Statement of Facts
Lawyers A, B, C, and D agree to practice law together within a single, contiguous office space as "Law Offices of A and B." The organization and practice of the "Law Offices of A and B" is set up as follows:
Each attorney represents to his clients and the public that the attorney is a member of the firm of A and B through the use of pleadings, business cards, letterheads and the like.
Each attorney recognizes that because of such representation as opposed to merely sharing an office space as independent practitioners, each attorney is vicariously liable for the other attorneys' professional acts and/or omission and has consented to disclosing potential difficulties concerning representation of a client to all participating attorneys.
All participating attorneys are insured for legal negligence through a common insurance policy in the name of "Law Offices of A and B" identifying each participating attorney as a member of the firm, and with each attorney paying a pro-rata share of the premiums.
Each attorney maintains an autonomous practice with independent bank accounts, trust accounts, and books and records.
Each attorney has his own clientele from whom he is, in most circumstances, solely responsible, but there is frequent cooperation or participation between two or more attorneys on cases warranting or requiring such involvement. All attorneys regularly seek and receive informal advice from the other members of the firm regarding the handling of current client matters.
There is no pooling of the income generated by the several attorneys from their individual rendition of legal services, nor is there a sharing of the net profits.
Each attorney separately bills for legal services rendered although each attorney may pay a fee to another attorney within the firm for referral or for hourly work on behalf of the attorney's client. Each attorney filed his own tax return reflecting such attorney's operations.
The attorney-client contracts usually refer to the retention of "attorney C of the Law Firm of A and B" or the "Law Offices of A and B" or merely "attorney C."
Common assets are leased from a nonprofessional corporation the shares of which are exclusively owned by the participating attorneys and the common liabilities such as office rent are incurred by the nonprofessional corporation, which has two common employees leased to each attorney member and their staff and all other staff personnel are employed directly by the attorney for whom they work. The variable expenses such as long distance, copying expense, incurred by the nonprofessional corporation is paid for by each participating attorney on the basis of personal usage while fixed expenses incurred by the nonprofessional corporation such as rent and equipment leases are paid by the participating attorney on a per capita basis. Shareholders make majority rule decisions regarding the purchase of new assets and services and the "Law Office of A and B" has substantial library and computer research facilities.
The participating attorneys of "A and B" do not have any written agreement concerning the relationship other than the bylaws of the nonprofessional corporation.
Except for the addition of new attorneys, the relationship of the participating attorneys "A and B" has remained static for several years with no deviation from the purposeful holding out as a firm of attorneys associated in the practice of law.
Is the relationship of lawyers A, B, C, and D and their collective continuing holding out as attorneys associated in the practice of law consistent with Rule 7.04(d), Texas Disciplinary Rules of Professional Conduct?
Rule 7.04(d) provides: "A lawyer shall not hold himself out as being a partner or associate with one or more other lawyers unless they are in fact partners or associates."
The comment of Rule 7.04 provides: "Lawyers who share office facilities but who are not in fact partners or employees of a single law firm may not denominate themselves in any manner suggesting such an ongoing professional relationship as, for example 'Smith & Jones' or "Smith & Jones Associates', or 'Smith & Associates'. Such titles create the false impression that the lawyers named have assumed a joint professional responsibility for clients' legal affairs."
The intent of Rule 7.04(d) is to prevent lawyers who are not partners from appearing to be partners. The purpose of Rule 7.04(d) is to prevent lawyers from misleading the public through the use of a firm name into believing the lawyers have assumed joint professional responsibility for the clients' legal services.
A reasonably prudent person would conclude that lawyers practicing as members of "the Law Offices of A and B" have represented to the general public the existence of a partnership, since the general public is not privy to private arrangements between the lawyers. To avoid such holding out, the "Law Offices of A and B" should disclaim partnership status by adding appropriate language of disclaimer.