Opinion 2006-3
(June 2006)

The inquiry involves the propriety of a proposed arrangement between two law firms, A&B, LLP and C&D, P.C.

A&B, LLP is a limited liability partnership. Five (5) of the seven (7) lawyers in the firm represent labor unions and union benefit plans. The remaining two (2) lawyers represent claimants in workers’ compensation matters and social security disability cases, as well as plaintiffs in personal injury matters.

C&D, P.C. is a professional corporation consisting of four (4) attorneys. Three (3) of the attorneys represent plaintiffs in personal injury matters; the fourth represents claimants in workers’ compensation matters.

The inquirer proposes to form a partnership known as A,B,C, & D (ABCD) consisting of A&B, LLP and C&D, P.C. The attorneys and support staff who will be performing work for ABCD will be on the A&B, LLP payroll. Their salaries and expenses will be charged to ABCD as an internal accounting matter.

ABCD will take over the pending workers’ compensation and social security disability cases of both A&B, LLP and C&D, P.C. ABCD will also take over all of the personal injury cases of A&B, LLP as well as some of the personal injury cases of C&D, P.C.. A&B, LLP will continue to separately represent labor unions and union benefit plans. C&D, P.C. will continue to separately handle certain personal injury matters on behalf of plaintiffs.

You have inquired as to whether the proposed formation of partnership ABCD is acceptable within the Rules of Professional Conduct.

It is the opinion of the Committee that nothing in the Pennsylvania Rules of Professional Conduct prohibits the proposed arrangement. Two Committee opinions address similar situations. In 2001-5 the Committee approved of an attorney being a member in more than one law firm at the same time; in 89-19, the Committee approved of an attorney being a member of one law firm and a partner or “Of Counsel” to another at the same time. The same analysis applies to the present inquiry. The proposed arrangement raises issues under several Pennsylvania Rules of Professional Conduct (the “Rules”) specifically, Rule 1.0(e) defining informed consent; Rule 1.5(e) regarding fee splitting; Rules 1.6, 1.7, 1.9, and 1.10 regarding disclosure of confidential information and conflicts of interest; Rule 7.1 prohibiting misleading communications about the lawyers or the lawyers’ services; and finally Rule 7.5 relating to firm names and letterheads.

Upon formation of the above partnership, Rule 1.7 requires that an ongoing conflict of interest check be done between the clients not only of each firm, but also between the clients of all firms, i.e. A&B, C&D and ABCD. Rule 1.9, dealing with former clients, mandates consideration of potential conflicts with them as well. The conflict of interest check between firms is required because of imputed disqualification under Rule 1.10. That Rule provides (with very limited exception), that the conflict of one member of a firm becomes the conflict of all members of a firm. Thus, if an individual is a member of more than one firm, it follows under the Rule that the conflict of any member of any of the involved firms becomes the conflict of all the members of the involved firms. Moreover, since there are different firms involved, the dictates of client confidentiality under Rule 1.6 require that each firm obtain a client's or potential client's informed consent, as defined under Rule 1.0(e), to circulate enough information outside the firm to the other firms involved in order to do the required conflicts check.
Regarding the use of different names for the firms that have a shared member or partner, Rule of Professional Conduct 7.1(a) provides that:

A lawyer shall not make a false or misleading communication about the lawyer or the lawyer's services. A communication is false or misleading if it contains a material misrepresentation of fact or law, or omits a fact necessary to make the statement considered as a whole not materially misleading.
The committee is very concerned by the potential for misleading a client into thinking there is no involvement with the other two firms, when establishing a professional relationship with only one specific firm. A client of A&B, C&D and/or ABC&D, must understand that while the client is establishing a professional relationship with only one of them, that for the purposes of conflicts of interest, the clients of all the firms must be considered as a whole. Thus, non-disclosure of the multiple firm relationships could be considered misleading under Rule 7.1. Thus, the inquirer is advised to provide for compliance with the provisions of Rule 7.5. Thus, any attorneys in any of the firms who are also members or partners in any of the other firms should have this clearly noted on listings such as stationary, announcements and business cards. Specifically, such listings must indicate which members of the firm are members of other firms, and the identification of those other firms. Likewise, the composition of ABC&D being A&B LLP and C&D, P.C. should also be noted.

Finally, there must be compliance by all three firms with the disclosure provisions regarding fee sharing as provided for in Rule 1.5(e).

CAVEAT: The foregoing opinion is advisory only and is based upon the facts set forth above. The opinion is not binding upon the Disciplinary Board of the Supreme Court of Pennsylvania or any other Court. It carries only such weight as an appropriate reviewing authority may choose to give it.