Law Firms, Associations, and Public Service

Master the ethical responsibilities of law firms and lawyers' public service obligations with free flashcards and spaced repetition practice. This lesson covers supervisory duties, subordinate lawyer responsibilities, restrictions on practice rights, unauthorized practice of law, multijurisdictional practice, fee-sharing arrangements, and pro bono obligations—essential concepts for passing the MPRE and understanding professional conduct in modern legal practice.

Welcome to Lesson 4 🏛️

You've mastered individual lawyer duties in previous lessons. Now we expand our focus to the organizational context of legal practice. How do ethical rules apply when lawyers work together in firms? What responsibilities do partners have for associates' conduct? Can you practice law across state lines? Must you provide free legal services?

These questions are critical for the MPRE and real-world practice. The ABA Model Rules recognize that modern legal practice is rarely solo—most lawyers work in firms, share fees, supervise others, and have obligations beyond paying clients. Understanding the collective dimension of professional responsibility is essential for ethical practice management.

💡 Pro Tip: MPRE questions on this topic often involve vicarious liability (when is Partner A responsible for Associate B's misconduct?) and exceptions to general rules (when CAN you share fees with nonlawyers?). Focus on the precise conditions that trigger responsibility or permit otherwise prohibited conduct.

Core Concepts: Law Firm Structure and Responsibilities

1. Responsibilities of Partners and Supervisory Lawyers ⚖️

Partners and supervisors have affirmative duties to ensure ethical compliance throughout their firm. You're not just responsible for your own conduct—you must create systems and provide oversight.

When is a supervisor liable for a subordinate's misconduct?

VICARIOUS LIABILITY FLOWCHART

    Did subordinate violate ethical rules?
                |
               Yes
                |
                ↓
    ┌───────────────────────────┐
    │ Was supervisor a partner/ │
    │ managerial lawyer who     │
    │ KNEW of violation when    │ ───→ YES → ⚠️ LIABLE
    │ consequences could be     │           (Rule 5.1(c)(1))
    │ avoided/mitigated AND     │
    │ failed to take action?    │
    └───────────────────────────┘
                |
               OR
                ↓
    ┌───────────────────────────┐
    │ Did supervisor ORDER or   │
    │ RATIFY the conduct?       │ ───→ YES → ⚠️ LIABLE
    └───────────────────────────┘           (Rule 5.1(c)(2))
                |
               NO
                ↓
         ✅ NOT LIABLE
   (unless personally involved)

Key Distinctions:

• Managerial responsibility (5.1(a)): Creating firm-wide systems (compliance training, conflict-checking systems, file management protocols)
• Direct supervision (5.1(b)): Day-to-day oversight of specific lawyers' work
• Personal liability (5.1(c)): You're responsible only if you ordered/ratified misconduct OR knew and failed to remediate

💡 Memory Device - "KORA": You're liable if you Knew, Ordered, Ratified, or failed to Act when you could prevent consequences.

Example 1: The Inadequate Supervision

Senior Partner Sarah manages a litigation department with 12 associates. She provides no training on discovery ethics and never reviews associates' document productions. Associate Amy deliberately withholds responsive documents in discovery.

Analysis:

• Did Amy violate ethical rules? Yes (Rule 3.4 - obstruction of access to evidence)
• Is Sarah liable? Depends:
  • Did Sarah personally order/ratify the withholding? No → Not liable under 5.1(c)(2)
  • Did Sarah know about it when she could prevent consequences? Facts don't indicate this → Likely not liable under 5.1(c)(1)
  • Did Sarah violate her managerial duty under 5.1(a)? Arguably yes - no training or review systems may not constitute "reasonable efforts" to ensure compliance, but this doesn't create liability for Amy's specific violation, only potential discipline for Sarah's own failure to supervise

⚠️ Critical MPRE Point: Sarah might be disciplined for inadequate supervision systems (violating 5.1(a)), but she's not automatically liable for Amy's specific misconduct unless she knew/ordered/ratified it.

2. Responsibilities of Subordinate Lawyers 👔

Subordinate lawyers aren't excused from ethical violations just because a supervisor ordered the conduct. However, there's a narrow "safe harbor" provision.

Model Rule 5.2:

• (a) General Rule: A subordinate is bound by the Rules of Professional Conduct even if acting under supervision
• (b) Exception: A subordinate who acts according to a supervisor's reasonable resolution of an arguable question of professional duty does not violate the Rules

Scenario	Subordinate Liable?	Reasoning
Partner orders associate to file clearly frivolous motion	✅ YES	Not "arguable" - clearly violates Rule 3.1
Partner and associate disagree whether conflict exists; partner provides reasonable analysis concluding no conflict	❌ NO	Arguable question + reasonable resolution = safe harbor
Partner orders associate to lie to court	✅ YES	No "arguable question" - clearly violates Rule 3.3
Partner tells associate client's offensive tattoos are relevant impeachment; associate has doubts but partner provides case support	❌ PROBABLY NO	Relevance of evidence is often arguable; if partner's position is reasonable, safe harbor applies

The safe harbor is NARROW:

1. Must be an arguable question (not clearly prohibited conduct)
2. Supervisor's resolution must be reasonable (not just any answer)
3. Subordinate must actually rely on supervisor's judgment

3. Professional Independence and Restrictions on Practice 🔒

Lawyers must maintain independent professional judgment. Several rules protect this independence:

A. No Restrictions on Right to Practice (Rule 5.6)

General Principle: Lawyers shall not participate in offering or making:

1. A partnership/employment agreement that restricts a lawyer's right to practice after termination
2. A settlement agreement that restricts a lawyer's right to practice

Exceptions exist ONLY for:

• Retirement benefits conditioned on not competing
• Sale of a law practice (reasonable restrictions permitted)
• Court-imposed restrictions as part of professional discipline

Example 2: The Restrictive Settlement

Big Pharma Corp offers plaintiff's lawyer a lucrative settlement: "$10 million to client, BUT lawyer agrees never to represent any client suing Big Pharma in the future."

Analysis: Unethical under Rule 5.6(b). Settlement agreements cannot restrict a lawyer's right to practice. This protects:

• Client choice: Future clients should be able to hire the most qualified lawyer
• Lawyer independence: Lawyers shouldn't be bought off from representing certain types of clients
• Public interest: Society benefits from experienced lawyers representing future claimants

💡 MPRE Trap: Students often miss that the rule applies even if the restriction is LIMITED (e.g., "only pharmaceutical cases") or GENEROUS (e.g., huge payment). ANY practice restriction in a settlement violates Rule 5.6.

B. Fee Sharing with Nonlawyers (Rule 5.4)

General Rule: Lawyers cannot share legal fees with nonlawyers.

Why? Protects lawyer independence and prevents nonlawyer ownership/control of law practice (which could compromise professional judgment).

Exceptions - You MAY share fees with nonlawyers for:

Example 3: The Paralegal Bonus

Attorney wants to reward paralegal's excellent work. Three proposals:

1. "I'll give you 10% of the fees I earn from the Smith case you worked on" → ❌ UNETHICAL - Fee sharing based on specific case
2. "Your year-end bonus will be $10,000, reflecting our firm's overall profitability and your contributions" → ✅ ETHICAL - Compensation/bonus not tied to specific legal fees
3. "You'll get $500 monthly as deferred compensation after you retire" → ✅ ETHICAL - Retirement benefits are permitted

⚠️ Common Mistake: Thinking ALL payments to nonlawyers are forbidden. Salaries and bonuses based on firm profitability are fine—just not percentages of specific legal fees.

4. Unauthorized Practice of Law and Multijurisdictional Practice 🌍

A. What is Unauthorized Practice? (Rule 5.5(a))

A lawyer shall not:

1. Practice law in a jurisdiction in violation of regulation in that jurisdiction
2. Assist a nonlawyer in unauthorized practice of law

Unauthorized practice generally means providing legal services in a jurisdiction where you're not licensed.

B. When CAN You Practice Outside Your Licensed Jurisdiction? (Rule 5.5(c))

You may provide legal services on a temporary basis in a jurisdiction where you're not licensed if:

MULTIJURISDICTIONAL PRACTICE: FOUR SAFE HARBORS

┌────────────────────────────────────────────┐
│  (1) ASSOCIATION WITH LOCAL LAWYER         │
│      You associate with local counsel      │
│      who actively participates             │
└────────────────────────────────────────────┘
               |
┌────────────────────────────────────────────┐
│  (2) PRO HAC VICE ADMISSION               │
│      Court admits you for specific case    │
│      (or you reasonably expect admission)  │
└────────────────────────────────────────────┘
               |
┌────────────────────────────────────────────┐
│  (3) ALTERNATIVE DISPUTE RESOLUTION        │
│      Services arise from or reasonably     │
│      related to your home-state practice   │
└────────────────────────────────────────────┘
               |
┌────────────────────────────────────────────┐
│  (4) SERVICES REASONABLY RELATED          │
│      TO HOME-STATE PRACTICE               │
│      (transactional, counseling work       │
│      connected to where you're licensed)   │
└────────────────────────────────────────────┘

Example 4: The Cross-Border Transaction

Lawyer L is licensed only in California. Three scenarios:

1. New York client calls: "I'm buying a New York building. Handle the closing?" → L accepts and works on transaction from California office → ✅ LIKELY ETHICAL under 5.5(c)(4) if reasonably related to L's California practice and client sought L out

2. L opens New York office, advertises New York real estate services, regularly handles New York matters → ❌ UNETHICAL - This is establishing systematic/continuous presence, requiring New York license under 5.5(d)

3. L files lawsuit in New York court without seeking pro hac vice admission → ❌ UNETHICAL - Litigation requires pro hac vice admission (5.5(c)(2)) or local license

💡 Key Distinction: Temporary (occasional, client-specific) vs. Systematic/Continuous (holding yourself out, establishing office) practice.

5. Law Firm Names and Letterhead 📝

Rule 7.5 governs law firm names to prevent misleading communications:

Prohibited:

• False or misleading names
• Names implying connection with government agency or public/charitable legal services organization (unless true)
• Trade names (e.g., "Budget Legal Clinic") - though some jurisdictions permit

Permitted:

• Names of deceased or retired partners may remain
• Name of lawyer holding public office may remain during office (if not misleading)
• Law firms may practice under same name in multiple jurisdictions (even if some named lawyers aren't licensed in all jurisdictions) IF not misleading

Example: "Smith, Jones & Associates" where Jones retired 5 years ago → ✅ ETHICAL

Example: "Justice Legal Services" (private firm) → ❌ LIKELY UNETHICAL - implies charitable/public entity

Professional Independence and Nonlawyer Involvement

Partners Must Be Lawyers (Rule 5.4(b), (d))

A lawyer shall not:

• (b) Form a partnership with a nonlawyer if any partnership activities involve practice of law
• (d) Practice in organization where:
  • Nonlawyer owns interest
  • Nonlawyer is director/officer
  • Nonlawyer has right to direct/control professional judgment

Rationale: Prevents nonlawyers from controlling lawyers' professional judgment (e.g., business person forcing lawyer to cut corners for profit).

⚠️ Important Exception: Many jurisdictions now permit "Alternative Business Structures" (ABS) with limited nonlawyer ownership, but traditional MPRE questions follow strict Model Rules prohibiting this.

Business Structure	Permitted?	Why/Why Not
Law firm partnership with only lawyers	✅ YES	Standard structure
Law firm with nonlawyer office manager as PARTNER	❌ NO	Rule 5.4(b) - nonlawyer cannot be partner in entity practicing law
Lawyer owns accounting firm AND law firm as SEPARATE entities	✅ YES (with conditions)	Separate entities okay if no fee-sharing and clients understand distinction
Accountant owns law firm	❌ NO	Rule 5.4(d) - nonlawyer ownership prohibited
Bank hires lawyer as in-house counsel	✅ YES	Lawyer is employee, not in private practice

Public Service Obligations 🤝

Pro Bono Publico (Rule 6.1)

Aspirational Goal: Every lawyer should provide at least 50 hours of pro bono service annually.

What counts?

💡 MPRE Key Point: Rule 6.1 is aspirational, not mandatory. You cannot be disciplined for failing to meet 50 hours. However, some states have mandatory reporting requirements.

Accepting Appointments (Rule 6.2)

General Rule: Lawyer should not seek to avoid court appointments to represent clients.

You MAY decline appointment only if:

VALID REASONS TO DECLINE APPOINTMENT

┌─────────────────────────────────────────┐
│ (1) Representation would violate        │
│     Rules of Professional Conduct       │
│     (e.g., conflict of interest)        │
└─────────────────────────────────────────┘
          ↓
┌─────────────────────────────────────────┐
│ (2) Representation would impose         │
│     UNREASONABLE FINANCIAL BURDEN       │
│     (considering your resources)        │
└─────────────────────────────────────────┘
          ↓
┌─────────────────────────────────────────┐
│ (3) Client/cause is so REPUGNANT to     │
│     you that it would impair client-    │
│     lawyer relationship or lawyer's     │
│     ability to represent                │
└─────────────────────────────────────────┘
          ↓
┌─────────────────────────────────────────┐
│ (4) Other GOOD CAUSE                    │
│     (context-dependent)                 │
└─────────────────────────────────────────┘

⚠️ Common MPRE Trap: "I find the client morally reprehensible" is generally NOT sufficient to decline appointment. Exception (3) requires that your personal feelings are SO strong they would impair representation.

Example: Judge appoints you to represent defendant charged with child abuse. You find this morally offensive. → MUST accept unless your feelings are so strong you cannot provide competent representation.

Membership in Legal Services Organizations (Rule 6.3)

You MAY serve as director/officer of legal services organization (providing services to persons of limited means) EVEN IF the organization serves persons whose interests conflict with your clients.

Exception: You shall not knowingly participate in a decision if doing so would create Rule 1.7 conflict (directly adverse to your client or significant risk of material limitation).

Example: You serve on board of Legal Aid Society. Your firm represents Landlord Corp. Legal Aid brings case against Landlord Corp. → You should recuse yourself from any board decisions about that case.

Law Reform Activities (Rule 6.4)

You MAY serve on law reform committees/organizations whose activities might affect your clients' interests.

Disclosure Rule: When participating, identify fact that you represent client affected by proposed reform IF:

1. Your participation is on behalf of client (not personal views), OR
2. Reasonable person would think your participation is on behalf of client

Example: You represent tobacco companies. You testify before legislature considering smoking regulations. → You should disclose your representation so legislators understand potential bias.

Common Mistakes to Avoid ⚠️

1. Assuming supervisors are automatically liable for subordinates' misconduct

   • ❌ Wrong: "Partner Smith is liable because Associate worked for him"
   • ✅ Right: "Partner Smith is liable only if he knew/ordered/ratified the misconduct OR violated his duty to create adequate supervision systems"

2. Believing subordinates can blame supervisors for ethical violations

   • ❌ Wrong: "I'm not responsible—my boss told me to do it"
   • ✅ Right: "I'm responsible unless this was an arguable question and my supervisor provided a reasonable resolution"

3. Thinking ANY payment to nonlawyers violates fee-sharing rules

   • ❌ Wrong: "We can't pay our paralegal a bonus"
   • ✅ Right: "We can't give paralegal a percentage of specific case fees, but salary and firm-profitability bonuses are fine"

4. Missing that settlement restrictions on practice are ALWAYS unethical

   • ❌ Wrong: "The restriction only applies to similar cases, so it's okay"
   • ✅ Right: "ANY restriction on right to practice in settlement agreement violates Rule 5.6"

5. Confusing temporary vs. systematic multijurisdictional practice

   • ❌ Wrong: "I can practice in any state as long as I associate with local counsel"
   • ✅ Right: "I can practice temporarily with local counsel, but establishing continuous presence requires license in that jurisdiction"

6. Treating pro bono as mandatory

   • ❌ Wrong: "Lawyer can be disciplined for not doing 50 hours pro bono"
   • ✅ Right: "50 hours is aspirational—encouraged but not disciplinable"

7. Allowing personal feelings to justify declining appointments too easily

   • ❌ Wrong: "I find this case offensive, so I can decline"
   • ✅ Right: "I can decline only if my feelings are SO strong they would impair my ability to represent the client competently"

Key Takeaways 🎯

Memory Device - "SUPER FIRM":

• Supervisors must create systems
• Unauthorized practice prohibitions
• Partners liable for knowing/ordering/ratifying
• Employee bonuses okay (but not % of specific fees)
• Restrictions on practice forbidden in settlements
• Fee sharing with nonlawyers generally prohibited
• Independence from nonlawyer control required
• Reasonable efforts to ensure compliance
• Multijurisdictional practice has safe harbors

🧠 Did You Know?

The "Big Law" dilemma: Many large law firms have offices in dozens of jurisdictions worldwide. Before modern multijurisdictional practice rules, lawyers technically committed unauthorized practice daily by giving advice on matters touching multiple states. Rule 5.5's 2002 amendments created safe harbors recognizing that modern legal practice is inherently interstate—a client's single transaction might involve New York financing, Delaware incorporation, California intellectual property, and Texas real estate.

Historical context: The prohibition on nonlawyer ownership (Rule 5.4) stems from early 20th-century concerns about "commercialization" of legal practice. Some modern jurisdictions (notably Washington D.C. and several non-U.S. countries) now permit "Alternative Business Structures" where nonlawyers can own portions of law firms. The debate continues: Does nonlawyer ownership threaten professional independence, or does it increase access to justice by enabling innovative service delivery?

📚 Further Study

• ABA Model Rules 5.1-5.7 & 6.1-6.5 - Complete text with official comments
• ABA Center for Professional Responsibility - Ethics opinions and resources on multijurisdictional practice
• MPRE Study Resources - Official NCBE materials and sample questions

---

You've completed Lesson 4! You now understand how ethical rules apply to law firm operations, supervisory relationships, and lawyers' public service obligations. These organizational and societal dimensions of professional responsibility are essential for both MPRE success and ethical practice management. Next, you'll explore client funds, advertising, and solicitation rules.