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PROPOSED RULE 5.3
RESPONSIBILITIES REGARDING NONLAWYER ASSISTANTS
comparable managerial authority in a law firm shall make reasonable efforts to ensure that
the firm in effect measures giving reasonable assurance that the nonlawyer’s conduct is
compatible with these Rules;
nonlawyer shall make reasonable
efforts to ensure that the person's conduct is compatible with these Rules; and
violation of these Rules if engaged in by a lawyer and if:
involved; or
in
which the person is employed or has direct supervisory authority over the
nonlawyer, and
consequences can be avoided or mitigated but fails to take reasonable
remedial action.
[1] Lawyers generally employ nonlawyers in their practice, including secretaries,
investigators, law student interns, and paraprofessionals. Such employees act for the lawyer in
rendition of the lawyer's professional services. A lawyer should give such employees appropriate
instruction and supervision concerning the ethical aspects of their employment, particularly
regarding the obligation not to disclose information relating to representation of the client, and
should be responsible for their work product. The measures employed in supervising nonlawyers
should take account of the fact that they do not have legal training and are not subject to
professional discipline.
and “Law Firm” See Rule 1.0(d)
“Knows”See Rule 1.0(f)
“Partner”See Rule 1.0(h)
“Reasonable”See Rule 1.0(i)
There is no direct counterpart to the Proposed Rule in the Disciplinary Rules. More
specifically, however, DR 4-101(D) provides that a lawyer "shall exercise reasonable care to prevent
his employees, associates, and others whose services are utilized by the lawyer from disclosing or
using confidences or secrets of a client. . . ." DR 7-107(J) also provides that "[a] lawyer shall
exercise reasonable care to prevent the lawyer’s employees and associates from making an
extrajudicial statement that the lawyer would be prohibited from making under DR 7-107."
The Proposed Rule tracks ABA Model Rule 5.3 with some modifications to clarify the
Rule’s applicability to lawyers in legal departments and legal seervice organizations who possess
managerial authority comparable to that possessed by partners in private practice. In the two places
where the Model Rule refers to nonlawyers acting in conformity with the “professional obligations
of the lawyer,” we have instead referred to the nonlawyer acting in conformity “with these
Rules.”
Changes Made to 1997 Committee Preliminary Draft In Response to Comments
The Preliminary Draft limited the lawyer’s Rule 5.3 duties to the actions of nonlawyer
employees. The Committee voted to return to the Model Rule formulation that makes the Rule
applicable to “nonlawyers employed or retained or associated with a lawyer, law firm, legal
department or other legal service organization.”
Made
The Committee has modified Paragraph (a) and Comment [1] to eliminate the specific
references to legal departments and legal service organizations, because the definition of a law firm
in Rule 1.0(d) already includes such organizations. A conforming change was made to Paragraph
(c)(1)(i). While eliminating the redundancy, the Committee also conformed the wording of
Paragraphs (a) and (c)(1)(i) to the Ethics 2000 Commission proposal. No change in substance is
intended.
PROPOSED RULE 5.4
PROFESSIONAL INDEPENDENCE OF A LAWYER
provide for the payment of money, over a reasonable period of time after the
lawyer's death, to the lawyer's estate or to one or more specified persons;
pursuant to the provisions of Rule 1.17, pay to the estate or other representative of that
lawyer the agreed-upon purchase price;
plan, even though the plan is based in whole or in part on a profit-sharing arrangement;
(4) a lawyer may share a court-awarded fee with a client represented in the matter for
the fee was awarded or with a non-profit organization which employed or retained the lawyer in the
matter for which the fee was awarded;
(5) a lawyer who is a full-time employee of a client may share a legal fee with the client
to the extent necessary to reimburse the client for the actual cost to the client of permitting the
lawyer to represent another client while continuing in the full-time employ of the client with
whom the fee will be shared; and
calculated by reference to a reasonable percentage of the fee paid to the lawyer by the
client referred to the lawyer by the intermediary organization.
consist of the practice of law.
legal services for another to direct or regulate the lawyer's professional judgment in rendering such
legal services.
limited liability company authorized to practice law for a profit, if:
nonlawyer owns any interest therein, except that a fiduciary representative of the
estate of a lawyer may hold the stock or ownership interest of the lawyer for a
reasonable time during administration;
(2) anonlawyer is a member of the governing board or an officer thereof; or
nonlawyer has the right to direct or control the professional judgment of a lawyer.
[1] The provisions of this Rule largely express the traditional limitations on sharing fees
and the co-ownership of law practices bynonlawyers. These limitations are to protect the lawyer's
prohibition against fee splitting with nonlawyers. These are situations in which there is little risk of
harm resulting from lay attempts to interfere with the independent professional judgment of the
lawyer.
[2] Where someone other than the client pays the lawyer's fee or salary, or recommends
employment of the lawyer, that arrangement does not modify the lawyer's obligation to the client.
As stated in paragraph (c), such arrangements must not interfere with the lawyer's professional
judgment.
See Rue 1.0(d)
“Partner”See Rule 1.0(h)
“Reasonable”See Rule 1.0(i)
Paragraph (a): With the exception of subparagraphs (4), (5), and (6), paragraph (a) is
substantially identical to DR 3-102(A). There are no counterparts in the Disciplinary Rules to
subparagraphs (4), (5), and (6).
Paragraph (a)(4) is more permissive than the holding in Tennessee Formal Ethics Opinion
91-F-125 which permits governmental organizations to be awarded attorneys fees in excess of the
pro rata salary of the lawyers who handled the case. The Proposed Rule effectively extends the
holding in Formal Ethics Opinion 91-F-125 to all non-profit organizations which employ or retain
counsel to act on behalf of the organization or its members or beneficiaries.
The issue addressed by subparagraph (a)(5) is addressed by Tennessee Formal Ethics
Opinions 83-F-52and 84-F-80 which appear to permit fee-sharing to the extent necessary to
recoup the salary of a lawyer loaned by one for-profit organization to another. Although those
opinions involved theloan of a lawyer to an affiliated company, there is nothing in the reasoning of
the board suggesting such cost-recovery should be restricted to such cases.
Paragraph (a)(6) extends to all approved non-profit intermediary organizations the
permission now granted to bar association-operated lawyer referral services to charge lawyers a
referral fee based on a percentage of the fee they are paid by clients referred to them by the service.
SeeTennessee Formal Ethics Opinions 88-F-115 and 88-F-115(a).
Paragraph (a): Except for the addition of subparagraphs (4), (5), and (6), paragraph (a) is
identical to ABA Model Rule 5.4(a). Subparagraph (a)(4) codifies ABA Formal Opinion 93-374.
lawyers and nonlawyers. Subparagraph (a)(5) codifies ABA Formal Opinion 95-392. The
rationale is that the cost recovery poses little risk of the harms normally associated with fee-sharing
between lawyers andnonlawyers.
Paragraph (d): Paragraph (d) is identical to ABA Model Rule 5.4(d) except for the issue of
the specific reference to limited liability companies and the deletion of the catchall reference to
“other incorporated association.”
No changes in the text of the Rule, except for the deletion in paragraph (D) of the catchall
reference to “other incorporated association.”Also deleted as surplusage were Comments [2],
[3], and [4].
Due to changes made in Proposed Rule 7.6, conforming changes were made in paragraph
(a)(6).
Made
PROPOSED RULE 5.5
UNAUTHORIZED PRACTICE OF LAW
lawyer shall not:
profession in that jurisdiction; or
practice of law.
[1] The definition of the practice of law is established by law and varies from one
jurisdiction to another. Whatever the definition, limiting the practice of law to members of the bar
protects the public against rendition of legal services by unqualified persons.
[2]Paragraph (b) does not prohibit a lawyer from employing the services of
paraprofessionals and delegating functions to them, so long as the lawyer supervises the delegated
work and retains responsibility for their work. See Rule 5.3. Likewise, it does not prohibit lawyers
from providing professional advice and instruction to nonlawyers whose employment requires
knowledge of law; for example, claims adjusters, employees of financial or commercial institutions,
social workers, accountants and persons employed in government agencies. In addition, a lawyer
may counsel nonlawyers who wish to proceed pro se.
[3] A lawyer does not assist the unauthorized practice of law if he or she advises a client
with respect to whether an activity constitutes the unauthorized practice of law, accepts an
unsolicited referral of a client from a person whose prior involvement in the matter constituted the
unauthorized practice of law, or defends a person against charges that he or she has engaged in the
unauthorized practice of law.