Important Practical and Ethical Points in Space Sharing: By Connie Rudnick, Esq., Professor of Law, Massachusetts School of Law

Sharing space with other lawyers or non-lawyers, while an attractive set up for practical and financial reasons, gives rise to liability and disciplinary issues:

FIRM NAME

  1. Rule 7.5(d) and Comment [2] prohibit using a firm name that implies a partnership when one does not exist, unless a disclaimer is also included, for example, Smith & Jones, “An association of independently practicing attorneys, not responsible for the liability of any other attorney in this office.” The goal is to insure that the public is not misled into thinking a partnership exists when it does not.
  2. It is deceptive to call your “firm” Smith & Associates, when you are in fact a solo practitioner.

ADVERTISING

  1. Use of firm name above requires disclaimer wherever the firm name is used.
  2. Sole practitioners should maintain separate signs on the door, separate business cards and stationary.

SHARING TECHNOLOGICAL SERVICES-COMPUTERS, FAXES, PHONES

  1. Sharing fax line has been held in some jurisdictions to create an unintended and unwanted relationship between the attorneys. Thus, all telecommunications equipment should be separate whenever possible.
  2. Maintain separate phone lines, voice mail should be accessible only by attorney and his/her support staff. Same with e-mail.
  3. If one computer is used for multiple lawyers, work product should be stored only in password protected part of computer or on jump drive.

SHARING ASSISTANTS—LAWYER AND NON LAWYER

  1. Lawyers must instruct subordinates—lawyers and non-lawyers—concerning their ethical obligations, which include the duty not to share confidential information of one client with anyone not directly associated with the attorney handling the case.
  2. Employees should be careful to make sure snail mail is directed to the proper attorney, particularly if the practice is to remove it from an envelope first.

MALPRACTICE INSURANCE AND OTHER FINANCIAL CONSIDERATIONS

  1. Whether a “group practice” (group of sole practitioners sharing space on one policy) can purchase one group policy was covered in Space Sharers, Beware! By Daniel Crane, former Bar Counsel, and John Marshall, First Assistant Bar Counsel, accessible on the Office of Bar Counsel website (www.mass.gov/obcbbo). The authors questioned whether joint coverage on one policy would eliminate the need for a disclaimer under Rule 7.5(d) and Comment [2]. Further, some policies may exclude coverage for liability resulting from acts of other attorneys who appear to be, but are not intended to be, partners. Check with your malpractice insurer for the latest coverages available.
  2. Each attorney must maintain separate operating, IOLTA or other client accounts.
  3. Expenses shared by the group should reflect actual costs incurred or to be incurred; over or under allocating costs could be construed as creating a relationship not intended to exist. Put terms in writing.
  4. Group should not maintain one joint bank account for payment of expenses. Expenses should be paid separately by each member of the group. Do not volunteer to “front” another lawyer’s financial obligation unless strict record is kept of the transaction in writing.

SHARING FILES, FILE STORAGE AND CONFERENCE ROOMS/LIBRARIES

  1. Each lawyer’s files should be kept in separate file drawers, which can be locked. Only the attorney and dedicated (working for one attorney only) subordinates should have the key. Do not keep keys in a place where other lawyers or employees can have ready access.

MISCELLANEOUS

  1. Don’t refer to your colleagues with whom you share space as “my partner.”
  2. When paying a referral fee to another attorney in the group, include that attorney specifically on the fee agreement as you would if he/she were in another office entirely. See Saggese v Kelley, 445 Mass. 434 (2005), on the requirement of advance client consent in writing to a referral fee arrangement.
  3. If possible, each individual lawyer should be on the lease. If that is not possible or practicable, then sub-leases should be executed providing that is permitted by the lease agreement.
  4. Configure office so that attorney-client communications cannot be heard by other lawyers or support personnel in the office.

SHARING SPACE WITH NON-LAWYERS

  1. Take care not to publicize the relationship in a way that implies you have a legal relationship with the space sharer(s). Just as with sharing space with other lawyers, maintain independent public identity.
  2. Protect client confidences; store files in separate room if possible, or in separate locked file if not.
  3. Do not take or give referral fees or share fees with the non-lawyer.
  4. Allocate expenses according to actual amount incurred or to be incurred; over or under allocating expenses can look like fee sharing.

CONSEQUENCES OF IMPERFECT DIVISION

  1. Joint civil liability/partnership by estoppels.
    • Governed by Mass. Gen. Laws ch. 108A, § 16(1)(partnership by estoppel)
    • Atlas Tack Corp. v. DiMasi, 37 Mass.App.Ct. 66, 637 N.E.2d 230, 232 (1994)(Genuine issue of material fact existed concerning whether attorneys were partnership where, inter alia, they used a “firm name,” called themselves “a professional association”).
    • Brown v. Gerstein, 17 Mass.App.Ct. 558, 460 N.E.2d 1043, 1052 (1984)(evidence of use of firm name insufficient to prove partnership
    • Gosselin v. Webb, 242 F.3d 412 (1st Cir. 2001) (Genuine issue of material fact existed concerning whether attorneys were partnership where evidence in addition to use of a “firm name” existed).
  2. Disqualification for conflict of interest
    • In re Custody of a Minor, 432 N.E.2d 546 (Mass.App.Ct.1982) (foster parents’ lawyer not disqualified even though she shared offices with lawyer who had represented natural mother earlier in proceeding, when each lawyer had own offices and files and was not connected with other’s cases).
    • Commonwealth v. Allison, 434 Mass. 670, 751 NE2d 868 (2001)(Fact that attorney representing defendant and co-defendant shared space did not create conflict; no per se disqualification).
    • Commonwealth v. Fogarty, 419 Mass. 456, 646 N.E.2d 103 (1995) (attorneys’ joint ownership of building in which attorneys shared space did not create partnership and therefore conflict).

Note: If lawyers sharing space routinely work jointly on cases, or “cover for each other” in situations that require some knowledge of the case or access to it file(s), court could find disqualifiable conflict. See generally Rule 1.10, Comment [1] (Definition of “Firm”).

3. Discipline Cases

In the Matter of Godbout, 18 Mass.Att’y.Disc.R. 254 (2002) (Firm name)

In the Matter of Daniels, 23 Mass.Att’y.Disc.R. (2007) (S.J.C. Docket No. BD-2006-111, Order of Term Suspension entered January 8, 2007) (Firm name)

In the Matter of Zachery, 23 Mass.Att’y.Disc.R. (2007) (Public Reprimand No. 2007-3, January 26, 2007) (Firm name)