Share Office Space and Resources, Not Liability
(County Bar Update, Vol. 23, No. 4)

Share Office Space and Resources, Not Liability

Collegiality, economics, common library, staff resources — These are among the reasons attorneys share office space. Sometimes lawyers share with other lawyers. Sometimes space or resources are shared with accountants, title companies, or other complementary businesses. These arrangements run the gamut from shared office suites to long- or short-term landlord-tenant relationships, cost-sharing arrangements, and combined cost/income-sharing situations.

The advantages of such arrangements are a frequent subject of articles or discussions among lawyers who practice solo or in small firms. Rarely, however, are the pitfalls of such arrangements — or the ways to avoid them — given full consideration.

Lawyers who share suites with others have numerous issues to contend with, including confidentiality problems with a shared receptionist and reception area, common phone lines, file integrity, and the appearance of a professional relationship between lawyers in the suite. The manner in which the sharing arrangement is documented and implemented, the types of staff and resources that are shared, and the communications with clients and third parties are all key factors to be considered; a wrong step could open the door to liability for the business or legal conduct of those with whom you share an office (but not a law practice) under a theory of partnership by estoppel. In certain situations, even though there is no agreement and the parties among themselves are not partners, they may nevertheless be held liable to third parties as if they were partners. Two basic partnership by estoppel situations common in office sharing involve liability imposed where either office sharer appears to hold the other out as a partner.

One veteran who has participated in a variety of such arrangements during more than 12 years of law practice has compared office sharing with marriage. He suggests that it begin with a “trial marriage or engagement period.” While many lawyers begin sharing an office on an informal basis, this analogy aptly hints that greater forethought is warranted.

A logical place to look for advice on “how to do it right” is the courts. Obviously, some of our brethren have “done it wrong.” There are lessons in those reported cases from which we can learn. The organized bar and the courts provide additional hints as they discipline other lawyers in office sharing situations.

Yet one does not find a clear path to follow in those decisions. Instead, we are left with a patchwork of “factors” to be considered in a sort of balancing test — a term with which we are all familiar and one in which we rarely have found comfort.

From a patchwork of cases and ethics opinions some guidelines emerge. While many of these factors individually have not been determinative factors in imposing liability on an office sharing colleague under the theory of partnership by estoppel, courts and disciplinary authorities review these factors cumulatively.

The fewer number of factors that are present in a sharing arrangement, the less likely it is that you will be sued successfully with respect to the actions of an office sharing colleague.

Physical Arrangements

Office sharing arrangements might include any or all of the following: a private office, library, conference room, secretarial workspace, file space, and storage space. Physical assets also may be shared. These might include library books, furnishings, phone or intercom systems, supplies, copiers, postage meters, computers, or typewriters.

Establish Physical Barriers and Train Staff. One of the most critical issues to address from a risk management standpoint is ensuring that client secrets and confidences are maintained. Client files, papers, and documents should not be left in common areas even for a brief period. The ideal physical arrangement of the office space ensures that in-person or telephone conversations with clients by attorneys or staff are not overheard by the office sharing colleagues. Personnel should be instructed on the importance of confidentiality and separation of files and resources between the practices or businesses.

Shared Staff

Sometimes personnel are shared. Common personnel might include a receptionist, typist, bookkeeper, messengers, law clerks, administrator, or associates.

Be Alert to Conflicts of Interest. In most states, representation of adverse parties by two or more lawyers who share office space but maintain separate practices is prohibited. Ethical guidance regarding representation of former clients or parties that are related (but not adverse) is less clear. Pay attention to circumstances that might lead to a conflict of interest between the two practices.

Adopt Common Procedures to Avoid Conflicts.The potential malpractice and client relations risks posed by shared staff can be avoided through a formalized system for checking conflicts between the two practices, adoption by both practices of written screening procedures (if ethically permissible) where a conflict of interest between the clients of the two practices may exist, and written procedures for disclosing potential conflicts and obtaining client consent to representation.

Financial Arrangements

When resources are shared, they may be billed back either individually on a “per use” basis or through a pre-determined, fixed amount.

Monitor Referral Fees. When sharing space with a non-lawyer, lawyers should be careful that the financial arrangements do not reflect an ethically impermissible fee for referrals generated by the other business to the law practice. Many jurisdictions also have adopted ethical rules regarding referral fees among lawyers. Attention to these rules may alleviate problems arising from improper arrangements.

Relationship Between Office Sharers: Monitoring the Three “C”s of Confidentiality, Conflicts, and Confusion

Sharing with Another Law Practice. An experienced practitioner, for example, might share office space with a more recent law graduate, serving as mentor and sharing practical experience with the newer lawyer while receiving the benefit of the other lawyer’s more recent training and breadth of knowledge. Sometimes workload is shared, either in peak times or in the event of a conflict. As with shared staff, attention to confidentiality and conflicts is paramount.

Sharing with Another Business. Additional issues arise when sharing space or resources with another business. Most jurisdictions prohibit the use of another business as a “feeder” for the law practice; attorneys sharing office space with complementary businesses often are vulnerable to ethical challenges on this ground. When sharing with a business in which the lawyer has a financial interest, the three “C”s should be weighed carefully: confusion (regarding the attorney’s role or the nature of the services being provided), conflicts (not only between clients but between the lawyer’s own financial interest and that of the client), and confidentiality.

Written Communications

Carefully Draft and Review Written Communications. The way in which the relationship is communicated to clients, potential clients, and third parties is the most significant factor considered by courts and ethics experts in determining whether to impose a partnership by estoppel. Every written communication from business cards to the sign on the office door is examined from the perspective of a client or third party unfamiliar with the circumstances of law practice. Each office sharer must be equally vigilant in properly identifying the relationship with each other; sloppy practices by one may create the circumstances that lead a court to impose liability on the other office sharer.

Written Agreement Between the Office Sharing Parties

Agree in Writing About Communication with Clients Regarding the Practices. Agree in advance on how the practices will be described and any common practice disclaimed in verbal and written communications to clients and non-clients alike. Address how to phrase business cards, office signs, announcements, and the like.

Address Through Written Agreements the Areas That Can Lead to Problems. As part of an office sharing arrangement, development of appropriate written policies can minimize problems. Developing policies regarding confidentiality issues of shared staff and common areas, and conflict of interest-related issues of file integrity and segregation of practices, plus careful attention to the appearance of a relationship between the lawyers in communications with clients and third parties can serve to protect both the clients of these lawyers and the lawyers themselves.

Choose Wisely

Ultimately, you have no control over the actions of other office sharing lawyers or firms. In the end — at best — you have only remedies. Choose your neighbors wisely.

This article is intended to inform the reader of potential liability exposures for attorneys. This article reflects general principles only and does not render legal advice. Readers should consult legal, financial, insurance and other advisors if they have specific concerns. Neither the Los Angeles County Bar Association nor Aon and its affiliates assumes any responsibility for how the information in this article is applied in practice or for the accuracy and completeness of the information. Reproduction without written permission is prohibited. This article is made available to County Bar Update by Aon Direct Insurance Administrators, administrators of the Aon Attorneys’ Advantage Program, part of the LACBA Sponsored Aon Insurance Solutions Program. The Aon Attorneys’ Advantage Program provides a wide variety of benefits and products exclusive to LACBA members. For information or to contact a representative, visit

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