The Ethics of Space Sharing
By Emily L. Bloedel – December 12, 2013
Space-sharing arrangements, in which attorneys enter into a lease to share office space but remain separate firms, provide numerous benefits. Space sharing allows attorneys to share resources, such as receptionists, conference rooms, copiers, and other equipment. It allows attorneys to split operating costs. Space sharing also increases collegiality among lawyers while allowing them to retain financial independence and control.
However, space sharing presents a number of ethical pitfalls that attorneys need to be wary of, including the risk of being perceived as one firm, maintaining confidentiality and evidentiary privileges, and sharing client confidences without client consent. If the attorneys involved in an office-sharing arrangement hold themselves out to the public as a firm or conduct themselves as a firm, they must engage in a conflict-of-interest analysis with every potential client. If the attorneys involved in an office-sharing arrangement give the impression of being one firm, even unintentionally, they could be disqualified from representation in some cases under the doctrine of imputed disqualification.
The Model Rules of Professional Conduct require lawyers to consider the ethical implications of their actions. Public confidence in law and lawyers may be eroded by the irresponsible or improper conduct of a lawyer. Model Code of Prof’l Responsibility Canon 2 cmt. 2. This article discusses the ethics of space sharing with reference to both the Model Rules of Professional Conduct and the Model Code of Professional Responsibility. The Model Code was replaced by the Model Rules in 1983. Some states, however, continued to use the Model Code to guide attorneys in their practice until 2008. Other states, like California, maintain a system separate from the Model Code or the Model Rules. As of May 2013, all states but California have adopted the Model Rules. Although the Model Code has been replaced by the Model Rules, the canons and case law interpreting the canons are used to guide courts in interpreting the Model Rules.
The Risk of Being Perceived as One Firm
The possibility of a client believing that attorneys are acting as one firm rather than several different firms gives rise to the risk of all attorneys involved in the arrangement being sued for legal malpractice even though not all of the attorneys were actually engaged by the client. If a lawyer practices under a name that is misleading as to the identity of the lawyer or lawyers practicing under the firm name, the lawyer has violated Rules 7.1 and 7.5 of the Model Rules of Professional Conduct. (For additional guidance, see the Model Code of Professional Responsibility DR 2-102(B).) By making the separation between firms involved in an office-sharing arrangement clear, attorneys can reduce the risk of being viewed as one firm. Several steps can be taken to reduce the risk:
• Each attorney or firm in the space-sharing arrangement should have separate phone lines and numbers. If the attorneys share a secretary or receptionist, the secretary or receptionist must be trained to identify each firm separately. Colorado Formal Ethics Op. 89 (Nov. 2007).
• Joint letterhead, business cards, or trade names should not be used. Id.
• The firm website should identify its attorneys only. Providing a link to another attorney’s website is acceptable as long as it is clear that the other attorney is not a member of the firm.
• If the firm has a LinkedIn profile, Facebook page, or other social media presence, the firm should list only attorneys who are members of the firm.
Protection of Client Information
A lawyer must preserve the confidences and secrets of a client, including all information about the client’s case. Model Rules of Prof’l Conduct R. 1.6. The normal operation of a law office can expose confidential information to non-lawyer employees. This obligates the lawyer to exercise care in selecting and training employees so that all client confidences may be preserved. Comment 2 to Canon 4 of the Model Code of Professional Responsibility is instructive on this point. To protect client information, attorneys should consider the various ways the information can be accidentally shared, and they should take the following steps:
• Restrict access to client files and information from other office-sharing lawyers.
• Restrict computer and phone access to firm members.
• Restrict fax and copier access. Attorneys and staff should ensure they do not leave confidential client information in copiers where others can view the information, even by accident. If the space-sharing attorneys share a fax number, they must warn all potential users of the machine that fax communications are not private and establish office procedures to prevent confidential materials from being seen by persons other than those employed by the attorney. See ABA Comm. on Prof’l Ethics, Formal Op. 310 (1963).
• Attorneys in separate firms should have their own offices. Filing cabinets and other storage spaces should not be shared by attorneys from different firms. Placing locks on filing cabinets and other areas that hold confidential client information can help reduce the risk of an accidental disclosure of confidential client information.
• Receptionists and secretaries should make an effort to keep clients from being able to see their workspace or hear a potentially privileged conversation. This includes orienting any computers so that clients and others in public areas cannot see what is displayed on the screen. If a privileged conversation occurs over the phone, the receptionist or secretary should take steps to prevent any clients in the waiting area from overhearing the conversation, including taking the call in a private space.
"Cover" Agreements and Sharing Client Confidences Without Consent
Attorneys must take care to avoid revealing client confidences in any context, not just in space-sharing arrangements. However, because space-sharing attorneys occasionally have a “cover” agreement allowing one attorney to step in and handle the other’s work in an emergency, space-sharing arrangements present a special risk to client confidences. If an attorney does have a cover agreement with another attorney, he or she must inform the client and allow the client to decide whether to allow the other attorney access to confidential information in certain circumstances. If the client has not consented to such an arrangement, the lawyer should not associate another lawyer in the handling of a matter. Model Code of Prof’l Responsibility Canon 4 cmt. 2 (discussing the ethical implications of “cover” arrangements). If a client has consented to emergency cover and the cover goes beyond relaying nonconfidential messages, the association is subject to conflict-of-interest rules. Commonwealth v. Allison, 434 Mass. 670, 692 (Mass. 2001).
The Consequences of Insufficient Precautions
In some cases, attorneys who share office space may unintentionally hold themselves out to the public as a firm or conduct themselves as a firm. If this happens, attorneys must engage in a conflict-of-interest analysis under Rule 1.7 of the Model Rules of Professional Conduct. If the attorneys find that a conflict exists among the attorneys and the potential client, they must decline representation. This duty extends to imputed conflicts of interest, which may apply to space sharers if they do not clearly maintain separate firm identities. Model Rules of Prof’l Conduct Rule 1.10 & cmt. 1. If space-sharing attorneys unintentionally appear as a single firm to clients, they run the risk of facing a motion for disqualification under the Model Rules of Professional Conduct. A lawyer’s ethical obligations to current and former clients “generally require disqualification of the lawyer’s entire law firm where any potential for conflict arises.” Castro v. State, 597 So. 2d 259, 260 (Fla. 1992).
Lawyers who share office space, personnel, equipment, or expenses are not prohibited by the ABA Model Rules of Professional Conduct, the ABA Model Code of Professional Responsibility, or other rules, from representing parties with adverse interests. The safeguards, outlined above, although defeating some of the cost-saving benefits of a shared-office relationship, are necessary to ensure that the public is not misled into believing that the lawyers are associated as a firm. Allison, 434 Mass. at 690–92. If attorneys and staff involved in an office-sharing arrangement create adequate safeguards and are diligent in maintaining client confidence, the office-sharing arrangement can benefit both the attorneys and their clients. Office-sharing arrangements should be considered by attorneys working as solo practitioners or in small firms as a way to reduce costs and increase professionalism.
Emily Bloedel is an attorney with the firm of Felser, P.C., in Denver, Colorado.