MARYLAND STATE BAR ASSOCIATION, INC.
COMMITTEE ON ETHICS
ETHICS DOCKET NO. 2001-11
Listing of Investment Advisor and Insurance Designers on Law Firm Letterhead As Being “Affiliated.”
You ask whether the name of a business which furnishes financial counseling and investment brokerage and insurance services to the general public can be listed on a law firm’s letterhead and be referred to as a “Client Services Affiliated Organization.” You state that the relationship between the law firm and the business is limited to occasional referrals of clients between the two on a non-exclusive basis, namely, clients are free to retain the other entity or not as they see fit and there is no pressure imposed on clients.
The stated intent for listing the business on the law firm’s letterhead is to let clients know that the law firm has available financial planning resources which may be helpful to provide more complete client services.
We are not aware of another ethics committee having occasion to address the precise question presented. In ABA Formal Opinion 94-388,’ the Committee dealt with the relationship
1. In that opinion, the Committee said:
It is critical, no matter what words are used to describe the relationship between firms, for clients to receive information that will tell them the exact nature of the relationship and the extent to which resources of another firm will be available in connection with the client’s retention of the firm that is claiming the relationship. The Committee concludes that the use of one or two word shorthand expressions is not sufficient to fulfill that requirement. Because the words mentioned above and others have been employed to describe so many different relationships, and because the modern era has generated so many imaginative ways in which firms relate to one another (and with which they describe them), the Committee believes that the mandate of Model Rule 7.1 not to mislead or deceive can only be met if a full description of any relationships the firm may have used in marketing its services is provided to all prospective clients as to whom the lawyer reasonably believes the relationships may be relevant, and to all present clients to whom the lawyer reasonably believes the relationships may be relevant if at any time any of those relationships changes between anv firms and the propriety of using a term such as “affiliate” to describe the relationship. See also, MSBA Opinion 96-49.
Generally, a firm may list nonlawyers on its letterhead, provided the nonlawyers’ status is clear. See, e.g., Professional Ethics Comm. of Fla. Bar, Op. 94-6 (1995) (letterhead may list mediation department’s mediators only if nonlawyer status clear); Comm. on Professional Ethics of Bar Ass’n of Nassau County, Op. 91-32 (1991) (letterhead may include nonlawyer, only if listing indicates individual’s function and nonlawyer status); N.Y. County Lawyers’ Ass’n Comm. on Professional Ethics, Op. 682 (1990) (letterhead may list name of law school graduate not yet admitted to practice, provided it discloses that individual not admitted to practice); Ethics Comm. of Utah State Bar, Op. 131 (1993) (letterhead may list nonlawyer employees, as long as designation not false or misleading and contains clear indication of nonlawyer’s status).
Based on the facts presented, it is apparent to the Committee that the actual relationship between the law firm and the business in question does not amount to one being “affiliated” with the other. The common definition of “affiliated” is to be “closely associated with another typically in a dependent or subordinate position.” Merriam-Webster’s Collegiate Dictionary (10U1 ed. 1995).
A lawyer’s letterhead is a form of public communication and as such is subject to the general directive of Rule 7.1 of the Rules of Professional Conduct that it not contain material that is false or misleading. Rule 7.5 of the Rules of Professional Conduct.
Rule 7. 1 provides, in pertinent part:
* * *
In so concluding, the Committee does not mean to suggest that on letterhead and law lists like Martindale Hubbell the firm cannot simply state that it is ‘affiliated’ with another or that it is a member of a particular ‘network.’ The full disclosure addressed here rather must be given to any prospective client to whom the lawyer reasonably believes the relationship may be relevant, preferably in writing, before the lawyer embarks on the work required by the engagement. Most firms will no doubt find it simplest to prepare an addendum to their standard retention letter that would include a description of the relevant relationship for this purpose.”
“A lawyer shall not make a false or misleading communication about the lawyer or the lawyer’s services. A communication is false or misleading if it:
(a) contains a material misrepresentation of fact at law, or omits a fact necessary to make the statement considered as a whole not materially misleading.”
We are of the opinion that the use of the term “affiliated” under the circumstances would be false or misleading in violation of Rule 7.1(a).
This opinion, 01-11 makes references to opinion 96-49.
OTHER REFERENCES:
ABA Formal Opinion 94-3 88; Professional Ethics
Comm. of Fla. Bar, Op. 94-6 (1995); Ethics Comm. of Utah State Bar, Op.
131(1993); Comm. on Professional Ethics of Bar Ass’n of Nassau County,
Op. 91-32 (1991); N.Y. County Lawyers’ Ass’n Comm. on Professional
Ethics, Op. 682 (1990); Rules 7.1, 7.1(a) and 7.5, Maryland Rules of
Professional Conduct; Merriam-Webster’s Collegiate Dictionary (10th ed.1995)