Can a Washington lawyer run an ancillary law-related business and refer clients to it?

Plain-English summary

The committee responded generally because the lawyer presented no details about the contemplated conduct, and it expressed no opinion about the conduct of others. It stated there is no per se prohibition on a lawyer establishing a law-related business. However, to the extent the lawyer makes any referrals to the law-related business, the conduct must strictly adhere to the Rules of Professional Conduct, including but not limited to RPC 1.6, 1.7, 1.8, 5.4, and 5.5, as well as Informal Opinion 87-1.

The committee added that whether an attorney-client relationship exists depends on the subjective understanding of the client, citing In re McGlothlen, 99 Wn.2d 515 (1983). To the extent that strict separation exists between the legal practice and the law-related business, the law-related business may be held to all of the RPCs. For further analysis the committee referred the lawyer to ABA Model Rule 5.7, noting specifically that this Model Rule has not been adopted by Washington.

Currency note

This opinion was issued in 1997, before the Washington State Bar Association's adoption of the 2006 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 Treat this page as historical context, not current guidance.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. Washington's cited rules correspond to ABA Model Rules 1.6 (confidentiality), 1.7 and 1.8 (conflicts of interest), 5.4 (professional independence), and 5.5 (unauthorized practice); the committee referred to ABA Model Rule 5.7 (law-related services) but noted Washington had not adopted it.

Common questions

Q: Can a lawyer set up a law-related business on the side?

A: The committee said there is no per se prohibition on a lawyer establishing a law-related business.

Q: What rules govern referrals to that business?

A: The committee said referrals must strictly adhere to the RPCs, including but not limited to RPC 1.6, 1.7, 1.8, 5.4, and 5.5, plus Informal Opinion 87-1.

Q: Could the side business itself be held to the lawyer rules?

A: The committee said that to the extent strict separation exists between the legal practice and the law-related business, the law-related business may be held to all of the RPCs, and that whether an attorney-client relationship exists turns on the client's subjective understanding under In re McGlothlen.

Q: Does Washington follow ABA Model Rule 5.7?

A: The committee referred the lawyer to Model Rule 5.7 for further analysis but specifically noted that Washington has not adopted it.

Background and rules framework

The opinion treated a lawyer's ancillary law-related business under RPC 1.6 (confidentiality), 1.7 and 1.8 (conflicts of interest), 5.4 (professional independence), and 5.5 (unauthorized practice), corresponding to the like-numbered ABA Model Rules. The committee tied the risk to referrals between the law practice and the side business and to the client's subjective understanding of whether an attorney-client relationship exists, citing In re McGlothlen. It pointed to ABA Model Rule 5.7 (law-related services) as further reading while noting Washington had not adopted that rule.

Citations and references

Rules of Professional Conduct:

• ABA Model Rule 1.6 (confidentiality); Washington RPC 1.6
• ABA Model Rule 1.7 (conflicts of interest); Washington RPC 1.7
• ABA Model Rule 1.8 (conflicts; specific rules); Washington RPC 1.8
• ABA Model Rule 5.4 (professional independence of a lawyer); Washington RPC 5.4
• ABA Model Rule 5.5 (unauthorized practice of law); Washington RPC 5.5
• ABA Model Rule 5.7 (responsibilities regarding law-related services), noted as not adopted by Washington

Cases:

• In re McGlothlen, 99 Wn.2d 515 (1983), existence of an attorney-client relationship turns on the client's subjective understanding

Other opinions cited:

• Informal Opinion 87-1

See also

• WSBA Ethics Op. 1119: Lawyer-Nonlawyer Partnership
• WSBA Ethics Op. 1051: Lawyer Referral Service and UPL
• WSBA Ethics Op. 1165: Aiding Unauthorized Practice

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=797

Original opinion text

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

Advisory Opinion: 1723
Year Issued: 1997
RPC(s): RPC 1.6; 1.7; 1.8; 5.4; 5.5; ABA Model Rule 5.7; Informal Opinion 87-1
Subject: Dual professions; ancillary law-related business; referrals.

The Committee expresses no opinion regarding the conduct of others. Since you do not present any details regarding your contemplated conduct, we can respond to your contemplated conduct only generally. There is no per se prohibition on the establishment of a law-related business by a lawyer. However, to the extent that any referrals are made by you to the law-related business, your conduct must strictly adhere to the Rules of Professional Conduct including, but not limited to, RPC 1.6, 1.7, 1.8, 5.4, and 5.5 as well as Informal Opinion 87-1. Furthermore, whether an attorney-client relationship exists depends on the subjective understanding of the client, In re Mc Glothlen, 99 Wn.2d 515 (1983). Thus, to the extent that strict separation exists between your legal practice and the law-related business, the law-related business may be held to all of the RPCs. For further analysis of this matter, the Committee refers you to ABA Model Rule 5.7. We specifically note, however, that this Model Rule has not been adopted by Washington.