I want to run a separate import-export and resort business out of my law office, staffed by my firm's office manager and paralegal, and some people may be clients of both. Is that allowed?

Plain-English summary

The inquiring attorney was incorporating a business in which the attorney and spouse would be directors and shareholders, and proposed to operate it from the same office as the law practice. The firm's office manager and paralegal/secretary would staff the business and serve as its officers. The attorney anticipated that some individuals might be mutual clients of both the law firm and the business, whose purposes were the importation and exportation of consumer products and resort development outside the continental United States. The attorney asked whether the arrangement was permissible.

The panel concluded that it was, provided the attorney and the firm's employees adhered to the Rules of Professional Conduct, particularly those on client confidentiality, conflicts of interest, advertising, direct contact with prospective clients, and the requirement that an attorney exercise independent judgment. The panel noted that attorneys may share office space and staff with nonlawyers but must make the separate nature of the businesses clear to the public and take measures to protect client confidences, and directed the attorney's attention to Rules 1.6, 1.7, 1.8, 5.3, 5.4(c), 7.1, and 7.3(a). Because the attorney had not specified the interrelationship between the firm and the business but foresaw mutual clients, the panel observed the arrangement was rife with potential conflicts of interest that might preclude representing a client/customer of the corporation or otherwise give rise to violations, and invited the attorney to reapply for further guidance should such circumstances arise.

Currency note

This opinion was issued in April 1997, after the Rhode Island Supreme Court adopted the Model Rules of Professional Conduct effective November 15, 1988, and it applies Rules 1.6, 1.7, 1.8, 5.3, 5.4, 7.1, and 7.3 as originally adopted. The Rhode Island Supreme Court later revised the Rules of Professional Conduct in 2007 as part of the nationwide Ethics 2000 process, which added a rule specific to law-related services. 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 Treat this page as historical context, not current guidance.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 mentioned here.

Common questions

Q: Can a lawyer run a non-legal business out of the law office?

A: The opinion concluded a lawyer may, provided the lawyer and firm employees comply with the Rules, particularly on confidentiality, conflicts, advertising, direct contact with prospective clients, and independent judgment.

Q: Can law-firm staff also work for the lawyer's side business?

A: The opinion permitted sharing staff with the nonlawyer business but required making the separate nature of the businesses clear to the public and taking measures to protect client confidences, pointing to Rules 5.3 and 5.4(c) among others.

Q: What is the main risk the panel flagged?

A: The opinion warned that where individuals may be clients of both the firm and the business, the arrangement is rife with potential conflicts of interest that could preclude representing a client/customer or otherwise violate the Rules.

Background and rules framework

The opinion did not resolve a single rule but directed the attorney to a cluster of Rhode Island Rules of Professional Conduct: Rule 1.6 (confidentiality), Rules 1.7 and 1.8 (conflicts and business dealings), Rule 5.3 (responsibilities for nonlawyer assistants), Rule 5.4(c) (independence of professional judgment from nonlawyer influence), Rule 7.1 (communications about services), and Rule 7.3(a) (direct contact with prospective clients). The panel relied on a South Carolina opinion for the principle that a lawyer may share space and staff with nonlawyers if the separate businesses are clear to the public and client confidences are protected.

Citations and references

Rules of Professional Conduct:

• Model Rule 1.6 / RI RPC 1.6 (confidentiality of information)
• Model Rules 1.7, 1.8 / RI RPC 1.7, 1.8 (conflicts of interest; business transactions)
• Model Rule 5.3 / RI RPC 5.3 (responsibilities regarding nonlawyer assistants)
• Model Rule 5.4 / RI RPC 5.4(c) (professional independence of a lawyer)
• Model Rules 7.1, 7.3 / RI RPC 7.1, 7.3(a) (communications; direct contact with prospective clients)

Other opinions cited:

• South Carolina Bar Ethics Advisory Comm. Op. 96-13 (1996): sharing office space and staff with nonlawyers requires clarity and protection of confidences

See also

• RI EAP Op. 99-08: A dual law and investment-advisory practice
• RI EAP Op. 97-06: Former solicitor and of-counsel city conflicts

Source

• Landing page: https://www.courts.ri.gov/attorney-resources/Pages/Ethics-Advisory-Panel-default.aspx
• Original PDF: https://www.courts.ri.gov/Opinions/EAP%2097-05.pdf

Original opinion text

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

Final

                      RHODE ISLAND SUPREME COURT
                           ETHICS ADVISORY PANEL

Opinion No. 97-05, Request # 703
Issued April 10, 1997

FACTS:

    The inquiring attorney is incorporating a business in which the attorney and his/her

spouse will be directors and shareholders. The attorney proposes to operate the business in the
same office where he/she conducts a law practice. The office manager and the parale-
gal/secretary for the law firm will staff the business and serve as its officers. The inquiring at-
torney anticipates that individuals may be mutual clients of both his/her law firm and of the busi-
ness. The purposes of the business are the importation and exportation of consumer products and
resort development outside the continental United States.

ISSUES PRESENTED:

   The inquiring attorney asks whether the arrangement is permissible under the Rules of

Professional Conduct.

OPINION:

    The arrangement is permissible provided the inquiring attorney and employees of the law

firm adhere to the Rules of Professional Conduct particularly those rules pertaining to client con-
fidentiality, conflicts of interest, advertising, direct contact with prospective clients, and the re-
quirement that an attorney exercise independent judgment.

REASONING:

    Attorneys may share office space and staff members with nonlawyers, but must make the

separate nature of their businesses clear to the public and must take measures to protect client
confidences. See South Carolina Bar Ethics Advisory Comm. Op. 96-13 (1996). The Panel di-
rects the inquiring attorney's attention to Rules 1.6, 1.7, 1.8, 5.3, 5.4(c), 7.1, and 7.3(a).

     The inquiring attorney has not specified the nature of the interrelationship between the

law firm and the business corporation. The attorney foresees, however, that there will be indi-
viduals who will be clients of both. In the opinion of the Panel, the arrangement is rife with po-
tential conflicts of interest. Circumstances may preclude the inquiring attorney from undertaking
the legal representation of a client/customer of the corporation, or may otherwise give rise to vio-
lations of the Rules of Professional Conduct. Such circumstances, should they arise, may war-
rant the inquiring attorney to reapply to the Panel for further guidance.