Thursday, October 15, 2020

Inherent Conflicts; Trade Names

A Staff Report from the web page of the Ohio Supreme Court

The Ohio Board of Professional Conduct has issued two advisory opinions addressing rules regarding law firm representation of current clients and the use of trade names by law firms.

Advisory Opinion 2020-10 analyzes a law firm’s proposed representation of two adverse clients negotiating the same transaction. The board found an inherent conflict of interest in such an arrangement, even when the lawyers are separately assigned to each client, screening of the lawyers is utilized, and both clients consent to the arrangement. 

The board concluded that the lawyers’ independent professional judgment and competence would be compromised by the concurrent representation and would require an impermissible departure from the rules governing the imputation of conflicts.

Advisory Opinion 2020-11 concludes that a recent amendment to the Rules of Professional Conduct permits the use of trade names by Ohio law firms, provided the trade name is not false, misleading, or unverifiable. The opinion gives several examples of trade names that would be prohibited and identifies names that would be considered permissible.

Screening does not cure direct adversity

The steps proposed by the law firm in order to represent the two clients underscore the inherent nature of the conflict of interests that exist in the concurrent representation of two or more firm clients in the same transaction. The key features of the law firm’s proposal to resolve the conflicts, a combination of client consent and the screening of two groups of assigned lawyers, is not provided for in the Rules of Professional Conduct as a method to ameliorate conflicts arising from concurrent representation in the same law firm. The firm’s proposal would require a departure from the rules governing the imputation of conflicts that the Board is reluctant to endorse. For the foregoing reasons, the Board concludes that the law firm’s proposed concurrent representation of the two adverse clients in the same transaction is not permissible.

The trade name opinion

Because a trade name may contain one word or a combination of words, it may be considered misleading if it contains a material misrepresentation of fact or omits a fact necessary to make the trade name, considered as a whole, not materially misleading. Prof.Cond.R. 7.1, cmt. [2]. A trade name may also be misleading if a substantial likelihood exists that it will lead a prospective client to formulate a specific conclusion about the lawyer or the lawyer’s services for which there is no reasonable factual foundation. Id. For example, a trade name that implies results, such as “Zero Tax” or “Winning Law Firm,” would be considered misleading because it could lead a reasonable person or a prospective client to form an unjustified expectation that certain results can be obtained from the lawyer or firm. Id., cmt.[3]. In addition, trade names that imply a connection to a governmental agency, e.g. “Attorney General Collections,” “Public Defenders,” “Ohio Judge’s Law Group,” “Social Security Administration Associates;” imply expediency, e.g. “Divorce Fast,” “EZ Divorce,” “Quick Settlement;” or that imply a connection to an existing nonprofit or charitable organization, e.g. “Legal Aid Associates,” “Project Innocence Associates,” or “Legal Assistance Foundation;” are inherently false or misleading and implicate Prof.Cond.R. 7.1. See generally S.C. Bar Eth. Adv. Op. 03-04.

On the other hand, there exists a number of possible law firm names that utilize a trade name and that would be permissible under Prof.Cond.R. 7.1 and 7.5. For example, a law firm with multiple lawyers that concentrates its law practice in representing plaintiffs in personal injury law cases could ethically use the trade name “Ohio Personal Injury Associates.” Prof.Cond.R. 7.4(a), cmt.[1]. The name would only be considered false or misleading if no lawyers in the firm practice personal injury law or the firm ceased providing any legal services in the area of law used in the trade name. Likewise, a firm that exclusively practices in the area of insurance defense law may appropriately use the trade name “Ohio Insurance Defense Counsel.” However, a trade name is not required to reference the area of legal services the lawyer or the law firm provides in order to not be false, misleading, or nonverifiable. For example, a trade name such as “Summit Law” or “First Legal” would be permissible, even though the trade name does not indicate the area of law practiced

(Mike Frisch)

https://lawprofessors.typepad.com/legal_profession/2020/10/inherent-conflicts-trade-names-.html

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