Can a lawyer form a partnership with a law student before the student is admitted and take capital contributions from the student for office expenses?

Plain-English summary

The committee considered whether an attorney could open a law office in partnership with a second-year law student before the student's admission to the bar, relying on the student's law-clerk assistance and capital contributions to defray office expenses. It answered no.

The committee applied DR 3-102, which (with exceptions not applicable here) bars a lawyer from sharing legal fees with a non-lawyer, and DR 3-103, which bars a lawyer from forming a partnership with a non-lawyer if any of the partnership's activities consist of the practice of law. It held a partnership with a law student could not be established, reasoning that to rule otherwise would permit professional association with someone not amenable to the profession's disciplinary rules. It likewise held there could be no division of fees with the student.

The committee found that a capital contribution would equally violate the disciplinary rules, reasoning that paying office expenses necessarily implies a right to some voice in the operation of the office, and that once a layman participates in that decisional process he is to some degree a partner of the attorney. It concluded the partnership arrangements could not be adopted at that time, while noting nothing prevented discussing such plans, with implementation awaiting the student's admission. The committee added that nothing prohibited employing the student in the office and paying reasonable compensation for services performed.

Currency note

This opinion was issued in 1975 under Kentucky's former Code of Professional Responsibility (in effect 1971 to 1990), before the Kentucky Bar Association's 1990 adoption of the Rules of Professional Conduct (SCR 3.130) and the substantial 2009 revisions to those rules. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against the current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Can a lawyer form a partnership with a law student before the student is admitted?

A: No. The committee held DR 3-103 bars a partnership with a non-lawyer where the partnership practices law, and a not-yet-admitted student is a non-lawyer not subject to the disciplinary rules.

Q: Can the lawyer accept the student's capital contribution toward office expenses?

A: No. The committee held a capital contribution would violate the rules, because paying office expenses implies a voice in running the office, making the student to some degree a partner.

Q: Can the lawyer employ the student at all?

A: Yes. The committee said nothing prohibits employing the student in the office and paying reasonable compensation for services performed; only partnership and fee-sharing are barred.

Background and rules framework

The opinion applied DR 3-102 (division of legal fees with a non-lawyer) and DR 3-103 (forming a law-practice partnership with a non-lawyer) of the former Code of Professional Responsibility. The modern analog is Model Rule 5.4 (professional independence of a lawyer, which prohibits fee-sharing with and law-practice partnership with non-lawyers).

Citations and references

Rules of Professional Conduct:

• DR 3-102 (dividing fees with a non-lawyer); DR 3-103 (partnership with a non-lawyer); modern analog Model Rule 5.4

See also

• KBA Ethics Op. E-166: Nonlawyer Employee Bonuses as a Percentage of Firm Income
• KBA Ethics Op. E-175: Buying a Disbarred Lawyer's Practice for a Fee Percentage
• KBA Ethics Op. E-101: University Student Legal Advising Service

Source

• Landing page: https://kybar.org/For-Members/Rules-Ethics-Information/Ethics-Opinions
• Original PDF: https://kybar.org/Portals/0/Admin/Ethics%20Opinions/KBA_E-107.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

KENTUCKY BAR ASSOCIATION
Ethics Opinion KBA E-107
Issued: March 1975

This opinion was decided under the Code of Professional Responsibility, which was in effect from 1971 to 1990. Lawyers should consult the current version of the Rules of Professional Conduct and Comments, SCR 3.130 (available at http://www.kybar.org), before relying on this opinion.

Question:

May an attorney establish a law office in partnership with a law student prior to his admission to the Bar, and accept capital contributions from the student to help defray office expenses?

Answer:

No.

References:

DR 3-102, 3-103

OPINION

An attorney contemplates opening a law office and anticipates that a second year law student will join him in the practice of law upon his admission to the Bar. If the attorney opens the office before the student is qualified to practice, he would have to depend heavily upon the student's assistance as a law clerk and on his capital contributions to help defray office expenses. Before proceeding, he has requested our advice on the propriety of adopting partnership plans at this time.

DR 3-102 provides that with certain exceptions not here applicable an attorney may not share legal fees with a non-lawyer. In DR 3-103 it is noted that a lawyer may not form a partnership with a non-lawyer if any of the activities of the partnership consist of the practice of law.

From an examination of these rules, it is clear that a partnership may not be established with a law student, and we have no hesitation in so holding. To rule otherwise would permit professional association with one not amenable to the disciplinary rules of our profession. We also find that there may be no division of fees with a law student, although there is nothing to prohibit his employment in the office and the payment of reasonable compensation for services performed. A contribution of capital would be equally violative of the disciplinary rules. Payment of office expenses necessarily implies the right to some voice in the operation of that office. Once a layman participates in this decisional process, he is to some degree a "partner" of the attorney.

For these reasons we have concluded that it would not be proper for the attorney and law student to adopt any partnership arrangements at this time. This of course is not to say that such plans may not be discussed, but any implementation must await the day when the student is a duly qualified attorney.

Note to Reader

This ethics opinion has been formally adopted by the Board of Governors of the Kentucky Bar Association under the provisions of Kentucky Supreme Court Rule 3.530 (or its predecessor rule). The Rule provides that formal opinions are advisory only.