(1) by the lawyer in circumstances that are not distinct from the lawyer’s provision of legal services to clients; or
(2) in other circumstances by an 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 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.
Comment
[1] 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.
[2] 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
and whether the law-related services are performed through a law firm
or a separate entity. The rule identifies the circumstances in which
all 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.
[3] 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 paragraph (a)(1). Even when the law-related and
legal services are provided in circumstances that are distinct from
each other, for example through separate entities or different support
staff within the law firm, the Rules of Professional Conduct apply to
the lawyer as provided in paragraph (a)(2) unless the lawyer takes reasonable
measures to assure that the recipient of the law-related services knows
that the services are not legal services and that the protections of
the client-lawyer relationship do not apply.
[4] 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.
[5] 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).
[6] 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.
[7] The burden is upon the lawyer to show that the
lawyer has taken reasonable measures under the circumstances to communicate
the desired understanding. For instance, a sophisticated user of law-related
services, such as a publicly held corporation, may require a lesser
explanation than someone unaccustomed to making distinctions between
legal services and law-related services, such as an individual seeking
tax advice from a lawyer-accountant or investigative services in connection
with a lawsuit.
[8] 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 that the lawyer controls complies in all respects
with the Rules of Professional Conduct.
[9] 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, psychological
counseling, tax preparation, and patent, medical or environmental consulting.
[10] 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 (Rules 1.7 through 1.11,
especially Rules 1.7(b)(2)-(4) and 1.8(a) and (e)), and to scrupulously
adhere to the requirements of Rule 1.6 relating to disclosure and use
of confidential information. See also Comment [26] to Rule 1.7.
The promotion of the law-related services must also in all respects
comply with Rule 7.1, 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 decisional law. Rule
1.8 addresses a lawyer’s provision of non-law-related services
to a client.
[11] When the full protections of all 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. Rule
5.7 does not limit the protection provided by any other Rule, including
but not limited to Rule 8.4, which prohibits, among other things, conduct
involving dishonesty or fraud whether or not the lawyer engages in such
conduct in connection with the rendering of law-related services.
