Ethical Consideration 4-5 provides that a lawyer should be diligent to prevent misuse of client secrets and confidences. The lawyer's duty should be no less, nor no more difficult under the proposed leasing arrangement. The lawyer's ability to counsel longer term leased personnel concerning client secrets and confidences maybe easier than counselling temporary personnel or shared personnel.

Finally, under the mandatory Disciplinary Rule 4-101(D), a lawyer is implicitly allowed to utilize others, other than employees, but must exercise reasonable care to prevent disclosure. Thus nothing in the Rule specifies whose services the lawyer must utilize in operating his office, but that, whatever arrangement he or she utilizes, is subject to the same duty if reasonable care to prevent disclosure.

In Formal Ethics Opinion 84-F-70, the Board stated that an attorney could share a receptionist/typist, with a corporate client.

There is no impropriety in a law firm leasing non-lawyer staff personnel from a third party lessor/employer provided the law firm exercises reasonable care to prevent the leased personnel from disclosing or using the confidences or secrets of a client.

This 12th day of September, 1985.

ETHICS COMMITTEE:

Jerry Colley, Chairman

William R. Willis

O. B. Hofstetter, Jr.

APPROVED AND ADOPTED BY THE BOARD