Ethics Committee Formal Opinion #1989-90/9
Employee Leasing – Law Firm Partners
July 25, 1990
A law firm may lease some or all of its lawyers from an employee leasing company so long as the following conditions are met: (i) the existence of the leasing arrangement and, where necessary or appropriate, of its pertinent terms and conditions, are fully disclosed and explained to the clients of the firm and of its leased lawyers, to the leasing company’s insurer(s), and to the creditors (including the taxing authorities) or the firm and of the leasing company; (ii) the lawyers retain complete and independent judgment in rendering legal services to client; (iii) the firm does not, directly or indirectly, share legal fees with the leasing company; and (iv) the lawyers and the firm rigidly adhere to and take reasonable steps to assure ongoing compliance with all provisions of the Rules of Professional Conduct in the delivery of legal services. (see, Rule References above; Rule 5.4(d))
The purpose of Rule 5.4(d) is to (1) assure that the client retains control of the representation; and (2) to enhance the lawyer’s ability to exercise professional independence. To permit a non-lawyer to have a financial stake, or managerial control in the lawyer’s practice would frustrate those purposes. (Rule 5.4(d))
The rules do not expressly prohibit the leasing of lawyers from or by a business not engaged in the practice of law. (Rule 5.4)
Any permitted lawyer-leasing arrangement could not involve a sharing of client fees, or a sharing of profits by the law firm with a nonlawyer. (Rule 1.5(f); Rule 5.4(a); Rule 5.4(d))
Any permitted lawyer-leasing arrangement must permit the complete and unfettered authority for the leased attorneys to exercise independent judgment for and on behalf of all their clients. (Rule 2.1; Rule 5.4(c); Rule 5.4(d)(3))
Any permitted lawyer-leasing arrangement must also insure preservation of client confidences and avoidance of conflicts of interest. (Rule 1.6; Rule 1.7)
The lawyer-employee would have to make a full and adequate disclosure to existing and prospective clients as to the leasing arrangement and those responsible for representing the clients’ interests. (Rule 1.2 (a); Rule 1.4(b); Rule 1.8(f); Rule 7.1)
- Would a law firm violate Rule 5.4(d) or other rules of the New Hampshire Rules of Professional Conduct if it leases its employees from a company not engaged in the practice of law?
- Assuming that lawyer-leasing is not prohibited per se by Rule 5.4(d), what restrictions would be imposed on such an arrangement by Rule 5.4 and other provisions of the Rules of Professional Conduct?