The Ethics of the Inter-Firm Collaboration Model
Unlike business persons, lawyers are often confined by ethical rules that are linked to their license to practice law. For example, lawyers, generally, cannot combine operations with non-lawyers. Lawyers cannot engage in certain kinds of advertising and are, in general, not allowed to split fees with other lawyers.
As lawyers serve as fiduciaries to their clients and so have an extremely high duty of loyalty to live up to, the legal profession is very sensitive to conflicts of interest that may arise in the attorney-client relationship. Even joining networking groups, which is very popular in certain professional communities, confronts the lawyer with ethical considerations.
As the result, the issue of ethics has a role to play among attorneys pursuing the Inter-Firm Collaboration Model of Law practice, in which informal combinations of lawyers are formed to fulfill a specific legal function.
On the other side, clients, working with attorneys who operate under this mode, may at first blush be disconcerted by the fact that the legal team organized does not constitute a formal partnership or corporation. In reviewing the ethics rules that govern attorney conduct, the forms of association contemplated do not include attorney networks, collaborations, or affiliations. Indeed, Disciplinary Rule (”DR”) 2-102(C) of the New York Rules of Professional Responsibility expressly prohibits a lawyer from holding “himself or herself out as having a partnership with one or more lawyers unless they are in fact partners.”
For this reason, in IFC practice, more than in traditional law practice, disclosure and transparency are critical. Indeed, the caveat to many of the restrictions imposed on lawyers by the rules of professional responsibility, is that if the client, after being duly educated about an arrangement, consents to it, then the lawyer has fulfilled his or her ethical responsibilities. For example, DR 2-107(A) prohibits lawyers from splitting fees with other lawyers, except where “[t]he client consents to employment of the other lawyer after full disclosure that a division of fees will be made . . . .”
For practitioners of IFC, the lesson is clear: clients need to understand what inter-firm collaboration means, both in terms of what the relationship between and among attorneys will be and the manner in which collaborating attorneys will be paid.
One manner of assuring that clients are informed enough to consent to the IFC arrangement is to prepare a Q&A document to be provided to a potential client that describes what the legal arrangement between or among attorneys will be, and how the arrangement will operate. One example of such a document is the Q&A web page that can be found on the C-G Immigration & Commercial Affiliates website (www.cglawaffiliates.com). The page details the arrangement between Goodman Law and H. Taufiq Choudhury, P.C. It should be noted that at several junctures, the website discloses to readers that the affiliation does not constitute a corporation or partnership under New York law. The Q&A web page re-confirms this fact, along with detailing how fees shall be allocated and how resources shall be shared as between the collaborating firms.
It is also recommended to IFC attorneys that they enter into retainer agreements that include a provision warranting that the client has reviewed related IFC literature provided by the attorney and understands and consents to the nature of the collaboration. In sum, the ethical issues confronting IFC practice are not insurmountable and should not be an impediment to clients interested in working with a group of collaborating attorneys. That said, however, there is no formal body of rules that governs IFC practice. While the existing rules of professional conduct can provide over all moral guidance to IFC practitioners, the fact that these rules only refer to formal “partnerships” and “professional corporations”, leaving out less traditional forms of collaboration, is evidence of how far the legal profession has to go to address the significant challenges that technology and changing economic requirements will pose to traditional law practice in the near future.
Tags: attorney-client relationship, conflicts of interest, Disciplinary Rule, disclosure, DR-2-107(A), ethical rules, ethics, fiduciaries, Inter Firm Collaboration Model, lawyers, legal profession, license to practice law, transparency
