State Bar of Arizona Ethics Opinions

01-09: Advertising and Solicitation; Sharing Office Space; Referrals
10/2001

A group of lawyers who share an office suite but are separate firms may share a common phone number for communications with Spanish-speaking prospective clients and hire a common receptionist simply to route calls to lawyers in the group based upon practice area without being deemed a "referral service." Such an arrangement appears to be group advertising. If the receptionist's only interaction with the prospective clients is to forward the calls to the appropriate attorney, then his or her common employment by the separate firms probably will not impute conflicts among the group members. [ERs 1.6, 1.10, 5.3, 7.1(r)(3), 7.5]

FACTS[1]

 

The inquiring attorney is one of a group of Spanish-speaking attorneys ("The Group"), each member of which practices in a different area of law.  The Group wishes to pool resources in order to more efficiently advertise to the Spanish-speaking community.  In addition, The Group wants to hire a Spanish-speaking receptionist who would handle calls from potential clients.

 

The Group's interest in such a program arises from its belief that Spanish-speaking potential clients tend to look in the telephone book for any attorney who speaks Spanish, regardless of whether the attorney practices in the area of law that the potential client needs.  The Group feels that this practice wastes the time of both the attorney and the caller, because the attorney spends time speaking with a person he cannot help, and may not be able to refer the caller to an attorney who both speaks Spanish and practices the needed area of law.

 

The members of The Group are all either sole practitioners or members of firms containing two or three attorneys.  They do not want to associate together as a firm.  The inquiring attorney indicated that in the advertisement the members of The Group would be separately listed with their firm names, but they would share a phone number for receiving calls from Spanish-speaking potential clients.  The Group has limited resources available to hire the Spanish-speaking staff necessary to help members of the Spanish-speaking community, but together would be able to hire a Spanish-speaking receptionist.

 

QUESTIONS PRESENTED

 

1.       May lawyers, not associated together in a firm, advertise as a group?

 

2.       Is the proposed advertisement and staff-sharing program a lawyer-referral service as contemplated by the Rules of Professional Conduct?

 

3.       May lawyers, not associated together in a firm, share a telephone line and a receptionist for the purpose of screening potential clients and setting appointments?

 

RELEVANT ETHICAL RULES

 

ER 1.6.            Confidentiality of Information

 

(a)           A lawyer shall not reveal information relating to representation of a client unless the client consents after consultation, except for disclosures that are impliedly authorized in order to carry out the representation, and except as stated in paragraph (b), (c) and (d) or ER 3.3(a)(2).

 

(b)            A lawyer shall reveal such information to the extent the lawyer reasonably believes necessary to prevent the client from committing a criminal act that the lawyer believes is likely to result in death or substantial bodily harm.

 

(c)            A lawyer may reveal the intention of his client to commit a crime and the information necessary to prevent the crime.

 

(d)            A lawyer may reveal such information to the extent the lawyer reasonably believes necessary to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client, to establish a defense to a criminal charge or civil claim against the lawyer based upon conduct in which the client was involved, or to respond to allegations in any proceedings concerning the lawyer's representation of the client.

 

ER 1.10.            Imputed Disqualification:  General Rule

 

(a)       While lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by ER 1.7, 1.8(c), 1.9 or 2.2.

 

(b)            When a lawyer becomes associated with a firm, the firm may not knowingly represent a person in the same or a substantially related matter in which that lawyer, or a firm with which the lawyer was associated, had previously represented a client whose interests are materially adverse to that person and about whom the lawyer had acquired information protected by ER 1.6 and 1.9(b) that is material to the matter.

 

(c)            When a lawyer has terminated an association with a firm, the firm is not prohibited from thereafter representing a person with interests materially adverse to those of a client represented by the formerly associated lawyer unless:

 

(1)          the matter is the same or substantially related to that in which the formerly associated lawyer represented the client; and

 

(2)          any lawyer remaining in the firm has information protected by ER 1.6 and 1.9(b) that is material to the matter.

 

(d)            A disqualification prescribed by this Rule may be waived by the affected client under the conditions stated in ER 1.7.

 

ER 5.3.            Responsibilities Regarding Nonlawyer Assistants

 

With respect to a nonlawyer employed or retained by or associated with a lawyer:

 

(a)            a partner in a law firm shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that the person's conduct is compatible with the professional obligations of the lawyer;

 

(b)            a lawyer having direct supervisory authority over the nonlawyer shall make reasonable efforts to ensure that the person's conduct is compatible with the professional obligations of the lawyer; and 

 

(c)           a lawyer shall be responsible for conduct of such a person that would be a violation of the rules of professional conduct if engaged in by a lawyer if:

 

(1)            the lawyer orders or, with the knowledge of the specific conduct, ratifies the conduct involved; or

 

(2)            the lawyer is a partner in the law firm in which the person is employed, or has direct supervisory authority over the person, and knows of the conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable remedial action. 

 

ER 7.1.            Communications and Advertising Concerning a Lawyer's Services

 

(a)       A lawyer shall not make false or misleading communication about the lawyer or the lawyer's services.  A communication is false or misleading if it:

 

(1)            contains a material misrepresentation of fact or law or omits a fact necessary to make the statement considered as a whole not materially misleading;

 

(2)            is likely to create an unjustified expectation about results the lawyer can achieve or states or implies that the lawyer can achieve results by means that violate the rules of professional conduct or other law;

 

(3)            compares the lawyer's services with any other lawyers' services, unless the comparison can be factually substantiated;

 

(4)            is a factual statement which cannot be factually substantiated.

 

* * * *

 

(h)            No lawyer shall, directly or indirectly, pay all or a part of the cost of an advertisement by a lawyer not in the same firm unless the advertisement discloses the name and address of the non-advertising lawyer, the relationship between the advertising lawyer and the non-advertising lawyer, and whether the advertising lawyer may refer any case received through the advertisement to the non-advertising lawyer.

 

* * * *

 

(j)            A lawyer shall not give anything of value to a person for recommending the lawyer's services, except that a lawyer may pay the reasonable cost of advertising or written or recorded communications permitted by these rules and may pay the usual charges of a lawyer referral service or other legal service organization.

 

* * * *

 

(r)            A lawyer or his partner or associate or any other lawyer affiliated with him or his firm may be recommended, employed or paid by, or may cooperate with, one of the following offices or organizations that promote the use of his services or those of his partner or associate or any other lawyer affiliated with him or his firm if there is no interference with the exercise of independent professional judgment in behalf of his client:

 

* * * *

 

(3)        a lawyer referral service operated, sponsored, or approved by a bar association.  A lawyer shall not accept referrals from a lawyer referral service unless the service:

 

(A)            engages in no communication with the public and in no direct contact with prospective clients in a manner that would violate the rules of professional conduct if the communication or contact were made by the lawyer;

 

(B)            receives no fee or charge that constitutes a division or sharing of fees;

 

(C)            refers clients only to lawyers lawfully permitted to practice law in Arizona when the services to be rendered constitute the practice of law in Arizona;

 

(D)            furnishes the state bar on a quarterly basis with the names of all lawyers participating in the service; and

 

(E)            neither represents nor implies to the public that this service is operated, endorsed, sponsored or approved by the state bar, unless the service is operated, endorsed, sponsored or expressly approved by the state bar.

 

* * * *

 

ER 7.5.            Firm Names and Letterheads

 

(a)            A lawyer shall not use a firm name, letterhead or other professional designation that violates ER 7.1.  A trade name may not be used by a lawyer in private practice.

 

(b)            A law firm with offices in more than one jurisdiction may use the same name in each jurisdiction, but identification of the lawyers in an office of the firm shall indicate the jurisdictional limitations on those not licensed to practice in the jurisdiction where the office is located.

 

(c)            The name of a lawyer holding a public office shall not be used in the name of a law firm, or in communications on its behalf, during any substantial period in which the lawyer is not actively and regularly practicing with the firm.

 

(d)            Lawyers may state or imply that they practice in a partnership or other organization only when that is the fact.

 

RELEVANT ARIZONA ETHICS OPINIONS

 

Ariz. Ops. 85-8, 90-09, 91-24, 94-04, 95-13, 99-06

Adv. Op. 01-93

 

OPINION

 

I.        Group Advertising

         

No provision of the Rules of Professional Conduct specifically prohibits lawyers from advertising as a group.  The group advertisement proposed, like all attorney advertising, is subject to ER 7.1(a).  Therefore, it must not be false or misleading, nor may it contain a material misrepresentation of fact, or omit a fact necessary to make the advertisement not materially misleading.  The inquiry does not clearly indicate the contents of the proposed group advertisement, therefore this Opinion does not comprehensively address its compliance with ER 7.1(a).

 

The Committee and the courts have indicated that group advertising programs are ethically permissible.  Numerous opinions have distinguished group advertising from impermissible lawyer referral services.  See, e.g., Ariz. Op. 95-13 (1995) (stating that "'group advertising' is distinguishable from referral services and is permissible even if for profit and not sponsored by a bar association"); Adv. Op. 01-93 (1993) (noting that a program that refers callers to lawyers based strictly on geography is permissible group advertising rather than a lawyer referral service); see also Alabama State Bar Assn. v. R.W. Lynch Co., Inc., 655 So.2d 982, 984 (Ala. 1995) (approving same program considered in Adv. Op. 01-93).  Advertising Opinion 01-93 also indicated that group advertising is "one of the few economically feasible means for individual and small firm attorneys to" advertise, impliedly approving the practice.

 

Ethical Rule 7.1(h) provides that no lawyer may pay the cost of advertising for another lawyer with whom he is not affiliated in a firm, unless the advertisement discloses the name and address of the paying lawyer and his relationship with the other lawyer.  While The Group's proposal may be viewed as each of The Group's members financing the advertisement of the other members, the advertisement that The Group proposes does not run afoul of ER 7.1(h) for two reasons.  First, the advertisement is more reasonably characterized as each lawyer paying for his portion of the advertisement, rather than financing the other lawyers' advertisement.  In addition, the advertisement, as proposed, meets the requirements of ER 7.1(h) because, according to the inquiry, each attorney will be individually listed within the advertisement.

 

Ethical Rule 7.5(a) prohibits a lawyer from using a professional designation that is false or misleading.  In addition, ER 7.5(d) allows a lawyer to "state or imply that [he] practice[s] in a partnership or other organization only when that is the fact."  (emphasis added).  The Committee has found fault with group advertisements that imply a false relationship between the advertising attorneys.  See Ariz. Op. 85-8 (1985)  ("The obvious problem with a group advertisement of this sort is that it fails to indicate the individual lawyers who are sponsoring the advertisement or, if it does indicate their names and affiliations, it may imply some sort of relationship between them that is probably impermissible under ER 7.5.  This would, of course, depend on the specific content of the advertisement . . .")  If a group advertisement clearly indicates that the advertising lawyers are not affiliated together in a firm, the advertisement is ethically permissible. 

 

II.          Referral Services

 

The inquiring attorney noted a concern that having the receptionist schedule appointments with the attorneys based upon the subject matter of the client's needs may violate the Rules of Professional Conduct.  The question is whether such an arrangement qualifies as a lawyer referral service.  If so, the lawyer and the referral service must comply with ER 7.1(j) and ER 7.1(r)(3).  Under ER 7.1(j), "a lawyer . . . may pay the usual charges of a lawyer referral service . . ." but such a service must meet the requirements of ER 7.1(r)(3), that is, it must be "operated, sponsored, or approved by a bar association."  The inquiry did not indicate any advance approval by a bar association, so, if the shared receptionist is a lawyer referral service, paying the receptionist would violate ER 7.1(r)(3).

 

The Committee has differentiated group advertising programs from lawyer referral services by the manner in which each matches potential clients to attorneys.  The programs that match attorneys to clients based strictly on geography have been considered to be group advertising programs, while those that match clients to attorneys based upon the character of the client's legal needs are considered referral services.  See Ariz. Op. 99-06 (1999) (lawyer referral service); Ariz. Op. 95-13 (1995) (group advertising program); Adv. Op. 01-93 (1993) (group advertising program); Ariz. Op. 90-09 (1990) (lawyer referral service).  The Committee has stated:

 

[T]he defining characteristic of a lawyer referral service to be "[t]he process of ascertaining the caller's legal needs and then matching them to a member having the appropriate 'area of expertise.'". . . Likewise, a report of the ABA Standing Committee on Lawyer Referral and Information Services notes that the primary purpose of lawyer referral services "is to provide the client with an unbiased referral to an attorney who has experience in the area of law appropriate to the client's need . . . [The service] is expected to be able to match the consumer's particular legal, economic, geographic, language, and other needs with an attorney who is competent to handle the matter

referred . . ."

 

Ariz. Op. 99-06 (1999).

 

The manner in which the inquiring attorney proposes that the receptionist will screen calls and schedule appointments, based on the type of attorney the client appears to need, is similar to a lawyer referral service.  But, since the receptionist is an employee of The Group, rather than a separate entity, the receptionist should not be considered a referral service.  It appears that the receptionist, in scheduling appointments with members of The Group based upon practice area, will be doing nothing different than a receptionist who works for a firm with attorneys who practice different areas of law.

 

III.      Staff-Sharing

 

Staff and office-sharing arrangements are not addressed by the Rules of Professional Conduct. However, such arrangements give rise to concerns under ER 5.3, Responsibilities Regarding Nonlawyer Assistants.  Lawyers have a duty to supervise their nonlawyer assistants, and may be subject to discipline for failure to adequately do so.  Each member of The Group owes a separate duty under ER 5.3 to supervise the jointly employed receptionist, and each member may be held liable for another member's failure to fulfill his duty.  This joint liability does not make the arrangement unethical, it simply requires the members to be especially vigilant.

 

The staff-sharing arrangement also implicates the conflict of interest rules, specifically ER 1.10, Imputed Disqualification.  Even though the inquiring attorney and the other members of The Group that wish to jointly employ a receptionist are not associated together in a firm, their relationship may be considered such that the rule regarding imputed disqualification may come into play.  In numerous situations, courts and ethics committees have considered lawyers who share office space and staff to be a firm for purposes of the conflicts of interest rules.  Concerns regarding preserving client confidences and the appearance of impropriety have led them to apply ER 1.10 to attorneys who merely share office space and staff.

 

The inquiry into whether lawyers who share staff should be considered a firm for the purpose of imputed disqualification is a factual one that takes into account the totality of the circumstances.  See In re Sexson, 613 N.E.2d 841 (Ind. 1993) (noting that the court must look at "the level of association, the appearance of the association to the public, any specific agreements, access to confidential information, and the purpose of the rule").  When attorneys share staff and office space, leave their office doors open, and commonly consult with each other, they are often considered to be a firm for conflicts of interest purposes.  Under ER 1.10, a lawyer may not represent a client who a member of his firm could not represent under ERs 1.7, 1.8(c), or 1.9.  If the shared receptionist merits considering The Group a firm, either because all of the members have access to confidential information of one of the member's clients, or because the duty of loyalty to clients will be damaged by the client's impression that the attorneys are in some way professionally affiliated, then the members may be disqualified from representing certain clients.

 

The inquiring attorney did not indicate that the Spanish-speaking staff member would do anything other than answer initial telephone calls from potential clients and schedule appointments.  If this is actually the extent of the receptionist's work, it seems that the attorneys would not be considered a firm for conflicts purposes.  The receptionist's access to confidential information would be limited, and his opportunity to pass on such information would also be limited.  See Ariz. Op. 91-24 (1991) (stating that "[s]o long as safeguards are instituted to ensure that confidential information obtained in the intake process is not disseminated" the conflict of interest rules would not apply).  Assuming that the members of The Group do not share office space, it is unlikely that a client would feel that the attorney's loyalty is compromised by sharing a receptionist, that the client may never even see, and will likely speak with only once.

 

CONCLUSION

 

A group of lawyers who share an office suite but are separate firms may share a common phone number for communications with Spanish-speaking prospective clients and hire a common receptionist simply to route calls to lawyers in the group based upon practice area without being deemed a "referral service."  Such an arrangement appears to be group advertising.  If the receptionist's only interaction with the prospective clients is to forward the calls to the appropriate attorney, then his or her common employment by the separate firms probably will not impute conflicts among the group members.  A group advertisement listing one phone number for several individual firms is permissible as long as each firm is identified in the advertisement. 



[1] Formal Opinions of the Committee on the Rules of Professional Conduct are advisory in nature only and are not binding in any disciplinary or other legal proceedings.  Ó State Bar of Arizona 2001