News & Events

June 30, 2017

MSBA Ethics Docket - Business Structures, Third Parties, and Fixed Fees

Linda Schwartz, Principal

You state that you are a member of the Maryland Bar and in your capacity as the sole member of a limited liability company, you intend to enter into a general partnership ("Law Firm") with another law firm for the purpose of providing legal services related to the defense of real estate foreclosures and law modifications.

You state that the Law Firm will contract for all nonlegal administrative and other nonlegal matters with respect to the operation of the Law Firm. You will supervise all nonlawyer employees and third party vendors that provide nonlegal services to the firm in accordance with the Maryland Lawyers' Rules of Professional Conduct ("Rules"); particularly Rules 1.6 regarding confidentiality, 5.1 regarding responsibilities of supervising partners and 5.3 regarding the supervision of nonlawyers. You inquire whether the business structure that you have described complies with the Rules.

The Committee has reviewed similar business arrangements in the past. We direct your attention to Ethics Docket 2009-07 which analyzes the several ethical issues that may arise with respect to the operation of the Law Firm and your contemplated professional conduct. You will find a copy of that opinion at www.msba.org. Except as otherwise provided in Ethics Docket 2009-07 and in this opinion, the Committee declines to opine on whether your proposed business operation complies with the Rules and Maryland law. It is our view that while a business arrangement and its contemplated operation may be in compliance on a theoretical basis, in reality, a contrary result may occur because the intentions are not carried out in compliance with the prescribed standards of professional confuct.

To read the rest of the article, click here.

This article originally appeared in the May/June 2017 issue of the Maryland Bar Journal and is reproduced by permission of the Maryland State Bar Association.

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