1. F. REGULATION OF LAWYERS IN FIRMS 1. REGULATION OF LAW FIRMS o What Forms of Business Entity Can Lawyers Use? o Traditional forms o Sole Proprietorship o Partnership o Limited Liability Forms o Corporation o Limited Liability Company o Limited Liability Partnership

2. [Forms of business entity] o What is at stake? o interests of creditors/ claimants o Clients (recipients of legal services) o Other creditors of the firm o Liability o E ntity itself o Principals (partners, shareholders) o Particular members providing service o Liability insurance!

3. o Basic issues o Statutory forms, judicial regulation of lawyers’ practice – who decides what? o Henderson, p. 93: how exactly does the Georgia court answer this question? o when corporate form is used, what is liability of principal for others’ malpractice? o are lawyers permitted to use that form? o Is there a problem with limiting liability to non-client creditors of the firm?

4. o MRPC 1.8(h)(1): limitation of liability for professional services – is a lawyer permitted to do that? If so, under what conditions? o No agreement between lawyer and client to limit lawyer’s prospective liability for malpractice, unless client is independently represented by other counsel in doing so

5. o How does that principle apply to a lawyer in a firm practicing as a limited liability entity? o ABA Ethics Committee 1961 (!) said that as long as the lawyer performing the services remains personally liable, and the firm as such remains liable to the extent of its assets, it’s OK to relieve others from personal liability o many if not most jurisdictions require each firm as well as each lawyer to have adequate professional liability insurance o Comment 14 to Rule 1.8

6. Law-related Services and Multidisciplinary Practice o May a law firm also provide non-legal services as part of its business, including those which are separately regulated and licensed? 4 possible modes: o lawyer member as provider o qualified non-lawyer provider (NLP) as employee o qualified NLP as firm principal (partner, shareholder) o qualified NLP as separate entity, with law firm holding equity interest

7. Non-lawyer provider as employee o Are the non-legal services to be provided “law-related”? MRPC 5.7(b) o If so, what are the firm’s obligations? MRPC 5.7(a) o If the customer receives only those services? o If the customer is also a legal-services client? o See also MRPC 5.3 on lawyer duties concerning non-lawyer assistants

8. Non-lawyer provider as principal o What is the issue? MRPC 5.4 o Will the non-lawyer share in the firm’s legal fees? o Will the non-lawyer exercise control over the provision of legal services? o If either, flat prohibition!

9. Non-lawyer provider as distinct enterprise owned by firm o What is the issue? o Does an attorney-client relationship arise between N-L’s customer and firm? o If the customer also wants legal services, can the firm provide them? Under what conditions? o MRPC 5.7(a)(2) o Formal Opinion No. 2003-1, p. 95

10. Associate’s Ethical Obligations o What is the nature of the associate’s employment relationship to firm? o Jacobson, p. 101 o If associate is directed by partner to do something that assoc. believes is improper, what are assoc’s obligations and options? o MRPC 5.2 o Jacobson: what if you get fired for objecting? o If associate engages in improper conduct, are partners co-responsible? MRPC 5.1

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