Ethics Opinions

Opinion No. 01-1

Summary: A lawyer may be "of counsel" to two firms if he performs legal services for both firms on a regular and continuous basis. Such a relationship constitutes an association within the meaning of Rule 1.10 and the two firms would therefore be treated as one for purposes of disclosure to clients and of compliance with conflict of interest rules.

Facts:A lawyer inquires whether he may be "of counsel" to two differentfirms at the same time.
Discussion:This inquiry requires the Committee to interpret the combined effect of Mass.R. Prof. C., Rules 7.1 and 7.5. Rule 7.1 states:

Alawyer shall not make a false or misleading communication about the lawyer orthe lawyer's services. A communication is false or misleading if itcontains a material misrepresentation of fact or law, or omits a fact necessaryto make the statement considered as a whole not materially misleading.

Rule 7.5 states:
(a)A lawyer shall not use a firm name, letterhead, or other professionaldesignation that violates Rule 7.1. . . .

TheCommittee addressed the use of the term "of counsel" in its Opinion82-10. It concluded that "it would be deceptive under the present rulefor a lawyer or law firm to identify another lawyer or law firm as ‘ofcounsel' unless they have continuous and regular dealings that involve the rendering of legal advice by one tothe other" (emphasis added). The governing language under the currentRules of Professional Conduct is similar to the language of the previousdisciplinary rules and we reach the same conclusion as Opinion 82-10. Wetherefore advise that it would not be misleading for a lawyer to be "ofcounsel" to two different firms so long as the lawyer has"continuous and regular dealings" that constitute the performanceof legal services for both firms. See ABA Formal Opinion 90-357, which statesthe "core characteristic" of an "of counsel" status asbeing that the lawyer has a "close, regular, personal relationship"with the firm.
Asecond issue raised by the inquiry is the extent to which an "ofcounsel" relationship raises problems of conflict of interest. Mass. R.Prof. C., Rule 1.10 states the general rule on imputed disqualification asfollows:
(a)While lawyers are associated in a firm, none of them shall knowingly representa client when any one of them practicing alone would be prohibited from doingso by Rules 1.7, 1.8(c), or 1.9 . . . .

TheComments to Rule 1.10 indicate that there is no bright line test defining whenlawyers are "associated in a firm," but Comment [1] to Rule 1.10states that the way the firm presents itself to the public is significant. The designation "ofcounsel" indicates an ongoing relationship with each firm, and theCommittee believes that such a relationship falls well within the notion of anassociation for the purpose of the conflict of interest rules. The Committeetherefore concludes that if a lawyer becomes of counsel to two firms, conflictswould have to be checked and dealt with as though the two firms were one. Thismeans that whenever anyone, not just the "of counsel" lawyer, ineither firm contemplates undertaking a new matter, the conflicts data bases ofboth firms need to be checked. (See Cinema 5, Ltd. v. Cinerama, Inc., 528 F.2d1384 (2d Cir. 1976) where the court treated two firms in different cities asone for disqualification purposes when they had a common partner). Screeningwould be permitted only to the limited extent allowed in Rule 1.10(d). (Seealso the column by First Assistant Bar Counsel Nancy Kaufman, "Up closeand personal - the of counsel relationship," MBA Lawyers Journal,p. 4 (Oct. 2000). The article also discusses many problems, not addressed inthis inquiry, that may arise out of an "of counsel" relationship.)
Thefact that the two firms are treated as one also raises problems of thedisclosure that must be made to clients. In our view, the fact that the twofirms are treated as one for purposes of conflict of interest matters, thusimplicating the vicarious disqualification principle of Rule 1.10, means thatclients need to be told of this circumstance. Comment 6 to Rule 1.10 statesthat the imputed disqualification principle "gives effect to theprinciple of loyalty to the client as it applies to lawyers who practice in alaw firm. Such situations can be considered from the point of view of thepremise that a firm of lawyers is essentially one lawyer for purposes of therules governing loyalty to the client, or from the premise that each lawyer isvicariously bound by the obligation of loyalty owed by each lawyer with whomthe lawyer is associated." That latter premise governs this situation,and clients of both firms need to be so informed. Therefore, clients whoconsult the "of counsel" lawyer at firm A must be told that thelawyer has an "of counsel" relation with Firm B that results in thetwo firms being treated as one for a variety of purposes. Clients who come toFirm A will ordinarily have no expectation that they are involved with Firm Bat all and may not wish to have any relationship at all with Firm B. Moreover,the same situation may exist with all clients of any lawyer at either Firm Aand Firm B. They too need to be informed of the affiliation with the other firmand of the consequences thereof. This conclusion also derives from Rule 1.4(b),which requires a lawyer to "explain a matter to the extent reasonablynecessary to permit the client to make informed decisions regarding therepresentation." (See also Opinions 1995-8 and 2000-4 of the Committee onProfessional and Judicial Ethics of the Association of the Bar of the City ofNew York permitting firms to designate themselves as affiliated or associatedif they have an "of counsel" relationship with one another and makeappropriate disclosure of the nature of the relationship to clients andprospective clients and also requiring the firms to be considered as one unitfor conflict clearing purposes.)
Thus,while we have advised that a lawyer may be "of counsel" to twofirms, the consequences of a dual affiliation suggest that such an associationmay present problems unless the two firms are in, or are prepared to assume, anaffiliated status or other special circumstances exist. Examples of the lattermight be a lawyer being of counsel to two family members who have their ownpractices or a labor specialist being of counsel to two small labor specialtyfirms in different parts of the state.
This advice is that of acommittee without official governmental status.
©2014 Massachusetts Bar Association