I. Model Rules of Professional Conduct
LAW FIRMS AND ASSOCIATIONS
RULE 5.7 RESPONSIBILITIES REGARDING LAW-RELATED SERVICES
(a) A lawyer shall be subject to the Rules of Professional Conduct
with respect to the provision of law-related services, as defined
in paragraph (b), if the law-related services are provided:
(1) by the lawyer in circumstances that are not distinct from
the lawyer's provision of legal services to clients; or
(2) in other circumstances by an entity controlled by the lawyer
individually or with others if the lawyer fails to take reasonable
measures to assure that a person obtaining the law-related services
knows that the services are not legal services and that the protections
of the client-lawyer relationship do not exist.
(b) The term "law-related services" denotes services that might reasonably be performed in conjunction with and in substance are related to the provision of legal services, and that are not prohibited as unauthorized practice of law when provided by a nonlawyer.
Comment
[1] When a lawyer performs law-related services or controls an
organization that does so, there exists the potential for ethical
problems. Principal among these is the possibility that the person
for whom the law-related services are performed fails to understand
that the services may not carry with them the protections normally
afforded as part of the client-lawyer relationship. The recipient
of the law-related services may expect, for example, that the protection
of client confidences, prohibitions against representation of persons
with conflicting interests, and obligations of a lawyer to maintain
professional independence apply to the provision of law-related
services when that may not be the case.
[2] Rule 5.7 applies to the provision of law-related services by
a lawyer even when the lawyer does not provide any legal services
to the person for whom the law-related services are performed and
whether the law-related services are performed through a law firm
or a separate entity. The Rule identifies the circumstances in which
all of the Rules of Professional Conduct apply to the provision
of law-related services. Even when those circumstances do not exist,
however, the conduct of a lawyer involved in the provision of law-related
services is subject to those Rules that apply generally to lawyer
conduct, regardless of whether the conduct involves the provision
of legal services. See, e.g., Rule 8.4.
[3] When law-related services are provided by a lawyer under circumstances
that are not distinct from the lawyer's provision of legal services
to clients, the lawyer in providing the law-related services must
adhere to the requirements of the Rules of Professional Conduct
as provided in paragraph (a)(1). Even when the law-related and legal
services are provided in circumstances that are distinct from each
other, for example through separate entities or different support
staff within the law firm, the Rules of Professional Conduct apply
to the lawyer as provided in paragraph (a)(2) unless the lawyer
takes reasonable measures to assure that the recipient of the law-related
services knows that the services are not legal services and that
the protections of the client-lawyer relationship do not apply.
[4] Law-related services also may be provided through an entity
that is distinct from that through which the lawyer provides legal
services. If the lawyer individually or with others has control
of such an entity's operations, the Rule requires the lawyer to
take reasonable measures to assure that each person using the services
of the entity knows that the services provided by the entity are
not legal services and that the Rules of Professional Conduct that
relate to the client-lawyer relationship do not apply. A lawyer's
control of an entity extends to the ability to direct its operation.
Whether a lawyer has such control will depend upon the circumstances
of the particular case.
[5] When a client-lawyer relationship exists with a person who
is referred by a lawyer to a separate law-related service entity
controlled by the lawyer, individually or with others, the lawyer
must comply with Rule 1.8(a).
[6] In taking the reasonable measures referred to in paragraph
(a)(2) to assure that a person using law-related services understands
the practical effect or significance of the inapplicability of the
Rules of Professional Conduct, the lawyer should communicate to
the person receiving the law-related services, in a manner sufficient
to assure that the person understands the significance of the fact,
that the relationship of the person to the business entity will
not be a client-lawyer relationship. The communication should be
made before entering into an agreement for provision of or providing
law-related services, and preferably should be in writing.
[7] The burden is upon the lawyer to show that the lawyer has taken
reasonable measures under the circumstances to communicate the desired
understanding. For instance, a sophisticated user of law-related
services, such as a publicly held corporation, may require a lesser
explanation than someone unaccustomed to making distinctions between
legal services and law-related services, such as an individual seeking
tax advice from a lawyer-accountant or investigative services in
connection with a lawsuit.
[8] Regardless of the sophistication of potential recipients of
law-related services, a lawyer should take special care to keep
separate the provision of law-related and legal services in order
to minimize the risk that the recipient will assume that the law-related
services are legal services. The risk of such confusion is especially
acute when the lawyer renders both types of services with respect
to the same matter. Under some circumstances the legal and law-related
services may be so closely entwined that they cannot be distinguished
from each other, and the requirement of disclosure and consultation
imposed by paragraph (a)(2) of the Rule cannot be met. In such a
case a lawyer will be responsible for assuring that both the lawyer's
conduct and, to the extent required by Rule 5.3, that of nonlawyer
employees in the distinct entity that the lawyer controls complies
in all respects with the Rules of Professional Conduct.
[9] A broad range of economic and other interests of clients may
be served by lawyers' engaging in the delivery of law-related services.
Examples of law-related services include providing title insurance,
financial planning, accounting, trust services, real estate counseling,
legislative lobbying, economic analysis, social work, psychological
counseling, tax preparation, and patent, medical or environmental
consulting.
[10] When a lawyer is obliged to accord the recipients of such
services the protections of those Rules that apply to the client-lawyer
relationship, the lawyer must take special care to heed the proscriptions
of the Rules addressing conflict of interest (Rules 1.7 through
1.11, especially Rules 1.7(a)(2) and 1.8(a), (b) and (f)), and to
scrupulously adhere to the requirements of Rule 1.6 relating to
disclosure of confidential information. The promotion of the law-related
services must also in all respects comply with Rules 7.1 through
7.3, dealing with advertising and solicitation. In that regard,
lawyers should take special care to identify the obligations that
may be imposed as a result of a jurisdiction's decisional law.
[11] When the full protections of all of the Rules of Professional Conduct do not apply to the provision of law-related services, principles of law external to the Rules, for example, the law of principal and agent, govern the legal duties owed to those receiving the services. Those other legal principles may establish a different degree of protection for the recipient with respect to confidentiality of information, conflicts of interest and permissible business relationships with clients. See also Rule 8.4 (Misconduct).
II. State bar ethics opinions.
State Bar of Arizona Ethics Opinion 05-01 (2005)
District of Columbia Opinion 306 (2001)
Illinois State Bar Association Opinion 97-07 (1998)
Illinois State Bar Association Opinion 98-03 (1999)
Michigan State Bar Opinion RI-135
The Supreme Court of Ohio Board Of Commissioners On Grievances And Discipline 2003-1
The Supreme Court of Ohio Board Of Commissioners On Grievances And Discipline 2000-4
Pennsylvania State Bar Opinion 2002-07
New York State Opinion 755 (2002)
New York State Opinion 752 (2002)
Oklahoma Bar Association Ethics Opinion 316 (2001)
Tenn. Sup. Ct. Bd. of Professional Responsibility, Ethics Comm., Op. 94-F-135 (1994)
III. Law Review Articles on Law-Related Services
Gantt, More Than Lawyers: the Legal and Ethical Implications
of Counseling
Clients on Nonlegal Considerations, 18 Geo J. L. Ethics 365
(2005)
Note, Legal And Professional Ethics: The Regulation Of Ancillaries And Law-Related Services Reaches Oklahoma, 56 Ok L. Rev. 541
Practicing Law Institute PLI Order No. N0-002W November, 1999 Title Insurance 1999: Mastering Critical Issues Facing Buyers, Sellers and Lenders: A Guide To Ethical Issues For Title Insurance Lawyers 484 PLI/REAL 297 (2002).
Georgetown Journal of Legal Ethics Spring, 1998 Note, Minding
Someone Else's Businesses: Pennsylvania Rule Of Professional Conduct
5.7 Leads The Way 11 Geo. J. Legal Ethics 767 (1998)
Georgetown Journal of Legal Ethics Arash Mostafavipour, Mixing
Law and Other Business Services Law Firms: Should They Mind Their
Own Business? 11 Geo. J. Legal Ethics 435 (1998).
IV. The ABA Multi Disciplinary Practice Commission (MDP)
The Commission's Website at http://www.abanet.org/cpr/mdp/
A bibliography of materials assembled for the MDP Commission.
V. Amendment to Rule 7.2 of the ABA Model Rules of Professional Conduct
The ABA Standing Committee and Professional Responsibility's recent amendment to Rule 7.2 of the ABA Model Rules may also be of interest. The Report and Recommendation regarding this amendment is available here.
