Lawyers who are not in fact members of a partnership or a single professional corporation may not use letterhead identifying themselves as associates or as an association of professional corporations.
References: MCPR DR 2-102(B), DR 102(C); CI-1, CI-111, CI-154, CI-298.
The name on a law firm's stationery reads "Smith & Jones, a partnership including professional corporations." However, Smith is currently practicing as "Smith, P.C." representing certain clients as well as contracting with "Jones, P.C." to perform legal services for some of Mr. Jones' clients, and Jones performs legal services for some of Smith's clients. May Smith practice as a professional corporation along with Jones' corporation in a format to be known as "Smith & Jones, an association of professional corporations?"
It is permissible in Michigan for professional corporations to join together as a partnership for purposes of practicing law. This arrangement was expressly approved by this committee in CI-154. However, the committee has frequently noted that it is impermissible for lawyers to give the appearance of practicing as partners when a partnership does not exist. See e.g., CI-1, CI-111, and CI-298.
An association of professional corporations without any partnership or other unifying corporate structure would be inappropriate under ethics rules. MCPR DR 2-102(B) provides in pertinent part:
"A lawyer in private practice shall not practice under a trade name, a name that is misleading as to the identity of the lawyer or lawyers practicing under such name, or a firm name containing names other than those of one or more of the lawyers in the firm, except that the name of a professional corporation or professional association may contain "P.C." or "P.A." or similar symbols indicating the nature of the organization and if otherwise lawful, a firm may use as, or continue to include in, its name the name or names of one or more deceases or retired members' of the firm or of a predecessor firm in a continuing line of succession . . . ."
MCPR DR-102(C) provides:
"A lawyer shall not hold himself out as having a partnership with one or more other lawyers unless they are in fact partners."
In CI-298, interpreting MCPR DR 2-102(C), the committee opined that a lawyer who practiced as "of counsel" to a firm, and was so designated on that firm's stationery, could not be included in the name of the firm in such a manner as to imply to the general public that the lawyer was in fact a partner in the firm. The committee stated:
"As long as, for the reasons you have stated, none of you feel it expedient to merge your firms and operations, the use of the proposed letterhead you submitted would appear prohibited as constituting a misrepresentation to the public."
Designation of Smith & Jones standing alone would indicate to a reader that Smith is in partnership with Jones. Adding the words "an association of professional corporations" does little to remove that assumption. Historically, the junior lawyer/employees of a law firm partnership have been identified as "associates." To identify Smith & Jones as association would be to imply that there is some type of corporate structure or partnership arrangement between Smith and Jones, other than the contractual arrangement suggested. Clearly there would not be.
A discussion of the word "association" can be found at 6 Am Jur 2d, Associations and Clubs, Sec. 2:
"Like partnerships, voluntary unincorporated associations have been classified as trading or non-trading associations, and are also classified as associations organized for profit or as non-profit associations. Also, according to the rule generally recognized at the present time, the members of a voluntary association or individuals of an unincorporated company organized for profit are to be considered as partners in their relations to third persons. On the other hand, voluntary associations formed for moral, benevolent, social, patriotic, or political purposes are considered by most authorities as resting on a different basis from that of partnerships for commercial enterprises, and members of such clubs, associations, and societies are not held to be partners, even though such clubs, etc., possess business features and are conducted partly for pecuniary gain." 6 Am Jur 2d, Associations and Clubs, Sec. 2, pages 430-431.
Moreover, the Supreme Court's decision in Friedman v Rogers, 440 US 1 (1979), which upholds a state's right to ban the use of trade names, indicates that the public is to be protected against being misled by the name an organization uses. Use of the name "Smith & Jones, an association of professional corporations," although not inherently misleading, is misleading to the extent that it creates a perception in the mind of the average citizen that Smith and Jones are in partnership.
The committee concludes that under the circumstances outlined, use of the name "Smith & Jones," an association of professional corporations" would be misleading and a violation of MCPR DR 2-102. Further, we note that ABA Model Rule of Professional Conduct 7.5(a), as well as the Proposed Michigan Rules of Professional Conduct Rule 7.5(d), provide:
"Lawyers may state or imply that they practice in a partnership or other organization only when that is the fact."
We therefore conclude that such an organizational arrangement is impermissible.