Can two lawyers hold themselves out to the public as a law partnership if their agreement mainly shares office expenses?

Plain-English summary

The inquiry arose from a threatened malpractice claim and asked whether a particular "partnership agreement" created a proper partnership under the Rules of Professional Conduct, so that two attorneys could hold themselves out to the public as a law partnership. The agreement was largely concerned with shared office expenses, but it also contemplated sharing certain cases and the fees from them; the two attorneys practiced under both names and used joint stationery. The lawyers asked whether they had to change the agreement to comply with the Rules.

The opinion explained that Rule 2.3(e) forbids a lawyer from holding out as practicing in a law firm unless the association is in fact a firm. Whether the business association was a bona fide partnership, or a "firm" in the rule's terms, was a legal question beyond the Ethics Committee's purview. The opinion concluded that if, as a matter of law, the association was a bona fide partnership, the attorneys could continue to hold themselves out as partners; if it was not, it would be unethical for them to continue to represent that they were partners.

Currency note

This opinion was issued in 1991, before the North Carolina State Bar's adoption of the 2003 revisions to the Rules of Professional Conduct. 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 Treat this page as historical context, not current guidance.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, deadline, or requirement mentioned here.

Common questions

Q: When may two lawyers hold themselves out as a partnership?

A: The opinion held that, under Rule 2.3(e), lawyers may hold out as practicing in a firm only if their association is in fact a firm.

Q: Did the Ethics Committee decide whether this particular agreement was a real partnership?

A: No. The opinion treated whether the arrangement was a bona fide partnership as a legal question beyond the Committee's purview.

Q: What follows if the arrangement is not a bona fide partnership?

A: The opinion concluded that, if the association is not a bona fide partnership, it would be unethical for the lawyers to continue to represent that they are partners.

Background and rules framework

The opinion applied North Carolina Rule 2.3(e), which barred a lawyer from holding out as practicing in a law firm unless the association was in fact a firm (the holding-out and firm-name principle corresponding to Model Rule 7.5). The opinion drew a line between the ethics question (may lawyers represent themselves as a firm) and the underlying legal question (is the association actually a partnership), reserving the latter to the courts.

Citations and references

Rules of Professional Conduct:

• North Carolina Rule 2.3(e) (holding out as a firm only if the association is in fact a firm)
• MR 7.5 (firm names and letterhead)

See also

• NC Ethics Op. RPC 126: letterhead listing of nonlawyers
• NC Ethics Op. 98 FEO 6: sale of a law firm to lawyers employed by the firm

Source

• Landing page: https://www.ncbar.gov/for-lawyers/ethics-and-governing-rules/ethics-opinions/opinions/rpc-116/

Original opinion text

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

Inquiry:

An issue has arisen as to whether a particular "partnership agreement" creates a proper partnership under the provisions of the Rules of Professional Conduct for purposes of two attorneys holding themselves out to the public as a law partnership.

The issue arises in the context of a threatened legal malpractice claim in which a former client alleges negligent representation by one of the two attorneys in the "partnership." Although the law does not permit a plaintiff to base a claim of malpractice on an ethical violation, the attorney believed the partnership agreement to be a valid partnership agreement. The two attorneys practiced law under their two names, have stationery with their two names, etc.

The partnership agreement in question is largely concerned with shared office expenses. It also contemplates the likelihood of sharing certain cases (and fees related to those shared cases). The dollar volume of the cases shared in 1990 was not insubstantial. The particular case which is the subject of the threatened litigation was not one of the shared cases. In fact, the partnership agreement was not entered into at the time the initial retainer agreement was executed. However, the partnership agreement was executed prior to the alleged negligent act.

Must the two attorneys make any changes in their partnership agreement to be in compliance with the Rules of Professional Conduct?

Opinion:

Rule 2.3(e) forbids a lawyer from holding himself or herself out as practicing in a law firm unless the association is in fact a firm. The question of whether the business association in question is a bona fide partnership or, in the parlance of the rule, a "firm," is a legal question beyond the purview of the Ethics Committee. If as a matter of law the association in question is a bona fide partnership, it is obvious that the attorneys may continue to hold themselves out as partners. If, on the other hand, the arrangement is not a bona fide partnership, it would be unethical for the attorneys involved to continue to represent that they are partners.