As a result of advances in technology, attorneys can now work from virtually anywhere and often require less space for the storage of physical files. Thus, with less need for significant amounts of office space, attorneys may increasingly be tempted to share offices with other attorneys who have separate law practices. After all, sharing office space can not only save money on the rent, it also can reduce costs through the sharing of receptionists, office supplies and other operational expenses.
In such an arrangement, although they are sharing office space, attorneys may think there is no doubt that the law practices are completely separate. Each practice within an office space generally will not share fees or other revenue, will file separate income taxes, and will have its own legal malpractice policy.
The problem is that, although all of these factors might suggest completely separate practices, the appearance to the client can often be the most important factor and can create significant risks.
Indeed, under Georgia law, all that is necessary to form an attorney-client relationship is a "'reasonable belief' on the part of the would-be client that he or she was being represented by the attorney." In re Holloway, No. 09-30446, 2015 WL 1545376, at *11 (Bankr. S.D. Ga. Mar. 31, 2015) (citing Cleveland Campers, Inc. v. R. Thad McCormack, P.C.,635 S.E.2d 274, 276–77 (Ga. Ct. App. 2006)). "A reasonable belief is one which is reasonably induced by representations or conduct on the part of the attorney." Id.
When an attorney shares office space with other attorneys, the risk is that the client may reasonably believe 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 the office. Thus, under a general partnership theory, the client may be able to allege a claim against all attorneys sharing the office space based on the conduct of any one attorney.
Compounding the risk of this unexpected liability is the likelihood that, for such claims, there would be no insurance coverage available. Generally, a legal malpractice policy will not provide coverage for a claim based on alleged vicarious liability for an attorney that is not a part of the insured law practice. This risk can far outweigh the costs saved by sharing office space.
In addition to potential legal malpractice exposure, sharing office space can implicate ethical concerns. For example, ABA Model Rule 7.1 prohibits an attorney from making false or misleading communications about his or her services, while Rule 7.5 prohibits an attorney from using a firm name, letterhead r any professional designation that would violate Rule 7.1. Comment 2 to Rule 7.5 specifically warns that attorneys who share office space but are not members of the same law firm may not suggest through the name of their practice or practices that they are part of a single firm.
Finally, sharing office space also poses risks associated with the failure to properly maintain client confidences and secrets. If confidential client information is shared or accessible by attorneys in separate law practices, the only defense to a grievance or challenge based on the failure to maintain client confidences may be that all of the attorneys represented the client, creating the de facto general partnership that leads to liability for all.
Although there are risks, office sharing can be completely legal and ethical, if precautions are taken. Above all, effective communication with the client can ensure that the client understands that each law practice within an office space is distinct and that no partnership exists. Below are some specific steps that can also be effective in minimizing risk.
In determining whether an attorney-client relationship is created, courts and juries often consider what a reasonable person would think based on how the attorneys hold themselves out to the public. Thus, firm signage, letterhead and business cards can be important in identifying the law firm practice with which an attorney is associated and can help avoid the risk of client confusion.
Attorneys also should ensure that any advertising does not contain misleading communications about the attorney's practice. Specific disclaimers clarifying that attorneys are part of separate law practices can be helpful where the names of all attorneys in the office are listed.
In addition, the engagement letter with a client can help limit risk by specifically identifying the attorney retained and by also including a disclaimer with respect to the other attorneys sharing office space.
Maintain separate files and computer systems
Although attorneys can share the same building and even the same receptionist, attorneys should be careful not to share the same filing cabinets or storage areas. Files should instead be segregated from every other law practice in the office. The office should also consider having systems in place to ensure that mail received by the office is only opened by the appropriate attorney or the attorney's employee.
Offices should also consider implementing precautions where attorneys share computer systems or utilize a common network. Access should be restricted so that each attorney only has access to their own clients' information and files. Specific protocols can also provide comfort to clients that their confidences and secrets will be protected from disclosure to other attorneys in the office.
Educate all personnel
While attorneys and staff from separate law practices will undoubtedly interact within a shared office space, it is important to ensure that all staff and attorneys are aware of the importance of maintaining the appearance of separate practices. This can include training as to answers to typical questions the staff might be asked that reinforce the fact that the law practice is distinct from others within the office space.
Indeed, as previously emphasized, clear communications can help erase any doubt as to whether each attorney is part of a separate law practice and, combined with the other steps suggested above, can help mitigate the risks created by sharing office space with other attorneys.