Can a lawyer hire a paralegal firm to run a branch law office, pay it from case recoveries, and advertise with the paralegal's photo?

Plain-English summary

The inquiry described a lawyer who proposed to hire a paralegal firm to operate a law office on the lawyer's behalf and under the lawyer's supervision in a nearby town, with the paralegal placing advertisements that included the paralegal's photograph in publications aimed at persons of the lawyer's ethnicity. The committee addressed fee splitting with, and supervision of, a nonlawyer assistant in five parts.

On compensation, the committee concluded that paying the paralegal on a case-by-case basis depending on the size of recovery is an improper division of fees under RPC 5.4(a), and that an hourly arrangement with bonuses for significant or successful recoveries may also be problematic depending on the contract and how it is implemented. On supervision, the committee concluded that, depending on the extent of the lawyer's instruction and supervision, the arrangement could constitute the unauthorized practice of law under RPC 5.5(b) (citing Formal Opinions 76 and 80), and that the lawyer's duty under RPC 5.3 to ensure the paralegal's conduct is compatible with the lawyer's obligations includes instruction and supervision.

On advertising, the committee concluded that if the paralegal's work consisted primarily of recommending the lawyer's services rather than performing substantive legal work, using the paralegal's photograph in yellow-pages and newspaper ads might violate RPC 7.1 (by misleading prospective clients into believing the paralegal was more substantially involved, or was an attorney) and RPC 7.2(c) (by giving value to the paralegal for recommending the lawyer's services). Finally, the committee concluded that if the paralegal continues working for several different law firms in the Tacoma area, the arrangement presents potential confidentiality and conflict-of-interest problems under RPC 1.6, 1.7, 1.9, and 1.10.

Currency note

This opinion was issued in 1998, before the Washington State Bar Association's adoption of the 2006 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 Treat this page as historical context, not current guidance.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. The Washington RPC cited here (1.6, 1.7, 1.9, 1.10, 5.3, 5.4, 5.5, 7.1, and 7.2) correspond to the ABA Model Rules of the same number; Washington's lawyer-advertising rules were later amended, so verify the current numbering and text of the RPC 7-series before relying on it.

Common questions

Q: Can a lawyer pay a paralegal a percentage of case recoveries?

A: No. The committee concluded that paying a paralegal on a case-by-case basis depending on the size of recovery is an improper division of fees under RPC 5.4(a).

Q: Can a paralegal run a branch office for the lawyer?

A: The committee concluded that, depending on the extent of the lawyer's instruction and supervision, the arrangement could constitute the unauthorized practice of law under RPC 5.5(b), citing Formal Opinions 76 and 80.

Q: Can the lawyer advertise using the paralegal's photograph?

A: The committee concluded that if the paralegal primarily recommends the lawyer's services rather than doing substantive work, the photograph ads might violate RPC 7.1 (misleading) and RPC 7.2(c) (giving value for a recommendation).

Q: Does the paralegal's work for other firms matter?

A: Yes. The committee concluded that if the paralegal works for several different law firms, the arrangement presents potential confidentiality and conflict-of-interest problems under RPC 1.6, 1.7, 1.9, and 1.10.

Background and rules framework

The opinion applied Washington RPC 5.4 (professional independence; sharing fees with a nonlawyer), RPC 5.5 (unauthorized practice), RPC 5.3 (responsibilities regarding nonlawyer assistance), RPC 7.1 and 7.2(c) (advertising and paying for recommendations), and RPC 1.6, 1.7, 1.9, and 1.10 (confidentiality and conflicts), all corresponding to the ABA Model Rules of the same number. The committee tied each conclusion to the details of the proposed compensation, supervision, and advertising, and cited its Formal Opinions 76 and 80 on the unauthorized-practice question.

Citations and references

Rules of Professional Conduct:

• ABA Model Rule 1.6 (confidentiality); Washington RPC 1.6
• ABA Model Rules 1.7, 1.9, 1.10 (conflicts of interest; imputation); Washington RPC 1.7, 1.9, 1.10
• ABA Model Rule 5.3 (responsibilities regarding nonlawyer assistance); Washington RPC 5.3
• ABA Model Rule 5.4 (professional independence; fee division with a nonlawyer); Washington RPC 5.4(a)
• ABA Model Rule 5.5 (unauthorized practice of law); Washington RPC 5.5(b)
• ABA Model Rule 7.1 (communications concerning a lawyer's services); Washington RPC 7.1
• ABA Model Rule 7.2 (giving value for a recommendation); Washington RPC 7.2(c)

Other opinions cited:

• WSBA Formal Opinion 76: unauthorized practice of law.
• WSBA Formal Opinion 80: unauthorized practice of law.

See also

• WA Ethics Op. 1335: Paralegal-Company Fee-Split Plan
• WA Ethics Op. 1051: Lawyer Referral Service and UPL
• WA Ethics Op. 1208: Hiring a Disbarred Out-of-State Lawyer

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=1009

Original opinion text

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

Advisory Opinion: 1816
Year Issued: 1998
RPC(s): RPC 1.6; 1.7; 1.9; 1.10; 5.3; 5.4; 5.5; 7.1; 7.2(c); Formal Opinion 76; Formal Opinion 80
Subject: Paralegal running separate law office for lawyer; division of fees with nonlawyer; advertising with paralegal's photograph

[The lawyer proposed hiring a paralegal firm to operate a law office on his behalf, and under his supervision, in a nearby town. The paralegal would place advertisements with his photograph in publications aimed at persons of his ethnicity.] The Committee researched and reviewed your inquiry concerning fee splitting with, and supervision of, a nonlawyer assistant and determined the following:

1. The first proposed alternative form of compensation [on a case by case basis depending on the size of recovery] is an improper division of fees under RPC 5.4(a), and the second proposed form [on an hourly basis with bonuses for significant or successful recoveries] may be problematic as well, depending on the details of the relevant provisions of the contract between you and the paralegal and in how the contract is implemented in practice.

2. Depending on the extent of your instruction and supervision of the paralegal, the proposed arrangement could constitute the unauthorized practice of law under RPC 5.5(b). See e.g., Formal Opinion Nos. 76 and 80. If the advertisement created the impression that the paralegal is entitled to practice law, then, in addition to being misleading under RPC 7.1 (See paragraph 4 below), it would also raise problems under PRC 5.5(b).

3. A lawyer's responsibility under RPC 5.3 -- to make reasonable efforts to ensure that a paralegal's conduct is compatible with the professional obligations of the lawyer -- includes instruction and supervision of the paralegal. See, e.g., Comment to Rule 5.3 of ABA Model Rules of Professional Conduct (1998 ed.). Under some circumstances, an attorney will be held responsible for a paralegal's ethical breaches (See RPC 5.3)).

4. If, in practice, the paralegal's work consisted primarily of recommending your legal services, rather than performing substantive legal work, then the use of the paralegal's photograph in advertisements in the yellow pages and newspapers might violate RPC 7.1, by misleading prospective clients to believe the paralegal was involved more substantially in the representation, or even that the paralegal was himself an attorney, and RPC 7.2(c), by giving value to the paralegal for recommending your services.

5. If the paralegal will continue to be "actively working as a paralegal for several attorneys in the Tacoma area," and that means he will be working for different law firms, then the proposed arrangement presents potential confidentiality and conflict of interest problems (See RPC 1.6, 1.7, 1.9, and 1.10).