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TEMPORARY LAWYER FIRMS GET OK: ABA panel says ethics rules don't always bar agenciesAuthor(s): Paul MarcotteSource: ABA Journal, Vol. 75, No. 3 (MARCH 1989), p. 28Published by: American Bar AssociationStable URL: http://www.jstor.org/stable/20760389 .
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TEMPORARY LAWYER FIRMS GET OK ABA panel says ethics rules don't always bar agencies
As temporary-lawyer placement agencies sprouted up around the United States in recent years, law yers have questioned whether the use of such agencies violated lawyer eth ics rules.
A 13-page opinion issued in De cember by the ABA's Standing Com mittee on Ethics and Professional Responsibility highlights potential problems, but suggests that the grow ing use of temporary agencies lends support to the idea they are an "ef ficient and cost-effective way for law firms to manage their work flow and deployment of resources." (See "Boom in Lawyer Temporaries," June
1, 1987 ABA Journal, page 30. Also see Ethics at page 108.)
The committee, chaired by Bal timore lawyer M. Peter Moser, says that paying agencies a percentage of a temporary lawyer's fee does not vi olate the ABA's Model Rules of Professional Conduct ban on sharing fees with non-lawyers nor does it vi
olate similar restrictions set forth in its predecessor, the Model Code of Professional Responsibility.
The opinion concludes that law firm payments to such agencies are not legal fees. It notes that a tempo rary agency is paid for locating, screening and providing a lawyer, while the lawyer is paid for his or her services.
Yet, the opinion cautions that a fee agreement between a temporary lawyer and placement agency must
make it clear the agency is not exer
cising any control over the lawyer's professional judgment.
Absent a division of the actual fee between the temporary lawyer and the law firm paid by the client, the opinion suggests that a client need not be informed of the financial ar
rangement between the firm and temporary lawyer.
However, if a temporary lawyer is not working under the direct su
pervision of one of the firm's law yers, the opinion says that the client must be informed that a temporary lawyer is working on the client's le gal matter.
The ABA opinion differs from an
ethics opinion issued last March by the Association of the Bar of the City of New York, which found that giv ing a placement agency a percentage of the temporary lawyer's compen sation is an improper sharing of fees with non-lawyers.
"The New York City bar opinion had the effect of making lawyers think temporary agencies were unethical," said Lesley Friedman, president of Special Counsel, a New York City temporary-lawyer agency.
Last August, the Connecticut Bar Association issued an ethics opinion finding that payments made directly to a temporary lawyer and separate payments to the placement agency based on a percentage of the lawyer's compensation did not violate its code of professional conduct. Yet, a Flor
ida bar opinion cited some potential problems with various fee divisions. The Kentucky bar also issued an
opinion saying that lawyers may not own or participate in a service that supplies temporary lawyers.
Eric Walker, a co-founder of
Lawsmiths, which has offices in Los Angeles, San Francisco and New York, said his agency agrees with the analysis used throughout the ABA ethics opinion and hopes it will serve as a model for state bars.
The ABA opinion addresses pos sible conflict-of-interest issues, con
fidentiality and disclosure require ments. Formal Opinion 88-356, Temporary Lawyers.
The opinion suggests that many of the ethical provisions that apply to full-time lawyers apply equally to temporary lawyers.
It warns that temporary lawyers with access to information about law
firm clients could be deemed to be "affiliated with" a law firm in in stances where the firm is subject to disqualification for a conflict of in terest. However, the opinion says it is less likely that a temporary lawyer
would be considered to be part of a firm if he or she works on a single
matter and is screened from other client information.
?Paul Marcotte
M. Peter Moser:
His committee
finds payments to lawyer-temp
agencies aren't
fee-splitting.
ABAJ/ULDIS SAULE
28 ABA JOURNAL / MARCH 1989
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