State Bar Ethics Opinions cite the applicable California Rules of Professional Conduct in effect at the time of the writing of the opinion. Please refer to the California Rules of Professional Conduct Cross Reference Chart for a table indicating the corresponding current operative rule. There, you can also link to the text of the current rule.
May a law office comprised of separate sole practitioners who share office space and overhead expenses but who are neither partners nor incorporated hold themselves out as a single entity without identifying themselves as individual practitioners?
May a former partner's name be continued as part of the firm name, with the former partner's consent?
ISSUE (1) Rule 2-101 prohibits attorneys who are neither partners nor principals in the same law corporation from advertising as a single entity without identifying themselves as individual practitioners. A joint advertisement representing the availability of a single entity to render legal services to the public would be deceptive, as it could suggest that each of the attorneys advertising their availability for employment share in the rights and duties arising from the employment of one member of such a group.
ISSUE (2) Rule 2-101 also prohibits the use of a law firm name which includes the name of a former partner of the firm without identifying such person as a non-member (deceased, of counsel, or retired. Such name may be deceptive to the client who could reasonably believe the non-member remains an active partner or member of the law firm, the totality of which the client is employing.
Communications concerning the availability of a member of the Bar for employment may not be confusing, deceptive, or misleading as to the identity of the lawyer and his or her affiliation with a law firm. Under the doctrine of "partnership by estoppel," if a member leads client reasonably to believe that such was being represented not by an individual attorney but entity comprised of several attorneys all the could be professionally liable client.>
Rule 2-101 of the Rules of Professional Responsibility and Conduct of the State Bar of California.
Attorneys may now advertise as a means to communicate their availability for providing legal services to the public. The United States Supreme Court in Bates v. Bar of Arizona (1977) 433 U.S. 350 [97 S.Ct. 2691, 53 L.Ed. 2d 810], invalidated Arizona's absolute prohibition on attorney advertising in holding that advertising by attorneys may not be subjected to blanket suppression. In 1979, the California Supreme Court, in response to the Bates decision, repealed former rule 2-101 of the California Rules of Professional Conduct. In deciding In re R.M.J. (1982) 433 U.S. 191 [105 S.Ct. 929] the U.S. Supreme Court held that misleading advertising may nonetheless be prohibited entirely under the commercial speech doctrine which extends First Amendment protection to commercial speech, subject to regulation concerning permissible restrictions as to the time, manner, and place of the commercial speech. An attorney advertiser's rights are adequately protected as long as any disclosure requirements imposed by law are reasonably related to the state's interest in preventing deception of consumers.1
Former rule 2-103(B) of the California Rules of Professional Conduct prohibited a member of the Bar from practicing under a trade name that was misleading as to the identity of the lawyer. Former rule 2-103 was repealed simultaneously with the enactment of current rule 2-101. In our Formal Opinion 1982-66, we concluded that, while trade names are now permitted following the repeal of the former rule 2-103, they are nonetheless "communications" within the meaning of current rule 2-101 and may therefore be regulated to ensure that they are not false, misleading, or deceptive to the public.
The use of a trade name for a law firm is one method by which a lawyer or lawyers can communicate to the public their availability for the rendering of legal services. Rule 2-1012 now provides:
(A) A "communication" is a message concerning the availability for professional employment of a member or a member's firm. A "communication" made by or on behalf of a member shall not:
(l) Contain any untrue statement; or
(2) Contain any matter, or present or arrange any matter in a manner or format which is false, deceptive, or which tends to confuse, deceive, or mislead the public; or
(3) Omit to state any fact necessary to make the statements made, in the light of the circumstances under which they are made, not misleading to the public...
Rule 2-101 is a client-consumer oriented statute seeking to protect the public from the potential for deception and confusion, which is particularly strong in the context of the advertising of professional services. The preamble of rule 2-101 states the public policy of the rule to be "... to assist the public . . . in making informed choice of legal counsel" The identity of the attorney, partnership or law firm is an overriding factor inherent in any decision to retain counsel. The policy supporting rule 2-101 is therefore to ensure that communications concerning attorney services be clear to the public.
Under the postulated facts, each sole practitioner in a group only shares office space and facilities with the other lawyers in the group. In contrast to a law partnership or law corporation, the members of the group are all sole practitioners with no authority to commit each other's services as counsel for a client and with no intention to assume professional responsibility for one another. The members desire simply to utilize their office sharing arrangement, to hold themselves out as "XYZ Associates," "ABC Legal Association," "The Anywhere Street Legal Clinic," or some similar joint name as a means of self-identification on office letterhead, name plaques on buildings or doors, and the like.
A client may wish to be represented by a law firm comprised of several or many lawyers, and the implications of the law firm name may affect the client's decision. Any communication that suggests multiple lawyers creates the appearance that the totality of the lawyers of the law firm could and would be available to render legal counsel to any prospective client of a member of that group. It may further suggest that each member of the entity shares in the rights and duties emanating from the employment of that single member.
In an earlier opinion, this Committee concluded that the use of a firm name, indicating a partnership when in fact a partnership did not exist, was ethically improper.3 This Committee now concludes that rule 2-101 prohibits separate sole practitioners from using a group trade name to advertise their sole practices jointly unless, in each usage, each lawyer discloses affirmatively that he or she is, in fact, a sole practitioner. Such disclosure will ensure that the public is not inadvertently misled by the common name and will be aware of the limited nature of the relationship between or among the lawyers in the group.
The fundamental principles of ethics and professional responsibility discussed above underlie the second situation posited in this opinion. It follows that any communication may be deceptive if it identifies as partners the names of persons who are not partners actively engaged in the practice of law unless the status of the non-partner or member is disclosed.
With regard to current rule 2-101, the Committee believes that the firm name "A&B" without any further explanation reasonably implies that both "A" and "B" are still actively in practice together. If, in fact, "A" has left the firm, then the use of the former partner's name without an adequate explanation of "A's" true role is violative of rule 2-101. If "B" desires to continue using the firm name "A&B," the firm's office letterhead or other forms of communication referring to the firm name should indicate that "A" has retired, is "of counsel" to the firm, or is deceased, or such other disclosure as will clarify the relationship to the public.
The consent of "A" to the continued use of his or her name after "A" has departed is a necessary but not sufficient condition to that usage. Even with such consent, the issue under rule 2-101 is the accuracy of the information conveyed to the public, and no form of consent can alter the potentially misleading or deceptive impression left by the firm name of "A&B," particularly where that name has been in use for some time and the public may have come to rely upon the active participation of both "A" and "B" in their practice.
In both of the situations posited under Issues (1) and (2) above, the participating lawyers do not intend to assume professional liability for one another. In Issue (1), the sole practitioners, by definition, desire to maintain independent practices, and in Issue (2), the departing partner presumably does not want to remain responsible for the acts and omissions of the remaining partner. In addition to the lawyers' duties arising under rule 2-101 as discussed above, the Committee wishes to note that California law may impute professional liability to the participants in these arrangements unless there are affirmative disclosures to the clients to preclude any detrimental reliance resulting from a deceptive or misleading communication.
An attorney using a group or firm name may be held liable under the doctrine of "partnership by estoppel" if it is suggested that each member of an apparent law firm shares in the rights and duties arising from the rendering of legal services. The doctrine derives principally from two statutes. California Corporations Code section 15016(1) states:
When a person, by words spoken or written or by conduct represents himself or consents to another representing him to anyone, as a partner in an existing partnership or with one or more persons not actual partners, he is liable to any such person to whom such representation has been made ....
Section 15013 of the California Corporations Code states:
Where, by any wrongful act or omission of any partner acting in the ordinary course of the business of the partnership or with the authority of his co-partners, loss or injury is caused to any person, not being a partner in the partnership, or any penalty is incurred, the partnership is liable therefor to the same extent as the partner so acting or omitting to act.
The Supreme Court in Blackmon v. Hale (1970) 1 Cal.3d 548 [83 Cal. Rptr. 194], held that the apparent scope of a partnership business depends primarily on the conduct of the partnership and its partners and on what they cause third persons to believe about the authority of the ostensible partners. A Maryland appellate decision further supports the imposition of partnership by estoppel liability specifically upon a non-member of a law firm. In Meyers v. Aragona (1974) 21 Md.App. 45 [318 A.2d 263], the court found that use of a joint name on letterheads and pleadings without exculpatory language as to the nature of the entity can suffice as a basis for imposing full partnership liability, notwithstanding a private understanding among the lawyers themselves to the contrary.
Thus, each sole practitioner advertising under the trade name of a entity could potentially become liable for the wrongful acts or omissions of the other individual attorneys comprising the entity. Similarly, a non-member named in a law firm title, while not actually engaged in that firm's practice, is potentially liable for the acts or omissions of the actual members of the firm if he or she fails to dispel the impression that a client is being represented by the entire entity. Knowledge of the non-member's status cannot be imputed to the client from the undisclosed knowledge of the attorney or members of the apparent law firm.4
The member may therefore guard against such unintended assumptions of professional liability by making the affirmative disclosures outlined above with respect to rule 2-10l. The crucial concern, both as a matter of legal ethics and of professional liability, is what a client knows or reasonably should know, not what the lawyers privately intend or agree among themselves but fail to communicate.
The manner of the required disclosure will vary with the time, place, and manner of the communication in which the firm name is used with respect to the two issues discussed above. It would be reasonable to expect such disclosures on office letterhead, in informational brochures or advertisements about the firm, and, depending upon its feasibility, in office signs or plaques.
Conversely, where the likelihood of a misimpression or misunderstanding may be less and where the insertion of such material would be unreasonable and impractical, such as the description of a law firm's continuation under the names of retired or deceased partners on a business card, we would deem such material unnecessary under rule 2-101. However, we believe that, under Issue (1) above, even the business cards of the members in the group should contain some appropriate phrase which would negate any misunderstanding by a recipient of the card. We disapprove of the phrase 'A Legal Association' as being insufficiently specific and descriptive. Such a phrase may deceive, confuse, or mislead clients into believing that the members do share professional responsibilities and liabilities with one another; thereby violating rule 2-10l. It may also create fertile grounds for professional liability claims.
This Opinion is issued by the Standing Committee of Professional Responsibility and Conduct of the State Bar of California. It is advisory only. It is not binding upon the courts, the State Bar of California, its Board of Governors, any persons or tribunals charged with regulatory responsibilities, or any member of the State Bar.
1 Zauderer v. Office of Disciplinary Counsel for the Supreme Court of Ohio (1985) 105 S.Ct. 2265.
2 Leoni v. State Bar (1985) 39 Cal. 609, held that rule 2-101(A) is a permissible regulation of misleading advertising. (See Cal. Civ. Code, section 1710, which defines deceit as, "the suggestion as a fact of that which is not true by one who does not believe it to be true;" and People v. Witzerman (1972) 29 Cal.App.2d 168 [105 Cal. Rptr. 284], which defined misleading as, "To guide wrongfully.")
3 Committee on Professional Responsibility and Conduct Formal Opinion 1971-27 which was rendered prior to the enactment of our current rule 2-101, and San Diego County Bar Association Formal Opinion 1985-1.
4 Redmond v. Halters (1979) 88 Cal. App.3d 448 [152 Cal. Rptr. 42.]