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When is a Lawyer Not a Lawyer?
Dual Practices
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© 1997 Charles F. Luce, Jr.
All Rights Reserved Worldwide

         It is said that "the Law is a jealous mistress." Certainly the practice of law can be so time consuming it allows for little else. As a matter of legal ethics, however, if the attorney has time for another profession, the law is not so jealous as to prohibit it.

         Special rules apply to attorneys at all times, however, simply by virtue of the fact that they are attorneys. As far as the Rules of Professional Conduct are concerned, a lawyer is never "not a lawyer," whether or not she is actively practicing law or engaged as an attorney in a particular transaction, until the day she surrenders her license. Thus, the rules generally requiring attorneys to act honestly and to be trustworthy apply at all times and in all capacities. See R.P.C. 8.4(b)-(c).

         When a lawyer concurrently undertakes another profession or vocation in addition to the practice of law, she should be especially mindful of possibility of violating certain Rules of Professional Conduct. This is particularly true if the other profession is closely related to the practice of law, e.g., public accountancy, insurance agent or business consultant; where the other profession is practiced from the same office as the legal practice; and where the attorney is performing both legal and non-legal services in the same transaction. Although the Supreme Court has made it clear that a state cannot bar an attorney from truthfully representing that she has other professional qualifications, see Ibanez v. Florida Dep't of Business & Prof. Regulation, 512 U.S. 136, 114 S.Ct. 2084 (1994), the attorney choosing to practice multiple professions must do so mindful that the "lawyer hat" is never off.

         Of particular importance are the Rules relating to the reasonableness of fees, attorney-client confidences, conflicts of interest, business transactions with clients, partnerships and fee-splitting with non-lawyers, aiding the unauthorized practice of laws, and advertising and solicitation. Colo. Bar Ass'n Ethics Committee Opinion 98, Dual Practices, reprinted in 26 The Colorado Lawyer 21 (April 1997), details these concerns in a detailed, narrative fashion, and applies its advise to a common example of dual practices: an attorney also acting as a title insurance agent. Opinion 98 does an excellent job of reviewing Colorado case law, as well as ethics opinions of the American Bar Association and other ethical bodies. Rather than duplicate that fine effort, this article sets forth, in order, those sections of the Colorado Rules of Professional Conduct which should be considered in any dual practice situation.

Rule 1.5(a) Fees: "A lawyer's fee shall be reasonable."

        R.P.C. 1.5 sets forth numerous criteria by which the reasonableness of an attorney's fee is to be judged. The basic test, however, is always one of "reasonableness" and "fairness." In determining "reasonableness," as attorneys who have had their fee applications scrutinized by a judge well know, courts do not follow the rule of "whatever the market will bear." Instead, the total fee for the transaction will be examined. Thus, for example, if the attorney performs services both as an attorney, and also attorney-like services as insurance agent, and receives a fee for each, she can count on the court aggregating the fees to determine whether the legal fee was "reasonable."

Confidentiality of Information

         R.P.C. 1.6:

         (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 . . . .

                  . . . .

         (d) A lawyer shall exercise reasonable care to prevent the lawyer's employees, associates, and others whose services are utilized by the lawyer from disclosing or using such information, except that a lawyer may reveal the information allowed by paragraphs (b) and (c) through such persons.

         R.P.C. 1.8

         (b) A lawyer shall not use information relating to representation of a client to the disadvantage of the client unless the client consents after consultation, except as permitted or required by Rule 1.6 or Rule 3.3.

         Two important considerations to be remembered regarding confidentiality. First, the attorney may not disclose or use confidences learned from a client. While an ordinary businessman may be able to lawfully act on information learned during a deal, a lawyer may not disclose or use this information to the disadvantage of the client. When wearing dual hats, the attorney can almost assuredly count on the court applying the "rule" that "the lawyer's hat is never off."

         Second, the attorney-client privilege applies only to "communication made by the client to him or his advice given thereon in the course of professional employment." Colo. Rev. Stat. 13-90-107(b). The "professional employment," contemplated by the statute is clearly employment as an attorney. Many clients may not separate, or may blur the legal and non-legal functions being performed by the attorney, but it is virtually certain that opposing counsel will attempt to dissect these functions and communications in discovery, with potentially disastrous consequences.

Conflict of Interests

R.P.C. 1.7: The General Rule

(a) A lawyer shall not represent a client if the representation of that client will be directly adverse to another client, unless:

(1) the lawyer reasonably believes the representation will not adversely affect the relationship with the other client; and

(2) each client consents after consultation.

(b) A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer's responsibilities to another client or to a third person, or by the lawyer's own interests, unless:

(1) the lawyer reasonably believes the representation will not be adversely affected; and

(2) the client consents after consultation. When representation of multiple clients in a single matter is undertaken, the consultation shall include explanation of the implications of the common representation and the advantages and risks involved.

(c) For the purposes of this Rule, a client's consent cannot be validly obtained in those instances in which a disinterested lawyer would conclude that the client should not agree to the representation under the circumstances of the particular situation.

R.P.C. 1.8: Prohibited Transactions

(a) A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security or other pecuniary interest adverse to a client unless:

(1) the transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing to the client in a manner which can be reasonably understood by the client;

(2) the client is informed that use of independent counsel may be advisable and is given a reasonable opportunity to seek the advice of such independent counsel in the transaction; and

(3) the client consents in writing thereto.

         The major concerns raised by the conflicts of interest Rules are to determine if the attorney can act as an attorney in a transaction. Under Rule 1.7, the attorney must consider whether she has any dual allegiance which, if not precluding representation altogether, requires the informed consent of the client. The attorney must question whether her own interest, such as receiving a commission for an insurance placement or real estate sale, will limit her ability to exercise independent professional judgement in this regard. With regard to Rule 1.7(c), it is worth noting the very strong admonition of Opinion 98 against an attorney also acting as real estate agents in the same transaction. Under Rule 1.7(c), if a "disinterested lawyer would conclude that the client should not agree to the representation under the circumstances of the particular situation," valid client consent cannot be obtained as a matter of law.

         Finally, Rule 1.8(a)'s general requirement of fairness, coupled with the broad requirement of honesty of Rule 8.4(c), assure that even those professional dealings in which the attorney plays no role as an attorney may be closely scrutinized under the Rules of Professional Conduct.

Independence from Non-Lawyers

         The Law does remain a jealous mistress in at least one respect: the monk-like financial isolation from non-lawyers decreed by R.P.C. 5.4 & 5.5 While the American Bar Association has proposed a rule which would allow law and related professions to practice together under one financial roof, it has not been, and appears a long way from ever being, adopted in Colorado. The prohibition is salient, and stems from the same concerns as champerty and barratry; that financial dependence or influence is antithetic to the exercise of independent professional judgment.

         R.P.C. 5.4(a) generally prohibits fee splitting with non-lawyers. Rule 5.4(a) forbids a lawyer from forming a "partnership with a nonlawyer if any of the activities of the partnership consist of the practice of law." In a similar vein, Rule 5.5(b) maintains the prohibition against assisting non-lawyers to perform activities that constitute the unauthorized practice of law.

         For the attorney conducting a dual practice, this is largely a matter of accountancy, but not one which can be taken lightly. As noted in Opinion 98:

Sharing office space with a nonlawyer does not automatically result in a violation of Rule 5.4(b). Lawyers must take care, however, to keep the law practice and the non-law business separate, including maintaining the confidentiality of law client files pursuant to Rule 1,6 and ensuring, pursuant to Rules 5.1 and 5.3, that their lawyer and nonlawyer employees of the law practice do the same. (Endnotes omitted.)

Advertising and Solicitation

         While this issue pales in comparison with the preservation of client confidences and the avoidance of conflicts of interest, it has received more than its share of publicity, perhaps because, by its nature, advertising is simply more visible.

         While, so far, the Colorado Supreme Court has wisely declined the invitation to regulate "taste" in attorney advertising, the prohibitions against in-person solicitation, by phone or face-to-face remain viable and vigorously enforced. Not so with other trades, as any attorney who has had her workday interrupted by a cold-calling stock broker might wish.

         The United States Supreme Court has made it clear that an attorney may truthfully advertise her other professions and licenses, Ibanez, supra, but has upheld the ban on in-person solicitation. Accordingly, the attorney concurrently practicing another profession must be mindful of the Rules relating to advertising and solicitation in any joint advertising effort.

         With regarding to advertising, R.P.C. 7.2(b) imposes record-keeping requirements on legal advertising not applicable to other professions, while Rule 7.2(c) prohibits an attorney from giving anything of value to another for "recommending the lawyer's services, except that a lawyer may pay the reasonable cost of advertisements or communications permitted by this rule and may pay the usual charges of a not-for-profit lawyer referral service or other legal service organization."

         Combined with R.P.C. 7.3(a)'s prohibition on in person solicitation, Rule 7.2(c) generally prohibits the establishment of "feeder operations" for attorneys. This may create a delicate situation for the dual practice attorney who, in her role as a non-lawyer, is asked by a client, "Say, can you recommend a good lawyer?" R.P.C. 7.2(a) provides:

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         A lawyer shall not by in-person or live telephone contact solicit professional employment from a prospective client with whom the lawyer has no family or prior professional relationship when a significant motive for the lawyer's doing so is the lawyer's pecuniary gain. (Emphasis added.)

"Prior professional relationship," has been generally construed as meaning an attorney-client relationship. See Opinion 98.

         In sum, while the Law does not require those seeking admittance before the bar to forsake all other employment, the attorney wishing to simultaneously wear another hat faces a myriad of issues, and some virtually impossible conflicts of interest, which require careful scrutiny and ad hoc analysis.

Return to the first page of Charles Luce on Legal Ethics and the Practice of Law.