Office Sharing:Practice with Benefits in an Uncertain Economy

by Linda Oligschlaeger

Law partnerships have often been compared to a marriage.If that's so, then office sharing arrangements might be similar to having a roommate.A roommate can provide the benefits of another to share expenses, companionship to avoid isolation and a supportive network, while living and working independently.Sometime in life, there are those of us who may have experienced the downside to having a roommate; nevertheless, in this era of an unsettled economy, an office sharing arrangement has garnered a lot of new appeal that may offset any negative aspects.

Sharing an office suite with other lawyers or professionals can be a good option for lawyers who want or need the benefit of financial savings by reducing their overhead.With many lawyers being laid off from firms or new lawyers without a lot of employment options, an office sharing arrangement may be particularly beneficial especially for start up firms. Office sharing can fill the gap of legal or practice management inexperience and the need for mentoring and fostering the development of a new solo firm. It can also be a good option for existing firms with a need to lean down and shed expenses.Starting a new law firm in good economic times can be risky; during these times, it can be critical to work on a shoe string budget where major capitol outlays may not be an option.And, working from home may not be the best alternative for a variety of reasons including the need for a good working environment that the dining room table in a busy household may not provide.An office sharing arrangement can be a viable alternative provided the ethical and liability issues are covered.

Benefits of Office Sharing

Sharing office space can provide a good economic arrangement and the opportunity to interact with other lawyers or professionals rather than "going it alone". Benefits may include:

  • more affordable rent in a better location than the lawyer might otherwise be able to afford;
  • access to facilities and services not otherwise possible, such as a suitable location to meet with clients;
  • ability to avoid significant capital outlays for equipment and other amenities;
  • availability of a receptionist or other staff;
  • suitable place to office in order to concentrate on your work;
  • suitemates who might serve as mentors and provide referrals.

Oscar and Felix:Determining if you're a Good Candidate for Office Sharing

Not everyone is a good candidate for an office sharing arrangement, so it's important for any lawyer considering this arrangement to make that determination early on. Setting aside any financial pressures, doing a bit of personal assessment should be the first step. You might recall Oscar and Felix in the Odd Couple as you consider this arrangement. Would the personal habits of your suitemates irritate you beyond the normal tolerance?If you're the type that can't function without everything neat and in order, can you tolerate sharing space with others who might leave coffee cups in the lobby or someone who has a office that looks as if a hurricane just came through?Could you be flexible with sharing staff and equipment?Generally, are you able to compromise when appropriate?Do you function well with others around, or do you prefer quiet and solitude to work?Are you too competitive to be in this environment especially with other lawyers?If so, you might consider other alternatives such as a home office, if appropriate, or renting or purchasing an office condominium instead.

Check Out Potential Suitemates and the Facilities

While assessing this type of arrangement, it would be a good exercise to find out about the other suitemates.What areas of the law do the potential suitemates practice in?Lawyers have a natural propensity to surround themselves with other lawyers who practice in the same areas of the law.This may set up a competitive atmosphere for clients and could cause tensions in the office sharing arrangement.It may be better to have suitemates who practice in complimentary areas of the law to avoid a tug-of-war over clients and may set up an excellent referral system for the suitemates.   Conversely, it may be important that the lawyers' practice areas be at least somewhat complimentary.Can you imagine the criminal law suitemate's client, a drug dealer covered with tattoos, sitting in the waiting area with a family law suitemate's client – a couple and the child they're adopting?

Further screening of the prospective suitemates might include such issues as do they have established and stable practices with a good reputation?Even though the law practices will be separate, sharing office space with a firm that does not enjoy a good reputation may not be the best option for you.Check references with prior tenants about the facilities and the suitemates.

In case there was a misconception about the separate practices, do all the lawyer suitemates carry professional liability insurance?

Occasionally, an office sharing arrangement may be an opportunity to "test-drive" a potential partner before forming a firm together.If it doesn't work out, it may be much easier to simply move to another location rather than dissolving a partnership.

Check out the building facilities.Is there convenient and adequate parking for suitemates and clients?What about security, external signage restrictions, handicap accessibility among others?

Together, Yet Separate:How to Make it Work

Before moving in one box, the first step should be entering into an Office Sharing Agreement that clearly sets out the terms of the arrangement.This agreement could be similar to a partnership agreement that covers such matters as how will disputes be handled as well as departures from the arrangement among others.(See sample Office Sharing Agreement Checklist sidebar.)

Ethical and Liability Issues

While sharing office space has its economic advantages, there are precautions that need to be taken to safeguard client confidentiality and avoid being drawn into a malpractice claim or ethical complaint generated by a suitemate.

  • It should be very clear to the public that multiple independent firms are sharing the office space.Signage or building directories should list the name of each firm followed by the legal entity under which the firms are organized (P.C. or L.L.C.).A line may be added between firm names for clarity.
  • The individual firms should use their own letterhead and business cards that should never include any mention of the other suitemates that might imply they are associated as a firm.
  • While the suitemates may share a common reception area, the remainder of the office suites should be arranged so as there is no doubt that these are separate offices housed within the same building.
  • It's preferable that each firm have a separate phone number that is answered by the receptionist with the firm name rather than simply "law offices".In addition, the receptionist should not take detailed messages from clients, but rather transfer them to the particular lawyer's voice mail.Listening to voice mail messages on a speaker phone should be avoided unless privacy can be assured.Voice mail should be secured by a password.
  • Written communications by mail or fax should be handled carefully.Regular mail should be delivered unopened.Fax communications can now be received or sent from your computer, which should eliminate the need for a shared fax machine in a common area.However, if a shared fax is used, confidentiality of any communication received or sent by fax must be assured.(See Informal Advisory Opinion 970192)
  • Suitemates should have their own computer system rather than sharing a network even though each firm may be "walled" off from the other.However, if a network is shared, it's imperative that the computers are property secured so that other suitemates are never able to access the files or email of the others.(See Informal Advisory Opinion 980220) Email communications should be received on each lawyer's computer.Each firm should have their own separate printer to avoid client confidential information being exposed in a common area.
  • Office doors should be closed when meeting with clients or when having discussions over the telephone to avoid being overheard by others.
  • Any written information or communications within the office should be well secured.Documents that are photocopied in a common area should never be left behind; in-boxes and any work-in-progress should be out of site by others.All confidential discarded items should be shredded.
  • Ideally, the files of each firm should be stored in their office suite and securely locked. However, if space is an issue, confidential file information should never be kept in a central storage area unless the files for each suitemate are kept separately and securely so they cannot be accessed by others.If sharing staff, color coded files for each lawyer may help to avoid filing errors.
  • Shared staff should be under watchful supervision and trained about the need to maintain complete confidentiality inside and outside the office as well as being required to sign a confidentiality agreement agreeing to do so.
  • Although permissible, as noted in Informal Advisory Opinion 970119, joint advertising may be risky.It must be clear in the advertisement that no partnership exists between the lawyers.
  • Per the Office Sharing Agreement, lawyers should enter into written engagement contracts with their clients that clearly state the separate nature of the law firm from the suitemates.
  • Separate firms sharing office space don't share conflicts but it's a good idea not to take cases that would be a conflict, if they were one firm.To do so, they would have to do conflicts checks, which would require client consent.If the suitemates elect to take a case where they are on opposing sides, they should each definitely explain that process thoroughly to their respective clients as early as possible in the attorney-client relationship.

Wrapping Up

Practicing in an office sharing arrangement can offer the mutual benefits of sharing costs with other suitemates, a source of built-in referrals as well as providing a supportive network, and the opportunity to learn from others.This arrangement offers the advantage of multiple solo or small firms in a single location where costs can be spread across the group making the practice of law more profitable. Many solos are "solo for a reason" because of their independent spirit, which they cherish.However, the reality of practicing law in an economy with fewer opportunities as well as the burden of high student loan debt and increasing overhead costs make the office sharing arrangement appealing.It can be a viable alternative provided the necessary precautions are taken to avoid ethical and liability quandaries.

(Sidebar)

Items to Include in an Office Sharing Agreement (not all inclusive)

An Office Sharing Checklist based on one developed by Nancy Byerly Jones, a practice management consultant from North Carolina, may include the following:

  • A strict prohibition against any attorney representing the shared office as a partnership.
  • A requirement that all lawyers in the suite carry professional liability insurance.
  • A requirement that all lawyers enter into written fee agreements with their clients that include a clear statement regarding the legal entity under which the firm is formed and an explanation that there is no partnership with the other suitemates.
  • An agreement not to take adversarial positions in a case unless in strict compliance with applicable ethical rules and opinions.
  • A statement of the need to protect client confidentiality at all times including the requirement that each lawyer provide locked file cabinets, door locks and secure computer passwords to ensure confidentiality and safekeeping of client files and property.
  • A clear understanding of what, if any, office equipment is to be shared, who is to provide the equipment, who is responsible for repair and maintenance and how the suitemates will be charged for their use of the equipment.
  • A clear understanding of the sharing, if any, of office personnel, the manner in which work priorities will be established, the payment of all relevant salaries, training and the methods of hiring and discharging staff.
  • Staff, including temporary employees, should be thoroughly instructed on how to respond to clients and others so as to not give the impression that the lawyers sharing office space are a partnership or other joint legal entity.
  • A policy for terminating the office sharing arrangement (i.e., advanced written notice, etc.) and the method to be used to if a dispute arises (mediation or binding arbitration).Note:The Missouri Bar's Lawyer-to-Lawyer Dispute Resolution Program offers facilitation and binding arbitration to resolve such disputes at no cost to the parties.
  • A detailed outline of all financial responsibilities by each individual lawyer and the group of suitemates and the ramifications if payments are not paid as agreed upon.
  • A plan for sharing conference rooms, traditional libraries, and such (a procedure for reserving conference rooms and rules for handling conflicts).
  • A clear understanding of responsibilities regarding day-to-day office maintenance and cleanup.
  • Provisions clearly stating the time duration of the agreement and optional renewal of the office sharing agreement on an annual basis including details of how the dissolution of the office sharing relationship will be handled.
  • The procedure concerning input, if any, that each suitemate will have regarding selecting new suitemates.
  • An agreement concerning how referrals to suitemates will be handled, if appropriate, particularly an acknowledgment and acceptance of the inherent risk that referrals for cases outside one's practice area or heavy caseload may result in some clients preference of the referred lawyer for future legal work.
  • A mechanism for breaking ties when an equal number of suitemates have opposing opinions particularly when decisions need to be made.      
  • An agreement that whenever two or more lawyers in the office work on a case together, the clients will be clearly informed in writing of who is doing what and instructed to pay separate fees to the lawyers for their particular work on the case.
  • An agreement that every precaution will be taken to ensure the public is not misled into thinking the lawyers are in a partnership through signage, separate phone lines, separate filing systems, separate computer systems, separate mail procedures and marketing efforts.