The objective of The Ethics and Professional Liability Bulletin is to keep legal professionals informed of recent developments and trends in the areas of legal ethics, professionalism, and professional liability.
November 10, 2021 – On October 1, 2021, the Ohio Board of Professional Conduct (the “Board”) issued Advisory Opinion 2021-10 advising that lawyers may not practice under a common trade name that is franchised nationally.[i] The Board considered an inquiry regarding the appropriateness of a lawyer partaking in a franchise agreement as part of a “nationwide network of franchised law firms.”[ii] The franchisee would supposedly benefit by possessing a strong brand image, access to programs on legal issues, mass purchasing power, and a large referral network.[iii]
Although the Supreme Court of Ohio amended Prof. Cond. R. 7.5 in 2020 to remove the prohibition on practicing law under a trade name, lawyers and firms are still responsible for ensuring that the trade name is not false, misleading, or nonverifiable per Rule 7.1. Even a truthful statement is misleading “if there is a substantial likelihood that it will lead a reasonable person to formulate a specific conclusion about the lawyer or the lawyer’s services for which there is no reasonable factual foundation.”[iv]
The use of a trade name in the practice of law in Ohio implicates Prof. Cond. R. 5.4, 7.1, and 7.5. Rule 5.4(b) prohibits lawyers from forming partnerships with non-lawyers “if any of the activities of the partnership consists of the practice of law.”[v] This means that Ohio lawyers may not practice under a trade name if the corporation franchising that trade name is owned, in whole or in part, by any non-lawyers.[vi] As discussed above, Rule 7.1 mandates that “[a] lawyer shall not make or use a false, misleading, or nonverifiable communication about the lawyer or the lawyer’s services.” So while Ohio lawyers may practice under trade names, if the lawyer practices as part of a legal association, corporation, clinic, limited liability company, or limited liability partnership, the trade name must still comply with the requirements imposed by Gov. Bar R. III(2) and carry the appropriate designation.[vii] Additionally, Rule 7.5(d) states that “[l]awyers may state or imply that they practice in a partnership or other organization only when that is the fact.” (Emphasis added). While a partnership shares responsibility for client matters, a trade name franchised nationally does not necessarily do so (unless it operates as a single law firm).
The Board expressed concern that a potential client seeking to retain an Ohio lawyer working under a franchised trade name would make several assumptions that may not necessarily be true. First, the client may assume that the network of lawyer franchisees will not represent any other clients with interests that conflict with those of the client. Second, the client might assume that the Ohio lawyer will have access to state-specific expertise of lawyers in other states. Third, the client could reasonably assume that the Ohio lawyer has access to extensive financial resources to pursue the client’s matters.[viii] But in this instance, the franchise would not operate as a single firm, even though an Ohio lawyer practicing under a nationally franchised trade name would be implying that the network is a “partnership” of lawyers. The Board thus concluded that unless the franchise and franchisee-lawyers are in a true partnership, sharing responsibilities and liabilities, an Ohio lawyer would violate Prof. Cond. R. 7.5(d) and 7.1 by practicing under a trade name franchised nationally.[ix]
Conclusion and Practical Takeaway. Ohio lawyers should exercise caution not to run afoul of the Rules of Professional Conduct if they choose to practice under a trade name. A lawyer practicing in Ohio cannot practice under a trade name if the franchisor of the trade name is owned by any non-lawyers. A potential client may reasonably assume that none of the lawyers in the franchise network will represent interests adverse to the client, or that the Ohio lawyer has access to state-specific expertise or financial resources that the lawyer does not have in reality. Further, if the franchise and franchisee-lawyers are not in a true partnership, the Ohio lawyer’s conduct violates Rules 7.1 and 7.5(d).
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The information provided in this bulletin speaks only to the information and guidance we have available as of the date of publication and is subject to change. We will continue to follow further issued guidance and regulations and endeavor to post those updates via our website. This legal update was created by Ulmer & Berne LLP, and is not intended as a substitute for professional legal advice. Receipt of this bulletin, by itself, does not create an attorney client relationship. For any questions, or for further information, please contact Alvin E. Mathews, Jr. at amathews@ulmer.com.
[i] This Opinion withdraws Advisory Opinion 1997-1. While the former opinion reached the same conclusion on this issue, it did so on different grounds and by applying the Disciplinary Rules of the former Ohio Code of Professional Responsibility, which are no longer in effect.
[ii] Ohio Board of Prof. Cond., Op. 2021-10, 1.
[iii] Ohio Board of Prof. Cond., Op. 2021-10, 1–2.
[iv] Ohio Prof. Cond. R. 7.1, cmt.[2].
[v] Ohio Board of Prof. Cond., Op. 2021-10, 2.
[vi] Ohio Board of Prof. Cond., Op. 2021-10, 2.
[vii] Ohio Board of Prof. Cond., Op. 2021-10, 2, citing Ohio Board of Prof. Cond., Op. 2020-11. Gov. Bar R. III(2) requires legal professional associations and clinics to have names that end with the legend, “Co., LPA” or “A Legal Professional Association.” The names of corporations, LLCs, and LLPs must include a designation as required under Ohio Rev. Code §§ 1701.05(A), 1705.05(A), or 1776.82, respectively.
[viii] Ohio Board of Prof. Cond., Op. 2021-10, 3.[ix] Ohio Board of Prof. Cond., Op. 2021-10, 3.