The State Bar seeks public comment on Proposed Formal Opinion Interim No. 16-0003 (Ancillary Business)
Deadline: August 30, 2019
The State Bar Standing Committee on Professional Responsibility and Conduct (COPRAC) is charged with the task of issuing advisory opinions on the ethical propriety of hypothetical attorney conduct. In accordance with State Bar policy and procedure, the Committee shall publish proposed formal opinions for public comment (See, State Bar Board of Trustee Resolutions July 1979 and December 2004. See also, Board of Trustee Resolution November 2016).
On May 10, 2018, the California Supreme Court issued an order approving 69 new Rules of Professional Conduct, which will go into effect on November 1, 2018. Information about the new rules is available at the State Bar website. Proposed Formal Opinion Interim No. 16-0003 interprets the new Rules of Professional Conduct.
Proposed Formal Opinion Interim No. 16‑0003 considers: Under what circumstances is a lawyer’s conduct or provision of services in connection with a non-law business potentially subject to regulation under the California Rules of Professional Conduct and, what steps, if any, can a lawyer take to ensure that the provision of non-legal services is not subject to those rules?How do rules governing partnership with non-lawyers, sharing of legal fees, solicitation, conflicts of interest and lawyer-client business transactions apply to a lawyer’s dealings with a non-law business in which the lawyer is involved?
The opinion interprets rules 1.7, 1.8.1, 5.4, 7.2, 7.3, and 8.4 of the Rules of Professional Conduct of the State Bar of California; and Business and Professions Code sections 6068(e)(1) and 6106.
The opinion digest states: Although non-legal services are, by definition, not the practice of law, their provision by a lawyer or lawyer-controlled entity is presumptively subject to the Rules of Professional Conduct if they are conducted in a manner that is not distinct from activities constituting the practice of law or if they are sufficiently law-related to give rise to a reasonable risk that the customer may understand that legal services are being provided or that a lawyer-client relationship has been formed. However, where appropriate steps have been taken to distinguish non-legal from legal services and to clarify that no legal services are being provided and that no lawyer-client relationship has been formed, the Rules of Professional Conduct will not apply to the services provided. The rules governing the lawyer’s separate practice of law, including rules pertaining to solicitation, conflict of interest, and lawyer-client business transactions will, however, remain applicable to the lawyer’s dealings with the non-legal entity in the course of the lawyer’s practice. In addition, a lawyer is always subject to professional discipline for acts involving moral turpitude, dishonesty, or corruption, whether or not those acts occur in connection with the practice of law. Accordingly, the fact that a lawyer has made clear that her distinct non-legal business does not involve the practice of law or the formation of an attorney-client relationship is not a bar to such discipline.
At its April 11, 2019 meeting and in accordance with its Rules of Procedure, the State Bar Standing Committee on Professional Responsibility and Conduct tentatively approved Proposed Formal Opinion Interim No. 16-0003 for a 90-day public comment distribution.
Proposed Formal Opinion Interim No. 16-0003
State Bar Standing Committee on Professional Responsibility and Conduct
August 30, 2019
Angela MarlaudOffice of Professional Competence, Planning and DevelopmentState Bar of California180 Howard StreetSan Francisco, CA 94105-1639Phone: 415-538-2116Fax: 415-538-2171E-mail: email@example.com