/>iLawyers and law firms frequently engage in a wide variety of ancillary, law-related services. Law-related services can include lobbying activities, civic positions, litigation funding, providing financial advice and serving as a fiduciary. Lawyers and firms can deliver such services through a law firm or separately. While some states follow a version of ABA Model Rule 5.7, as enacted in their jurisdiction’s Rules of Professional Conduct, others have yet to adopt specific guidance. Either way, providing law related services raises important ethical issues, including conflicts of interest. Lawyers and firms should design any law-related services accordingly.
What are law-related services? Model Rule 5.7 defines them as services that might reasonably be performed with and in substance are related to the provision of legal services, and are not the unauthorized practice of law. Where such services are provided through an entity controlled by a lawyer and are not distinct from the lawyer’s or law firm’s provision of “traditional” legal services, compliance with Rule 5.7 is required.
ETHICAL CONSIDERATIONS
The most important foundational requirement in providing law-related services is that the recipient is informed of the nature of the services and whether the attorney-client relationship protections govern them. From the lawyer and law firm’s perspective, the key question is whether the non-traditional law-related services comply with the Rules of Professional Conduct.
Where law-related services are integrated with the lawyer’s or law firm’s practice, recipients will generally assume that they enjoy the protections afforded by the attorney-client relationship, including the duty of confidentiality and adherence to conflict of interest rules. If the parties do not intend for a law-related services engagement to be governed by these traditional elements of legal representation, these provisions should be disclaimed in writing so the recipient is aware that the services will not include such protections. Lawyers must take reasonable measures to ensure this delineation is clear.
The extent to which law-related services are delivered apart from the lawyer or the firm may impact how the standard protections of the attorney-client relationship apply. This may depend on whether the lawyer’s relationship with the law-related activity is passive, such as having an ownership interest in an entity providing law-related services, or active, where the lawyer personally delivers the law-related services. If lawrelated services are delivered through the lawyer’s firm, and the lawyer uses the stationery, email, offices and resources related to the lawyer’s or the firm’s traditional legal practice, it will likely suggest to the client that the law-related services are being delivered by the law firm, even when a lawyer may view them as separate.
Where the ancillary law-related services are delivered through a law firm and could be adverse to existing clients, a conflict check is appropriate. Conflict of interest issues may arise when law-related services are provided to an established or “traditional” client of the firm. Such a scenario may involve a current client conflict and may necessitate compliance with Rule 1.7, requiring disclosure and informed written consent. Law-related services provided to a current client may also involve a business transaction with a client, requiring compliance with Rule 1.8, mandating that the transaction terms be fair, reasonable and fully disclosed to the client. The client also must be advised in writing of the right to obtain independent counsel and allowed the opportunity to obtain it.
When law-related services are not provided to a client of the lawyer or law firm, the services may raise other conflict of interest issues. For example, there may be adversity between the existing legal services client and the recipient of the law-related services. Lawyers engaging in law-related services may obtain confidential information that is material to the representation of a legal services client.
ADDITIONAL CONSIDERATIONS
Lawyers engaging in law-related services should also consider the coverage provided under their lawyers’ professional liability policies. When such services are offered through a separate entity, lawyers should consider having that entity named as an additional insured. When a lawyer or law firm has an ownership interest in that entity, the policy may provide for limitations on coverage should the lawyer own more than a specified percentage of the entity.
Finally, prospective laterals should be screened for any ancillary law-related service. If a lawyer has provided ancillary law-related services, the lawyer may have acquired confidential information adverse to a client of the new firm, in which case the new firm may consider whether screening could resolve the potential conflict.
