Concept

Applying Rule 5.7(a)

Law-related services and when the Rules of Professional Conduct apply (Rule 5.7(a))

Applying Rule 5.7(a)

Rule 5.7(a) subjects a lawyer to the Rules of Professional Conduct for law-related services, as paragraph (b) defines them, in either of two circumstances.¹ In the first, the lawyer provides the services in circumstances that are not distinct from the lawyer's provision of legal services to clients.² In the second, an entity the lawyer controls, individually or with others, provides the services in other circumstances, and the lawyer fails to take reasonable measures to assure that the recipient knows the services are not legal services and that the protections of the client-lawyer relationship do not exist.³

The two circumstances are alternatives, so proof of either one brings the Rules in, and a lawyer escapes only by defeating both. The default favors the recipient: unless the lawyer both performs the services in a manner distinctly separate from the legal practice and takes reasonable measures to ensure the recipient knows the services are not legal services, the traditional protections of the attorney-client relationship attach.⁴ Separation and explanation answer different questions, and an exam hypothetical rewards the student who keeps them apart and takes them in order.

Exam Analysis Steps

Every question in the sequence either resolves the problem or passes it to the next, so run the steps in this order on any fact pattern involving a lawyer's side activity:

Ask whether the activity is the practice of law itself. If it is, apply the Rules directly; Rule 5.7 is not needed.
Ask whether the activity is a business unrelated to law in its nature and its operation. If it is, Rule 5.7 does not reach it.
Confirm that what remains meets the paragraph (b) definition of a law-related service: it might reasonably be performed in conjunction with legal services, it is related in substance to them, and a nonlawyer could provide it without committing unauthorized practice of law.
Ask whether the lawyer provides the service in circumstances not distinct from the lawyer's legal services, including a service that only appears to be part of the practice. If so, the Rules apply, whatever the recipient was told.
If the circumstances are distinct, ask whether the lawyer controls the entity that provides the service, individually or with others. If the lawyer holds no ownership or control, the second circumstance is absent.
If the lawyer does control the entity, ask whether the lawyer took reasonable measures to assure that recipients know both that the services are not legal services and that client-lawyer protections do not exist. If not, the Rules apply.
If the lawyer clears steps four through six, Rule 5.7 does not bring the Rules in. Then check the general duties that follow a lawyer into every activity.

Two of these steps carry most of the weight. Step four decides whether any explanation can matter, because a service that is not distinct draws the Rules no matter what the recipient was told. Step six arises only after the lawyer clears step four, so a showing of separation never completes the analysis alone. A lawyer who merely refers clients to an independent provider, with no ownership or control, has no entity to answer for, and the second circumstance falls away at step five.⁵

Each trigger answers a different kind of confusion. When a law-related service is folded into the practice, or looks folded in because the lawyer has taken no affirmative steps to separate it, the recipient reasonably expects the lawyer to protect confidential information, avoid conflicts of interest, maintain professional independence, and advertise ethically, and the lawyer must perform the service accordingly.⁶ A sentence of explanation cannot repair that confusion, because the first circumstance contains no explanatory cure and the recipient sees no boundary to explain. A separately structured business gives the recipient a boundary to see, and the lawyer's clear communication can complete the picture. In both settings the burden stays with the lawyer, who controls how the service is structured and presented.

An exam stem that mixes a legal service and a related service in a single engagement tests the first trigger.

The letter changes nothing, and the text of paragraph (a) shows why. Only the second circumstance speaks of a failure to take reasonable measures to inform the recipient, so notice is a way out of that trigger alone, while the first circumstance contains no comparable clause.⁷ The usual exam error is to see a disclaimer in the stem and stop, when the first question is whether the services are distinct at all.

The second trigger asks a different question, and two lawyer-run businesses show how. A lawyer who offers accounting services or runs a copying and printing business has chosen services that by their nature could be joined with a law practice, so they fall within the category of law-related services. To escape the Rules, the lawyer must perform those services in a manner distinctly separate from the practice and take reasonable measures to ensure that customers know the services are not legal services.⁸

Hypothetical Illustration

A lawyer runs an accounting firm from a storefront across town, with its own staff and its own phone line. Her advertising names her as the firm's owner and describes her as an attorney, and customers are told nothing about whether the firm's work is legal service or carries any professional protections. Another lawyer owns a copying and printing shop in a separate building. He never identifies himself as an owner or operator, and before each new account is opened the shop gives the customer a clear written statement that its services are not legal services and that no attorney-client relationship or related protection exists. The accounting firm is distinct, but she controls it and took no reasonable measures, so Rule 5.7(a)(2) subjects her to the Rules. The print shop is distinct and he controls it, but his notice covers both required points, so neither circumstance is present and the shop is treated like any other business a lawyer owns.

Both lawyers built something distinct and both control what they built, so structure does not separate the two scenes. What the customer was told does. The first lawyer used her professional standing to attract customers and left them to assume that the protections of the profession came along, which is the confusion the second trigger polices. The second lawyer supplied both pieces of knowledge: that the services are not legal services and that client-lawyer protections do not exist. Distinctness is therefore necessary to escape the Rules but not sufficient.⁹

Escaping Rule 5.7 does not release the lawyer from every other duty, which is the point of step seven. When the recipient of law-related services is also a client of the lawyer for legal services, the lawyer who enters a business transaction with that client must ensure that the terms are fair, that the client has been fully informed in writing, that the client has had an opportunity to obtain independent legal counsel, and that the client has consented in writing, and this holds even when the matter is wholly unrelated to the practice of law. In the Rule 1.8(a) context, then, a notice that defeats Rule 5.7 coverage does not displace the separate rule on business transactions with a client.¹⁰ Rule 5.7 adds coverage for the particular confusion it targets and takes none away, so the lawyer's general duties continue to bind whatever the recipient believes.

Key Exam Rule

Applying Rule 5.7(a)

Sort the activity first: the practice of law is governed by the Rules directly, an unrelated business falls outside Rule 5.7, and a law-related service is covered in either of two circumstances. The first is that the lawyer provides it in circumstances not distinct from the lawyer's legal services. The second is that a lawyer-controlled entity provides it in distinct circumstances and the lawyer fails to take reasonable measures to assure the recipient knows the services are not legal services and that client-lawyer protections do not exist. The circumstances are alternatives, no disclaimer cures services that are not distinct, and only a lawyer who is both distinct and adequate in explanation escapes Rule 5.7. General duties, such as Rule 1.8(a) for a recipient who is also a client, still apply.¹¹

Applying Rule 5.7(a)

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