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114 N.J.L.J. 387
October 11, 1984
ADVISORY COMMITTEE ON PROFESSIONAL ETHICS
Appointed by the New Jersey Supreme Court
New Jersey Attorney
Employment With Out-of-State Firm
The inquiry presented here once again asks this Committee to
consider the ever-increasing pressures in the legal profession
toward interstate or multi-state associations of lawyers.
The questions raised here are framed as follows:
1. May an attorney practice law in New Jersey as a salaried
employee of an out-of-state law firm?
2. Does the use of the attorney-employee's name as the firm
name in New Jersey violate DR 2-105(B);-?
3. Are fees earned in New Jersey matters properly
distributed to the attorney-employee's firm?
One may glean the hypothetical factual situation from the
brief filed by the inquirer as required by R. 1:19-3: An attorney
admitted to practice out of state and in New Jersey has entered
into or intends to enter into a full-time salaried employment
relationship with an out-of-state law firm. The law firm will be
the attorney's bona fide and exclusive employer. The attorney will
maintain an office in New Jersey and will keep the requisite
separate financial accounts. (R. 1:21-l(a); R. 1:21-6). The
attorney-employee will handle matters both in the foreign
jurisdiction and in New Jersey; all office expenses and overhead
are paid for or advanced by the firm; the attorney's compensation
*now RPC 7.5(b)
is said to be independent of the fees generated or the jurisdiction
in which he handles cases; and fee arrangements for New Jersey
cases will follow New Jersey requirements. The New Jersey law
office will be in the name of the New Jersey attorney-employee.
However, the foreign firm's principals will be listed on the
letterhead and, presumably, wherever listed, individually with
appropriate jurisdictional limitations noted.
The New Jersey Supreme Court in the case of In re Professional
Ethics Advisory Committee Op. 475, 89, N.J. 74 (1982), app. dism.
sub. nom. Jacoby and Meyers v. Supreme Court of New Jersey, U.S.
103 S. Ct. 285,74 L. Ed.2d 272 (1982),recognized the right of New
Jersey attorneys to affiliate with a national law firm. Obviously,
therefore, a New Jersey lawyer may affiliate with a law firm
limiting its practice to only one or several foreign jurisdictions.
This Committee held in Opinion 36, 87 N.J.L.J. 190 (1964),
that a patent attorney admitted only to the Bar of the District of
Columbia could not form an association with a New Jersey law firm
restricted to the practice of patent law. However, we further said
that if he were to join the New Jersey firm, his name could appear
on the stationery of the New Jersey firm, not as a partner, but
with the notation that he was admitted in Washington, D.C. only. In
Opinion 223, 94 N.J.L.J. 1197 (1971), we said,"[t]he formation of
partnerships between attorneys authorized to practice in different
jurisdictions is not unethical... It is a matter of law, not of
ethics, as to where an individual may practice law." The Committee
took up a related issue in its Opinion 512, 111 N.J.L.J. 381
(1983), in which it relied on In re Professional Ethics Opinion
475, supra. We wrote that a New Jersey law firm with numerous
partners admitted to bars in other states, including Pennsylvania,
could show on its stationery its partnership affiliation with a
Philadelphia law firm. However, the New Jersey firm is required to
make clear that the out-of-state firm is not licensed to practice
in this State.
The issue presented here is slightly different from the
situations dealt with by us in the Opinions referred to above. They
all appear to have involved more that an employer-employee
relationship which is contemplated here. Does that or should that
distinction make a difference?
We were asked in Opinion 103, 90 N.J.L.J. 49 (1967), to
respond to the question whether a New Jersey attorney retained by
a New York law firm to effect collections on promissory notes held
by its New York client could remit all sums collected to his New
York correspondent where the local attorney was paid on a salary
basis for the client and would continue his individual practice.
The answer given was that it would be improper to accept the
retainer. The basis for the holding was that, since it is improper
for an attorney to accept less for his services than is awarded and
paid to his client, an intermediary - the New York attorneys -
could not be used as a subterfuge to accomplish an improper result.
The distinctions between this case and the factual situation
set out in Opinion 103, supra, are that, in the earlier case, the
New Jersey attorney had no bona fide employment or partnership
relationship with the New York firm; was carrying on an individual
practice in New Jersey; was collecting fees from debtors of the New
York client based upon a provision in the notes between debtor and
creditor; and was thereby taking a fee less than received and
paying the difference to his forwarding attorney.
However, out Supreme Court recently promulgated amendments to
the Disciplinary Rules of the Code of Professional Responsibility
effective January 16, 1984. DR 2-105(B) provides:
Where the name of an attorney not licensed to practice in
the State is used in a firm name, any advertisement,
letterhead or other communication containing the firm
name must include the name of at least one licensed New
Jersey attorney who is responsible for the firm's New
Jersey practice or the local office thereof.
The facts presented here postulate a bona fide full time
employment relationship and a bona fide law office here in New
Jersey. In light of the recently developed and developing law in
this area, this Committee is constrained to answer each of the
inquiries in the affirmative. However, those who wish to affiliate
under similar circumstances are cautioned that only bona fide
associations are permissible; and the status of partners and
associates should be made clear on letterhead and other listings.
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