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Alabama Legal Ethics

V. LAW FIRMS AND ASSOCIATIONS

5.1 Rule 5.1 Responsibilities of a Partner and Supervisory Lawyer

5.1:100 Comparative Analysis of Alabama Rule

  • Primary Alabama References: AL Rule 5.1
  • Background References: ABA Model Rule 5.1, Other Jurisdictions
  • Commentary:
  • Alabama Commentary:

5.1:101   Model Rule Comparison

There are no differences between ARPC Rule 5.1 and the model rule.

5.1:102   Model Code Comparison

Inapplicable.

5.1:200 Duty of Partners to Monitor Compliance with Professional Rules

  • Primary Alabama References: AL Rule 5.1(a)
  • Background References: ABA Model Rule 5.1(a), Other Jurisdictions
  • Commentary: ABA/BNA § 91:201, ALI-LGL § 11, Wolfram § 16.2
  • Alabama Commentary:

Depending on the law firm's structure and the nature of its practice, the steps needed to fulfill the requirements of ARPC Rule 5.1(a) and (b) may vary from "informal supervision and an occasional admonition" in a small firm to "more elaborate procedures" in a large firm or more ethically difficult practice situations. Examples of "more elaborate procedures" include confidential referral of ethical problems directly to a designated senior partner or special committee and continuing legal education in professional ethics.

A disbarred or suspended attorney may be employed as a paralegal, law clerk or legal assistant by another attorney subject to the following conditions and restrictions: (1) no client contact; (2) close continuous and regular supervision by the employing attorney; (3) employing attorney must file a written report with the disciplinary commission; (4) supervising attorney must be physically located within the same premises as the disbarred or suspended attorney; (5) disbarred or suspended attorney shall not attend any court proceeding; (6) no access to client funds; and (7) employing attorney shall confirm the parameters of the employment in a quarterly report to the disciplinary commission. (RO-96-08).

5.1:300 Monitoring Duty of Supervising Lawyer

  • Primary Alabama References: AL Rule 5.1(b)
  • Background References: ABA Model Rule 5.1(b), Other Jurisdictions
  • Commentary: ABA/BNA § 91:201, ALI-LGL § 11, Wolfram § 16.2
  • Alabama Commentary:

A lawyer with supervisory authority may not assume that the subordinate is in compliance with the rules. Whether a duty to supervise exists depends upon the particular circumstances.

5.1:400 Failing to Rectify the Misconduct of a Subordinate Lawyer

  • Primary Alabama References: AL Rule 5.1(c)
  • Background References: ABA Model Rule 5.1(c), Other Jurisdictions
  • Commentary: ABA/BNA § 91:201, ALI-LGL § 5, Wolfram § 16.2
  • Alabama Commentary:

A lawyer has an affirmative duty to mitigate if the lawyer has knowledge of misconduct of a subordinate lawyer.

5.1:500 Vicarious Liability of Partners

  • Primary Alabama References: AL Rule 5.1
  • Background References: ABA Model Rule 5.1, Other Jurisdictions
  • Commentary: ABA/BNA § 91:201, ALI-LGL §§ 8, 9
  • Alabama Commentary:

In Davis v. Alabama State Bar, 676 So.2d 306 (Ala. 1996), the decision of the Alabama State Bar Disciplinary Board finding two attorneys who were the sole partners in a law firm in violation of ARPC Rule 5.1 was upheld. The firm spent approximately $500,000 per year on advertising which generated a large number of clients. The firm's often inexperienced associate attorneys had "unmanageable caseloads" some consisting of close to 600 active cases. The heavy caseloads meant that "the amount of time that could be spent on each case was so limited as to make it impossible for them to adequately represent their clients." Id. at 307-308. Further, the firm imposed policies on its associates that "interfered with their adequate and professional representation of their clients," including (1) time limits or restrictions on time spent with clients and on cases, (2) a quota system on the number of new files opened, and (3) not returning existing clients' telephone calls in order to make more time to recruit new clients. Id. at 308. These activities violated ARPC Rule 5.1 because they resulted in inadequate representation and a failure by the partners to make reasonable efforts to insure that the associates in the firm were conforming to the Rules of Professional Conduct. Id. at 307.

5.2 Rule 5.2 Responsibilities of a Subordinate Lawyer

5.2:100 Comparative Analysis of Alabama Rule

  • Primary Alabama References: AL Rule 5.2
  • Background References: ABA Model Rule 5.2, Other Jurisdictions
  • Commentary:
  • Alabama Commentary:

5.2:101   Model Rule Comparison

There are no differences between ARPC Rule 5.2 and the model rule.

5.2:102   Model Code Comparison

5.2:200 Independent Responsibility of a Subordinate Lawyer

  • Primary Alabama References: AL Rule 5.2(a)
  • Background References: ABA Model Rule 5.2(a), Other Jurisdictions
  • Commentary: ABA/BNA § 91:201, ALI-LGL § 5, Wolfram § 16.2
  • Alabama Commentary:

See discussion at 5.2:300.

5.2:300 Reliance on a Supervisor's Resolution of Arguable Ethical Issues

  • Primary Alabama References: AL Rule 5.2(b)
  • Background References: ABA Model Rule 5.2(b), Other Jurisdictions
  • Commentary: ABA/BNA § 91:201, ALI-LGL § 5, Wolfram § 16.2
  • Alabama Commentary:

When a matter of professional judgment as to an ethical duty is at issue, the supervisory lawyer, not the subordinate, may assume responsibility for the decision. In situations where the question is arguable, the supervisor's reasonable resolution of the issue should protect the subordinate professional from any subsequent challenge. However, if the situation is such that there is clearly only one reasonable course of action, then the supervisory and subordinate lawyer should share responsibility for the decision. The fact that the subordinate acted at the direction of a supervisory lawyer does not relieve the subordinate of responsibility for such misconduct.

5.3 Rule 5.3 Responsibilities Regarding Nonlawyer Assistants

5.3:100 Comparative Analysis of Alabama Rule

  • Primary Alabama References: AL Rule 5.3
  • Background References: ABA Model Rule 5.3, Other Jurisdictions
  • Commentary:
  • Alabama Commentary:

5.3:101   Model Rule Comparison

There are no differences between ARPC Rule 5.3 and the model rule.

5.3:102   Model Code Comparison

Inapplicable.

5.3:200 Duty to Establish Safeguards

  • Primary Alabama References: AL Rule 5.3(a)
  • Background References: ABA Model Rule 5.3(a), Other Jurisdictions
  • Commentary: ABA/BNA § 91:201, ALI-LGL §§ 4, 5, Wolfram § 16.3
  • Alabama Commentary:

Because nonlawyer assistants do not have a background in legal training and are not subject to professional discipline, the lawyer must give them appropriate supervision and instruction including discussing ethical obligations regarding non-disclosure of client information.

5.3:300 Duty to Control Nonlawyer Assistants

  • Primary Alabama References: AL Rule 5.3(b)
  • Background References: ABA Model Rule 5.3(b), Other Jurisdictions
  • Commentary: ABA/BNA § 21:8601, ALI-LGL §§ 4, 5, Wolfram § 16.3
  • Alabama Commentary:

See discussion at 5.3:200.

5.3:400 Responsibility for Misconduct of Nonlawyer Assistants

  • Primary Alabama References: AL Rule 5.3(c)
  • Background References: ABA Model Rule 5.3(c), Other Jurisdictions
  • Commentary: ABA/BNA § 91:201, ALI-LGL §§ 4, 5, Wolfram § 16.3
  • Alabama Commentary:

In Davis v. Alabama State Bar, 676 So.2d 306, 307 (Ala. 1996), the Court upheld the State Bar Disciplinary Board's finding that the partners of a law firm violated ARPC Rule 5.3(b) in that the partners allowed nonlawyer secretaries to perform legal work, interview clients, prepare legal findings and give legal advice.

5.4 Rule 5.4 Professional Independence of a Lawyer [Restrictions on Form of Practice]

5.4:100 Comparative Analysis of Alabama Rule

  • Primary Alabama References: AL Rule 5.4
  • Background References: ABA Model Rule 5.4, Other Jurisdictions
  • Commentary:
  • Alabama Commentary:

5.4:101   Model Rule Comparison

There are no differences between ARPC Rule 5.4 and the model rule.

5.4:102   Model Code Comparison

Inapplicable.

5.4:200 Sharing Fees with a Nonlawyer

  • Primary Alabama References: AL Rule 5.4(a)
  • Background References: ABA Model Rule 5.4(a), Other Jurisdictions
  • Commentary: ABA/BNA § 41:801, ALI-LGL § 60, Wolfram §§ 16.4, 16.5
  • Alabama Commentary:

ARPC Rule 5.4 does not permit fee sharing with a nonlawyer except in certain limited delineated situations.

5.4:300 Forming a Partnership with Nonlawyers

  • Primary Alabama References: AL Rule 5.4(b)
  • Background References: ABA Model Rule 5.4(b), Other Jurisdictions
  • Commentary: ABA/BNA § 91:401, ALI-LGL § 60, Wolfram §§ 16.4, 16.5
  • Alabama Commentary:

ARPC Rule 5.4(b) prohibits forming a partnership with nonlawyers if any of the activities of the partnership involve the practice of law. See (RO - 02-02) re: affiliation with a foreign lawyer.

5.4:400 Third Party Interference with a Lawyer's Professional Judgment

  • Primary Alabama References: AL Rule 5.4(c)
  • Background References: ABA Model Rule 5.4(c), Other Jurisdictions
  • Commentary: ABA/BNA § 51:901, ALI-LGL § 60, Wolfram § 8.8
  • Alabama Commentary:

The question of whether third party auditing of a lawyer's billings pose confidential problems and interference with representation was addressed in Ethics Opinion RO-98-02. One aspect of particular concern to the Commission was a litigation management guidebook used by insurance companies to direct lawyers in representing insurers. The Commission stated as follows:

The Commission is of the opinion that foremost among an attorney's ethical obligation is the duty to exercise his or her independent professional judgment on behalf of a client and nothing should be permitted to interfere with or restrict the attorney in fulfilling this obligation. An attorney should not allow litigation guidelines, or any other requirement or restriction imposed by the insurer, to in any way impair or influence the independent unfettered exercise of the attorney's best professional judgment in his or her representation of the insurer.

The litigation guidelines imposed many requirements that could result in a violation of Rule 5.4(c), including that a claims professional manage all litigation. The Commission concluded that "a lawyer should not permit an insurance company, which pays the lawyer to render legal services to its insured, to interfere with the lawyer's independence of professional judgment. . .through the acceptance of litigation management guidelines which have that effect." Furthermore, the lawyer is under an obligation to not submit his bills to a third party auditor without the consent of his client.

5.4:500 Nonlawyer Ownership in or Control of Profit-Making Legal Service Organizations

  • Primary Alabama References: AL Rule 5.4(d)
  • Background References: ABA Model Rule 5.4(d), Other Jurisdictions
  • Commentary: ABA/BNA § 91:401, ALI-LGL § 60, Wolfram § 16.4, 16.5
  • Alabama Commentary:

5.4:510   Group Legal Services

5.4:520   Nonprofit Organizations Delivering Legal Services

5.5 Rule 5.5 Unauthorized Practice of Law

5.5:100 Comparative Analysis of Alabama Rule

  • Primary Alabama References: AL Rule 5.5
  • Background References: ABA Model Rule 5.5, Other Jurisdictions
  • Commentary:
  • Alabama Commentary:

5.5:101   Model Rule Comparison

There are no differences between ARPC Rule 5.5 and the model rule. RO-86-52 is an interesting opinion regarding the practice of law by in-house counsel. An attorney, not licensed to practice in Alabama, but admitted to the Bar of another state, who is employed full-time by a company in Alabama and does legal work exclusively for that company would not be considered to be engaged in the unauthorized practice of law. The attorney should not make court appearances for the company.

5.5:102   Model Code Comparison

Inapplicable.

5.5:200 Engaging in Unauthorized Practice

  • Primary Alabama References: AL Rule 5.5(a)
  • Background References: ABA Model Rule 5.5(a), Other Jurisdictions
  • Commentary: ABA/BNA § 21:8001, ALI-LGL §§ 3, 4, Wolfram § 15.1
  • Alabama Commentary:

5.5:210   Practice of Law by Nonlawyers

An interesting decision is found in Godwin v. State, 2000 WL 869594 (Ala. 2000). There, the Court held that a nonlawyer executor of an estate could not represent the estate.

5.5:220   Admission and Residency Requirements for Out-of-State Lawyers

5.5:230   Pro Hac Vice Admission [see also 8.1:240]

5.5:240   Performing Legal Services in Another Jurisdiction

ARPC Rule 5.5(a) prohibits an attorney licensed to practice law in Alabama from practicing law in a state if he is not admitted to the bar or has had his license suspended or terminated by the State Bar. The definition of practicing law may differ in various jurisdictions and it is the responsibility of the attorney to know whether or not the activities in which he is participating constitute the practice of law in these various jurisdictions.

5.5:300 Assisting in the Unauthorized Practice of Law

  • Primary Alabama References: AL Rule 5.5(b)
  • Background References: ABA Model Rule 5.5(b), Other Jurisdictions
  • Commentary: ABA/BNA § 21:8201, ALI-LGL § 4, Wolfram § 15.1
  • Alabama Commentary:

An attorney admitted to the Bar in Alabama cannot help another whom he knows is not an admitted attorney participate in practicing law in any jurisdiction in Alabama. This rule does not prohibit attorneys from giving aid and professional advice to nonlawyers whose occupations require a certain understanding of the law such as social workers, accountants, financial and commercial lenders, claims adjusters and persons employed by government agencies. Attorneys are permitted to advise nonlawyers who wish to appear in court pro se.

5.6 Rule 5.6 Restrictions on Right to Practice

5.6:100 Comparative Analysis of Alabama Rule

  • Primary Alabama References: AL Rule 5.6
  • Background References: ABA Model Rule 5.6, Other Jurisdictions
  • Commentary:
  • Alabama Commentary:

5.6:101   Model Rule Comparison

There are no differences between ARPC Rule 5.6 and the model rule.

5.6:102   Model Code Comparison

Inapplicable.

5.6:200 Restrictions on Lawyers Leaving a Firm

  • Primary Alabama References: AL Rule 5.6(a)
  • Background References: ABA Model Rule 5.6(a), Other Jurisdictions
  • Commentary: ABA/BNA § 51:1201 ALI-LGL § 9
  • Alabama Commentary:

In Pierce v. Hand, Arendall, Bedsole, Greaves & Johnston, 678 So.2d 765 (Ala. 1996), the Court addressed the issue of whether the predecessor to ARPC Rule 5.6 allowed a law firm to withhold retirement payments from an attorney who, after leaving the firm, started his own practice and violated a non-competition agreement in his contract with the firm. Finding that the non-competition agreement did not truly concern retirement benefits in the manner contemplated by the rule, the Court found that the clause in this rule, allowing a restriction of practice in agreements dealing with retirement benefits, did not apply. For reasons of public policy, the Court rejected the idea that departure compensation packages should be treated as retirement benefits packages for the purposes of the rule. Thus, unless an agreement restricting a lawyer's right to practice dealt very specifically with the lawyer's retirement, it would not be covered by the retirement exception in the rule and would be in violation of the rule. The Court thus ordered the firm to pay Pierce the benefits that he had earned as the non-competition agreement could not be considered to meet the exception of the rule.

5.6:300 Settlements Restricting a Lawyer's Future Practice

  • Primary Alabama References: AL Rule 5.6(b)
  • Background References: ABA Model Rule 5.6(b), Other Jurisdictions
  • Commentary: ABA/BNA § 51:1201, ALI-LGL § 9, Wolfram § 16.2.3
  • Alabama Commentary:

An attorney's representation of a litigant should not in any way be impaired by his agreement to restrict his representation of this client as part of a settlement in the same or a separate matter. (RO-92-01). Such agreements are considered restrictive covenants which are voided by ARPC Rule 5.6(b). In the absence of this rule, the interest of the attorney could possibly be put above the interest of clients being represented. The rule does not preclude an attorney from participating in confidential settlement agreements with adverse parties, even though there might be the possibility of negative consequences for the public or other third parties. (RO-91-17). Thus, such settlements can remain confidential so long as they do not restrict an attorney's ability to represent any potential client. Id. The rule is a straightforward rule that does not contain any exceptions to the prohibitions of a lawyer "offering or making" such an agreement. J. Anthony McClain, Restriction on a Lawyer's Right to Practice Law, The Alabama Lawyer, September 1997 at 294. Further, "this type of restriction would deny potential litigants their choice of counsel by eliminating those lawyers from the pool of available lawyers." Id. at 295.

5.7 Rule 5.7 Responsibilities Regarding Law-Related Services

5.7:100 Comparative Analysis of Alabama Rule

  • Primary Alabama References: AL Rule 5.7
  • Background References: ABA Model Rule 5.7, Other Jurisdictions
  • Commentary:
  • Alabama Commentary:

5.7:101   Model Rule Comparison

Alabama has not adopted model rule 5.7 or a similar provision.

5.7:102   Model Code Comparison

Inapplicable.

5.7:200 Applicability of Ethics Rules to Ancillary Business Activities

  • Primary Alabama References: AL Rule 5.7
  • Background References: ABA Model Rule 5.7, Other Jurisdictions
  • Commentary: ABA/BNA § 101:2101
  • Alabama Commentary:

Alabama has not adopted Model Rule 5.7.