Risks for practitioners sharing office space

Operating a law practice can be expensive. Considering staff salaries, leasing office space, filing fees, maintaining IT systems, and office supplies, the costs can rack up quickly. For this reason, some practitioners soften the blow by starting law firms with partners who share the costs. However, with the increase in hybrid working arrangements and the evolution of the legal field, some solo practitioners have explored sharing office space with other professionals or attorneys in order to share resources.

Although these arrangements have become more common, they are not without both ethical and liability risks. Thus, it can be helpful for attorneys engaging in office-sharing arrangements who are not actually part of a law partnership to ensure that they are keeping their practices separate, both in fact and appearance. Here are some tips to consider.

Advertising, Signage, and Firm Materials

When attorneys share office space, there is a risk that a client may think that he or she is retaining a partnership of all attorneys in the office instead of only a solo practitioner or a certain group of attorneys within that office. Thus, the ethical rules require attorneys to ensure that their signage, advertisements, and other materials do not mislead the public and clients about the relationship of the attorneys who share the space.

Rule 7.1(a) of the California Rules of Professional Conduct provides that “a lawyer shall not make a false or misleading communication about the lawyer or the lawyer’s services.” Rule 7.5 provides further that a “lawyer shall not use a firm name, trade name or other professional designation that violates rule 7.1” and “shall not state or imply that the lawyer practices in or has a professional relationship with a law firm or other organization unless that is the fact.” The consequences for violating these rules can be severe.

One way to guard against the risk of confusion is to ensure that signage and advertising materials clearly explain that attorneys sharing office space are operating separate law practices. Indeed, Formal Opinion No. 1997-150, which was reviewed under California’s prior yet similar ethical rules, states that “attorneys sharing space are well advised to have separate business cards and letterhead or otherwise clearly identify their separate practices in order to avoid any confusion that they are affiliated when they are not.” Some attorneys will even include disclaimers on their business cards or correspondence. Others will use their engagement letters to specifically identify the attorney retained in connection with a matter and to confirm that the attorney-client relationship does not extend to other attorneys sharing the space.

In addition to the ethical risks, misleading or confusing office-sharing arrangements may present liability risks, too. If a client reasonably believes that he or she is retaining all attorneys in the shared office space, the client may be able to assert a claim against all of them based on the conduct of any one attorney. Although a non-participating attorney may be able to ultimately prove that they were not the client’s lawyer, that can be an expensive and lengthy process, given that courts will often view these issues from the reasonable perspective of the client. Exacerbating the risk of this unanticipated liability is the risk that insurance coverage may not be available under standard legal malpractice policies for such vicarious liability claims.

Maintaining Client Confidences

All attorneys are required to “maintain inviolate the confidence, and at every peril to himself or herself to preserve the secrets, of his or her client.” Cal. Bus. & Prof. Code § 6068(e)(1). Just as in a traditional law firm setting, attorneys also have ethical obligations to supervise non-lawyer staff and maintain adequate firm procedures to help fulfill the attorney’s obligation to maintain client confidences.

The measures needed to protect confidential client information in a shared office space generally will depend on the circumstances, including the nature of the arrangement and the attorneys’ law practices. A simple measure for many practitioners is taking client calls privately rather than in shared communal areas with other attorneys. This can help maintain the privilege and confidences of the relationship. It may also serve as extrinsic evidence that the others in the suite do not share in that privilege or those confidences. In addition, many attorneys will implement systems to restrict others in the space from accessing client files and confidential information.

Tips for Sharing Space, Staff and Systems

A common way to minimize the risks of sharing office space is to provide clear instructions to common staff and to segregate the firms’ systems.

For example, if attorneys in the office space share the same receptionist, they can provide guidance to that receptionist in how to answer calls or communicate with walk-ins to help ensure that there is no confusion about the lack of affiliation among the lawyers. Practitioners can train staff and others in the office on how to answer typical questions to reinforce the fact that the law practice is distinct from others within the office space.

Attorneys may also take steps to ensure that mail or other confidential communications are directed to and opened by only those persons affiliated with the law practice. Not only can this help the attorney keep their obligation to safeguard confidential client information, but it may also indicate to others that attorneys operating within the same office are independent.

Although attorneys may share the same building and even the same receptionist, most attorneys in that situation will not share the same filing cabinets or storage areas for client files. Rather, they will keep those files separate and protected from other law practices or companies in the shared office space. Even if an attorney shares computer systems or a network with others in the office space, the attorney should take steps to restrict access to their file system so that others in the shared space who are not entitled to that information are not able to access it.

Taking these precautions can help attorneys minimize the risks of sharing office space while enjoying the benefits of lower operating costs.