Ethical perils of partnering with nonlawyers
There is nothing new with lawyers partnering with nonlawyers on business matters, agreed panelists of a recent ABA CLE program “Foreclosures, Debt Collection and Other High Volume Areas of Practice: The Ethical Perils of Partnering with Nonlawyers.” What has changed is the vehicle by which the partnering is being done, such as through Craigslist and new technologies. And tighter economic climes — both in terms of foreclosures for clients, and also the need for lawyers to draw in new business in — are raising the likelihood of doing so.
While certain tasks can be delegated, the lawyer is ultimately responsible for the work and his or her reputation, said Tarbert.
Young lawyers may be especially vulnerable to a pitch from the outside, said panelists Elizabeth Clark Tarbert, The Florida Bar; and Kenneth M. Mogill, a Lake Orion, Mich., attorney. They urged lawyers to investigate the approaching entity to understand how that entity operates, who does what and what they want—or else lawyers are putting their license on the line.
Among the first questions lawyers should ask themselves is “Who’s in charge here?” If it’s not the lawyer, she should avoid such a relationship, said panelists, citing Model Rules 5.4 and 5.5.
A second question lawyers should ask is “Who’s getting the client?” Lawyers need to remind themselves of the restrictions on lawyer advertising that may impact the partnering, and how clients are being led to the business and/or lawyer.
A further consideration is “Who has the expertise?” Given the escalation in foreclosures, it may not be the lawyer who has the extensive experience in such things as refinancing. Without the expertise, one might not be truly in charge and may not be able to offer the best legal advice.
Lawyers should also continue to keep in mind that establishing the attorney-client relationship has to be done by the lawyer. While certain tasks can be delegated, the lawyer is ultimately responsible for the work and his or her reputation, said Tarbert.
A lawyer’s workload must not be such that the lawyer cannot adequately supervise and make the independent, professional decisions as to what is in the best interest of the client, continued panelists, citing ABA Formal Opinion 08-451 and Model Rule 5.3.
When it comes to the issue of confidentiality, it can be especially challenging to make one’s nonlawyer partner understand the critical importance of confidentiality. Having procedures in place, including training and written manuals and policies, is helpful.
Victoria Vuletich, associate professor, Thomas M. Cooley Law School, moderated the Center for Professional Responsibility, Young Lawyers Division and Center for CLE-sponsored program.