THE ALPS RISK MANAGEMENT REPORT
Limiting Letterhead Liability and Other Advertising Issues
by Mark C.S. Bassingthwaite, J.D.

(This article summarizes material found in the ABA/BNA Lawyers' Manual on Professional Conduct, sections 81:3001-3015 and 91:501-590. Please consult this reference for additional information on this topic.)

First letterhead routinely comes through the ALPS office, allowing us to see examples of letterhead around the country. For the most part, the letterhead samples are well within the bounds of acceptability. Our concern comes from a continues attempt to push the boundaries of acceptable advertising, and particularly with web pages. We also are beginning to see more aggressive letterhead, business cards, and firm name advertising.

Consider how highly qualified, responsible underwriter will respond to letterhead that does not comply with ethical rules. The obvious first question is, "if the firm does not understand and adequately research letterhead ethics issues, does it understand and adequately research the difficult matters brought in by clients?" In other words, a firm's letterhead represents not only the firm itself, but it practice as well.

We urge you not to get careless or assume what letterhead contents and/or formats are acceptable, and in the process run afoul of ethical constraints. Erroneous assumptions regarding ethics rules can expose you to disciplinary action or professional liability. Below I will review the ethics rules regarding firm letterhead, and discuss how exposures can arise. Be aware that generally, the rules also apply to business cards and web pages.

The relevant ethics rules are Model Rules 7.1 and 7.5, and Model Code Section DR 2-102. In short, the rules prohibit a firm name, business card or letterhead that communicates misleading information. For example, a firm cannot imply that a partnership or other business form exists if such is not the case. In certain circumstances, letterhead and/or business cards must identify the practice jurisdiction limits upon the firm's attorneys. In addition, if one of the firm's lawyers holds public office, the firm may not list him/her on the firm's letterhead unless he/she has an active practice within the firm. Further, communications on firm letterhead reflect the position that the firm is responsible for the facts and content therein. A lawyer therefore must not provide a client, or anyone else, with blank letterhead for unsupervised use.

A common problem is a letterhead or business card, or webpage) that creates an implied formal and legal relationship between attorneys. For example, solo attorneys Mr. Black and Ms. White cannot, and should not create a letterhead for the Firm "Black and White" if in fact and indeed there is no leal partnership or corporation between them. Letterhead for "Black and White" can create a partnership by estoppel when a person engages Mr. Black under the assumption, based upon seeing and receiving the "Black and White" letterhead, and Mr. Black is formally and legally affiliated with Ms. White.

In a true partnership between Mr. Black and Ms. White, they agree to share liability. Their practice as a partnership allows clients to reasonably infer that each partner may draw upon the other's skills and expertise when rendering services on the client's behalf. However, if Mr. Black's and Ms. White's true arrangement is independent attorneys merely sharing an office, then the partnership resources may be illusory. More importantly, in an office-sharing setting, Mr. Black and Ms. White desire only to be responsible for his/her own liability. But if they use "Black and White" firm letterhead, the notion of independent liability may be terminated by estoppel.

State and local bar associations unanimously prohibit office-sharing attorneys from using common letterhead. Many also say that disclaimer cannot solve the problem, because non-lawyers may not understand the differences between, and therefore can be confused by, such terms as partnership, professional corporation, or professional association.

A more common problem exists regarding use of the term "of counsel." A lawyer who is not a partner, associate or outside consultant may be designated as "of counsel" to a firm if the lawyer has a close and continuing relationship with the firm, involving frequent contact for consultation and advice. Thus, firms should not use the term to describe a relationship that principally is a referral mechanism, or an advisor on an isolated matter. Again, the concern is that designation as "of counsel" should accurately convey the attorney's status within the firm.

Examples of acceptable "of counsel" designation include, but are not limited to, retired lawyers, withdrawing partner or associate, part-time practitioner, permanent non-partner or non-associate, partner on leave of absence or sabbatical, and probationary partner. As discussed above, the firm must disclose the "of counsel" attorney's jurisdiction limitations. Examples of unacceptable "of counsel" designations include (but are not limited to) quasi-associate, outside consultant, suspended lawyer, independent contractor, and a public official who is not engaged in active practice with the firm.

As noted above, firms should not provide their letterhead for unsupervised use, since it can result in the unauthorized practice of law. We have seen this happen most often in the area of debt collection practice. A firm does not want to be responsible for the legal conclusions or litigation threats made by a non-attorney.

A number of other ethics rules address such letterhead issues as listing deceased attorney in a firm name, listing an attorney's multiple degrees, and listing non-attorneys. Space limitations prevent us from addressing those other issues here. We encourage you to review the ABA/BNA Manual on Professional Conduct, and/or consult your local or state bar, to obtain information on these additional rules. Remember that the rules addressed in this Report will vary from state to state, and generally apply not only to letterhead, but also to business cards and Internet web sites.

About the Author
Mr. Bassingthwaighte is a Regional Risk Manager with the Attorneys Liability Protection Society (ALPS).