Ohio Board Advisory Opinion Op 99-007

The Supreme Court of Ohio
BOARD OF COMMISSIONERS ON GRIEVANCES AND DISCIPLINE
41 SOUTH HIGH STREET-SUITE 3370, COLUMBUS, OH 43215-6105
(614) 644-5800 FAX: (614) 644-5804
OFFICE OF SECRETARY
OPINION 99-7
Issued December 2, 1999
WITHDRAWN IN PART BY OPINION 2013-1 ON APRIL 4, 2013
[CPR Opinion-provides advice under the Ohio Code of Professional Responsibility which is superseded
by the Ohio Rules of Professional Conduct, eff. 2/1/2007.]
SYLLABUS: It is proper under Gov. Bar R. III §3 of the Supreme Court Rules for the
Government of the Bar of Ohio for an attorney not licensed in Ohio but licensed in
another state to be a member, partner or other equity holder in an Ohio legal professional
association, corporation, limited liability company, or registered partnership when formed
in accord with Ohio law. Whether it is legally proper is a question beyond the advisory
authority of this Board.
Whether it is proper for an attorney licensed in another state but not licensed in Ohio to
be a member, partner, or other equity holder in two unrelated firms is in part a legal
question beyond the advisory authority of this Board.
A law firm does not become a lawyer referral service subject to regulation under DR 2-
103 by merely referring a client whose case it cannot competently handle to another law
firm. Assuming that a law firm does not advertise or solicit business it does not intend to
handle, it would be proper for the law firm to refer a client to another law firm when
unable to competently handle a client’s matter.
OPINION: This opinion addresses questions regarding the formation of a law firm in
Ohio by an attorney licensed in another state but not licensed in Ohio.
1. Is it proper for an attorney licensed in another state but not licensed in
Ohio to be a member, partner, or other equity holder in an Ohio law
firm?
2. Is it proper for an attorney licensed in another state but not Ohio to be
a member, partner, or other equity holder in two unrelated firms, the
out of state law firm and the Ohio law firm?
3. Is a law firm required to register as a lawyer referral service if it refers
to other law firms the cases it cannot competently handle?

Opinion 99-7 2
Question One
Is it proper for an attorney licensed in another state but not licensed in
Ohio to be a member, partner, or other equity holder in an Ohio law firm?
Traditionally, lawyers have practiced law through sole proprietorships or partnerships.
These forms of practice continue today, but since 1970, lawyers have also been permitted
under former Prac. R. XVII B (now Gov. Bar R. III) to practice law in legal professional
associations or legal clinics. Beginning November 1, 1995, lawyers have also been
permitted under Gov. Bar R. III §1 to practice law through an even wider variety of
entities: legal professional associations; corporations, or legal clinics (formed under
Chapter 1701 or 1785 or licensed under 1703); limited liability companies (formed or
registered under Chapter 1705 of the Revised Code); limited liability partnerships
(registered under Chapter 1775. of the Revised Code). See Gov. Bar R. III §1.
As to partnerships, the Ohio Code of Professional Responsibility contemplates that
attorneys licensed in different jurisdictions may become partners in a law firm. DR 2-
102(D), a rule governing professional notices, letterheads, and offices, states that “[a]
partnership shall not be formed or continued between or among lawyers licensed in
different jurisdictions unless all enumerations of the members and associates of the firm
on its letterhead and in another permissible listings make clear the jurisdictional
limitation on those members and associates of the firm not licensed to practice in all
listed jurisdictions; however, the same firm name may be used in each jurisdiction.”
There is a distinction between forming partnerships with attorneys licensed in other states
and forming partnerships with non-attorneys. Ohio attorneys may form partnerships with
attorneys licensed in other states, but Ohio attorneys may not form partnerships with non-
lawyers when any of the activities of the partnership involve the practice of law, for that
is prohibited by DR 3-103.
As to legal professional associations, corporations, legal clinics, limited liability
companies, or registered partnerships, Gov.Bar R. III §3(B) states that members, partners,
or other equity holders may be persons licensed in Ohio or “elsewhere.” Presumably,
“elsewhere” means outside Ohio.
Gov. Bar R. III § 3(B) An attorney shall not use a legal professional
association, corporation, legal clinic, limited liability company, or
registered partnership to share legal fees with a person not authorized to
practice law in Ohio or elsewhere, except as permitted by DR 3-102 of
the Code of Professional Responsibility. An attorney shall not
participate in a legal professional association, corporation, legal clinic,
limited liability company, or registered partnership in which a
member, partner, or other equity holder is a person not authorized to
practice law in Ohio or elsewhere, except as permitted by DR 5-107 of
the Code of Professional Responsibility [a fiduciary representative of the
estate of a lawyer may hold the stock of the lawyer for a reasonable time
during administration]. (Emphasis added).

Opinion 99-7 3
The licensed “elsewhere” language in Section 3 does not appear in Section 1 of the rule.
Gov. Bar R. III § 1 An attorney who is otherwise authorized to practice
as an active attorney under Gov. Bar. R. VI may practice law in Ohio, to
the same extent as individuals and groups of individuals, through a legal
professional association, corporation, or legal clinic, formed under
Chapters 1701. or 1785. or licensed under Chapter 1703 of the Revised
Code, a limited liability company, formed or registered under Chapter
1705. of the Revised Code, or a partnership having limited liability,
registered under Chapter 1775. of the Revised Code.
Section 1 and Section 3 are complementary rules. Section 1 authorizes Ohio attorneys
who are licensed under Governing Bar Rule VI to practice law through the entities
identified in the rule. Section 3 qualifies who may be members, partners, or equity
holders in those entities. Under Section 3, the members, partners, or other equity holders
must be persons authorized to practice law in Ohio or “elsewhere.” The members,
partners, or equity holders of the listed entities may be attorneys licensed in Ohio or in
another state, but they may not be persons who are non-attorneys. Two pertinent rules
are DR 5-107 and DR 2-102(G). DR 5-107 prohibits attorneys from practicing in a
professional corporation or association authorized to practice law for profit if a non-
lawyer has an ownership interest therein, is a corporate director or officer thereof, or has
the right to direct or control the professional judgment of a lawyer. DR 2-102(G)
provides that a “legal clinic cannot be owned by, and profits or losses cannot be shared
with, non-lawyers or lawyers who are not actively engaged in the practice of law in the
organization.”
State corporation law also governs the question raised. While it is beyond the authority
of this Board to advise upon state law, the Board does suggest that attorneys give careful
consideration to state laws governing legal professional associations, corporations, legal
clinics, limited liability companies, or registered partnerships. For example, Section
1785.05 of the Ohio Revised Code restricts the issuance of the capital stock of a
professional association “to persons who are duly licensed, certificated, or otherwise
legally authorized to render within this state the same professional service as that for
which the association was organized.” (Baldwin Supp 1999).
In conclusion, it is proper under Gov. Bar R. III §3 of the Supreme Court Rules for the
Government of the Bar of Ohio for an attorney not licensed in Ohio but licensed in
another state to be a member, partner or other equity holder in an Ohio legal professional
association, corporation, limited liability company, or registered partnership when formed
in accord with Ohio law. Whether it is legally proper is a question beyond the advisory
authority of this Board.

Opinion 99-7 4
Question Two
Is it proper for an attorney licensed in another state but not licensed in
Ohio to be a member, partner, or other equity holder in two unrelated
firms (an out of state law firm and an Ohio law firm)?
The issue of whether it is proper for an attorney licensed in another state but not licensed
in Ohio to be a member, partner, or other equity holder in two unrelated firms the Board
declines to opine for it is in part a legal question beyond the advisory authority of this
Board. See e.g., Colaluca v. Climaco, Climaco, Seminatore, Lefkowitz & Garafoli Co., L.
P. A. (1995), 72 Ohio St. 3d 229 in which an attorney was permitted to practice with one
law firm while retaining one share of stock in a legal professional association. The court
held it was not obligatory for a legal professional corporation, to redeem the stock of a
shareholder/employee when that person voluntarily separates from the corporation; when
the stock in question was issued with no express terms of redemption; when there is no
agreement subsequent to issue which has reference to any right of redemption between
the corporation and the shareholder; and when the shareholder wishes to continue to
practice law in this state. Id. at 231. The attorney was not prohibited from practicing law
with another firm even though he still held a single share of stock in a legal professional
association. According to the court, the attorney did not practice with the legal
professional association and therefore no longer was associated with the legal
professional association even though he retained a single share of stock. Id. at 233.
The issue of whether an attorney is permitted to be a member, partner, or other equity
holder in two unrelated firms is distinct from the issue of whether an attorney may
practice law with more than one firm. On the latter issue, the Board advised in past
Opinion 89-35 that “[a]n attorney may not practice with more than one legal professional
association or law firm in Ohio at the same time.” At the time Opinion 89-35 was issued
(and at the time the Colaluca case was decided), former Gov. Bar R. III §3 (D) stated that
“[n]o attorney at law shall be associated in any capacity with a legal professional
association other than the one with which the attorney is actively and publicly
associated.” That rule no longer exists. Nevertheless, the Board’s advice in Opinion 89-
35 was also based upon multiple rules within the Code of Professional Responsibility:
DR 2-101 (a lawyer practicing in two firms is potentially misleading and confusing to the
public); DR 4-101(B) (there would be a potential for the disclosure of confidential
information between various firms and lawyers); Canon 5 (multiple firm membership
may increase the number of conflicts of interest); EC 5-1, 5-13, 5-24 (lawyer who
maintains two separate law practices may have difficulty exercising his or her
professional judgment solely for the benefit of a client and free from outside influences;
lawyer must maintain professional independence).
The Board stands by the advice offered within Op. 89-35 that an attorney should not
practice with more than one law firm (An “of counsel” relationship with more than one
firm is distinguished in Opinion 97-2). The Supreme Court of Ohio published for
comment (Ohio State Bar Association Report, Vol. 65 No. 22, xlv-xlviii, June 1, 1992)
proposed amendments that would have permitted lawyers to practice in multiple firms,

Opinion 99-7 5
but did not adopt those amendments. This lends support to the Board’s view that an
attorney may not practice with more than one law firm.
Question Three
Is a law firm required to register as a lawyer referral service if it refers a
client whose case it cannot competently handle to other law firms?
In Ohio, a lawyer or law firm is not permitted to use any form of public communication
to seek employment that it does not intend to participate in the representation.
DR 2-101(A) A lawyer shall not, on his or her own behalf or that of a
partner, associate, or other lawyer affiliated with the lawyer or the
lawyer’s firm use or participate in the use of, any form of public
communication, including direct mail solicitation, that:
(2) Seeks employment in connection with matters in which
the lawyer or law firm does not intend to actively
participate in the representation, but that the lawyer or law
firm intends to refer to other counsel, except that this
provision shall not apply to organizations defined in DR 2-
103(D)(1).
A law firm does not become a lawyer referral service subject to regulation under DR 2-
103 by merely referring a client whose case it cannot competently handle to another law
firm. Assuming that a law firm does not advertise or solicit business it does not intend to
handle, it would be proper for the law firm to refer a client to another law firm when
unable to competently handle a client’s matter.
Advisory Opinions of the Board of Commissioners on Grievances and Discipline are
informal, nonbinding opinions in response to prospective or hypothetical questions
regarding the application of the Supreme Court Rules for the Government of the
Bar of Ohio, the Supreme Court Rules for the Government of the Judiciary, the
Code of Professional Responsibility, the Code of Judicial Conduct, and the
Attorney’s Oath of Office.