The legal industry is not immune to the technological and workplace advances of the 21st century. One such development is “co-working spaces,” where attorneys or other professionals share an office space even though they are not affiliated together in a practice or firm, often for a much reduced cost than if they each rented their own space. This new phenomenon is especially popular in urban areas where the cost of rent is high. In the last decade the number of co-working spaces is reported to have nearly doubled every year.
As a result, many attorneys, especially young attorneys, have joined their fellow professionals in the co-working space world. In addition to saving money on rent, attorneys in a shared space may find it helpful to occasionally consult one another on a case or other issues related to the business and practice of law. And these conversations are usually an acceptable and beneficial boon when sharing a workplace.
While co-working spaces may cure the discomfort of isolation, allow attorneys to save on overhead costs, and provide an opportunity for peer feedback, they are not without risk.
When attorneys share an office space, each of them likely understands that they are not a “firm” but are each conducting their own practice. As separate practices, each member of the co-working space will usually not share fees or other revenue, will file separate income taxes, and typically maintain their own malpractice policies.
But a consideration that may not be obvious is what their clients believe about the shared arrangement. This factor is often a critical consideration when determining whether an attorney-client relationship exists.
A risk when attorneys share their office space with others is that their clients could reasonably believe they were retaining the representation of every attorney in the co-working space, or that each attorney in the co-working space represents their interests. Under a general partnership theory, a client could then potentially bring a claim against every attorney in the space arising from the conduct of the sole attorney that was retained. Ultimately, it will likely be a question of fact whether the client “reasonably believed” an attorney-client relationship existed. (See Darlow v. Day, Berry & Howard, No. CV 970575509S, at *7 (Conn. Super. Ct. Mar. 4, 1999).)
To make matters worse, the other attorneys in the shared space may not have insurance coverage available to them for such a claim. Malpractice policies usually do not provide coverage for claims arising from alleged vicarious liability for an attorney that is not a member of the law firm that is insured under the policy.
Therefore, if at any time a client expresses confusion about whether he or she is also represented by the other attorneys in the co-working space, most attorneys will immediately remedy that misunderstanding. Many attorneys also find it is helpful to address the shared office space at the beginning of the representation, including by providing the client with a written disclaimer of a formal relationship with the other attorneys in the shared space.
Of the state bar organizations that have addressed the issue, most have readily concluded that sharing office space is acceptable for attorneys when ethical rules are followed. Pertinent rules include those relating to client confidentiality, conflicts of interest, disqualification, communications concerning the attorney’s services, and firm materials.
The Connecticut Bar Association has also issued a few opinions concerning shared office spaces, demonstrating that these arrangements warrant consideration of the risks and advantages. Many attorneys that make the decision to practice in a co-working space will, therefore, take the following steps to make sure they are practicing ethically.
Utilize Appropriate Materials
While sharing office materials can be cost-effective, it is important that materials containing the attorneys’ information that is shared with the outside world accurately portrays the arrangement.
The Connecticut Bar Association has provided that is improper under the Rules of Professional Conduct for attorneys sharing office space to use letterhead, business cards, or similar material listing the three lawyers together as a single entity. (Informal Opinion No. 9 (1997); see also Formal Opinion No. 40 (1990) (providing that it is not unethical for attorneys to share an office space, but that firm stationary must clearly indicate the separate practices and reference made to the practices plural at all times).)
Take Concrete Steps to Maintain Confidentiality
The Connecticut Bar Association has also made clear that preservation of client confidences and secrets must be strictly observed when sharing an office space. To ensure this rule is being observed, many attorneys will not share the same filing cabinets or storage areas within their co-working space. Attorneys in the space may also discuss devising a system for mail reception so that it is delivered to, and then opened and read by, only the appropriate attorney.
Sharing computer systems is another important consideration. Network access can be restricted so that an attorney in the office can only access his or her clients’ files and information. Informing clients of these measures will also alleviate any potential concerns that they may have about the shared space and their attorney’s obligation to maintain confidentiality.
Finally, it is important for attorneys in the shared space to have a conversation about the goals and limits of the shared space.
Consistent communication will generally ensure there is no doubt in the co-working space that each attorney continues to practice independently, while gaining the advantages of workplace density. Attorneys can also discuss referral agreements (where compliant with the ethical rules) and set guidelines that will reduce the risk of conflicts being imputed throughout the office.
With the added benefit of additional minds to solve the new ethical issues that arise, the use of co-working spaces will likely continue to increase.
Shari L. Klevens is a partner at Dentons U.S. in Atlanta and Washington and serves on the firm’s U.S. board of directors. She represents and advises lawyers and insurers on complex claims and is co-chairwoman of Dentons’ global insurance sector team.
Alanna G. Clair is a senior managing associate at the firm in Washington and focuses on professional liability defense. Klevens and Clair are co-authors of “The Lawyer’s Handbook: Ethics Compliance and Claim Avoidance.”