Can a law firm build a network of independent-contractor attorneys it is contractually bound to feed work, and label them 'of counsel' or 'affiliates'?

Plain-English summary

A law firm solicited attorneys to join a network of contracts under which the attorneys would handle legal work for the firm's clients in exchange for the firm using its best efforts to obtain work to subcontract to them. The attorneys were deemed independent contractors; the firm kept the exclusive right to assign work, remained the sole judge of the quality of services with a right to withdraw deficient work, collected the client's fees directly and paid each attorney a percentage, and was to be listed as "of counsel" to the attorneys while the attorneys appeared as "affiliates" on the firm's letterhead. The attorneys were barred from independently taking on clients they had served through a firm assignment.

The committee concluded the plan violated numerous Code provisions. The firm's contractual obligation to refer matters fell outside former Rule 2-107(a): that rule encourages voluntary referral of cases to more skilled counsel in appropriate circumstances, but a contractually mandated referral of cases to a multitude of attorneys (potentially ad hoc, just to satisfy contractual commitments) is not what the rule sanctions. The plan also conflicted with Rule 5-107(c), which bars a lawyer from letting a person who recommends, employs, or pays him direct or regulate his professional judgment: the firm's role as sole judge of quality with a right to withdraw work undermined the affiliates' independence and the client's right to choose counsel. The committee added that Rule 2-103(d) supported its conclusion, because the affiliated attorneys' contractual commitment to perform the firm's work under penalty of suit amounted to giving the firm value to initiate contact with prospective clients.

Finally, the committee found that even an otherwise proper relationship would not support an "of counsel" or "affiliate" designation. Citing Opinion 776 and ABA Formal Opinion 330, it explained that a lawyer properly shown as "of counsel" is a member or component of the firm, not a mere forwarder or receiver of business, and that "affiliate" lacks a generally recognized meaning and could mislead the public.

Currency note

This opinion was issued in 1984, under the former Illinois Code of Professional Responsibility and before Illinois adopted the 1990 (and later 2010) Rules of Professional Conduct. The ISBA Board of Governors affirmed the opinion in July 2010 as generally consistent with the 2010 Rule (Rule 1.2(e)), while cautioning that the specific standards referenced may differ from the 2010 Rules. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule or requirement mentioned here.

Common questions

Q: Can a firm contractually commit to feed work to a network of independent attorneys?

A: The opinion concluded no; the committee held a contractually mandated referral plan is not sanctioned by former Rule 2-107(a), which is meant to encourage voluntary referrals to more skilled counsel, not obligatory ones.

Q: Why did the firm's quality-control role create a problem?

A: Per the opinion, the firm being sole judge of quality with a right to withdraw work let a payer direct the affiliates' professional judgment, contrary to Rule 5-107(c), and undercut the client's right to choose counsel.

Q: Could the firm and the attorneys call themselves "of counsel" or "affiliates"?

A: No. The committee found "of counsel" is for a member or component of a firm, not a mere forwarder or receiver of business, and that "affiliate" lacks a recognized meaning and could mislead the public.

Background and rules framework

The opinion applied former Illinois Code Rule 2-107(a) (division of fees and referral), Rule 5-107(c) (a lawyer may not let one who recommends, employs, or pays him control his professional judgment), and Rule 2-103(d) (no giving value to another to initiate client contact), with EC 2-13 on the misleading use of designations. The Board's 2010 affirmation maps the analysis to current Illinois Rule of Professional Conduct 1.2(e). The Model Rule analogues are Rule 1.5 (division of fees), Rule 5.4 (professional independence of a lawyer), and Rule 7.5 (firm names and designations).

Citations and references

Rules of Professional Conduct:

• Illinois Code Rule 2-107(a), Rule 5-107(c), Rule 2-103(d), EC 2-13 (applied in the opinion)
• Illinois RPC 1.2(e) (2010 equivalent per the Board's affirmation)
• MR 1.5 (division of fees); MR 5.4 (professional independence); MR 7.5 (firm names and "of counsel")

Other opinions cited:

• ISBA Opinions 764, 776, 817, 826: the meaning of "of counsel" and related designations
• ABA Formal Opinion 330: "of counsel" denotes a member or component of the firm, not a forwarder of business

See also

• ISBA Ethics Op. 84-15: Fee-Sharing on Departed Clients
• ISBA Ethics Op. 85-02: Practicing Under a Name That Hides the Real Firm
• ISBA Ethics Op. 03-02: Firm Name and Of Counsel

Source

• Landing page: https://www.isba.org/ethics/opinions/840