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Ethics Opinions from the Bar Association of San Francisco

INFORMAL OPINION 1974-1

It is ethical for a law firm opening an office in a city in another state to list both offices' partners on the letterhead with those out of state indicated by an asterisk if the law firm is a partnership. However, if the firm is a California professional corporation, it would not be permitted.

QUESTION:

Is it ethically proper for a San Francisco law firm which is opening an office in Washington, D. C. to list the four or five lawyers who will be partners in the firm and will be staffing the Washington office on the firm's San Francisco letterhead in the proper ranking of those lawyers within the firm but with identification, such as an asterisk, of these lawyers as having been admitted to the District of Columbia Bar only.

OPINION:
It is if the law firm is a partnership, but it is not if the firm is a California professional corporation.

DISCUSSION:
The question of multistate partnerships has been presented to other ethics committees with nonuniform decisions on the question, depending upon the specific facts of the situation. As noted below in this opinion, only a partnership may admit lawyers who are not admitted in California. Rules IV A. 2(a) and (4) of the Law Corporation Rules of the State Bar of California provide explicitly that:

"(2)(a) each shareholder is an active member of the State bar, and (b) each director and officer (except as provided in §13403 of the Corporations Code) is a shareholder of the applicant;"

"(4) each employee of applicant who will practice law, whether or not a director, officer, or shareholder, is an active member of the State Bar."

Thus, if the question concerned a California law corporation, the opinion would have to be an unequivocal no since neither a partner ("shareholder") nor a lawyer employee may be unlicensed in California. Therefore, a California law corporation apparently cannot lawfully open an out-of-state office if that office will be staffed by other than California lawyers.

Since the question presented concerns a San Francisco law firm which is a partnership, the California Law Corporation Rules do not apply. In addition, the proposed new Rules of Professional Conduct which were approved in principle and suggested for adoption by the Board of Governors of the State Bar contain the following provisions:

Rule 2-103(B) "A member of the State Bar in private practice shall not practice under a trade name, a name that is misleading as to the identity of the lawyer or the lawyers practicing under such name, or any name other than a firm or corporation name containing the name of one or more of the lawyers in the firm, except that the name of a professional corporation shall contain the words 'professional corporation' or wording or abbreviations denoting corporate existence, and if otherwise lawful a firm may use as, or continue to include in, its name the name or names of one or more deceased or retired members of the firm or of a predecessor firm in a continuing line of succession."

Rule 2-103(D) "A partnership shall not be formed or continued between or among lawyers licensed in different jurisdictions unless all enumerations of the members and associates of the firm on its letterhead and in the listings permissible under (A)(6) of this rule make clear that jurisdictional limitations on those members and associates of the firm not licensed to practice in all listed jurisdictions; however, the firm name may be used on its letterhead and in listings permitted under (A)(6) of this rule so long as neither is used as a public communication nor as an advertisement calculated to attract lay clients."

Rule 2-103(A)(6) referred to in 2-103(D) concerns permission to members of the State Bar to use law lists or ABA certified directories.

Analogous problems to the question presented have been analyzed and opinions given by other legal ethics committees. For example, in Opinion No. 306 (October 3, 1968) the Los Angeles County Bar Association Committee on Legal Ethics decided that a California law firm may not include on its letterhead the name of an out-of-state law firm as "of counsel." The facts in that question were that there would be two separate law firms and they would merely be referring work to each other.

In Opinion No. 325 of the Los Angeles County Committee, the question of an out-of-state law firm opening a branch office in California was presented. The California branch office would be staffed by California lawyers who would handle not only their own previously engaged clients but also clients of the out-of-state firm. The decision of the Los Angeles County Committee was that it was entirely proper for California lawyers to become members of a law firm which had lawyers who were admitted in other jurisdictions. However, the Committee referred to its earlier Opinion No. 295 which holds that it is improper to include in the firm name of a California partnership the name of a lawyer who is not a member of the California State Bar. This latter point is not at issue in the present question since it is a California law firm which presently has only California lawyers as members whose name will be used out of the State.

The American Bar Association Committee on Professional Ethics in its Opinion No. 318 (July 3, 1967) quotes approvingly decisions from the New York City Committee on Professional Ethics to the effect that it is not improper for lawyers licensed in other jurisdictions to be listed on the letterheads of New York firms providing the letterheads and other representations of the firm make it clear which members of the firm are licensed to practice only in the other jurisdiction. The New York rule is also to the effect that the firm name must be made up only of New York lawyers.

After review of earlier decisions the ABA Committee reached the following conclusion in Opinion No. 318:

"It would be improper to maintain an office in a state under a partnership name which includes the names of partners not licensed to practice in that state, unless such practice is condoned by local custom and usage in the state where the office is to be maintained. This prohibition does not apply to firms engaged exclusively in the practice of one of the specialized services recognized by Canon 27 or to firms maintaining a branch office in Washington, D. C., except in states where such a practice is prohibited by statute. In those exceptional cases, care should be taken to see that the letterheads, listings and all other representations of the firm name to the public make it clear which members of the firm are licensed to practice only in Wasnington, or wherever the branch office may be located."

Former Canon 33 of the "Canons of Professional Ethics of the American Bar Association" provided as follows:

"Partnerships among lawyers for the practice of their profession are very common and are not to be condemned. In the formation of partnerships and the use of partnership names, care should be taken not to violate any law, custom, or rule of court locally applicable. Where partnerships are formed between lawyers who are not all admitted to practice in the courts of the state, care should be taken to avoid any misleading name or representation which would create a false impression as to the professional position or privileges of the members not locally admitted. In the formation of partnerships for the practice of law, no person should be admitted or held out as a practitioner or member who is not a member of the legal profession duly authorized to practice, and amenable to professional discipline. In the selection and use of a firm name, no false, misleading, assumed or trade name should be used. The continued use of the name of a deceased or former partner when permissible by local custom, is not unethical, but care should be taken that no imposition or deception is practiced through this use. When a member of the firm on becoming a judge, is precluded from practicing law, his name should not be continued in the firm name. Partnerships between lawyers and members of other professions or nonprofessional persons should not be formed or permitted where any part of the partnership's employment consists of the practice of law."

The former Canons have been superseded now by the Code of Professional Responsibility which comprises Canon 2 "A lawyer should assist the legal profession in fulfilling its duty to make legal counsel available." The Disciplinary Rules following Canon 2, DR 2-102 (C) and (D) state:

"(C) A lawyer shall not hold himself out as having a partnership with one or more other lawyers unless they are in fact partners."

"(D) A partnership shall not be formed or continued between or among lawyers licensed in different jurisdictions unless all enumerations of the members and associates of the firm on its letterhead and in other permissible listings make clear the jurisdictional limitations on those members and associates of the firm not licensed to practice in all listed jurisdictions; however, the same firm name may be used in each jurisdiction."

It therefore appears that under both the former and present Canons of the ABA the proposed action is ethical as to a law partnership. The proposed new State Bar rules explicitly approve the proposed action. For reasons best known to the board of Governors, professional law corporations are prohibited from doing what law partnerships apparently are able to do, at least insofar as the explicit rules presently in effect and the proposed rules provide. Recognizing that there is a distinction between law corporations and law partnerships it is therefore the conclusion of this Committee that it is ethically proper for a California law partnership to admit to membership lawyers licensed in jurisdictions other than California and it is further ethically proper for the letterhead of such firm to list the out-of-state partners and associates provided that the limitations on their practice are clearly indicated, e.g., by means of an asterisk next to each name and the legend below the listing " District of Columbia Bar only."

All opinions of the Committee are subject to the following disclaimer:
Opinions rendered by the Ethics Committee are an uncompensated service of The Bar Association of San Francisco. Opinions are advisory only, and no liability whatsoever is assumed by the Committee or The Bar Association of San Francisco in rendering such opinions, and the opinions are relied upon at the risk of the user thereof. Opinions of the Committee are not binding in any manner upon the State Bar of California, the Board of Governors, any disciplinary committee, The Bar Association of San Francisco, or the individual members of the Ethics Committee.

In using these opinions you should be aware that subsequent judicial opinions and revised rules of professional conduct may have dealt with the areas covered by these ethics opinions.

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