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Dentons lawyers named in Who’s Who Legal Thought Leaders: Global Elite 2019 guide
Dentons is proud to congratulate six of our lawyers who have been recognised by Who’s Who Legal in its Thought Leaders: Global Elite 2019 guide.
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Canada Federal Budget 2019
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With 175 locations in 78 countries, Dentons is home to top-tier talent that is found at the intersection of geography, industry knowledge and substantive legal experience. Working with Dentons, you will have the opportunity to learn from the best lawyers in the industry at the largest law firm in the world.
The Legal 500 EMEA 2019 recognizes over 130 Dentons lawyers
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As published in The Recorder
With the rising cost of overhead expenses, many law practices are looking for creative solutions to save money. One idea that many small law practices consider is the use of shared office space. At first blush, such an arrangement may be very appealing, as it allows attorneys to minimize expenses by sharing a receptionist and other costs. Even for larger law firms, the same type of arrangement can occur where the firm sublets part of its space to other attorneys.
While attorneys in such situations may share office space, in all other respects they maintain separate law practices. For example, the various attorneys in the office generally will not share fees, will file separate income taxes, and will each have their own legal malpractice policy. Thus, attorneys sharing office space may feel that it is unmistakably clear that they are separate and distinct from the other law practices in the office.
However, the problem is that if the client does not see things so clearly, it can create risk. Indeed, in some situations, it is the reasonable understanding of the client that will determine an attorney’s potential liability rather than the attorney’s intent. If the client reasonably believed that an attorney was practicing in a general partnership with the other attorneys in the office, then there are risks for all of the attorneys no matter how clearly separated the financial and other aspects of their practices may be.
Where the client reasonably believes that she or he is retaining a partnership, the client may be able to allege a claim against all attorneys in the office based on the conduct of any one of the attorneys. Courts have recognized an implied attorney-client relationship arising out of the client's beliefs and understandings so long as they are reasonable and based on the actions of the attorney.
There is also a risk that attorneys receiving such a claim from another attorney’s client may be left without malpractice insurance. Legal malpractice policies may not cover claims based on legal services rendered by attorneys who are not part of the insured law practice and thus do not qualify as insureds under the policy. As a result, absent careful attention, attorneys attempting to improve the profitability of their practices might be creating risks that far outweigh any benefits from office sharing.
There are also potential ethical issues associated with sharing office space. For example, California Rule of Professional Conduct 1-400(A) addresses communications concerning attorneys’ services, firm names, and letterhead. Rule 1-400(D) prohibits an attorney from making communications that are false, deceptive, or which tend to confuse, deceive, or mislead the public.
Despite this, sharing offices is completely legal and ethical—and following the below steps can help minimize risks.
A key factor in cases involving these issues is how the attorneys held themselves out to the public. Some courts apply the standard of a “reasonable person” in asking how the attorney’s signage, letterhead, business cards, and advertising would be perceived. As a result, these materials are very important as they are the most concrete evidence of how attorneys hold themselves out to the public. Each should be specifically designed to avoid the risk of client confusion.
Where the names of all attorneys in the offices are listed, specific disclaimers are helpful. The disclaimer should communicate that the attorneys are separate law practices, not a single law firm, and that retaining one attorney does not and shall not constitute the retention of any other attorney.
Another issue that can arise relates to maintaining client confidences and secrets. Attorneys should be careful to ensure that the confidential information of their clients is not accessible to the other attorneys in the office. In the event that there is a bar grievance regarding the failure to properly maintain such information, attorneys may find themselves in the unenviable position of arguing that all of the attorneys in the office represented the client as the only defense to the failure to prevent those other attorneys from accessing confidential information. As noted herein, such a “defense” can also create more potential liability.
Although sharing the same office and even receptionist may be proper, it can be problematic for attorneys to share filing systems or storage areas. In addition to other risks, attorneys that share filing systems or storage space can jeopardize the client’s expectation of confidentiality as addressed above.
When attorneys share a mail room, segregation of incoming mail can be especially difficult. Having procedures in place can help ensure that mail is opened only by the client's attorney or an employee of the client's attorney.
Another difficult issue is the use of shared computer systems, servers, and software. Attorneys in the same office may be inclined to share networks and other technology but, if doing so, access to client information should be restricted to only the client’s attorney. It is helpful to document the procedures in place to prevent the sharing of client confidences to both reassure the client and to combat claims that the attorney failed to enact adequate protections.
Even the strongest protections can be undone if the attorney’s staff is not properly trained. Attorneys sharing office space can consider training sessions regarding procedures to protect client information and to help project to clients that the attorneys in the office are truly part of separate law practices.
Proper training combined with engagement letters and clear advertising can help minimize the risk that clients will get the wrong idea about the attorneys sharing office space.