EDITOR'S NOTE: The Report referred to is not on-line; however, the proposed amendments and Rule 3.9, as adopted, are on-line. The Report will be added upon availability.
IN THE SUPREME COURT
STATE OF NORTH DAKOTA
NOTICE OF HEARING AND ORDER OF ADOPTION
Supreme Court No. 960326
Proposed Amendments to North Dakota Rules of Professional Conduct
The Joint Attorney Standards Committee filed a Report and proposed amendments to the North Dakota Rules of Professional Conduct. The Committee requested amendments to Rules 1.17, 1.18, 1.5, 3.9, 5.3, 5.4, 5.6, 5.7, 7.2, and the terminology section of NDRPC, and requested adoption of Rule 3.9, NDRPC, on an emergency basis. The Report of the Committee regarding the proposed amendments is attached.
ORDERED, the proposed amendments to Rule 3.9, ND Rules of Professional Conduct, as further amended, are adopted on an emergency basis effective November 1, 1996. (See attached.) IT IS FURTHER ORDERED, that a hearing be held on all of the proposed amendments to the ND Rules of Professional Conduct, including Rule 3.9, as adopted on an emergency basis, on Tuesday, December 3, 1996, at 2:45 p.m., in the Courtroom of the Supreme Court, at the State Capitol in Bismarck, North Dakota. Time for personal appearances will be limited. Any person wishing to comment on the proposed amendments may do so in writing prior to the hearing. Address written comments to Penny Miller, Clerk of the Supreme Court, 600 East Boulevard Avenue, Bismarck, ND 58505-0530.
Dated this 23rd day of October, 1996.
Gerald W. VandeWalle, Chief Justice
Herbert L. Meschke, Justice
William A. Neumann, Justice
Dale V. Sandstrom, Justice
Mary Muehlen Maring, Justice
Penny Miller, Clerk
North Dakota Supreme Court
Amendments to Rule 3.9, ND Rules of Professional Professional Conduct, adopted October 23, 1996, on an emergency basis, effective November 1, 1996
RULE 3.9 ADVOCATE IN NONADJUDICATIVE PROCEEDINGS
A lawyer representing a client before a legislative or administrative body in a nonadjudicative proceeding shall disclose that the appearance is in a representative capacity and shall conform to the provisions of Rules 3.3(a) through (e) and 3.4(a) through (c). A lawyer shall also conform to the provisions of Rule 3.5, except the lawyer may participate in exparte communications with members of a legislative body regarding legislative matters.
In representation before bodies engaged in rule-making or policy making, such as legislatures, municipal councils, or executive or administrative agencies, lawyers present facts, formulate issues and advance argument in the matters under consideration. The decision-making body, like a tribunal, should be able to rely on the integrity of the submissions made to it. A lawyer appearing before such a body should deal with it honestly and in conformity with applicable rules of procedure.
Lawyers have no exclusive right to appear before nonadjudicative bodies, as they do before a tribunal. The requirements of this Rule therefore may subject lawyers to regulations inapplicable to advocates who are not lawyers. However, legislative and administrative bodies have a right to expect lawyers to deal with them as lawyers are required to deal with tribunal.
Reference: Minutes of the Professional Conduct Subcommittee of the Attorney Standards Committee on 09/20/85 and 01/10/86; Minutes of the Joint Committee on Attorney Standards Meeting of 12/01/95, 06/11/96.
Proposed Amendment to Rule 1.17, ND Rules of Professional Conduct
1.171.18 GOVERNMENTAL ENTITY AS THE CLIENT
(a) A lawyer employed or retained to represent a governmental entity represents the governmental entity as distinct from its officials or employees.
(b) In dealing with a governmental entity's officials or employees, a lawyer shall explain the identity of the client when the lawyer reasonably believes that the entity's interests are or are likely to become adverse to those of the persons with whom the lawyer is dealing.
(c) A lawyer representing a governmental entity may also represent any of its officials or employees, subject to the provisions of Rule 1.7. If the entity's consent to the dual representation is required by Rule 1.7, the consent shall be given by an appropriate official of the entity other than the individual who is to be represented.
The Governmental Entity as the Client
In general, the Rules of Professional Conduct apply to a lawyer representing a governmental entity in the same manner as they apply to a lawyer for a private client. In the government context, however, defining precisely the identity of the client and prescribing the resulting obligations of the lawyer may be more difficult. The duties of lawyers employed by the government or lawyers in military service may be defined by statute or regulation. Although in some circumstances the client may be a specific agency, it is generally the government as a whole.
In a matter involving the conduct of a government official, a government lawyer may have more extensive authority to question the official's conduct than would a lawyer for a private organization in similar circumstances. This Rule does not limit that authority. In addition, when the client is a governmental organization, a different balance may be appropriate between maintaining confidentiality and assuring that a wrongful official act is prevented or rectified, for public business is involved.
Under various legal provisions, including constitutional, statutory and common law, the responsibilities of government lawyers may include authority concerning legal matters that ordinarily reposes in the client in private client-lawyer relationships. For example, a lawyer for a government agency may have authority on behalf of the government to decide upon settlement or whether to appeal from an adverse judgment. This authority in various respects is generally vested in the attorney general and the state's attorney in state government, and their federal counterparts, and the same may be true of other government law officers. Also, lawyers under the supervision of these officers may be authorized to represent several government agencies in intragovernmental legal controversies in circumstances where a private lawyer could not represent multiple private clients. They also may have authority to represent the "public interest" in circumstances where a private lawyer would not be authorized to do so. These Rules do not abrogate this authority.
Clarifying the Lawyer's Role
There are times when the governmental entity's interests may be or become adverse to those of one or more of its officials or employees. In these circumstances the lawyer should advise any official or employee, whose interest the lawyer reasonably believes is or is likely to become adverse to that of the governmental entity, of the conflict or potential conflict of interest, that the lawyer cannot represent the official or employee, and that the official or employee may wish to obtain independent representation. Care must be taken to assure that the official or employee understands that, when there is an adversity of interest, the lawyer for the governmental entity cannot provide legal representation for the official or employee, and that discussions between the lawyer for the governmental entity and the official or employee may not be privileged. Whether and when this warning should be given by the lawyer may turn on the facts of each case.
Paragraph (c) recognizes that a lawyer for a governmental entity may also represent an official or employee. Rule 1.7 may require consent to the dual representation, and this consent may be given by an appropriate official of the entity but not by the person who is to be represented.
Reference: Minutes of the Professional Conduct Subcommittee of the Attorney Standards Committee on 11/08/85, 01/31/86 and 03/15/86; Minutes of the Joint Committee on Attorney Standards Meetings of 09/15/95, 12/01/95, 06/11/96.
Proposed Amendment to Rule 5.4 ND Rules of Professional Conduct
RULE 5.4. PROFESSIONAL INDEPENDENCE OF A LAWYER.
(a) A lawyer or law firm shall not share legal fees with a nonlawyer, except that:
(1) An agreement by a lawyer with his firm, partners, or associate may provide for the payment of money, over a reasonable period of time after his death, to his estate or to one or more specified persons;
(2) A lawyer who
undertakes to complete unfinished legal business of a deceased lawyer may pay to the estate of the deceased lawyer that proportion of the total compensation which fairly represents the services rendered by the deceased lawyer purchases the practice of a deceased, disabled, or disappeared lawyer may, under Rule 1.17, pay to the estate or other representatives of that lawyer the agreed-upon purchase price; and
(3) A lawyer or law firm may include nonlawyer employees in a compensation or retirement plan, even though the plan is based in whole or in part on the profit-sharing arrangement.
(b) A lawyer shall not form a partnership with a nonlawyer if any of the activities of the partnership consist of the practice of law.
(c) A lawyer shall not permit a person who recommends, employs, or pays him to render legal services for another to direct or regulate his professional judgment in rendering such legal services.
(d) A lawyer shall not practice with or in the form of a professional corporation or association authorized to practice law for a profit, if:
(1) A nonlawyer owns any interest therein, except that a fiduciary representative of the estate of a lawyer may hold the stock or interest of the lawyer for a reasonable time during administration;
(2) A nonlawyer is a corporate director or officer thereof; or
(3) A nonlawyer has the right to direct or control the professional judgment of a lawyer.
The provisions of this Rule express traditional limitations on sharing fees. These limitations are to protect the lawyer's professional independence of judgment. 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 should not interfere with the lawyer's professional judgment.
Reference: Minutes of the Professional Conduct Subcommittee of the Attorney Standards Committee on 11/08/85 and 01/10/86; Minutes of the Joint Committee on Attorney Standards Meetings of 09/15/95, 12/01/95, 06/11/96.
Proposed Amendments to Rule 5.6, ND Rules of Professional Conduct
RULE 5.6. RESTRICTIONS ON RIGHT TO PRACTICE.
A lawyer shall not participate in offering or making:
(a) A partnership or employment agreement that restricts the rights of a lawyer to practice after termination of the relationship, except an agreement concerning benefits upon retirement; or
(b) An agreement in which a restriction on the lawyer's right to practice is part of the settlement of a controversy between private parties.
An agreement restricting the right of partners or associates to practice after leaving a firm not only limits their professional autonomy but also limits the freedom of clients to choose a lawyer. Paragraph (a) prohibits such agreements except for restrictions incident to provisions concerning retirement benefits for service with the firm.
Paragraph (b) prohibits a lawyer from agreeing not to represent other persons in connection with settling a claim on behalf of a client.
This Rule does not prohibit restrictions that may be included in the terms of the sale of a law practice under Rule 1.17 as long as the restrictions are otherwise consistent with state law.
Reference: Minutes of the Professional Conduct Subcommittee of the Attorney Standards Committee on 11/08/85 and 01/31/86; Minutes of the Joint Committee on Attorney Standards Meetings of 09/15/95, 12/01/95, 06/11/96.
PROPOSED AMENDMENTS TO TERMINOLOGY, ND RULES OF PROFESSIONAL CONDUCT
Certain terms used in these Rules have special significance. This section is intended to provide guidance in the interpretation of these terms. The section does not provide precise definitions, and the words included here may vary in meaning within the context of a particular Rule. Unless the context dictates otherwise, however, the meaning suggested by this section should be applied.
"Belief" or "believes" denotes that the person involved actually supposed the fact in question to be true. A person's belief may be inferred from the person's conduct in the circumstances.
"Consult" or "consultation" denotes communication of information reasonably sufficient to permit the client to appreciate the significance of the matter in question.
"Firm" or "law firm" denotes a lawyer or lawyers in a private firm, lawyers employed in the legal department of a corporation or other organization and lawyers employed in a legal services organization. See Comment, Rule 1.10.
"Fraud" or "fraudulent" denotes conduct having a purpose to deceive and not merely negligent misrepresentation or negligent failure to apprise another of relevant information.
"Knowingly", "known", or "knows" denotes actual knowledge of the fact in question. A person's knowledge may be inferred from the person's conduct in the circumstances.
"Legal Assistant" (or paralegal) means a person who assists lawyers in the delivery of legal services. Through formal education, training, or experience, a legal assistant has knowledge and expertise regarding the legal system and substantive and procedural law which qualifies the person to do work of a legal nature under the direct supervision of a licensed lawyer.
"Reasonable" or "reasonably" when used to describe conduct by a lawyer denotes the conduct of a reasonably prudent and competent lawyer.
"Reasonable belief" or "reasonably believes" when used in reference to a lawyer denotes that the lawyer believes the matter in question and that the circumstances are such that the belief is reasonable.
"Reasonably should know" when used in reference to a lawyer denotes that a lawyer of reasonable prudence and competence would ascertain the matter in question.
"Tribunal" includes all courts and all other adjudicatory bodies.
Reference: Minutes of the Professional Conduct Subcommittee of the Attorney Standards Committee on 01/10/86 and 01/31/86; Minutes of the Joint Committee on Attorney Standards Meetings of 06/13/95, 09/15/95, 12/01/95, 06/11/96.
Proposed Amendments to Rule 1.5, ND Rules of Professional Conduct
RULE 1.5 FEES
(a) A lawyer's fee shall be reasonable. The factors to be considered in determining the reasonableness of a fee include the following:
(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
(2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
(3) the fee customarily charged in the locality for similar legal services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the client;
(7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and
(8) whether the fee is fixed or contingent.
(b) When the lawyer has not regularly represented the client, the basis, rate, or amount of the fee shall be communicated to the client before or within a reasonable time after commencing the representation.
(c) A fee may be contingent on the outcome of the matter for which the service is rendered, except in a matter in which a contingent fee is prohibited by paragraph (d) or other law. A contingent fee agreement shall be in writing and shall state the method by which the fee is to be determined, including the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial or appeal, litigation and other expenses to be deducted from the recovery, and whether such expenses are to be deducted before or after the contingent fee is calculated. Upon conclusion of a contingent fee matter, the lawyer shall provide the client with a written statement stating the outcome of the matter and, if there is a recovery, showing the remittance to the client and the method of its determination.
(d) A lawyer shall not enter into an arrangement for, charge, or collect:
(1) any fee in a domestic relations matter, the payment or amount of which is contingent upon the securing of a divorce or upon the amount of alimony or support, or property settlement in lieu thereof; or
(2) a contingent fee for representing a defendant in a criminal case.
(e) A division of fee between lawyers who are not in the same firm may be made only if:
(1) The division of fee is in proportion to the services performed by each lawyer or each lawyer, by written agreement, assumes joint responsibility for the representation;
(2) After consultation, the client does not object to the participation of all the lawyers involved; and
(3) The total fee is reasonable.
(f)A lawyer may charge for work performed by a legal assistant.
(g)A lawyer may not split legal fees with a legal assistant nor pay a legal assistant for the referral of legal business. A lawyer may compensate a legal assistant based on the quantity and quality of the legal assistant's work and value of that work to a law practice. The legal assistant's compensation may not be contingent, by advance agreement, upon the outcome of a case or upon the profitability of the lawyer's practice.
Basis, Rate or Amount of Fee
When the lawyer has regularly represented a client, they ordinarily will have evolved an understanding concerning the basis or rate of the fee. In a new client-lawyer relationship, however, an understanding as to the fee should be promptly established. It is not necessary to recite all the factors that underlie the basis of the fee, but only those that are directly involved in its computation. It is sufficient, for example, to state that the basic rate is an hourly charge or a fixed amount or an estimated amount, or to identify the factors that may be taken into account in finally fixing the fee. When developments occur during the representation that render an earlier estimate substantially inaccurate, a revised estimate should be provided to the client. A written statement concerning the fee reduces the possibility of misunderstanding. The written statement may be a copy of the lawyer's customary fee schedule or a simple memorandum setting forth the basis, rate or amount of the fee.
Terms of Payment
A lawyer may require advance payment of a fee, but is obliged to return any unearned portion. See Rule 1.16(e). A lawyer may accept property in payment for services, such as an ownership interest in an enterprise. However, a fee paid in property instead of money may be subject to special scrutiny because it involves questions concerning both the value of the services and the lawyer's special knowledge of the value of the property.
An agreement may not be made whose terms might induce the lawyer improperly to curtail services for the client or perform them in a way contrary to the client's interest. For example, a lawyer should not enter into an agreement whereby services are to be provided only up to a stated amount when it is foreseeable that more extensive services probably will be required, unless the situation is adequately explained to the client. Otherwise, the client might have to bargain for further assistance in the midst of a proceeding or transaction. However, it is proper to define the extent of services in light of the client's ability to pay. A lawyer should not exploit a fee arrangement based primarily on hourly charges by using wasteful procedures. When there is doubt whether a contingent fee is consistent with the client's best interest, the lawyer should offer the client alternative bases for the fee and explain their implications. Applicable law may impose limitations on contingent fees, such as a ceiling on the percentage.
Division of Fee
A division of fee is a single billing to a client covering the fee of two or more lawyers who are not in the same firm. A division of fee facilitates association of more than one lawyer in a matter in which neither alone could serve the client as well, and most often is used when the fee is contingent and the division is between a referring lawyer and a trial specialist. Paragraph (e) permits the lawyers to divide a fee on either the basis of the proportion of services they render or by agreement between the participating lawyers if all assume responsibility for the representation as a whole and the client is consulted and does not object. It does not require disclosure to the client of the share that each lawyer is to receive.
Disputes Over Fees
If there is a fee dispute, a lawyer should consider submitting to the arbitration procedure established by the bar.
Law may prescribe a procedure for determining a lawyer's fee, for example, in representation of an executor or administrator, a class or a person entitled to a reasonable fee as part of the measure of damages. The lawyer entitled to such a fee and a lawyer representing another party concerned with the fee should comply with the prescribed procedure.
Fees for the Services of Legal Assistants
In cases involving fixed fees or contingent fees, the total fees are agreed upon in advance and there should be no separate charge for legal assistant services. In matters charged on the basis of "fee for service" or "charge by the hour", a lawyer may include separate charges for work performed by legal assistants or otherwise include legal assistant hours in calculating the amount of fees to be charged. In Missouri v. Jenkins, 491 US 274 (1989), the Court held in setting a reasonable lawyer's fee under 28 U.S.C. 1988 that it was appropriate to include a charge for legal assistant services, and that it was appropriate to value such services at "market prices" rather than "actual costs" to the lawyer.
In such instances, the lawyer should disclose to the client, either at the outset of the representation or at the point during the representation when the lawyer determines a legal assistant should be used, that the lawyer proposes to use a legal assistant and obtain the client's agreement to any separate charges for legal assistant services.
A lawyer may not split fees with a legal assistant, whether characterized as splitting of contingent fees, "forwarding" fees or other sharing of legal fees. Furthermore, a legal assistant may not be compensated on a contingent basis for a particular case or paid for "signing up" clients for a legal practice. The linchpin of the prohibition is the lawyer's obligation to pay the legal assistant regardless of the outcome of the case. There is no general prohibition against a lawyer who enjoys a particularly profitable period recognizing the contribution of the legal assistant to that profitability with a discretionary bonus. Likewise, a lawyer engaged in a particularly profitable speciality of legal practice is not prohibited from compensating the legal assistant who aids materially in that practice more handsomely than the compensation generally awarded to legal assistants in the geographic area working in less lucrative law practices.
Reference: Minutes of the Professional Conduct Subcommittee of the Attorney Standards Committee on 02/03/84, 03/16/84, 05/23/84, 06/27/84 and 07/27/84; Minutes of Joint Committee on Attorney Standards Meetings of 06/13/95, 09/15/95, 12/01/95, 06/11/96.
Proposed Amendments to Rule 5.3, ND Rules of Professional Conduct
RULE 5.3 RESPONSIBILITIES REGARDING NONLAWYER ASSISTANTS
With respect to a nonlawyer employed or retained by or associated with a lawyer:
(a) The lawyer shall make reasonable efforts to put into effect measures giving reasonable assurance that the nonlawyer's conduct is compatible with the professional obligations of the lawyer;
(b) The lawyer having direct supervisory authority over the nonlawyer shall make reasonable efforts to ensure that the nonlawyer's conduct is compatible with the professional obligations of the lawyer; and
(c) The lawyer shall be responsible for a violation of these rules by the nonlawyer if the lawyer knows of the violation at a time when its consequences can be avoided or mitigated but fails to take reasonable remedial action.
(d)In addition to paragraphs (a), (b) and (c), the following apply with respect to a legal assistant employed or retained by or associated with a lawyer:
(1) A lawyer may delegate to a legal assistant any task normally performed by the lawyer except those tasks proscribed to one not licensed as a lawyer by statute, court rule, administrative rule or regulation, controlling authority, or these rules.
(2) A lawyer may not delegate to a legal assistant:
(i) responsibility for establishing an attorney-client relationship;
(ii) responsibility for establishing the amount of a fee to be charged for a legal service;
(iii) responsibility for a legal opinion rendered to a client; or
(iv) responsibility for the work product.
(3) The lawyer shall make reasonable efforts to ensure that clients, courts, and other lawyers are aware that a legal assistant is not licensed to practice law.
Lawyers generally employ
assistants nonlawyers in their practice, including secretaries, legal assistants, investigators, law student interns, and paraprofessionals. Such assistants These individuals, whether employees or independent contractors, act for the lawyer in rendition of the lawyer's professional services. A lawyer should must give such assistants nonlawyers 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 beis 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.
While appropriate delegation of tasks to legal assistants is allowed, a lawyer may not permit a legal assistant to engage in the "practice of law." The key to appropriate delegation is proper supervision, which includes adequate instruction when assigning projects, monitoring of the project, and review of the project. Lawyers should take care in hiring and choosing a legal assistant to work on a specific project to ensure that the legal assistant has the education, knowledge, and ability necessary to perform the delegated tasks.
The following guidelines have been recognized as helpful in evaluating the education, training or experience of a qualified legal assistant. 1) Graduation from one of the following ABA approved legal assistant/paralegal programs: bachelor's degree, associate's degree, or a post-baccalaureate program. If not ABA approved, graduation from a legal assistant/paralegal program that consists of a minimum of 60 semester credit hours or the equivalent, of which 18 semester credit hours are substantive paralegal courses. 2) A bachelor's degree in any field, and either one-year employer training as a legal assistant/paralegal or 18 semester credit hours of legal assistant/paralegal substantive courses. 3) Successful completion of a national certifying examination that is specifically designed for legal assistants/paralegals and which includes continuing legal education for maintenance of that certification status. 4) Seven years or more of experience working as a legal assistant/paralegal who has been employer trained by and under the supervision of an attorney.
The essential elements of any lawyer-client relationship are the agreement to undertake representation, the scope of that representation, and the fee arrangement relating to that representation. In evaluating whether to undertake the representation, the lawyer must evaluate whether any circumstances exist which would require that the representation be declined (See, Rule 1.16). Rule 1.2 requires that the lawyer consult with the client regarding any limitations on the scope of representation. The lawyer must further obtain the agreement of the client, and in some cases written agreement, with respect to the fee arrangement relating to the presentation (See, Rule 1.5). In addition, Rule 2.1 requires a lawyer to exercise independent professional judgment and render candid advice. These matters are of such importance that they must be handled personally by the lawyer. Regardless of how the legal assistant may be used in the initial stages of establishing an attorney/client relationship, i.e., gathering background information from the client and others, preparing initial drafts of fee arrangements, or performing other incidental tasks, the lawyer may not delegate responsibility to a legal assistant or other nonlawyer for deciding whether the representation will be undertaken or for any legal opinion rendered to a client.
Finally, nonlawyers may not hold themselves out as lawyers. It is the lawyer's responsibility to see that communications about services rendered by the law firm and its nonlawyers are not false, fraudulent, deceptive or misleading (See, Rule 7.1), and that nonlawyer employees of the firm understand those limitations. If the lawyer or a legal assistant becomes aware that the role of the legal assistant is unclear, the lawyer has an affirmative duty to clarify the legal assistant's role.
Reference: Minutes of the Professional Conduct Subcommittee of the Attorney Standards Committee on 11/08/85 and 01/31/86; Minutes of the Joint Committee on Attorney Standards Meetings of 06/13/95, 09/15/95, 12/01/95, 06/11/96.
Proposed Amendments to Rule 7.2, ND Rules of Professional Conduct
RULE 7.2 FIRM NAMES AND LETTERHEADS
(a) A lawyer shall not use a firm name, letterhead or other professional designation that violates Rule 7.1. A trade name may be used by a lawyer in private practice if it does not imply a connection with a government agency or with a public or charitable legal services organization and is not otherwise in violation of Rule 7.1.
(b) A law firm with offices in more than one jurisdiction may use the same name in each jurisdiction, but identification of the lawyers in an office of the firm shall indicate the jurisdictional limitations on those not licensed to practice in the jurisdiction where the office is located.
(c) The name of a lawyer holding a public office shall not be used in the name of a law firm, or in communications on its behalf, during any substantial period in which the lawyer is not actively and regularly practicing with the firm.
(d) Lawyers may state or imply that they practice in a partnership or other organization only when that is the fact.
(e)A lawyer may identify legal assistants on the lawyer's letterhead and on business cards identifying the lawyer's firm, provided the legal assistant's status is clearly identified.
A firm may be designated by the names of all or some of its members, by the names of deceased members where there has been a continuing succession in the firm's identity or by a trade name such as the "ABC Legal Clinic". Although the United States Supreme Court has held that legislation may prohibit the use of trade names in professional practice, use of such names in law practice is acceptable so long as it is not misleading. If a private firm uses a trade name that includes a geographical name such as "Springfield Legal Clinic", an express disclaimer that it is a public legal aid agency may be required to avoid a misleading implication. It may be observed that any firm name including the name of a deceased partner is, strictly speaking, a trade name. The use of such names to designate law firms has proven a useful means of identification. However, it is misleading to use the name of a lawyer not associated with the firm or a predecessor of the firm.
With regard to paragraph (d), lawyers sharing office facilities, but who are not in fact partners, may not denominate themselves as, for example, "Smith and Jones" for that title suggests partnership in the practice of law.
With regard to paragraph (e), a firm may identify the name and title of a legal assistant as long as the letterhead or business card accurately and clearly identifies the legal assistant's status.
Reference: Minutes of the Professional Conduct Subcommittee of the Attorney Standards Committee on 01/10/86; Minutes of the Joint Committee on Attorney Standards Meetings of 06/13/95. 09/15/95,12/01/95, 06/11/96.
Proposed Rule 5.7, ND Rules of Professional Conduct
RULE 5.7 RESPONSIBILITIES REGARDING LAW-RELATED SERVICES
(a) A lawyer shall be subject to the Rules of Professional Conduct with respect to the provision of law-related services, as defined in paragraph (b), if the law-related services are provided:
(1) by the lawyer in circumstances that are not distinct from the lawyer's provision of legal services to clients; or
(2) by a separate entity controlled by the lawyer individually or with others if the lawyer fails to take reasonable measures to assure that a person obtaining the law-related services knows that the services of the separate entity are not legal services and that the protections of the client-lawyer relationship do not exist.
(b) The term "law-related services" denotes services that might reasonably be performed in conjunction with and in substance are related to the provision of legal services, and that are not prohibited as unauthorized practice of law when provided by a nonlawyer.
When a lawyer performs law-related services or controls an organization that does so, there exists the potential for ethical problems. Principal among these is the possibility that the person for whom the law-related services are performed fails to understand that the services may not carry with them the protections normally afforded as part of the client-lawyer relationship. The recipient of the law-related services may expect, for example, that the protection of client confidences, prohibitions against representation of persons with conflicting interests, and obligations of a lawyer to maintain professional independence apply to the provision of law-related services when that may not be the case. Rule 5.7 applies to the provision of law-related services by a lawyer even when the lawyer does not provide any legal services to the person for whom the law-related services are performed. The Rule identifies the circumstances in which all of the Rules of Professional Conduct apply to the provision of law-related services. Even when those circumstances do not exist, however, the conduct of a lawyer involved in the provision of law-related services is subject to those Rules that apply generally to lawyer conduct, regardless of whether the conduct involves the provision of legal services. See, e.g., Rule 8.4.
When law-related services are provided by a lawyer under circumstances that are not distinct from the lawyer's provision of legal services to clients, the lawyer in providing the law-related services must adhere to the requirements of the Rules of Professional Conduct as provided in Rule 5.7(a)(1).
Law-related services also may be provided through an entity that is distinct from that through which the lawyer provides legal services. If the lawyer individually or with others has control of such an entity's operations, the Rule requires the lawyer to take reasonable measures to assure that each person using the services of the entity knows that the services provided by the entity are not legal services and that the Rules of Professional Conduct that relate to the client-lawyer relationship do not apply. A lawyer's control of an entity extends to the ability to direct its operation. Whether a lawyer has such control will depend upon the circumstances of the particular case.
When a client-lawyer relationship exists with a person who is referred by a lawyer to a separate law-related service entity controlled by the lawyer, individually or with others, the lawyer must comply with Rule 1.8(a).
In taking the reasonable measures referred to in paragraph (a)(2) to assure that a person using law-related services understands the practical effect or significance of the inapplicability of the Rules of Professional Conduct, the lawyer should communicate to the person receiving the law-related services, in a manner sufficient to assure that the person understands the significance of the fact, that the relationship of the person to the business entity will not be a client-lawyer relationship. The communication should be made before entering into an agreement for provision of or providing law-related services, and preferably should be in writing.
Regardless of the sophistication of potential recipients of law-related services, a lawyer should take special care to keep separate the provision of law-related and legal services in order to minimize the risk that the recipient will assume that the law-related services are legal services. The risk of such confusion is especially acute when the lawyer renders both types of services with respect to the same matter. Under some circumstances the legal and law-related services may be so closely entwined that they cannot be distinguished from each other, and the requirement of disclosure and consultation imposed by paragraph (a)(2) of the Rule cannot be met. In such a case a lawyer will be responsible for assuring that both the lawyer's conduct and, to the extent required by Rule 5.3, that of nonlawyer employees in the distinct entity which the lawyer controls complies in all respects with the Rules of Professional Conduct.
A broad range of economic and other interests of clients may be served by lawyers engaging in the delivery of law-related services. Examples of law-related services include providing title insurance, financial planning, accounting, trust services, real estate counseling, legislative lobbying, economic analysis, social work, tax return preparation, and patent, medical or environmental consulting. When a lawyer is obliged to accord the recipients of such services the protections of those Rules that apply to the client-lawyer relationship, the lawyer must take special care to heed the proscriptions of the Rules addressing conflict of interest [Rule 1.7 through 1.11, especially Rules 1.7(b) and 1.8(a), (b) and (f)], and to scrupulously adhere to the requirements of Rule 1.6 relating to disclosure of confidential information. The promotion of the law-related services must also in all respects comply with Rules 7.1 and 7.2, dealing with advertising and solicitation. In that regard, lawyers should take special care to identify the obligations that may be imposed as a result of a jurisdiction's decisional law.
When the full protections of all of the Rules of Professional Conduct do not apply to the provision of law-related services, principles of law external to the Rules, for example, the law of principal and agent, govern the legal duties owed to those receiving the services. Those other legal principles may establish a different degree of protection for the recipient with respect to confidentiality of information, conflicts of interest and permissible business relationships with clients. See also Rule 8.4 (Misconduct).
Reference: Minutes of the Joint Committee on Attorney Standards Meetings of 03/31/95, 06/13/95, 09/15/95.