How should a firm list a retiring partner who forms his own PA but stays in the building as Of Counsel?

Plain-English summary

A professional association law firm ("X") had three attorneys. The senior attorney ("A") was nearing retirement and would form his own professional association ("A's P.A.") for tax purposes, of which he would be sole owner. A would remain in X's building, sharing office space, equipment, staff, and facilities, and, though no longer on X's payroll, would continue to practice part time, handling criminal and domestic work for his clients and those referred by X, and would serve as a sounding board for X's members. The question was how to indicate this new relationship on X's letterhead.

The committee assumed A, through A's P.A., would be "Of Counsel" to X, a term Ethics Advisory Opinion 82-23 (quoting ABA Formal Opinion 330) defined as a close, continuing, personal relationship that is not that of a partner, associate, or outside consultant. Under Rule 7.1, a lawyer may not make false, misleading, deceptive, or unfair communications about the lawyer or his services, and Rule 7.5(a) bars a firm name, letterhead, or designation that violates Rule 7.1, while Rule 7.5(d) allows lawyers to state or imply they practice in a partnership or organization only when that is the fact. The committee concluded that listing A's P.A. as "Of Counsel" to X should dispel any notion that A is a partner; if neither A nor A's P.A. is a shareholder in X, listing A without making his quasi-independent status clear would violate Rule 7.5(d).

The committee added, citing Ethics Advisory Opinion 86-20, that a firm that is a professional association must state that fact on its letterhead, and that where a lawyer has incorporated his practice, that must be designated too, so both X's PA status and A's practice through A's P.A. must appear. Quoting the first Comment to Rule 7.5 (and Opinion 96-01), it concluded a firm may be designated by the names of all or some members, including names reflecting the firm's lineage, so long as the communication is not materially misleading; X should be able to retain A's name as part of its firm name as long as his status and that of A's P.A. are clearly shown on the letterhead.

Currency note

This opinion was issued in 1998, before the South Carolina Bar's adoption of the 2005 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: How should the firm list a retiring partner who forms his own PA but stays in the building?

A: The committee concluded the letterhead should indicate the lawyer is "Of Counsel" and that he practices through his own professional association.

Q: Can the retiring lawyer's name stay in the firm name?

A: The committee concluded yes, so long as his "Of Counsel" status and his PA's status are clearly shown on the letterhead and nothing is materially misleading.

Q: Must the firm's professional-association status appear on the letterhead?

A: The committee concluded yes: both the firm's PA status and the lawyer's practice through his own PA must be designated on the letterhead.

Background and rules framework

The opinion interpreted South Carolina RPC 7.1 (no false or misleading communications) and RPC 7.5(a) and 7.5(d) (firm names and letterhead; stating or implying a partnership or organization only when true), corresponding to the like-numbered Model Rules, and the meaning of "Of Counsel" from Opinion 82-23 and ABA Formal Opinion 330.

Citations and references

Rules of Professional Conduct:

• South Carolina RPC 7.1 / Model Rule 7.1: no false or misleading communications.
• South Carolina RPC 7.5(a), 7.5(d) / Model Rule 7.5: firm names and letterhead.

Other opinions cited:

• S.C. Bar Advisory Opinions 82-23, 86-20, 96-01; ABA Formal Opinion 330 (definition of "Of Counsel").

See also

• No sibling opinions yet indexed.

Source

• Landing page: https://www.scbar.org/for-lawyers/quicklinks/legal-resources/ethics-advisory-opinions/ethics-advisory-opinion-98-31/

Original opinion text

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

UPON THE REQUEST OF A MEMBER OF THE SOUTH CAROLINA BAR, THE ETHICS ADVISORY COMMITTEE HAS RENDERED THIS OPINION ON THE ETHICAL PROPRIETY OF THE INQUIRER’S CONTEMPLATED CONDUCT. THIS COMMITTEE HAS NO DISCIPLINARY AUTHORITY. LAWYER DISCIPLINE IS ADMINISTERED SOLELY BY THE SOUTH CAROLINA SUPREME COURT THROUGH ITS COMMISSION ON LAWYER CONDUCT.

Ethics Advisory Opinion 98-31

A professional association law firm ("X") consists of three attorneys. The senior of the three ("A") will soon reach retirement age and at that time will form his own professional association ("A's P.A.") for tax purposes. A will be the sole owner of A's P.A. However, it is anticipated A will remain in X's building and share office space, equipment, telephone, administrative staff and other facilities in the building. While A will no longer be on the payroll of X, it is anticipated he will continue to practice part time, handling all criminal and domestic work for his clients and those referred to him by X. He will also make himself available to counsel with the members of X on any item which may need a "sounding board."

QUESTION:
What is the proper way to indicate this anticipated new professional relationship between these attorneys on X's letterhead?

SUMMARY:
X's letterhead should indicate that A is "Of Counsel" to X, along with an indication that A is practicing as a professional association. So long as A is listed in accordance with the foregoing, his name may remain a part of the firm name.

OPINION:
It is assumed that A, through A's P.A., will be "Of Counsel" to X. Ethics Advisory Opinion 82-23, quoting ABA Formal Opinion 330, defined this term as "a close, continuing, personal relationship between an individual lawyer and a law firm or lawyer, . . . one that is not that of a partner, associate, or outside consultant."

Rule 7.1 states that "A lawyer shall not make false, misleading, deceptive, or unfair communications about the lawyer or the lawyer's services. A communication violates this rule if it:

(A) Contains a material misrepresentation of fact or law, or omits a fact necessary to make the statement considered as a whole not materially misleading; . . ."

Rule 7.5(a) states that "A lawyer shall not use a firm name, letterhead or other professional designation that violates Rule 7.1." Rule 7.5(d) states the "Lawyers may state or imply that they practice in a partnership or other organization only when that is the fact." Listing A's P.A. as "Of Counsel" to X should be sufficient to dispel any notion that A is a partner of X and make clear his relationship to the firm. If neither A nor A's P.A. is a shareholder in X, listing A or his P.A. without making his quasi-independent status clear would violate Rule 7.5(d).

Ethics Advisory Opinion 86-20, issued under the Code of Professional Responsibility, stated that "the vast majority of ethics advisory opinions considering the issue have held that a law firm that is a professional association must state this fact on its letterhead and further that when one or more of the lawyers in the firm have incorporated their practices as a professional corporation, this fact must be designated on the letterhead," and the result should be the same under the present Rules of Professional Conduct. X's status as a professional association must appear on its letterhead, as must that of A's practice through A's P.A.,

In Ethics Advisory Opinion 96-01, this Committee quoted the first Comment to Rule 7.5, which states that a law firm may be designated by the names of all or some of its members or by the name of deceased members where there has been a "continuing succession" in the firm's identity. It was the opinion of the Committee that the intent of Rule 7.5 is to allow law firms to inform the public of the law firm's lineage as long as such communication does not contain a material misrepresentation or other misleading statement regarding the law firm's origin. X should be able to retain A's name as a part of its firm name as his status and that of A's P.A. is clearly shown on X's letterhead.