Lawyers Who Choose to Moonlight Are Better Off if They’re Open About It
Posted May 28, 2005 6:09 AM CDT
By Kathryn A. Thompson
Most jurisdictions in the United States find nothing inherently wrong about attorneys moonlighting--working for more than one law firm--as long as it’s done with the full knowledge, consent and cooperation of the firms involved.
Courts typically find that a lawyer who engages in those types of activities violates a fiduciary obligation to other members of the firm. Under the common law in most jurisdictions, this duty arises from the agency relationship and requires that the fiduciary act solely for the benefit of the principal in all matters relating to his or her agency.
For example, in Prince, Yeates & Geldzahler v. Young, 94 P.3d 179 (2004), the Utah Supreme Court ruled that an associate who secretly represented clients using the firm name and resources, and then retained the fees, breached a fiduciary duty of noncompetition to his employer. Likewise, in Rogers v. Mississippi Bar, 731 So. 2d 1158 (1999), the Mississippi Supreme Court upheld sanctions against a partner for secretly representing clients and diverting fees based on his position as an officer and director of his firm, a professional corporation.
Moreover, any legal breaches will invariably trigger violations of ethics rules, as they did in Young and Rogers.
Most cases of dishonest dealings with a lawyer’s own firm implicate one of the prongs of Rule 8.4 (Misconduct) of the ABA Model Rules of Professional Conduct, which serve as the basis for most state ethics codes for lawyers. Model Rule 8.4(b), for instance, prohibits a lawyer from committing “a criminal act that reflects adversely on the lawyer’s honesty, trustworthiness or fitness as a lawyer,” while Rule 8.4(c) prohibits “conduct involving dishonesty, fraud, deceit or misrepresentation.”
Additional ethics violations commonly arise where a lawyer engages in deception to camouflage his or her moonlighting activities, such as falsifying billing statements, circumventing filing systems or failing to report moonlighting income to the Internal Revenue Service.
Side Jobs Can Work Out
True moonlighting in the sense of working for more than one law firm is another matter. Most states permit such arrangements as long as they adhere to the ethics mandates on conflicts and confidentiality embodied in Model Rules 1.6, 1.7, 1.9 and 1.10, which generally treat the firms as one for purposes of confidentiality, conflicts of interest and imputed disqualification. In addition, a lawyer moonlighting at another firm must avoid misleading prospective clients about the nature and extent of the dual association under Model Rules 7.1 (Communications Concerning a Lawyer’s Services) and 7.5 (Firm Names and Letterheads).
The opinion of the ABA and most states is that an attorney may be a partner in more than one firm. Moreover, the states usually make no distinction between partners, associates, shareholders or other employment relationships when permitting multiple affiliations. Multiple of counsel relationships generally are allowed so long as the attorney has the requisite “close, regular, personal relationship” with the firms. See ABA Formal Opinion 90-357 (1990). Most jurisdictions also allow a lawyer to be a partner or member of one firm and of counsel to another.
Several states expressly allow a lawyer to practice simultaneously as a solo practitioner and a partner in a firm as long as the two practices are distinct from each other, with separate ownership and personnel.
For lawyers who moonlight away from their primary firms, full disclosure with the firms involved is the only sure way to avoid the significant obstacles posed by common-law principles and ethics rules.
Kathryn A. Thompson is research counsel for the ABA Center for Professional Responsibility.