Establishing a legal practice Flashcards
1
Q
Categories of practitioners in law firms
A
- three categories of practitioners
i. partner: parties to firm’s partnership agreement (“members” of the firm)
ii. associate: a lawyer employee who is paid by salary
iii. of counsel: a lawyer who has a continuing relationship with a law firm other than as a partner or associate - lawyers may not imply they practice in a partnership or organization that they do not
2
Q
Firm name restrictions
A
i. must not use misleading name or letterhead
ii. names of lawyers holding public office must not be used in the firm’s name or communications while the lawyer is not actively and regularly practicing at the firm
iii. multi-state firms may use the same name in each jurisdiction, but must list the jurisdictional limitations of lawyers not licensed to practice in a particular jurisdiction
3
Q
Partnerships with Non-lawyers
A
- must not form a partnership with a non-lawyer if any part of the partnership activities will constitute the practice of law
i. i.e. even if the lawyer practices law and the other professional does their job - non-lawyers may not own an interest in a law firm, be a partner or corporate officer or director, or direct or control a lawyer’s professional judgment
4
Q
Reciprocal referral fees
A
- Referral fees with other professionals ok if
a. Not exclusive
b. You explain the arrangement to the client
5
Q
Legal fee sharing
A
- lawyer must not share her legal fee with a non-lawyer
i. paying salaries of a firm’s nonlawyer employees does not count as “sharing” a fee
ii. paying (or charging clients for) temp agency fees for temporary lawyers is not fee sharing - exceptions:
i. death benefits of a lawyer to a designated person
ii. comp or pension to non-lawyer employees
iii. payout of the purchase price of a practice to a deceased lawyer
iv. sharing fees with a nonprofit that recommended a client
6
Q
Legal corporations
A
- lawyers may incorporate for tax purposes, but each lawyer remains personally liable for their own malpractice
7
Q
Legal service organizations
A
- lawyers can be directors, officers, or members of legal service organizations, even if they are employed at another firm
- a lawyer must not knowingly participate in decisions
i. incompatible with their obligations to their clients (at their firms)
ii. that could materially adversely affect the organization’s clients, if those clients have interests adverse to the lawyer’s clients (i.e. must recuse if harming client’s opponents) - definitions
i. legal service organizations: legal aid offices, public defenders, military legal assistance, and lawyer referral services
ii. group legal service plans: providing legal services to a specific group
8
Q
Responsibilities of Partners or Supervisory Lawyers
A
- supervisory lawyers must reasonably ensure all other lawyers and non-lawyers follow RPC
- informal supervision may be sufficient for small private firms, but larger organizations may require more formal supervision
- lawyers are discipline for violations committed by any another lawyer (even external) if:
i. the lawyer ordered it or knowingly ratified it, or
ii. (a) the first lawyer is a partner of, manager of, or has direct supervisory responsibility over the second lawyer, and (b) learns of the misconduct but fails to take reasonable remedial action
a. CA: even non-supervising partners can be liable if they knew about it and did nothing to prevent it
9
Q
Responsibilities of Subordinate Lawyers
A
- subordinate lawyers are liable for following orders that are clear ethics violations
- subordinate lawyers are not liable for following a supervisory lawyer’s reasonable resolution of a debatable ethics question
i. supervisor is solely respoinsible
10
Q
Restrictions on the Right to Practice Prohibited
A
- partnership, employment, and other agreements cannot restrict a lawyer’s right to practice law after termination of the relationship
i. ensures clients are able to choose a lawyer - settlement agreements must not restrict a lawyer’s right to practice
i. ex. can’t say settle all pending suits in exchange for the lawyer to never representing these clients or this matter again - retirement agreements exception: can restrict a lawyer’s ability to practice in exchange for paying retirement benefits
11
Q
Sale of a law practice
A
• sale of a law practice (including sale of goodwill) is allowed if: (all)
- the entire practice or practice group is sold to lawyers or law firms
i. CA: seller cannot sell an area of practice, only all or substantially all of the practice - seller stops practicing in the sold field or stops practicing law altogether, in the geographic area
a. seller can retain a few clients who pose a conflict for the buyer, or with whom seller has a long relationship
ii. CA: seller does not have to stop practicing in the geographic area (but there can be a valid noncompete clause) - client fees do not increase because of the sale
- seller notifies each client of the sale and their right to retain other counsel or to take possession of their files
i. CA: requirement for notice to clients is more complicated
12
Q
Ancillary Services
A
- lawyers may provide ancillary services (aka. law-related services)
i. services performed in conjunction with and related to legal services that could be provided by a non-lawyer
ii. ex. financial planning, accounting, lobbying, trust services, real estate counseling, providing title insurance, and preparing tax returns - lawyers providing such non-legal services are subject to PRC if provided in circumstances not distinct from the provision of legal services
i. ex. if lawyer does the financial planning and drafts the related legal documents - If it’s an entity that lawyer controls (but not personally providing the services) →
i. Must disclose to the client when the ethical obligations apply.
