May 13, 1983
A lawyer who has ownership interests in other businesses may operate them from the same office, provided stringent safeguards are observed to assure that any lay business is kept separate and distinct from the practice of law.
References: CI-520, CI-554, CI-581, CI-600, CI-622, CI-631, CI-725, CI-777, CI-782, CI-784, CI-824.
A lawyer licensed to practice in this state has a proprietary interest in multiple businesses including real estate brokerage, insurance, financial planning and financial services.
The lawyer has the opportunity to move into a basement office in a building which houses in upper offices, a C.P.A firm that employs the lawyer's brother. The lawyer desire to engage in all of the activities of the lawyer's various endeavors simultaneously from a single operation working out of the single leased basement office.
The inquiries presented goes to the propriety of such a multi-phase single operation with a view toward combined lay business and legal practice concerning:
- shared office space.
- shared telephone numbers
- shared advertising on stationary, business cards and advertisements
- joining a business's trading exchange barter society.
CI-520, 554, 600 and 622 deal with a lawyer in active law practice sharing a physical arrangement for office space with unrelated businesses such as real estate concerns, insurance businesses and other businesses or the like. They permit a shared leasing of space but specify that the operations and customers of the tenant remain separate and distinct, and do not become intermingled with the space and operations of the law office. The use of separate entrance and reception areas is required. The use of common areas (conference rooms) have been permitted so long as the operations and customers of the legal practice and other businesses do not become or are not likely to be intermingled. Common areas may not be used in such a way as to suggest a connection between the lawyer and other business.
CI-622 and 725 require that the lawyer maintain a separate telephone line for the law practice.
CI-581 and 824 have held that a lawyer may not participate in a trade exchange whose members offer their goods or services in exchange for goods or services to be provided by other participants, notwithstanding the lawyer does not pay any consideration for membership or service charges. However, a lawyer may advertise the availability of professional services in a local newspaper to others that may be willing to pay for them with something of value other than cash. See CI-784.
In regards to advertisements, it is ethically improper for a lawyer to include on his or her professional legal stationary any references to other outside business endeavors. However, it is ethically permissible for a lawyer to disseminate business cards and/or other advertisement materials that include references to other businesses in which the lawyer engages in, providing that such information is not false, fraudulent, misleading or deceptive. CI-631.
An added qualification is required with relationship to a lawyer's other business interests to the extent that the lawyer, by virtue of the ownership in the other business enterprises, can exercise complete control over the use of the legal identification and designation contained in said advertising materials. CI-596.
It is ethically improper to utilize a lawyer at law signature identification contained in a letter written by a lawyer on said lawyer's other business stationary where no legal service and/or services were actually rendered relative to the other business enterprise. CI-777.
Given the present status of the advertising rules, lawyers are free to disseminate just about any information about themselves and/or their practices so long as the information is not false, fraudulent or misleading or deceptive. Likewise, lawyers are permitted to send their informative materials to individuals or groups so long as they do not have an already identified need for legal services, urging the recipient to employ the services of the lawyer sender. To be permissible, communications are to be general in nature, making known the services available from the lawyer sender, along with such other information as may be permitted within the purview of administrative order 1978-4 namely:
"Fees, costs, office hours, and credentials . . . leaving the recipient wholly free to respond according to their own judgment. CI-782."
Upon obtaining the client's consent after full disclosure on the potential for conflict of interest, a lawyer/real estate broker may list and sell the client's property for a commission. DR 5-104(A); CI-520.
However, CI-642 holds that DR 2-103-104 prohibits a lawyer from using the services of group life insurance agents from passing out pamphlets to their clients informing them of the lawyer's special talents and assets in the field of wills and trusts.