The Florida Bar
(August 1, 1988)
If certain ethical concerns are satisfied, a lawyer may accept assignments from a service that rents lawyers to law firms and legal departments to fill temporary needs.

RPC: 4-1.1, 4-1.4, 4-l.5(G), 4-1.6, 4-1.7, 4-1.9, 4-5.4(a), 4-5.4(c), 4-5.5(b)
Rules Regulating TFB 10-7.1
Statutes: F.S. Ch. 621
Opinions: 87-8; Los Angeles Co. 431, Maryland 84-15, New Mexico 1984-13, N.Y. City 1988-3, Virginia 609
Case: The Florida Bar v. Consolidated Business and Legal Forms, Inc., 386 So. 2d 797 (Fla. 1980)

The inquiring attorney is contemplating involvement in a corporation that would provide attorneys for temporary assignment to other attorneys, law firms, or legal departments on a rental basis. He requests an opinion regarding the propriety of his involvement in his enterprise. The inquirer also asks whether the opinion would differ if nonlawyers are shareholders, directors, or officers of the corporation.

The inquirer describes the proposed enterprises as follows:

It is contemplated that a corporation for profit will do business in Florida as an agency providing the services of lawyers to other lawyers and law firms and departments for temporary assignments as needed by the supervisory lawyer. Although the agency lawyer will be an employee of the corporation which in turn will be responsible for all assignments, compensation and benefits, the legal work will be preformed under the direct supervisory authority of the contracting lawyer. The corporation will charge for those services on an hourly or other durational basis as is done by other temporary help services. To protect the confidentiality of client information of the supervisory lawyer and to insure that agency lawyers do not participate in an impermissible conflict of interest because of serial assignments to lawyers with opposing clients, the contracts of the corporation with its employee lawyers and of the corporation with the supervising lawyer, his firm or employer will expressly prov ide the subordinate position of the agency lawyer to the sole professional authority of the supervising lawyer and of the continuing duty to maintain confidentiality and avoid conflicts.

An attorney's involvement or participation in this type of temporary placement agency raises a number of ethical concerns. The areas of concern include confidentiality, conflicts of interests, professional independence, unlicensed practice of law, and improper division of fees. These concerns, and suggested changes that might help minimize them, are discussed below:

An attorney who is placed by the proposed corporation would be ethically obligated to preserve in confidence any information he or she obtained in the course of a representation. Rule 4-1.6, Rules Regulating The Florida Bar. This obligation would prevent the attorney from disclosing any such confidential information to corporation personnel, absent consent of the affected client.

The inquiring attorney indicates that the corporation plans to explicitly recognize this obligation by including it in the contracts between the corporation and its participating attorneys and in contracts between the corporation and its customers (referred to by the inquirer as "supervising lawyers"). Contractual recognition of this obligation by all parties is a necessity.

Participating attorneys who are placed by the corporation with a supervising lawyer or law firm are subject to all conflict of interest rules, including Rules 4-1.7 (general conflict of interest rule) and 4-1.9 (former client conflict rule). Again, the inquiring attorney indicates that the corporation-participating attorney and corporation-supervising lawyer contracts would expressly acknowledge this ethical obligation. The contracts should provide that the supervising lawyer or firm will not knowingly attempt to rent a particular participating attorney if doing so would place him in conflict position. However, the primary burden of recognizing and avoiding potential conflicts of interest must be borne by the participating attorneys and the corporation. The corporation will need to establish an effective screening mechanism to be used before assigning a participating attorney to a supervising lawyer or law firm. The nature of the corporation's business-the short-term placement of parti cipating attorneys with a variety of lawyers and law firms-necessarily requires that this screening procedure be sophisticated.

The corporation-participating attorney contract should provide that a participating attorney will not be asked to undertake a representation that he or she is not competent to handle. See Rule 4-1.1.

A participating attorney could not ethically allow the corporation to control the attorney's exercise of independent professional judgment in rendering services for clients or to interfere in any way with the attorney-client relationship. Rule 4-5.4(c). (For example, the corporation could not dictate to the participating attorney how much time he or she can or must spend on a particular case). This must be specified in the corporation-participating attorney contract.

If nonlawyers are shareholders, directors, officers, or managing agents of the proposed corporation, it is possible that the corporation's activities could constitute the unlicensed practice of law. See The Florida Bar v. Consolidated Business and Legal Forms, Inc., 386 So. 2d 797 (Fla. 1980). Of course, attorneys are prohibited from assisting nonlawyers in the unlicensed practice of law. Rule 4-5.5(b). Questions regarding the unlicensed practice of law are beyond the scope of an ethics opinion. Therefore, the inquiring attorney is urged either to make his own determination after examining relevant Florida law or to request an advisory opinion on the unlicensed practice of law pursuant to Rule 10-7.1.

A related issue is presented by the corporate form of the corporation. Florida attorneys are not permitted to practice law in a corporate form other than a professional service corporation organized pursuant to Florida Statutes Chapter 621. If the activities of the proposed business corporation are considered the practice of law (and, again, such a question is beyond the scope of an ethics opinion), any attorney employed by or having an ownership interest in the corporation would run afoul of this prohibition.

Whether the temporary nature of the participating attorney-supervising lawyer relationship need be disclosed to the supervising lawyer's client would depend on whether the client would likely consider the information material. See Rule 4-1.4.

Finally, particular problems are presented by the manner in which the proposed corporation plans to charge for its services. The inquiring attorney states that the corporation would charge for the participating attorney's services "on an hourly or other durational basis as is done by other temporary help services." For example, the corporation would charge its customers a certain amount per hour for the participating attorney's services with a portion of this amount going to the participating attorney and the remainder being retained by the corporation.

If nonlawyers are involved in ownership or management of the corporation, this billing system (i.e, charging a certain amount per hour for the lawyer's services, with only a portion of that amount actually being paid to the lawyer) must be considered division of legal fees with a nonlawyer in violation of Rule 4-5.4(a). See Florida Ethics Opinion 87-8; New York City Bar Association Opinion 1988-3. See also Los Angeles County Bar Association Opinion 431; Maryland State Bar Association Opinion 84-15; State Bar of New Mexico Opinion 1984-13; Virginia State Bar Opinion 609.

This problem could be avoided if, instead of receiving a portion or percentage of the fee charged for the participating attorney's services, the corporation charged its customers a flat fee. By handling the matter in this fashion the participating attorneys would receive 100 percent of the fees being charged for their services and the corporation would receive a completely separate fee for arranging the temporary employment placement.

Of course, the problems of fee division with nonlawyers could also be eliminated if nonlawyers are not involved in the corporation's ownership or management. Furthermore, if only attorneys are involved in the corporation's ownership or management, there will be no problems concerning improper division of fees among attorneys. The general rule concerning division of fees among attorneys, Rule 4-1.5 (G), applies only to fee divisions among attorneys not in the same firm. The attorneys involved in the proposed corporation should be considered as being the same firm for purposes of this rule.

In summary, it must be concluded that, because of the problems described above, the plan proposed by the inquiring attorney is not ethically permissible in its present form.

[Revised: 08-24-2011]