NYCLA Committee on Professional Ethics Formal Opinion 735 on Law Firm Titles

NYCLA COMMITTEE ON PROFESSIONAL ETHICS

FORMAL OPINION

No. 735

TOPIC:

 

Law firm titles and compensation arrangements between attorneys.

 

DIGEST:

 

A LAWYER WHO IS THE SOLE PARTNER AND OWNER OF A LAW FIRM MUST BE SUFFICIENTLY INVOLVED IN A LAW FIRM’S PRACTICE IN ORDER FOR THE LAWYER’S NAME TO APPEAR IN THE LAW FIRM’S TITLE; TRADES NAMES MAY NOT BE USED AS THE TITLE OF A LAW FIRM; NAMES OF ATTORNEYS ON THE LETTERHEAD OF A LAW FIRM MUST CORRECTLY STATE THE ROLE OF THE LAWYER AT THE LAW FIRM.

 

CODE:

 

DR 1-102, DR 1-104, DR 2-102.

 

QUESTIONS:

 

  1. Whether a foreign lawyer admitted to practice in New York may be employed by another lawyer in a non-partner role at a law firm and list the foreign lawyer’s name in the firm’s title if the foreign lawyer would be doing all or most of the work for the firm?

 

  1. Whether the foreign lawyer’s compensation may be structured as if the lawyer were a partner of the firm although the lawyer is in fact an employee?

 

  1. Whether an attorney’s name must appear as part of the firm’s title, or may the firm title reflect the type of law practiced at the firm, such as the name “Labor Law Rights”?

 

  1. Whether the foreign lawyer’s status as an employee of the firm prevents the lawyer from being (i) listed on the firm’s letterhead solely and/or with the partner, and (ii) the ultimate “beneficiary” with the partner of the law firm’s income?

 

OPINION:

 

The Committee received an inquiry from a foreign lawyer (the “Foreign Lawyer”) who holds a H1B work visa and is licensed to practice in New York. The Foreign Lawyer is employed by a small law firm that provides legal services in the labor and employment law areas. The Foreign Lawyer asserts that because of certain immigration requirements regarding the H1B work visa that the lawyer needs to “incorporate” with a U.S. citizen if the Foreign Lawyer wishes to establish his own law firm. A New York licensed attorney (who is an American citizen) is willing to do so (“the U.S. Lawyer”). The U.S. Lawyer would be the sole partner and owner of the new firm where the Foreign Lawyer would practice.

 

  1. Whether a foreign lawyer admitted to practice in New York may be employed by another lawyer in a non-partner role at a law firm and list the foreign lawyer’s name in the firm’s name if the foreign lawyer would be doing all or most of the work for the firm?

 

Disciplinary Rule (the “DR”) 2-102(B) of the New York Lawyer’s Code of Professional Responsibility (the “Code”) provides that a lawyer shall not practice under “a name that is misleading as to the identify of the lawyer or lawyers practicing under such name.” The test for how much work the U.S. Lawyer must contribute in order for his name to be ethically included in the law firm’s name is not numerical, but qualitative, namely: is the U.S. Lawyer sufficiently involved to provide the supervision required of the law firm collectively (see DR 1-104(A) and (C)) and himself individually as a manager of the law firm and partner (see DR 1-104(B))? If the U.S. Lawyer were not in fact practicing with the firm, then the name of the firm that includes the U.S. Lawyer would seem to violate DR 2-102(B).

 

The Foreign Lawyer’s question also raises the issue of whether his name may be included in the firm’s title if the Foreign Lawyer will not be a partner due to legal constraints. The Committee believes DR 2-102(C) is applicable in this instance, which states that “[a] lawyer shall not hold himself . . . out as having a partnership” unless the lawyer is in fact a partner. Listing an attorney’s name in a firm title, without further clarification, will generally convey that such attorney is a partner. Thus, the Foreign Lawyer could not hold himself out as a partner of a law firm unless he was in fact one.

 

  1. Whether the foreign lawyer’s compensation may be structured as if the lawyer were a partner of the firm although the lawyer is in fact an employee?

 

The Committee cannot address the question of the legality of such an arrangement, but the Committee believes DR 1-102(A)(4) is instructive, as “conduct involving dishonesty, fraud, deceit, or misrepresentation” is proscribed by the rule. If the effect or intent of such an arrangement were to deceive a person or governmental agency, it would violate the Code.

 

  1. Whether an attorney’s name must appear as part of the firm’s title, or may the firm title reflect the type of law practiced at the firm, such as the name “Labor Law Rights”?

 

DR 2-102(B) does not require that all lawyers’ names be included in the firm title, only, by implication, a minimum of one. The U.S Lawyer, as the sole partner and owner of the law firm, would appear in the firm’s title.

 

“Labor Law Rights” appears to be a trade name. Trade names are prohibited under DR 2- 102(B), which provides that a firm “shall not practice under a trade name,” and require that the appropriate legal suffix (e.g., P.C., L.L.C., or L.L.P.) be included if “permitted by law.”

 

  1. Whether the foreign lawyer’s status as an employee of the firm prevents the lawyer from being (i) listed on the firm’s letterhead solely and/or with the partner, and (ii) the ultimate “beneficiary” with the partner of the law firm’s income?

 

With respect to (i), if the Foreign Lawyer is not legally a partner of the firm, the Committee is of the view that the firm’s letterhead should clarify that the U.S. Lawyer is a partner and the role performed by the Foreign Lawyer at the firm. With respect to (ii), while the Committee does not believe that a specific ethical issue is apparent, if such an arrangement should prove illegal, it would be a violation of DR 1-102(A)(3) (lawyer shall not engage in “illegal conduct”).