Ethics Advisory Opinion No. 00-01

(Approved March 9, 2000)
Issue:
What are the ethical obligations of a lawyer to protect client confidentiality in the use of Internet e-mail communications?

Opinion: A lawyer may, in ordinary circumstances, use unencrypted Internet e-mail to transmit client confidential information without violating the Utah Rules of Professional Conduct.
Analysis: Utah Rules of Professional Conduct 1.6 imposes a duty on the lawyer to protect confidential information against unauthorized use or disclosure.1 Opinions that have addressed this issue in the area of electronic communication have characterized the obligation of the lawyer to use a means of communication that has a “reasonable expectation” that the information will remain confidential.2
With respect to land-line telephone, fax machine and ordinary mail, a reasonable expectation of privacy has been deemed to exist, and a lawyer can use these means of communication to transmit confidential client information. It is recognized that a reasonable expectation of privacy does not mean certainty of privacy. Land-line telephone conversations can be intercepted, and the means to prevent interception are available through scrambling technology. Faxes can also be encrypted, and mail can be hand-delivered. This level of security, however, is not normally required, although circumstances can arise that require increased security in client communications by a lawyer.
State bar associations that have considered this issue have concluded, with few exceptions, that a reasonable expectation of privacy exists in the use of Internet e-mail and a lawyer may use this form of communication to transmit confidential client information.3
The American Bar Association has also concluded in a recent formal opinion that the use of Internet e-mail does not violate any Rule of Professional Conduct. In Formal Opinion No. 99-413, the ABA concluded that: “A lawyer sending confidential client information by unencrypted e-mail does not violate Model Rule 1.6(a) in choosing that mode to communicate. This is principally because there is a reasonable expectation of privacy in its use.”
Analyzing the characteristics of e-mail, ABA Opinion 99-413 concludes that e-mail is virtually indistinguishable from the process of sending a fax. The opinion states that there is a reasonable expectation of privacy, in part, because of the difficulty of intercepting direct e-mail, the current huge volume of e-mail traffic, and the fact that interception of e-mail is a criminal act.4
There is little evidence that unencrypted e-mails pose any greater risk of unauthorized disclosure than other forms of communication commonly used, such as telephone and facsimile.5The fact that Internet service provider (ISP) administrators or hackers are capable of intercepting e-mail (in violation of federal law) does not render the expectation of privacy unreasonable, any more than the risk of an illegal telephone tap removes the reasonable expectation of privacy in a land-line telephone call.6
Where the client information is particularly sensitive or the lawyer has reason to believe that the risk of interception of the communication is higher, he may want to use a means of communication with higher security. The lawyer should abide by any policy of the client regarding the use of e-mail (or any other means of communication) for its confidential information. A lawyer may wish to advise a client at the time he is retained that the lawyer intends to use unencrypted e-mail as one of the methods of communication with the client.
Footnotes
1.Rule 1.6(a) provides: “A lawyer shall not reveal information relating to representation of a client except as stated in paragraph (b), unless the client consents after consultation.”
2.ABA Comm. on Ethics and Professional Responsibility, Formal Op. 99-413; S.C. Bar Ethics Advisory Comm. Op. 97-08, www.scbar.org; Ill. State Bar Ass’n Op. 96-10, www.illinoisbar.org; N.Y. State Bar Ass’n Comm. on Prof. Ethics Op. 709 (1998) www.nysba.org/opinions.
3.See cases at n.2, supra. Contra, Penn. Bar Ass’n Comm. on Legal Ethics Op. 97-130 (absent the client’s consent after consultation, lawyer should not use unencrypted e-mail to communicate information concerning the representation where interception would be damaging to the client); Iowa Bar Ass’n Op. 1997-1; State Bar of Ariz. Advisory Op. 97-04, www.azbar.org.
4.Electronics Communications Privacy Act, 18 U.S.C. §§ 2510 et seq. (1994).
5.N.Y. State Bar Ass’n Op. 709; Ill. State Bar Ass’n Op. 96-10.
6.ABA Op. 99-413; Alaska Bar Ass’n Op. 98-2; D.C. Bar Op. 281 (1998), www.dcbar.org; Ky. Bar Ass’n Ethics Comm. Advisory Op. E-403 (1998), www.uky.edu; N.Y. State Bar Ass’n Op. 709 (1998).

Ethics Advisory Opinion No. 00-02

(Approved March 9, 2000)
Issue:
May a Utah lawyer ethically state on her letterhead that she is “also admitted” in another state when she is on inactive status in that state?

Opinion: A lawyer on inactive status in a state may not ethically communicate by means of letterhead or otherwise that the lawyer is “admitted” in the state unless (i) the lawyer also affirmatively discloses the lawyer’s inactive status or (ii) the lawyer reasonably concludes that the communication would not be materially misleading under the circumstances as a whole, including the time and requirements involved in transferring from inactive to active status in the state in question. Further, the lawyer must (i) comply with any applicable requirements of the other state concerning inactive lawyers and (ii) guard against engaging in the unauthorized practice of law in the other state.
Analysis: A lawyer’s letterhead is a form of public communication1subject to the requirements of Rule 7.1, which provides in relevant part as follows:
A lawyer shall not make a false or misleading communication about the lawyer or the lawyer’s services. A communication is false or misleading if it:
(a) Contains a material misrepresentation of fact or law, or omits a fact necessary to make the statement considered as a whole not materially misleading;
(b) Is likely to create an unjustified expectation about results the lawyer can achieve, or states or implies that the lawyer can achieve results by means that violate the Rules of Professional Conduct or other law; or
(c) Compares the lawyer’s services with other lawyers’ services, unless the comparison can be factually substantiated.2
In a series of cases beginning with Bates v. State Bar of Arizona,3the U.S. Supreme Court has made it clear that public communication concerning a lawyer’s services (including any form of advertising) is commercial speech, enjoys First Amendment protection, and can be regulated only to further substantial state interests, and then only in the least restrictive manner possible.4The cardinal rule concerning all public communication about a lawyer and her services is that the communication not be false or misleading.5In this regard, Rule 7.1 “captures the essence” of the Court’s opinions in Bates and its progeny, and “informs all of Part 7: lawyers have a First Amendment right to communicate truthfulinformation about their services, and potential clients have a right to hear such information, but society has a right to protect against communications that are false and misleading.”6
The three subsections of Rule 7.1 undertake to identify what constitutes permitted and prohibited speech and establish guidelines for the development of a common law of false and misleading communications with respect to legal services. The provision most applicable to the present analysis, Rule 7.1(a),7not only prohibits statements which contain material misrepresentations, but also requires “acaveat or explanation when a statement would otherwise be misleading.” Determining whether a particular communication is misleading requires an examination of the particular circumstances in question. There is no bright-line test for determining what is or is not misleading.8Rather, “[e]ach statement must be judged on its facts to determine whether it would have that effect and how much explanation is necessary.”9
It is well-established that a lawyer admitted or licensed to practice law in more than one jurisdiction may make that fact known by any form of otherwise permissible communication, including letterhead, business cards, announcements, billing statements, mailings, advertisements, signs and the like. In In re R.M.J.,10the U.S. Supreme Court held that certain rules of the Missouri Supreme Court providing that a lawyer could communicate only certain categories of information, which did not include a category for listing the courts in which the lawyer was admitted to practice, were unconstitutional. In doing so, the Court observed not only that “[s]uch information is not misleading on its face,” but that the lawyer in question was licensed to practice in both Illinois and Missouri “is factual and highly relevant information particularly in light of the geography of the region in which the [lawyer] practiced.”11
The R.M.J. court, however, did not deal with the precise issue before this Committee: Is it misleading for a lawyer to state that the lawyer is “admitted” or “licensed” in a jurisdiction when the lawyer is on “inactive status” in that jurisdiction without making any reference or disclosure concerning such status? Before we address this specific question, it is necessary to review and define for purposes of this opinion what is meant by the term “inactive status.”
Utah, like other states, has different categories of bar membership, one of which is designated as “inactive.”12Generally, “inactive” refers to a type of bar membership where a lawyer for any number of reasons, may voluntarily be removed from the bar’s list of active lawyers and thereby be relieved of some or all of the obligations and burdens relating to active practice.13Typically, when a lawyer becomes inactive, she is still a member of the bar,14but she may not practice law in the relevant jurisdiction unless and until she is placed back on active status by the appropriate licensing authority.15
The limitations arising out of inactive status are significant, and the consequences of practicing law where a lawyer is on inactive status are serious. For example, states that have addressed the subject by rule or opinion have concluded that a lawyer on inactive status may not be listed on firm letterhead or in Martindale-Hubbell or similar professional directories,16or even hold equity in the lawyer’s former firm.17If the lawyer violates the terms of inactive status, she is subject to appropriate disciplinary or other action. For example, if the lawyer were to hold herself out as being “admitted to practice” in the jurisdiction, she would be making a false and misleading statement, and if the lawyer were to practice law in the jurisdiction, she would be engaged in the unauthorized practice of law.18
Turning now to the specific issue before us, we believe that, when a lawyer states that she is “admitted” in a jurisdiction, she is also implying that she is admitted to practice law in the jurisdiction and is available to do so.19Thus, if a lawyer communicates that she is admitted in a state when she is on inactive status in the state, there is a potential for a person to misconstrue the ability of the lawyer to represent a client in that state. The lone statement that the lawyer is admitted in a state may technically be truthful, but the implication that the lawyer is authorized to practice law there could be misleading and, without more, might violate Rule 7.1. In circumstances governed by Rule 7.5(b), a lawyer must indicate affirmatively any jurisdictional limitations she may have.20
Having concluded that could be is misleading to communicate (without appropriate disclosure) that a lawyer is admitted when she is on inactive status in a state, the more difficult question is whether the Committee should adopt a bright-line rule and conclude that such a communication would be materially misleading per se, without reference to any facts or circumstances surrounding a particular statement or a particular lawyer’s situation. It is troubling that a lawyer may make a statement that she knows or should know could be misleading at the time the statement is made (e.g., when pre-printed letterhead or cards are sent or given to a client or prospective client, or when an advertisement is published) without violating Rule 7.1.21Nevertheless, we believe that it would be going too far to adopt a per se rule. Again, whether a statement is misleading, especially materially so, is to be judged on the facts of each statement.22 Further, the rule itself suggests that a fact-oriented analysis is necessary and appropriate, since it contains a “materiality” standard and provides that whether an omission of fact makes a statement materially misleading must be “considered as a whole.”23
If a lawyer desires to communicate that she is admitted in a jurisdiction where she is on inactive status,24the preferred course of action would be for the attorney to disclose her inactive status in the communication and, as appropriate, inform the client or prospective client of the meaning and consequences of the status.25Although such a disclosure may be awkward or unwieldy on letterhead, professional cards and the like, it would reduce, or eliminate the chance that the statement concerning admission elsewhere would misinform, mislead or violate Rule 7.1.26
To the extent that a lawyer is on inactive status and chooses to omit reference to that status, the Committee concludes that the lawyer may do so ethically only if the lawyer is (i) ready and willing, if engaged by the client, to transfer to active status as may be necessary to represent properly the interests of a client and (ii) actually able to regain active status on a prompt, efficient and reasonable basis.27The ability of a lawyer to transfer from inactive to active status on a rapid and relatively effortless basis, however, varies widely from state to state.
For example, in some states a lawyer has the right to transfer from inactive to active status by simply requesting the change of status, providing a minimum amount of basic information-e.g., “good standing” and continuing legal education information, and paying a nominal fee.28In such circumstances, it would not be materially misleading to omit reference to inactive status because the lawyer essentially is entitled to move to active status, and doing so would require relatively simple actions the lawyer’s part and only ministerial actions on the part of the licensing authority.
In other jurisdictions, however, regaining active status may not be so quick and easy. For example, some states require that a lawyer effectively reapply to practice law, undertake additional educational activities or pay significant fees and dues. In some states, a review and deliberate decision-making process by the licensing authority may be required.29In such circumstances or any other circumstances where a lawyer cannot be assured of a prompt, certain, efficient and economically nominal reactivation, or where there are any other significant barriers to re-entry, the Committee believes that it would be materially misleading for a lawyer not to provide appropriate disclosure.
Conclusion: Whether a lawyer may ethically communicate that the lawyer is “also admitted” in another state when the lawyer is on inactive status in that state depends on whether the communication is materially misleading within the meaning of Rule 7.1. The Committee believes that a communication of the fact that a lawyer is admitted in a state implies that the lawyer is authorized and available to practice law in that state. Accordingly, the lawyer must either disclose the lawyer’s inactive status or reasonably determine that the lack of such disclosure is not materially misleading under the totality of the circumstances, including the time, effort and cost involved in the lawyer’s transferring from inactive to active status. A lawyer on inactive status who desires to communicate the bare fact of “admission” to the bar of another state must be fully acquainted with any requirements and limitations imposed upon her by the laws and rules of the other state by reason of such status, and the lawyer must refrain from taking any actions that would constitute engaging in the unauthorized practice of law in the other state unless and until she regains active status in the state.
Footnotes
1.All forms and means of communications regarding a lawyer’s services, including advertising, are governed by Utah Rules of Professional Conduct 7.1 cmt. Further, Rule 7.5 expressly prohibits a lawyer’s use of any “letterhead or other professional designation that violates Rule 7.1.”
2.Utah Rules of Professional Conduct 7.1 (emphasis added).
3.433 U.S. 350 (1977). See generally In re Primus, 436 U.S. 412 (1978); Ohralik v. Ohio State Bar Ass’n, 436 U.S. 447 (1978); In re R.M.J., 455 U.S. 191, 207 (1982); Zauderer v. Office of Disciplinary Counsel for Supreme Court of Ohio, 471 U.S. 626 (1985); Shapero v. Kentucky Bar Ass’n, 486 U.S. 466 (1988); Peel v. Attorney Registration and Disciplinary Comm’n of Illinois , 496 U.S. 91 (1990); Florida Bar v. Went for It, Inc., 515 U.S. 618 (1995).
4.The upshot of the cases is clear: Truthful written communications about legal services are permitted, but appropriate ancillary limitations or requirements may be imposed. E.g., In re R.M.J., 455 U.S. 191; Florida Bar v. Went for It, Inc., 515 U.S. 618; McDevitt v. New Mexico Supreme Court Disciplinary Bd., 108 F.3d 341 (10th Cir. 1997). See generally Geoffrey C. Hazard, Jr. & W. William Hodes, The Law of Lawyering, § 7.1: 101 (2d ed. Supp. 1998) [hereinafter Hazard].
5.As this Committee has noted on prior occasions: “The comment to Rule 7.1 states in part, ‘whatever means are used to make known a lawyer’s services, statements about them should be truthful.’ This is the sine qua non regarding communications, whatever the medium, between lawyers and their clients or the public in general.” Utah Ethics Advisory Op. 131, 1993 WL 75097 (Utah St. Bar). See also Utah Ethics Advisory Op. 138, 1994 WL 579848 (Utah St. Bar); and Utah Ethics Advisory Op. 108, 1990 WL 600110 (Utah St. Bar). See generally In re Utah State Bar Petition for Approval of Changes in Disciplinary Rules on Advertising, 647 P.2d 991, 993 (Utah 1982) (state has substantial and compelling interest in protecting the public against false or misleading advertising by lawyers).
6.Hazard, supra note 4, § 7.1:102, at 859.
7.Although Rule 7.1(b) is intended primarily to prohibit statements about favorable results achieved on behalf of one client and thereby creating unjustified expectations about results that may be obtained for other clients without reference to particular factual or legal circumstances (see Rule 7.1 cmt.), the subsection may also be applicable to the extent that a communication about where a lawyer is admitted may be viewed as creating an unjustified expectation about where, when and how results may be achieved.
8.Hazard, supra note 4, § 7.1:201, at 862.
9.Id.
10 455 U.S. 191 (1982).
11.Id. at 205. See, e.g., N.Y. Ethics Op. 637, 1992 WL 450727 (N.Y. St. Bar Ass’n).
12.Any member of the Bar who has retired [or is not otherwise practicing law] may upon request be enrolled as a inactive member.” Rule 19, Rules for Integration and Management of the Utah State Bar. Other states have the same, similar or further levels or designations of membership (e.g., “special” or “affiliate” members). See, e.g., Idaho Bar Commission Rule 302.
13.For example, lawyers on inactive status generally pay significantly reduced licensing fees, and are exempt from otherwise applicable assessments, reporting requirements and continuing legal education requirements.
14.State rules vary as to whether the lawyer remains a member in “good standing.”
15.In all jurisdictions surveyed by this Committee for purposes of this opinion, lawyers on inactive status are precluded from engaging in the practice of law. Further, all jurisdictions surveyed preclude inactive lawyers from holding office or voting in their respective bar organizations.
16.Ohio Adv. Op. 91-18, 1991 WL 717488 (Ohio St. Bar); Ohio Adv. Op. 91-1 1991 WL 717471 (Ohio St. Bar) (such listings are misleading in that they give the impression that the lawyer is authorized to practice law).
17.Ohio Adv. Op. 96-3, 1996 WL 202277 (Ohio St. Bar).
18.See, e.g., People v. Newman, 925 P.2d 785 (Colo. 1996) (lawyer censured because he “implied that he was licensed to practice law in Colorado even though he was on inactive status . . . [and] . . . engaged in the practice of law in Colorado while he was on inactive status”); In re Sousa, 915 P.2d 408 (Ore. 1996) (lawyer disbarred for numerous serious ethics violations, including “engaging in conduct involving dishonesty or misrepresentation” by affirmatively representing to client that he was currently licensed to practice law in another state and could take care of the client’s problems there when he was on inactive statutes in that state).
19.Terms such as “admitted” or “licensed” have little meaning without express or implied reference to a particular action. That is, a person is admitted or licensed to do something, and in the case of a lawyer that something is to practice law.
20.Utah Rules of Professional Conduct 7.5(b).
21.This Committee believes that a lawyer should be scrupulous in all dealings and communications and has previously suggested that a misleading statement may be viewed as a “material misrepresentation of fact” within the meaning of Rule 7.1. See Utah Ethics Advisory Op. 138, 1994 WL 579848 (Utah St. Bar).
22.See notes 4 and 8, supra, and accompanying text. See alsoMississippi Bar v.Attorney R., 649 So. 2d 820 (Miss. 1995).
23.Utah Rules of Professional Conduct 7.1(a).
24.This opinion assumes that the lawyer is on inactive status voluntarily. Where a lawyer has been placed on inactive status involuntarily (e.g., for disability or other such reasons) and would effectively need to obtain a favorable determination from the appropriate governing body before being reinstated to active status, we believe that the lawyer would be required to refrain from communicating that the lawyer is “admitted” in the jurisdiction unless she disclosed the inactive status.
25.If a lawyer desires the benefits of communicating that she is also admitted in another jurisdiction, the best course of action would be to remain on active status in the state. See, e.g., Ohio Adv. Op. 96-3 1996 WL 202277 (Ohio St. Bar) (in advising that an attorney could not take inactive status before retiring and keep the lawyer’s name part of a firm name, the Board observed that, after all, “prior to reaching age sixty-five, it is not too onerous a burden for an attorney to keep his or her license active if he or she wishes the privilege of his or her name being continued in a firm name”).
26.See, e.g., N.C. Ethics Op. RPC 13, 1986 WL 327916 (N.C. St. Bar); Response to Inquiry No. 86-137 (Penn. St. Bar). See also Florida Bar v. Lange, 711 So. 2d 518 (Fla. 1998).
27.The Committee believes that a lawyer has the duty (i) to know and be prepared to do whatever it may take to regain active status, and (ii) to know and comply with any rules of the jurisdiction applicable to the lawyer’s duties as an inactive lawyer in the jurisdiction.
28.For example, an inactive member of the Utah Bar may quickly transfer to active status, if she is otherwise in good standing. “Upon . . . request and the payment of the full annual license fee for the current licensure year and any other fees authorized by the Court, less any fee paid as an inactive member for such licensure year, the applicant shall be immediately transferred from the inactive roll to the active roll.” Rule 19, Rules for Integration and Management of the Utah State Bar (emphasis supplied).
29.In Florida, for example, an inactive member (who under the state’s rules is not considered to be in good standing) seeking reinstatement as an active member “must file a petition with the board of governors setting forth the reason [the lawyer went inactive] and showing good cause why the petition for reinstatement should be granted.” Further, if the petitioner has been inactive for more than five years, certain Florida Bar educational requirements must be met. Rules 1-3.7(b) and (g), Rules Regulating the Florida Bar. See also Bylaws of the State Bar of New Mexico § 2.2.

Ethics Advisory Opinion No. 00-03

(Approved March 9, 2000)
Issue: May a Utah lawyer who is also a real estate title officer ethically enter into a partnership with or form a small business corporation with a nonlawyer for the purpose of assisting clients in challenging their real estate taxes?

Opinion: No. Even if the proposed activities can also be performed lawfully by nonlawyers, a lawyer may not ethically form a partnership or other business association with a nonlawyer if any of the activities of the partnership consist of the “practice of law.” Nor may a lawyer practice with or in the form of a business organization if a nonlawyer owns an interest in that organization. A lawyer may form a business relationship with a nonlawyer to engage in such activities only if the lawyer withdraws entirely from the active practice of law.
Facts: A lawyer who is currently licensed to practice law in Utah is also licensed as a real estate title officer. He owns a title company and practices law part time. He proposes to form a small business corporation with a nonlawyer to assist clients in challenging their real estate taxes in return for a percentage of any resulting decreases in taxes. Each shareholder would have equal ownership. The corporation would also offer similar services to Utah counties in return for a percentage of any resulting increases in tax revenues. The request suggests that most but not all challenges on behalf of taxpayers would be resolved without an appearance before the applicable tax board or commission. The request claims that nonlawyers may assist taxpayers in proceedings before such tax boards and commissions.1
Analysis: Rule 5.4 imposes limitations on a lawyer’s affiliation with nonlawyers in order “to protect the lawyer’s professional independence of judgment.”2Rule 5.4(b) prohibits a lawyer from “form[ing] a partnership with a nonlawyer if any of the activities of the partnership consist of the practice of law.”3Here, the request proposes equal ownership with a nonlawyer of a small business corporation. That form of affiliation presents, however, no less of a threat to the lawyer’s professional independence of judgment than does a partnership. We conclude, therefore, that Rule 5.4(b)’s ethical prohibition applies to the proposed arrangement.4
The issue presented to this Committee is, therefore, whether the representation of taxpayers in tax commission proceedings for the purpose of challenging real estate tax assessments is “the practice of law” within the meaning of Rule 5.4.
The Rules do not define the practice of law. In interpreting Utah Code Ann. § 78-51-25, which prohibits the practice of law by those not licensed as lawyers, the Utah Supreme Court has held that activities prohibited to nonlawyers include a wide variety of activities beyond “appearing in court.”5The Court has also stated:
The practice of law, although difficult to define precisely, is generally acknowledged to involve the rendering of services that require the knowledge and application of legal principles to serve the interests of another with his consent. It not only consists of performing services in the courts of justice throughout the various stages of a matter, but in a larger sense involves counseling, advising and assisting others in connection with their legal rights, duties, and liabilities.6
Here, the proposed affiliation with a nonlawyer is for the purpose of representing clients in adversary proceedings before local tax boards and commissions that will determine the extent of the client’s tax liability under applicable law. Such advocacy would seem to fit comfortably within the Supreme Court’s definition of the practice of law, as “assisting others in connection with their legal rights, duties and liabilities.”7
The request alleges, however, that nonlawyers may lawfully assist taxpayers in proceedings before county tax boards. Whether or not this is true, the “practice of law” for purposes of Rule 5.4′s ethical prohibitions on affiliations with nonlawyers may be broader than the “practice of law” for purposes of substantive law prohibitions on the unauthorized practice of law. Rule 5.4 and its predecessors8have, at least, consistently been so interpreted in ABA ethics opinions and the ethics opinions of other state bars.
The ABA Committee on Ethics and Professional Responsibility has considered the application of Rule 5.4 on several occasions in factual contexts similar to that presented here. In 1940, the ABA Committee considered the propriety of a proposed partnership between a lawyer and a nonlawyer licensed to present patent applications to the United States Patent Office. Applying Canon 33, the Committee held:
The representation of persons in the presentation of patent applications is the practice of law when performed by an attorney. Thus, an attorney may not form a partnership with a layman for the rendition of such services even though the layman is permitted to represent patent applications by the United States Patent Office.9
The ABA Committee modified this opinion four years later, allowing such a partnership, but only if the lawyer refrained completely from holding herself out as a lawyer in any regard.
We have held that certain activities constitute the practice of law when engaged in by a lawyer despite the fact that those activities may lawfully be engaged in by one not a lawyer. A lawyer may properly enter into partnership with a layman if the activities of the partnership and of the lawyer member are confined to those which may be carried on by the layman, provided the lawyer renounces or refrains from holding himself out as a lawyer and from carrying on any activities which may not properly be carried on by the layman.10
In 1961, the ABA Committee applied these same principles to a proposed partnership between a lawyer and a public accountant, holding that “[a]n attorney may not form a partnership with an accountant if the attorney has a separate law practice or if the partnership furnishes service which would be considered legal services if done by a lawyer.”11The Committee clarified a year later that a lawyer could enter into a partnership with an accountant to perform services permissible for nonlawyers if the lawyer “withdraw[s] from the practice of law and refrain[s] from holding himself out as a lawyer.”12
In 1973, after the adoption of the Model Code, the ABA Committee considered “whether a lawyer may properly have a partnership with a non-lawyer who is an agent licensed by the United States Treasury Department if the activities of the partnership are limited to those permitted to non-lawyers pursuant to [Treasury Department guidelines].”13Applying DR 3-103(A), the Committee held that “[t]he practice by a lawyer of representing others before the Internal Revenue Service is the practice of law.” Citing Formal Opinions 297 and 305, the Committee acknowledged that, “if the lawyer does not hold himself out as a lawyer or maintain a law office, he properly (at least in theory) may form a partnership with an enrolled agent for the purpose of practicing before the Internal Revenue Service, provided that the activities of the partnership are limited to those that do not constitute the practice of law.”14
Ethics committees in other states have also held that for purposes of Rule 5.4 or its predecessors a lawyer may be engaged in “the practice of law” even if the same activities could be lawfully engaged in by a nonlawyer. The Kansas Ethics Committee, for example, held that “[r]epresenting someone in a social security appeal is the practice of law when done by a licensed attorney, regardless of whether such activity also can be performed by nonlawyers.”15
The New York State Ethics Committee responded to an inquiry nearly identical to that presently before this Committee. They considered whether a lawyer might affiliate with a nonlawyer to represent homeowners in small claims proceedings to reduce real estate taxes, if the lawyer were to refrain from holding himself out as a lawyer.
Applying DR 3-103(A), which is identical to Rule 5.4(b), the New York Committee found that the proposed activity was the “practice of law” for purposes of the ethical prohibition on a partnership with a nonlawyer.
We have no difficulty in concluding that the activity proposed herea lawyer representing homeowners in judicial or administrative proceedings challenging real estate taxes constitutes the practice of law. When a lawyer represents a client in a litigation or quasi-litigation proceeding, the lawyer is practicing law whether or not a nonlawyer is legally permitted to perform the same function.16
We agree. When a lawyer represents a client for a fee in an adversary proceeding that will determine legal obligations of the client, the lawyer is engaged in the practice of law for purposes of Rule 5.4′s prohibitions on affiliation with a nonlawyer whether or not a nonlawyer may lawfully engage in the same representation. This is true whether the adversary proceeding takes place in a court of general jurisdiction or before an administrative agency, board or commission. In each instance, the lawyer is “advising and assisting others in connection with their legal rights, duties, and liabilities”17and is advocating the client’s legal rights in a public tribunal. Such advice, assistance and advocacy is within the domain in which Rule 5.4 seeks to protect the lawyer’s professional independence.
The request does not specify whether the lawyer intends to identify himself as a lawyer in connection with services rendered by the proposed small business corporation. The question arises, nonetheless, whether he could avoid Rule 5.4′s ethical prohibitions on affiliation with a nonlawyer by refraining from holding himself out as a lawyer in connection with the proposed corporation.
The New York Committee considered this alternative and concluded that it was not an acceptable solution because it would violate ethical prohibitions against dishonesty and misrepresentation. The Committee reasoned that “both the adjudicating tribunal and the opposing party in the proceedings challenging homeowners’ real estate taxes are entitled to know that the homeowner’s representative is a member of the bar, rather than a person untrained in legal proceedings.”18
We believe there is force in this reasoning. In addition, so long as the lawyer continues actively to engage in the practice of law in other contexts, it cannot be truly said that he is not holding himself out as a lawyer. It will be publicly known that he is a lawyer whether or not he chooses to identify himself as such in connection with the proposed business with a nonlawyer. One can imagine that clients might seek him out over nonlawyers who render the same service for the very reason that he is trained as a lawyer and possesses the knowledge and skills associated with that training. So long as the lawyer is actively engaged in the practice of law in any context, he must be held to the standards of the legal profession, including Rule 5.4′s prohibitions on affiliation with nonlawyers.19
This is not to say, however, that one trained and licensed as a lawyer may not choose to withdraw from that practice and pursue another profession. Consistent with ABA Opinions 201, 257, 297 and 305 discussed above, we believe that a lawyer who refrains from holding himself out as a lawyer in any context may enter into a partnership or other business association with a nonlawyer so long as he confines his activities to those in which a nonlawyer may lawfully engage. Thus, assuming that a nonlawyer can lawfully represent taxpayers before local tax boards and commissions, a current lawyer would be free to enter into the proposed partnership if he withdrew completely from the active practice of law.
Rule 5.4′s prohibitions on affiliation with nonlawyers have been the subject of substantial criticism.20In August of 1999, the ABA Commission on Multidisciplinary Practice recommended that the Model Rules of Professional Conduct be amended to permit a lawyer (subject to certain regulations designed to safeguard the lawyer’s professional independence) to partner with a nonlawyer even if the activities of the enterprise include the practice of law. Those recommendations have not yet been accepted, however, by the ABA House of Delegates. More importantly for our purposes, the Utah Supreme Court has not yet seen fit to amend Rule 5.4. Unless and until it does, Rule 5.4 prohibits affiliations by a lawyer with a nonlawyer of the kind proposed here.
Footnotes
1.In issuing this Opinion, we impose the following three assumptions and reservations:
a. We express no opinion on the legal issue of whether a small business corporation may provide legal services under Utah law. Ethics Advisory Op. Comm. R. Proc. § III(b)(3).
b. As it is not relevant to the holding in this Opinion, we have not considered and express no opinion as to the ethical propriety of the contingent-fee arrangement described in the original request.
c. A determination of whether representation of taxpayers by nonlawyers before a tax board or commission is the unauthorized practice of law is beyond the scope of our jurisdiction, and we express no opinion on that issue. For purposes of this Opinion, we assume that such representation does not violate Utah law.
2.Rule 5.4 cmt.
3.Rule 5.4(d) provides a parallel prohibition with regard to practice in the form of a professional corporation: “A lawyer shall not practice with or in the form of a professional corporation or association authorized to practice law for profit, if . . .[a] nonlawyer owns any interest therein . . . .”
4.See, e.g., S. Car. Ethics Op. 93-05, 1993 WL 851338 (S. Car. St. Bar 1993) (“Rule 5.4(b) applies not only to partnerships, but also to other organizations that lawyers are involved in managing.”).
5.Utah State Bar v. Petersen, 937 P.2d 1263, 1267-68 (Utah 1997) (holding that a nonlawyer who had prepared wills, divorce papers and pleadings and conducted legal research on behalf of clients for a fee had engaged in the unauthorized practice of law in violation of § 78-51-25).
6.Utah State Bar v. Summerhayes, 905 P.2d 867, 869-70 (Utah 1995) (holding that the practice of “third-party adjusting-i.e., representing injured parties for the purpose of obtaining settlements from the tortfeasor’s insurance company-is the unauthorized practice of law and rejecting arguments that such practice is authorized by the Utah Insurance Code).
7.Id.
8.Utah Rules 5.4(b) and (d) were adopted without modification from ABA Model Rules of Professional Conduct 5.4(b) and (d). Those sections are “substantially identical” to DR 3-103(A) and DR 5-107(C) in the Rules’ predecessor, the ABA Model Code of Professional Responsibility. Those Code provisions had their origin, in turn, in ABA Canon 33, which provided: “Partnerships between lawyers and members of other professions or non-professional persons should not be formed or permitted where any part of the partnership’s employment consists of the practice of law.”
9.ABA Comm. on Ethics and Professional Responsibility, Formal Op. 201 (1940).
10.ABA Comm. on Ethics and Professional Responsibility, Formal Op. 257 (1944) (emphasis added).
11.ABA Comm. on Ethics and Professional Responsibility, Formal Op. 297 (1961). See also ABA Comm. on Ethics and Professional Responsibility, Formal Op. 239 (1942) (holding that “[i]t is improper for a practicing attorney to form a partnership with a certified public accountant to act as consultants in federal tax matters and represent taxpayers before the Bureau of Internal Revenue and the Board of Tax Appeals”).
12.ABA Comm. on Ethics and Professional Responsibility, Formal Op. 305 (1962), quoting ABA Formal Op. 225.
13. ABA Comm. on Ethics and Professional Responsibility, Formal Op. 1241 (1973).
14.Id. at 496. The ABA Committee expressed skepticism, however, that those conditions could be met in practice: “[A]s a practical matter, it is difficult if not impossible for the Committee to visualize such a situation, and if any part of its activities could be construed to constitute the practice of law, such a partnership would be improper.”
15.Kans. Ethics Op. LEO 93-11 (Kans. St. Bar 1993). See also, e.g., Maine Ethics Op. No. 79 (1987) (“The ‘practice of law’ as used in rules like 3.2(a)(2) [parallel to Rule 5.4(b)] has typically been interpreted as including services in fact performed by lawyers . . . even though non-lawyers may and do perform the same service.”); Mich. Ethics Op. Cl-1117 (1986), quoting Cl-25 (“[s]ome services, though a layman can perform them, may constitute the practice of law when performed by a lawyer-for example, the preparation of income tax returns”); N.Y.C. Bar Op. No. 80-25 (“Even if the services performed by a corporation may be done by a lay person, the services . . . involve activities, which when performed by a lawyer, may well involve the practice of law.”).
16.N.Y. Ethics Comm. Op. 662,1994 WL 120206 (N.Y. State Bar).
17.Summerhayes, 905 P.2d at 869-70.
18.Id.
19.We have held previously that a lawyer who practices a second profession will be subject to the ethical standards of a lawyer in both professions. See Utah Ethics Advisory Op. 5 (Utah St. Bar Jan. 13, 1972) (A practicing attorney who sells life insurance faces solicitation and conflict of interest problems and is held to the ethical standards of an attorney in both professions”). The ABA Committee on Ethics and Professional Responsibility enunciated this same principle in Informal Decision 709 (1964) in response to the inquiry of a lawyer licensed as a real estate broker regarding ethical issues involved in receiving a real estate commission. The ABA Committee stated: “Although you have a real estate broker’s license your letterhead indicates that you are engaged in the practice of law and are a member or associate in a law firm. A real estate brokerage business is so closely related to the practice of law that, when engaged in by a lawyer, it constitutes the practice of law.”
20.See, e.g., Thomas R. Andrews, Nonlawyers in the Business of Law: Does the One Who Has the Gold Really Make the Rules?, 40 Hastings L.J. 577 (1989); Louis M. Brown, Emerging Changes in the Practice of Law, 1978 Utah L. Rev. 599, 609; Roger C. Cramton, Delivery of Legal Services to Ordinary Americans, 44 Case W. Res. L. Rev. 531, 564-78 (1994); Susan Gilbert & Larry Lempert, The Nonlawyer Partner: Moderate Proposals Deserve a Chance, 2 Geo. J. Legal Ethics 383 (1988); Geoffrey C. Hazard, Jr. & W. William Hodes, The Law of Lawyering: A Handbook on the Model Rules of Professional Conduct 804 (2d ed. 1990).

Ethics Advisory Opinion No. 00-04

(Approved June 2, 2000)
Issue:
What are a lawyer’s ethical duties to a third person who claims an interest in proceeds of a personal injury settlement or award received by the lawyer?

Opinion: When a lawyer receives funds or property and knows a third person claims an interest in the funds or property, the lawyer must first determine whether the third person has a sufficient interest to trigger the duties stated in Rule 1.15(b). Only a matured legal or equitable claim-such as a valid assignment, a judgment lien, or a statutory lien-constitutes an interest within the meaning of Rule 1.15 so as to trigger duties to third persons under Rule 1.15. If no such interest exists, the lawyer may disburse the funds or property to the client. If such an interest exists, the lawyer must comply with the duties stated in Rule 1.15. Where the client does not have a good-faith basis to dispute the third person’s interest, the lawyer must promptly notify the third person, promptly disburse any funds or property to the third person to which that person is entitled, and render a full accounting when requested. If the client has a good-faith basis to dispute the third person’s interest, and instructs the lawyer not to disburse the funds or property to the third person, the lawyer must promptly notify the third person that the lawyer has received the funds or property and then must protect the funds or property until the dispute is resolved.
Background: Lawyers sometimes receive funds or property in which third per-sons, such as medical providers or other creditors of the lawyer’s client, claim an interest. The Office of Professional Conduct of the Utah State Bar has advised the Ethics Advisory Opinion Committee that it has received complaints from medical providers alleging that lawyers representing plaintiffs in personal injury matters have not distributed amounts from personal injury settlements or awards to reimburse them for medical services provided to the lawyer’s client. In cases of this nature, the medical provider and the patient may have agreed that the patient may defer payment for medical services until the time of a personal injury settlement or award, at which time the provider’s invoices will be paid. The medical provider may also rely on a statutory lien or an assignment. Medical providers without a statutory lien or an assignment may demand payment from funds held by the lawyer based on facts such as the client’s promise to pay the provider when a settlement or award is received or the lawyer’s use of the provider’s bill in proving damages. In other cases, non-medical service providers, sellers of goods, or judgment creditors may claim rights in funds or property in a lawyer’s possession. The Office of Professional Conduct has requested that the Committee issue a formal opinion regarding matters involving third-party claims to proceeds of a personal injury settlement or award received by a lawyer.
Analysis: Rule 1.15 of the Utah Rules of Professional Conduct specifically addresses a lawyer’s duties when safekeeping property for clients or third persons. It states, in pertinent part:
(b) Upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person. Except as stated in this Rule or otherwise permitted by law or by agreement with the client, a lawyer shall promptly deliver to the client or third person any funds or property that the client or third person is entitled to receive and, upon request by the client or third person, shall promptly render a full accounting regarding such property.1
Rule 1.15 does not differentiate between the duties a lawyer owes a client and those owed a third person when safekeeping property.
The rule addresses three distinct duties. First, if a client or third person “has an interest” in property or funds received by a lawyer, the lawyer must promptly notify the client or third person. Second, the lawyer must promptly deliver the funds or property to the client or third person who is “entitled to receive” the funds or property.2Third, if requested by the client or third person, the lawyer must promptly render a full accounting regarding the property. Generally, there will be no controversy surrounding who is entitled to the funds or property that the lawyer is safekeeping and application of Rule 1.15 will be simple. When a dispute exists between the client and a third person as to who is entitled to the funds or property in the lawyer’s possession, applying Rule 1.15 requires additional analysis.
Not every claim made by a third person triggers the duties expressed in Rule 1.15. Rather, these duties are triggered when the lawyer receives funds or property and the lawyer knows3that a third person “has an interest” in the property or funds. It thus becomes necessary to determine what is meant by “has an interest” under Rule 1.15. A third person who “has an interest” is different from a third person who merely claims an interest. Subsection (b) of Rule 1.15 speaks of interests that are “claim[ed].” In subsection (c) of Rule 1.15, the drafters of the rule chose the language “has an interest.” A person who “has an interest” has something stronger than a mere claim or demand for payment. This interpretation is supported by an official comment to Rule 1.15, which states:
Third parties, such as a client’s creditors, may have just claims against funds or other property in a lawyer’s custody. A lawyer may have a duty under applicable law to protect such third-party claims against wrongful interference by the client and accordingly may refuse to surrender the property to the client.4
Professors Hazard and Hodes have analyzed the significance of this comment as follows:
The fact that a third party “expects” funds held by the lawyer to be the source of payment would not justify a lawyer’s refusal to obey the instructions of his client to turn over the entire amount. The Comment to Rule 1.15 uses the phrases “just claims” and “duty under applicable law” to suggest that the third party must have a matured legal or equitable claim in order to qualify for special protection. Only in such cases may it be said that failure to recognize the third-party interest is a species of fraud upon creditors or fraud upon the rendering court.5
Only those claims that rise to the level of a “matured legal or equitable claim” constitute an “interest” and trigger the duties owed under Rule 1.15. For example, a valid assignment of the funds in question could be such a claim. Certainly, a statutory or judgment lien that attaches to the specific property or funds in question or a court order requiring that the specific property or funds be turned over to the third party is such an interest. A lawyer’s knowledge that the client owes bills, even if the lawyer knows that the creditor expects to be paid out of the proceeds of a settlement or judgment, does not give rise to such duties unless the creditor has an interest in the proceeds within the meaning of Rule 1.15.
This conclusion is consistent with prior opinions of this Committee. For example, in Opinion No. 96-03, the Committee stated that “[a]bsent dishonesty, fraud, deceit or misrepresentation, [an] attorney has no ethical obligation to honor personally the client’s agreements to pay medical providers out of a settlement or judgment.” The Committee noted that it was not addressing “agreements that expressly impose an obligation on the attorney or create a lien on the funds that are handled by the attorney.”6In a prior opinion, the Committee applied a similar approach to a lawyer’s refusal to pay for services rendered to the lawyer’s client at the lawyer’s request.7
Even where a third person has a sufficient interest to invoke the duties expressed in Rule 1.15(b), a lawyer ordinarily should not simply hand over the funds or property to the third person against the client’s instructions.8The comments to Rule 1.15(b) emphasize that “a lawyer should not unilaterally assume to arbitrate a dispute between the client and the third party.”9Where a third person has a sufficient interest to trigger the duties expressed in Rule 1.15(b) and a client in good faith instructs the lawyer not to pay the third person, the lawyer must hold the funds or property until the dispute is resolved, or, if resolution seems unlikely, interplead the funds or property. Retaining and protecting the funds will not be a violation of the lawyer’s duty to the client because, under Rule 1.15(b), the lawyer is only required to disburse to the client those funds to which the client is “entitled.” If there is a third-party “interest” within the meaning of Rule 1.15(b), the client is not “entitled” to the funds.10
To summarize, when a lawyer receives funds or property and knows a third person claims an interest in the funds or property, the lawyer must first determine whether the third person has an interest sufficient to trigger the duties expressed in Rule 1.15(b). Only a matured legal or equitable claim-such as a valid assignment, a judgment lien11or a statutory lien-constitutes a sufficient interest to trigger duties to third persons under Rule 1.15(b). If no such interest exists, the lawyer may disburse the funds or property to the client. If such an interest exists, the duties expressed in Rule 1.15 are triggered. If the client does not dispute the third person’s interest, the lawyer must promptly notify the third person, promptly disburse any funds or property to the third person to which that person is entitled and render a full accounting when requested. If the client has a good-faith basis to dispute the third person’s interest and instructs the lawyer not to disburse the funds or property to the third person, the lawyer must promptly notify the third person that the lawyer has received the funds or property and then must protect such funds or property until the dispute is resolved.12
Application: In the discussion that follows, we apply the foregoing analysis to a number of hypothetical situations posed by the Office of Professional Conduct of the Utah State Bar.
Example 1: The medical provider has a written “lien” which states that the client has agreed that the medical provider will defer payment for the medical services until the time of any settlement or award and then receive payment from the client directly from the settlement funds. In this example, the written “lien” has been sent to the lawyer.
First, the lawyer must determine whether the medical provider has a sufficient interest to trigger the duties expressed in Rule 1.15(b). Such an interest must be a matured legal or equitable claim. A valid assignment of the proceeds of a settlement or award of which the lawyer has knowledge is a sufficient interest. Whether a written “lien” creates a valid assignment must be determined under applicable law.13If it does, the lawyer must promptly notify the medical provider when the lawyer receives any settlement funds. If the client does not, in good faith, dispute the interest, the lawyer must then promptly disburse the funds to the medical provider and render an accounting if requested. If the client disputes the interest in good faith, the lawyer must protect the funds until the dispute is resolved.
Example 2: The medical provider does not have a written “lien,” but the client has informed the lawyer orally that he received the medical services from the provider. The client informs the lawyer that the client is not paying for the services. The lawyer knows the medical provider expects to be paid out of any settlement or award. The lawyer may have used the charges for the medical services to compute damages in a settlement demand for special and general pain and suffering damage.
In this situation, the medical provider does not have a matured legal or equitable claim to the settlement proceeds or any award. The medical provider might have obtained a statutory lien against the proceeds or a valid assignment of the proceeds, but evidently did not do so.14If the client instructs the lawyer to pay for the services out of the settlement proceeds, the lawyer may do so. If the client instructs the lawyer not to pay the medical provider from the proceeds, the lawyer has no duties to the medical provider and would breach a duty to the client by not following the client’s instructions.
Example 3: The client has not paid a public utility company for services for six months, and the client stalls any collection effort by promising to pay when the settlement funds come in. Now the company sends a letter to the lawyer demanding payment.
The public utility company does not have an interest within the meaning of Rule 1.15(b) and therefore the duties expressed in Rule 1.15(b) do not apply.
Example 4: A judgment creditor serves a writ of garnishment on the lawyer and obtains a garnishment lien against the client’s fund held in the trust account.
Here, the creditor has a matured legal claim in the form of a garnishment lien. The lawyer must notify the judgment creditor when the lawyer receives funds subject to the garnishment lien, and, if the client has no good-faith basis for disputing the validity of the lien, the lawyer must disburse the funds or property in the amount of the lien to the creditor and render a full accounting if requested. If the client has a good-faith basis to dispute the lien, after promptly notifying the judgment creditor that the lawyer has received the funds, the lawyer must protect the funds until the dispute is resolved.
Example 5: In a family law matter, the lawyer for one spouse accepts funds as a tender of settlement from the other spouse’s lawyer regarding past-due support payments. The receiving lawyer deposits the funds in his trust account, but refuses the settlement. The receiving lawyer then refuses to return the funds to the other lawyer, claiming the funds in the trust account are his client’s, whatever the final settlement is.
Here, the lawyer has received tendered funds subject to an express condition that the settlement proposed be accepted. The funds belong to the other party to the matter and cannot be paid to the lawyer’s client until the condition is satisfied. The lawyer should have returned the funds when the settlement was refused because the condition upon which they were received will not be satisfied.15
Conclusion: Third-party claims to funds or property held by a lawyer, where known to the lawyer, require the lawyer’s careful attention to Rule 1.15(b). The lawyer must determine whether the third person has a matured legal or equitable claim sufficient interest to trigger the duties stated in Rule 1.15(b). If no such interest exists, the lawyer may disburse the funds or property to the client. If such an interest exists, the lawyer must comply with the duties stated in Rule 1.15(b). Where the client does not dispute the third person’s interest, the lawyer must promptly notify the third person, promptly disburse any funds or property to the third person to which that person is entitled, and render a full accounting when requested. If the client has a good-faith basis to dispute the third person’s interest, and instructs the lawyer not to disburse the funds or property to the third person, the lawyer must promptly notify the third person that the lawyer has received the funds or property and then must protect the funds or property until the dispute is resolved.
We emphasize that independent ethical considerations and principles of substantive law may govern circumstances not addressed in this opinion. A lawyer’s dishonesty, fraud, deceit or misrepresentation to a third party in connection with a client’s obtaining goods or services is a violation of Rule 8.4(c).16For example, a lawyer who knows a client intends subsequently to avoid obligations to creditors but in spite of this knowledge assists the client to obtain goods or services under false pretenses will have committed an ethical violation. Under principles of agency law, a lawyer acting as a client’s agent may become personally liable to third parties for goods or services provided to the client.
Footnotes
1.Utah Rules of Professional Conduct 1.15(b).
2.A lawyer’s violation of the ethical duty to pay over funds to third parties has been held to be a ground for discipline. See In re George McCune, 717 P.2d 701 (Utah 1986) (under former Rule of Professional Conduct II, § 3, requiring lawyers to pay or deliver money or property “to the person entitled thereto within a reasonable time,” lawyer disbarred for failing to pay over to co-counsel and court reporter funds paid by client for payment of their invoices). In Utah, a lawyer’s obligation to pay or deliver money or property to the person entitled to it is reinforced by a criminal statute, Utah Code Ann. § 78-51-42, which provides: “An attorney and counselor who receives money or property of his client in the course of his professional business and who refuses to pay or deliver the same to the person entitled thereto within a reasonable time after demand is guilty of a misdemeanor.”
3.Rule 1.15(b) does not specify what level of belief or knowledge a lawyer must have to impose the duties specified in the rule. We agree with the analysis of the State Bar of Arizona that a lawyer must have actual knowledge of a third party’s interest before acting under Rule 1.15(b). Arizona Ethics Op. 98-06 (Ariz. St. Bar June 3, 1998), (level of cognition must be inferred when not specified; comments to Rule 1.15(b) concerning “just claims,” and lawyer’s “duty under applicable law to protect” third-party claims, and lawyer’s obligation not to “unilaterally assume to arbitrate” matters between client and third party strongly infer that a lawyer must have actual knowledge of a third party’s interest before acting). Under the Rules of Professional Conduct, “knowingly,” “known,” or “knows” “denotes actual knowledge of the fact in question. A person’s knowledge may be inferred from the circumstances.” Utah Rules of Professional Conduct, Preamble, comment.
4.Utah Rules of Professional Conduct 1.15, cmt. (emphasis added).
5.Geoffrey C. Hazard, Jr. & W. William Hodes, The Law of Lawyering—A Handbook on the Model Rules of Professional Conduct § 1.15:302, at 460 (2d ed. Supp. 1994).
6.Utah Ethics Advisory Op. 96-03, 1996 WL 227377, n.1 (Utah St. Bar).
7.Utah Ethics Advisory Op. 98, 1989 WL 509364 (Utah St. Bar): “Absent dishonesty, fraud, deceit or misrepresentation, disputes resulting from the failure of an attorney to make payment for services rendered by third parties should be treated as questions of substantive law, which should be examined under traditional contract and agency doctrines, rather than questions of the ethical propriety of the attorney’s actions.”
8.In cases where a court order or statute requires a lawyer to turn funds over to a third party, such as a client’s bankruptcy trustee, the lawyer must comply with the court order or statute even if the client directs otherwise. See, e.g., 11 U.S.C. § 542(a); Utah Farm Production Credit Ass’n v. Labrum, 762 P.2d 1070 (Utah 1988) (affirming contempt sanctions against debtor’s lawyer who paid himself out of funds and released remaining funds to client in spite of court order to hold funds for client’s bankruptcy trustee).
9.Utah Rule of Professional Conduct 1.15(b), cmt.
10.See, e.g., Leon v. Martinez, 638 N.E.2d 511, 514 (NY 1994); Berkowitz v. Haigood, 606 A.2d 1157, 1158 (N.J. Super. Ct. Law Div. 1992); Herzog v. Irace, 594 A.2d 1106, 1109 (Me. 1991).
11.A judgment which has not become a lien on the proceeds of a personal injury settlement or award is not a sufficient interest under Rule 1.15(b). Kansas Ethics Op. 92-14 (Kan. St. Bar Nov. 5, 1992), www/ksbar.org/ethics.
12.This approach is similar to that adopted by numerous states in addressing the same issue. See, e.g., Alaska Ethics Op. 92-3, (Alaska St. Bar); Arizona Ethics Op. 98-06, (Ariz. St. Bar); Connecticut Informal Ethics Op. 95-20 (Conn. St. Bar), ; District of Columbia Ethics Op. 251 (D.C. St. Bar Oct. 18, 1994); Ohio Ethics Op. 95-12 (Ohio St. Bar Oct. 6, 1995); Rhode Island General Informational Op. 7 (R.I. St. Bar Apr. 10, 1997); South Carolina Bar Advisory Op. 94-20, (S.C. St. Bar); see also Restatement (Third) of the Law Governing Lawyers § 57; Lawyer’s Manual on Professional Conduct (ABA/BNA) § 45:1101-10; Irene M. Ricci, Trust Account: Client Trust Funds: How to Avoid Ethical Problems, 11 Geo. J. Legal Ethics 245, 254-55 (1998).
13.The Committee is not empowered to decide legal, as opposed to ethical, questions. Utah Ethics Advisory Opinion Comm. Rules of Proc. § III(b)(3) (1996).
14.Hospitals can create a lien on proceeds of any settlement or judgment under Utah’s Hospital Lien Law. See Utah Code Ann. §§ 38-7-1 to -8. State assistance automatically becomes a lien on any proceeds under Utah’s Medical Benefits Recovery Act. See Utah Code Ann. § 26-19-5.
15.See In re Shannon, 179 Ariz. 52, 876 P.2d 548 (Ariz. 1994) (lawyer for personal injury plaintiffs received from defendant’s counsel insurance company check for the amount of the judgment marked “full satisfaction of judgment” along with a form of satisfaction of judgment and a letter specifying that the check should be cashed only upon the return of the executed satisfaction; lawyer disciplined for violating Rule 1.15 by depositing check without executing satisfaction).
16.Rule 8.4(c) provides: “It is professional misconduct for a lawyer to: . . . (c) Engage in conduct involving dishonesty, fraud, deceit or misrepresentation.”

Ethics Advisory Opinion No. 00-05

(Approved December 1, 2000)
¶ 1 Issue:
Where a defendant is being represented by a lawyer appointed by defendant’s insurance carrier prior to the entry of any judgment against the defendant, would it be ethical for plaintiff’s lawyer to convey a settlement offer proposing that plaintiff take an assignment of any bad-faith claim that the defendant might have against the insurance carrier in exchange for plaintiff’s agreement not to execute against defendant for amounts exceeding the insurance policy limits?

¶ 2 Opinion: It is ethical for plaintiff’s lawyer to communicate this offer of settlement to the defendant so long as the communication complies with Utah Rules of Professional Conduct 4.1 and 4.2. If the offer of settlement creates a conflict of interest for the defendant’s insurance carrier-appointed lawyer, then the defendant’s lawyer must fully comply with Rule 1.7. Counsel’s presentation of plaintiff’s settlement offer to advance plaintiff’s interests is not unethical, even though it may place defendant’s counsel in a conflict of interest.
¶ 3 Facts: In a lawsuit brought against Defendant by Plaintiff, Defendant is being represented by a lawyer appointed by Defendant’s insurance carrier. There is the potential for a judgment against Defendant for an amount greater than the limits of the insurance policy. Prior to the entry of judgment (or even prior to the filing of a complaint), Plaintiff, through her lawyer, wishes to make a settlement offer to Defendant under which Plaintiff would accept an assignment of any bad-faith claims1Defendant might have against his insurance carrier in exchange for Plaintiff’s agreement not to execute on any judgment against Defendant to the extent that a judgment would exceed the limits of the applicable insurance policy.
¶ 4 The request to the Committee questions whether Plaintiff’s counsel’s conveying such an offer of settlement has ethical ramifications if it creates a relationship between Plaintiff’s lawyer and an adverse party that results in a conflict of interest for Defendant’s counsel. The Committee has been asked to consider the request under two assumptions: that the offer is conveyed (a) by a letter addressed to Defendant, in care of Defendant’s counsel, and (b) by a letter addressed to Defendant, in care of the insurance adjuster for Defendant’s insurance carrier.2
¶ 5 Discussion: The Committee has previously issued an opinion that provides guidance on this issue. In Opinion No. 98-05,3the Committee was asked if it was unethical for a defense lawyer to offer a “full satisfaction” settlement, conditioned upon a plaintiff’s waiving a claim for attorneys’ fees against defendant. The request suggested that these offers of settlement were unethical because they created a conflict of interest for plaintiff’s counsel under Utah Rules of Professional Conduct 1.7(b), as plaintiff’s counsel’s interest in her fees might cloud her judgment as to the merits of the settlement. Opinion 98-05 states that defendant’s counsel does not act unethically in making an offer of settlement that may create a conflict of interest for plaintiff’s counsel. Defendant’s counsel in that case has a duty to represent the interests of his client zealously within the limits of law. It is the duty of plaintiff’s counsel to convey the settlement proposal to her client, to resolve any conflicts of interest arising under Rule 1.7(b), and to respond to the settlement proposal as dictated by her client.
¶ 6 The current request is governed by the same principles. We first observe that it is not for us to decide whether the proposed prejudgment assignment of bad-faith claims in exchange for a covenant not to execute for amounts exceeding insurance policy limits is enforceable. Whether such settlements are void as opposed to public policy or violate a provision of the insurance policy and invalidate insurance coverage are issues of law, not ethics.4If these issues arise, they must be resolved by the Utah courts.
¶ 7 So long as the offer of settlement is communicated in a manner that does not violate Rules 4.1 and 4.2, Plaintiff’s lawyer does not act unethically in making the settlement offer. As we noted in Opinion 98-05, it is Plaintiff, not Plaintiff’s counsel, who controls the settlement offer. It is Plaintiff’s lawyer’s duty to convey Plaintiff’s offers to Defendant. It is the duty of defense counsel to convey the substance of these settlement offers to Defendant5 and to accept or reject the settlement offers, as directed by Defendant.6
¶ 8 Rule 1.7(b). The settlement offer, if accepted, does not place Plaintiff’s lawyer in a conflict of interest. The assignment to Plaintiff of Defendant’s bad-faith claims against Defendant’s insurance carrier does not make Plaintiff’s lawyer the lawyer for Defendant. It does not create a relationship with an adverse party different from that created by an interim stipulation or partial settlement. It is not different from a partial settlement by the parties to resolve all property-loss claims for a stipulated amount and agreement to proceed to trial on the personal-injury claims.
¶ 9 Similarly, nothing in the proposed settlement changes the alignment or interests of Defendant. The Committee assumes that, while the settlement agreement may require Defendant’s later cooperation in Plaintiff’s prosecution of the bad-faith claims against Defendant’s insurance carrier, the settlement agreement does not provide for the cooperation or collusion of Defendant with respect to Plaintiff’s underlying claims. Defendant’s interests in the defense of the underlying claims are, therefore, no different after the assignment than if Defendant had insurance limits in excess of any exposure to liability.
¶ 10 If Defendant’s counsel represents only Defendant, the settlement offer does not appear to create any potential conflict of interest for Defendant’s counsel. The offer affords his client an opportunity to avoid any liability in excess of the insurance policy limits. This is clearly in Defendant’s interest.
¶ 11 The settlement offer may create a conflict of interest for Defendant’s counsel if he also represents the insurance carrier. In this circumstance, the lawyer’s responsibilities to the insurance carrier may limit his ability to advise and counsel Defendant with regard to the settlement offer. Defendant’s counsel may proceed with the representation only if he complies with Rule 1.7(b). However, the fact that a settlement offer may create a conflict of interest for defense counsel does not make the settlement offer inappropriate or Plaintiff’s counsel’s communication of the settlement offer unethical.
¶ 12 Rules 4.1 and 4.2. Plaintiff’s lawyer’s communication of the settlement offer must comply with Rules 4.1 and 4.2.7Rule 4.1(a) requires that Plaintiff’s counsel not “make a false statement of a material fact or law” to Defendant in the settlement offer.
¶ 13 Rule 4.2(a)8requires that the settlement offer not be communicated directly to Defendant or to Defendant’s insurance adjuster by Plaintiff’s lawyer if she knows that the recipient of the offer is represented by a lawyer in the matter, unless that lawyer consents to the communication or the communication is otherwise authorized by Rules 4.2(a)(1), (a)(2), (a)(3) or (a)(4). For purposes of this Opinion, the Committee assumes that direct communication of the written offer of settlement has not been so authorized.
¶ 14 If the written offer of settlement, regardless of whom it is written to, is contained in an envelope addressed to and delivered to Defendant, it is an ex parte communication in violation of Rule 4.2(a), even if it is also addressed to and delivered to Defendant’s counsel.9If the written offer, regardless of whom it is written to, is contained in an envelope addressed only to Defendant or to Defendant in care of his lawyer, is delivered only to Defendant’s lawyer, and Defendant’s lawyer delivers the envelope unopened to Defendant, the communication is an ex parte communication in violation of Rule 4.2(a). In such cases, Defendant’s lawyer is under no duty to open the envelope and may believe ethical or legal obligations require delivery of the envelope to Defendant unopened.
¶ 15 If the written offer, regardless whom it is written to, is contained in an envelope addressed to Defendant or to Defendant in care of Defendant’s lawyer, is delivered only to Defendant’s lawyer, and Defendant’s lawyer opens the envelope and chooses to deliver the offer to Defendant, the settlement offer is not an ex parte communication in violation of Rule 4.2(a). In these cases, Defendant’s lawyer has consented to the ex parte communication and may control the time, method and manner of communicating the offer. However, if the written offer is written to Defendant or to Defendant in care of his lawyer, and the lawyer chooses to deliver the written offer to Defendant, the content of the communication must comply with Rule 4.2(d)(1).10
¶ 16 Even if the ex parte communication is permitted by Rule 4.2(a) or (b), Rule 4.2(d)(1) prohibits the communication if it seeks to induce the person to forego representation or to disregard the advice of the person’s counsel. Therefore, if the content of the communication contains statements derisive of Defendant’s lawyer or Defendant’s lawyer’s representation of Defendant in the matter, such statements may and often will violate Rule 4.2(d)(1).
¶ 17 If the offer is written to Defendant or to Defendant in care of Defendant’s lawyer and it is contained in an envelope addressed and delivered only to Defendant’s lawyer, and Defendant’s lawyer delivers the written offer to Defendant, Defendant’s lawyer has consented to the ex parte communication and Rule 4.2(a) is not violated.11As in the prior case, the communication of the offer to Defendant is by Defendant’s lawyer, who may control the time, method and manner of communicating the offer. If Defendant’s lawyer delivers to Defendant the offer written to the Defendant or to Defendant in care of Defendant’s lawyer, the content of the communication is subject to Rule 4.2(d)(1).12
¶ 18 Communicating with the Insurance Adjuster. If the offer of settlement is written to Defendant, in care of Defendant’s insurance adjuster, and is delivered to Defendant’s insurance adjuster, the communication may violate Rule 4.2(a). In our Opinion No. 98-07,13we stated that communications by a plaintiff’s counsel directly to a defendant’s insurance adjuster are improper if plaintiff’s counsel knows or reasonably should know that the insurer is represented by counsel in the matter. The Committee stated that, when the injured party and the insurance company have been unable to achieve resolution of the claim and the matter is in or likely to proceed to litigation, the plaintiff’s lawyer reasonably should expect that the insurance company is represented by counsel in the matter.
¶ 19 Under these circumstances, direct contact with the insurance adjuster would be improper unless plaintiff’s lawyer has affirmatively determined that the insurer does not consider itself represented by counsel in the matter. Clearly, if Plaintiff’s settlement offer contemplates an assignment of bad-faith claims, Plaintiff has been unsuccessful in negotiations with the insurance carrier, and the matter would appear to be headed for litigation. It would, therefore, be unethical for Plaintiff’s counsel to direct the settlement offer to Defendant in care of Defendant’s insurance adjuster without first having affirmatively determined that the insurer does not consider itself represented by counsel in the matter.
¶ 20 Summary:
* It is not unethical for Plaintiff’s lawyer to convey the offer of settlement described in the request, as long as she does so in a manner complying with Rules 4.1 and 4.2. The offer of settlement must not, therefore, contain a false statement of material fact or law.
* If Plaintiff’s counsel knows Defendant is represented by a lawyer in the matter, she must not communicate the offer directly to Defendant unless his lawyer has consented to the communication or it is otherwise authorized by Rule 4.2(a).
* If (a) Plaintiff’s counsel places the offer in an envelope addressed to Defendant or to Defendant in care of his lawyer, (b) the offer is delivered only to Defendant’s lawyer, and (c) that lawyer delivers the offer to Defendant unopened, this violates Rule 4.2.14
* If (a) Defendant’s lawyer opens the envelope addressed to him or his client, (b) the offer is written to Defendant or to Defendant in care of his lawyer, and (c) Defendant’s lawyer chooses to deliver the offer to the Defendant, the offer d onot violate Rule 4.2(a), but the content of the offer must comply with Rule 4.2(d)(1).
* If (a) the offer is written to Defendant or to Defendant in care of his lawyer, (b) the offer is delivered only to Defendant’s lawyer in an envelope addressed only to that lawyer, and (c) Defendant’s lawyer delivers the offer to Defendant, the offer does not violate 4.2(a), but the content of the offer must comply with Rule 4.2(d)(1).
* An offer of settlement contemplating assignment of bad-faith claims against Defendant’s insurance carrier would ordinarily not be made until after settlement negotiations have been unsuccessful with the insurance carrier, and the matter is likely to proceed to litigation. Therefore, the settlement offer should not be communicated directly by Plaintiff’s counsel to the insurance adjuster for the insurance company unless Plaintiff’s counsel has affirmatively determined that the insurer does not consider itself represented by counsel in the matter.
Footnotes
1.Bad-faith claims against an insurance carrier can arise in cases where (i) a defendant is protected up to fixed limits by an insurance policy, (ii) the insurance carrier unreasonably rejects an offer to settle the case at or below the policy limit, (iii) a judgment is ultimately rendered for an amount exceeding the policy limit, and (iv) defendant becomes liable for payment of the judgment amount in excess of that limit.
2.The request before the Committee does not involve circumstances of dishonesty, fraud, deceit or misrepresentation. See Rule 8.4(c).
3.Utah Ethics Advisory Op. 98-05, 1998 WL 199535 (Utah St. Bar).
4.The following authorities provide a discussion of these legal issues: State Farm Fire and Casualty Co. v. Grady, 925 S.W.2d 696 (Tex. 1996); State Farm Mutual Auto Ins. Co. v. Peaton, 812 P.2d 1002 (Ariz. App. 1990); Assignability of Insured’s Right to Recover Over Against Liability Insurer for Rejection of Settlement Offer, 12 A.L.R.3d 1158 (1967 & Supp. 1999).
5.Utah Rules of Professional Conduct 1.4, Comment: “A lawyer who receives from opposing counsel an offer of settlement in a civil controversy . . . shall promptly inform the client of its substance unless prior discussions with the client have left it clear that the proposal will be unacceptable.”
6.Utah Rules of Professional Conduct 1.2(a): “A lawyer shall abide by a client’s decision whether to accept an offer of settlement of a matter.”
7.Utah Rules of Professional Conduct 4.1, 4.2 (2000).
8.(a) General Rule. A lawyer who is representing a client in a matter shall not communicate about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized to do so by:
(1) constitutional law, statute, or an agency regulation having the force of law;
(2) a decision or a rule of a court of competent jurisdiction;
(3) a prior written authorization by a court of competent jurisdiction obtained by the lawyer in good faith; or
(4) paragraph (b) of this rule [relating to government lawyers engaged in law enforcement].
Utah Rules of Professional Conduct 4.2(a) (2000). Note that, effective February 1, 1999, the Utah Supreme Court adopted a version of Rule 4.2 that is substantially different from ABA Model Rule 4.2. However, the differences primarily involve attorneys engaged in law enforcement and do not substantially change our analysis in this Opinion.
9.Unless Rule 4.2(a) is complied with, a settlement offer may not be communicated by a lawyer directly to the adverse party even if a copy is simultaneously delivered to the adverse party’s lawyer. See, e.g., Penn. Bar Ass’n, Op. 94-167 (Nov. 10, 1994). It is unethical for an attorney to send a copy of a letter concerning the subject of the representation to a represented opposing party, even if the opposing party’s attorney is copied on the letter, unless the attorney has the consent of the represented party’s attorney or unless the attorney is authorized by law to do so. See 26 A.L.R. 4th 102, “Communication with Party Represented by Counsel as Ground for Disciplining Attorney.” Likewise, unless the attorney has the consent of the represented party’s attorney or unless the attorney is authorized by law to do so, an attorney may not inquire directly of the opposing party about whether a settlement offer has been received, even if the attorney reasonably believes the opposing party’s attorney has not relayed the offer to his client. See ABA Formal Op. 92-362 (July 6, 1999).
10.Rule 4.2(d)(1), Limitations on Communications, provides: “When communicating with a represented person pursuant to this Rule, no lawyer may (1) inquire about information regarding litigation strategy or legal arguments of counsel, or seek to induce the person to forego representation or disregard the advice of the person’s counsel . . . .” This rule applies only when a lawyer is communicating with a represented person, as authorized by Rule 4.2, outside the presence of the represented person’s lawyer—for example, when the represented person’s lawyer has consented to the communication. Accordingly, a letter containing a settlement offer that is delivered directly to Defendant in violation of Rule 4.2(a) is not subject to Rule 4.2(d)(1). Furthermore, a letter containing a settlement offer written to Defendant or to Defendant in care of his lawyer that is not delivered to Defendant does not violate Rule 4.2(d)(1), regardless of its content, as there is no ex parte communication with a person represented by counsel in such cases. However, delivery to Defendant’s lawyer of a settlement offer written to Defendant or to Defendant in care of his lawyer with contents violative of Rule 4.2(d)(1) may constitute professional misconduct in violation of Rule 8.4(a), even if the letter is not delivered to Defendant. Rule 8.4(a) provides that it is professional misconduct for a lawyer to attempt to violate the Rules of Professional Conduct. Whether a settlement offer written to Defendant or to Defendant in care of his lawyer with contents violative of Rule 4.2(d)(1) which is not delivered to Defendant is an attempt to violate Rule 4.2(d)(1) will depend on a fact-intensive inquiry as to whether there is an intention that the offer be delivered to Defendant.
11.Defendant’s lawyer is not obligated in such cases to deliver the written offer to Defendant. Defendant’s lawyer’s obligation to keep Defendant reasonably informed about the status of the matter is satisfied by communicating to Defendant the substance of the offer of settlement. See Comment to Rule 1.4 (“A lawyer who receives from opposing counsel an offer of settlement in a civil controversy or a pro-offered plea bargain in a criminal case shall promptly inform the client of its substance unless prior discussions with the client have left it clear that the proposal will be unacceptable.”)
12.For the reasons explained in note 10, supra, even if the Defendant’s lawyer does not deliver the written offer to Defendant, the offer may constitute a violation of Rule 4.2(d)(1), depending upon an analysis of the content of the offer and the facts and circumstances of its delivery to Defendant’s lawyer.
13.Utah Ethics Advisory Op. 98-07, 1998 WL 493028 (Utah St. Bar).
14.Unless it is otherwise permitted.

Ethics Advisory Opinion No. 00-06

(Approved September 29, 2000)
¶ 1 Issue:
What are the ethical obligations of an attorney who, unaware his client will lie, hears the client commit perjury or otherwise materially mislead a tribunal?

¶ 2 Opinion: Counsel who knows that a client has materially misled the court may not remain silent and continue to represent the client; to do so would be “assisting” the client in committing a fraud on the court. Rather, counsel is obligated to remonstrate with the client and attempt to persuade the client to rectify the misleading or untruthful statements to the court. If this is unsuccessful, counsel must seek to withdraw. If withdrawal is denied, counsel must disclose the fraud to the court.

¶ 3 Facts
: This issue came to the Committee in the narrow setting of a criminal sentencing hearing in which the court asks the lawyer’s client, who is not under oath, about the client’s prior criminal history. The defendant misleads the court and gives false material information that counsel knows to be untruthful. Counsel is now confronted with ethical considerations.
Analysis:
A. Counsel may not remain silent and continue to represent the client; to do so would be “assisting” the client in committing a fraud on the court.
¶ 4 Rule 3.3(a)(2) provides that “[a] lawyer shall not knowingly . . . fail to disclose a material fact to a tribunal when disclosure is necessary to avoid assisting a criminal or fraudulent act by the client.”1The issue on the facts presented here is whether a lawyer, by remaining silent in response to unanticipated false client testimony not presented by the lawyer, is “assisting” the client in committing a fraud on the court.
¶ 5 Ethical dilemmas arising under Rule 3.3 present difficult issues requiring balancing of competing duties. A lawyer’s duty of candor to the court must be balanced against the duty of loyalty to and zealousness on behalf of a client and the duty to maintain confidential client information.2
¶ 6 After the adoption of the Model Rules of Professional Conduct by the American Bar Association, the ABA’s Committee on Professional Ethics reconsidered its prior opinions regarding a lawyer’s duties in response to false testimony by a client. In ABA Formal Opinion 87-353, the ABA Committee stated that Model Rules 3.3(a) and 3.3(b) were a “major policy change with regard to a lawyer’s duty . . . when his client testifies falsely. It is now mandatory under [Model Rule 3.3] for a lawyer who knows the client has committed perjury, to disclose this knowledge to the tribunal if the lawyer cannot persuade the client to rectify the perjury.”3That opinion considered the same facts presented here: “judge asks the defendant whether he has a criminal record and he falsely answers that he has none.”4The opinion states that “where the client has lied to the court about the client’s criminal record, the conclusion of Opinion 287 [decided in 1953 under the 1908 Canons of Professional Ethics] that the lawyer is prohibited from disclosing the client’s false statement to the court is contrary to the requirement of Model Rule 3.3. This rule imposes a duty on the lawyer, when the lawyer cannot persuade the client to rectify the perjury, to disclose the client’s false statement to the tribunal . . . .”5
¶ 7 We agree that a lawyer who knows6that a client has materially misled the court but remains silent and continues to represent the client is “assisting a criminal or fraudulent act by the client” within the meaning of Rule 3.3(a)(2). In our view, however, a lawyer who is surprised by false client testimony in response to questions of the court or opposing counsel has not assisted the client’s fraud either if: (1) she persuades the client to correct the misstatement or; (2) failing that, she is allowed to withdraw from further representation of the client. A prompt request to withdraw will signal to the court the lawyer’s unwillingness to assist her client’s conduct and, if allowed by the court, avoid Rule 3.3’s prohibitions without disclosure of client confidences.
¶ 8 Consideration of Texas Rule of Professional Conduct 3.03, adapted from Model Rule 3.3, is instructive in this context. The Texas Rule, unlike Model Rule 3.3 and Utah Rule 3.3, includes explicitly in its text the duty to correct or withdraw false evidence when efforts to persuade the client to do so have failed:
If a lawyer has offered material evidence and comes to know of its falsity, the lawyer shall make a good faith effort to persuade the client to authorize the lawyer to withdraw or correct the false evidence. If such efforts are unsuccessful, the lawyer shall take reasonable remedial measures, including disclosure of the true facts.7
The official comments to the Texas rule distinguish, however, the circumstance in which the false evidence was not introduced by the lawyer. Comment 13 to Texas Rule 3.03 provides:
False Evidence Not Introduced by the Lawyer. A lawyer may have introduced testimony of a client or other witness who testified truthfully under direct examination but who offered false testimony or other evidence during examination by another party. Although the lawyer should urge that the false evidence be corrected or withdrawn, the full range of obligation imposed by paragraphs (a)(5) and (b) of this Rule do not apply to such situations. A subsequent use of the false testimony or other evidence by the lawyer in support of the client’s case, however, would violate paragraph (a)(5).
¶ 9 We agree that there is a significant difference for purposes of Rule 3.3’s prohibition on “assisting” client fraud when the false evidence is not introduced by the lawyer. We do not agree, however, that the lawyer can continue to represent the client without any disclosure.
¶ 10 In Disciplinary Counsel v. Greene, the Supreme Court of Ohio said:
It is true that the vigorous and effective representation of a client is the responsibility of all attorneys. This duty, however, does not exist in isolation from the other obligations imposed upon an attorney through our Disciplinary Rules. In addition to the commitment to a client, a lawyer’s responsibilities include a devotion to the public good and to the maintenance and improvement of the administration of justice. . . . [T]he attorney’s duty, as an officer of the court, is to uphold the legal process and demonstrate respect for the legal system by at all times being truthful with a court and refraining from knowingly making statements of fact or law that are not true.8
¶ 11 In Cincinnati Bar Ass’n v. Nienaber, the Supreme Court of Ohio disciplined an attorney for both affirmatively making false statements and for remaining silent when the silence would result in two judges having a false appreciation of the situation.9As the court concluded, quoting from an opinion of the Nebraska Supreme Court, “[a]n attorney owes his first duty to the court. He assumed his obligations toward it before he ever had a client. His oath requires him to be absolutely honest even though his client’s interests may seem to require a contrary course. The [lawyer] cannot serve two masters; and the one [he has] undertaken to serve primarily is the court.”10
¶ 12 We agree and apply these principles in this context. We conclude that counsel’s silence and continued representation of a client who has lied to the court constitutes “assisting” the client, by acquiescence or tacit assent, in committing a fraud upon the court.11Such assistance is prohibited by Utah Rule 3.3(a)(2). This is true whether or not the client is under oath. Counsel may not, at will, detach himself from the client in those instances where the client is misleading the court, thus making the defense’s positions or statements only reliable when defense counsel is questioned or the client is under oath. Because silence and continued representation is “assisting” the client in those cases where counsel knows that the client has lied about information that is material to the court’s decision, counsel has an obligation under Rule 3.3 to take remedial measures.12
B. Counsel is obligated to remonstrate with the client. If remonstration is unsuccessful, counsel must seek to withdraw. If withdrawal is denied, counsel must disclose the fraud to the court.
Considerations Under Rule 3.3
¶ 13 When a lawyer knows that a client has offered false information to the court, a conflict arises between the lawyer’s duty to keep the client’s revelations in confidence and the duty of candor to the court. The official comments to Rule 3.3 give the following direction in that circumstance:
If perjured testimony or false evidence has been offered, the advocate’s proper course ordinarily is to remonstrate with the client confidentially. If that fails, the advocates should seek to withdraw if that will remedy the situation. If withdrawal will not remedy the situation or is impossible, the advocate should make disclosure to the court.
¶ 14 ABA Opinion 87–353, while acknowledging “Rule 3.3[’s] suggest[ion] that the lawyer may be able to avoid disclosure to the court if the lawyer can effectively withdraw,” concludes that “withdrawal can rarely serve as a remedy for the client’s perjury.”13Under Rule 3.3(a)(2), however, it is the lawyer’s duty not to assist the client’s fraud; it is not the lawyer’s duty to correct the inaccurate representations of the client unless such disclosure is necessary to avoid the lawyer’s assisting the client’s fraud.14Prompt withdrawal in response to unanticipated false testimony by a client, if allowed by the court, will comply with Rule 3.3. Depending on the timing and circumstances of the lawyer’s request, however, the court may not allow withdrawal.15If leave for withdrawal is denied, the advocate must make disclosure to the court.
¶ 15 The ethical dilemma in representing a criminal defendant who has misled the court while not bound by an oath is complicated by two important constitutional considerations: (1) the defendant’s right to a free exchange with the court; and (2) the defendant’s right to effective assistance of counsel. Some scholars have explored whether, by correcting any misleading information given by the defendant to the court, the lawyer would be infringing on the defendant’s right to testify. However, a defendant does not have a constitutional right to mislead the court or to have the assistance of an officer of the court, namely, the attorney, to assist in the fraud.16
¶ 16 The U.S. Supreme Court has noted, and we agree, that the lawyer has an undisputed ethical duty to remonstrate with the client when the lawyer knows the client intends to commit perjury, and that a lawyer should inform the client that misleading the court as to some material fact that the court is relying on not only subjects the client to possible criminal prosecution and undermines the client’s credibility, but also may expose the lawyer to criminal and disciplinary sanctions.17We conclude that this rule applies regardless of whether counsel was aware of the client’s future intentions of lying or is surprised when the client lies. It also applies whether the client is under oath and, therefore, committing a crime of perjury or not under oath and, therefore, committing a fraud on the court.18
¶ 17 If a lawyer is unsuccessful in persuading the client that the client should inform the court as to any misleading statements the client made to the court, counsel must seek to withdraw. Most courts, however, require a factual basis, as opposed to a mere hunch or suspicion, for the lawyer’s belief that the client intends to commit perjury or knowledge that the client has truly misled the court.19
¶ 18 If leave to withdraw is denied, counsel is then faced with proceeding with the case. One possible course of action, discussed in the literature, is for counsel simply to permit the client freely to engage the court without counsel’s participation. In Nix v. Whiteside, the U.S. Supreme Court addressed a similar issue in the context of perjury—i.e., permitting the client whom counsel knows will mislead the trier of fact to take the stand—and noted:
In the evolution of the contemporary standards promulgated by the American Bar Association, an early draft reflects a compromise suggesting that when the disclosure of intended perjury is made during the course of trial, when withdrawal of counsel would raise difficult questions of a mistrial holding, counsel had the option to let the defendant take the stand but decline to affirmatively assist the presentation of perjury by traditional direct examination. Instead, counsel would stand mute while the defendant undertook to present the false version in narrative form in his own words unaided by any direct examination. This conduct was thought to be a signal at least to the presiding judge that the attorney considered the testimony to be false and was seeking to disassociate himself from that course. Additionally, counsel would not be permitted to discuss the known false testimony in closing arguments. . . . The Rule finally promulgated in the current Model Rules of Professional Conduct rejects any participation or passive role whatever by counsel in allowing perjury to be presented without challenges.
The essence of the brief amicus of the American Bar Association reviewing practices long accepted by ethical lawyers is that under no circumstance may a lawyer either advocate or passively tolerate a client’s giving false testimony. This, of course, is consistent with the governance of trial conduct in what we have long called “a search for truth.” The suggestion sometimes made that “a lawyer must believe his client, not judge him” in no sense means a lawyer can honorably be a party to or in any way give aid to presenting known perjury.20
¶ 19 This Committee agrees that the narrative form of presenting perjury or of simply permitting the client freely to mislead the court without counsel’s intervening and taking remedial measures is not an acceptable practice. For parallel reasons, we reject the positions adopted in the Texas rules and by the Arizona ethics committee,21which would allow a lawyer whose client has testified falsely in response to questioning by another party or the court to continue representing the client but refrain from use of the false testimony in support of the client’s case.
¶ 20 Considerations Under Rule 1.6 and Rule 1.16
The issue before the Committee includes the question of whether counsel can or must reveal confidential client information in an attempt to remedy a client’s lie to the court. Utah Rule 1.6 provides in relevant part that:
(a) A lawyer shall not reveal information relating to the representation of a client except as stated in paragraph (b), unless the client consents after consultation.
(b) A lawyer may reveal such information to the extent the lawyer believes necessary: . . .
(2) To rectify the consequences of a client’s criminal or fraudulent act in the commission of which the lawyer’s services had been used; . . 22
This rule is permissive. It allows, but does not mandate, that confidential information be revealed to rectify the fraud perpetrated on the court.
¶ 21 However, Rule 1.6 is “trumped” by Rule 3.3(a)(2),23which, we have concluded, triggers the mandatory disclosure of a material fact, even if confidential, if that is necessary to avoid assisting the fraudulent act of the client’s lying to the court. While disclosure may be necessary, counsel should first attempt to persuade the client to correct the falsity and, if that fails, seek to withdraw.
¶ 22 A lawyer must withdraw, as stated in Rule 1.16(a)(1), if the lawyer’s services are being used or have been used to further a course of criminal or fraudulent conduct. Rule 4.1(b) provides that a lawyer shall not knowingly fail to disclose material facts to a third person when necessary to avoid the client’s criminal or fraudulent conduct, unless prohibited by Rule 1.6. The comment to Utah’s Rule 1.16 notes that:
A lawyer may withdraw from representation in some circumstances. The lawyer has the option to withdraw if it can be accomplished without material adverse effect on the client’s interest. Withdrawal is also justified if the client persists in a course of action that the lawyer believes is criminal or fraudulent, for a lawyer is not required to be associated with such conduct even if the lawyer does not further it.
C. Conclusion
¶ 23 Counsel may not affirmatively or passively mislead the court by allowing the court to rely on information that counsel knows to be untruthful. Specifically, counsel may not remain silent when counsel is aware that the client has misled the court in some material fashion. “The attorney’s duty, as an officer of the court, is to uphold the legal process and demonstrate respect for the legal system by at all times being truthful with a court and refraining from knowingly making [or permitting] statements of fact or law that are not true.”24It is difficult to imagine how remaining silent and continuing to represent the client is not “assisting” a client who has misled the court. Neither the U.S. Supreme Court nor the ABA Model Rules approve of the narrative approach in perjury situations because the lawyer is nevertheless assisting the client, albeit passively, in perpetrating a fraud on the court.25The distinction is not whether the client is under oath, but whether counsel is assisting. Counsel who continues to represent the client knowing that the client has misled the court is, either passively or affirmatively, “assisting” the client by not bringing the falsehood to the attention of the court.
¶ 24 The Committee concludes that the first requirement upon hearing one’s client lie to the court is for counsel to remonstrate with the client and attempt to rectify the misleading statements with the court. If this is unsuccessful, counsel must promptly seek to withdraw. If withdrawal is denied, counsel must promptly disclose the fraud to the court
Footnotes
1.Utah Rules of Professional Conduct 3.3(a)(2) (1999).
2.See Utah Rules of Professional Conduct 1.6.
3.ABA Comm. on Ethics and Professional Responsibility, Formal Op. 87-353, at 4 (1987).
4.Id. at 3.
5.Id. at 3–4.
6.Rule 3.3’s prohibitions apply only when the lawyer has actual knowledge. “The lawyer’s obligation to disclose client perjury to the tribunal . . . is strictly limited by Rule 3.3 to the situation where the lawyer knows that the client has committed perjury, ordinarily based on admissions the client has made to the lawyer. The lawyer’s suspicions are not enough.” Id. at 6–7.
7.Texas Rule of Professional Conduct 3.03(b).
8.655 N.E.2d 1299, 1301 (Ohio 1995).
9.687 N.E.2d 678, 680 (Ohio 1997), citing ABA Comm. on Professional Ethics and Grievances, Formal Op. 287 (1953).
10.Id., citing In re Integration of Nebraska State Bar Ass’n, 275 N.W. 265, 268 (Neb. 1937).
11.We disagree in this regard with a recent opinion of the Arizona Committee on the Rules of Professional Conduct which concluded that a lawyer who remains silent in these circumstances “is not even assisting in the presentation of testimony.” Arizona Op. 2000–02 (March 2000), at 11. The Arizona Committee analogized silence in these circumstances “to allowing a client to testify in narrative form” (id.), which we also reject. See infra, at 7–8.
12.The lawyer’s duties under 3.3(a) “continue to the conclusion of the proceeding.” Rule 3.3(b). The ABA Committee has commented that “it would appear that the Rule’s disclosure requirement was meant to apply only in those situations where the lawyer’s knowledge of the client’s fraud or perjury occurs prior to final judgment.” ABA Formal Op. 87–353, at 2–3.
13.ABA Formal Op. 87-353, supra note 3, at 4 n.7.
14.The Committee notes that the ABA’s Ethics 2000 Commission has circulated for public discussion a draft revision that would eliminate the current Rule 3.3(a)(2) and add the following new Rule 3.3(a)(3):
A lawyer shall not knowingly: . . . offer evidence that the lawyer knows to be false. If a lawyer, the lawyer’s client or a witness called by the lawyer has offered material evidence and the lawyer comes to know of its falsity, the lawyer shall take reasonable remedial measures, including, if necessary, disclosure to the tribunal. . . .
We do not express an opinion on whether the draft revision would change the analysis or the outcome in the situations we consider here.
15.See Nix v. Whiteside, 475 U.S. 157, 170 (1986) (“[w]ithdrawal of counsel when this situation arises at trial gives rise to many difficult questions including possible mistrial and claims of double jeopardy”).
16.See Nix, 475 U.S. at 173–74.
17.See id. at 169 (“at a minimum the attorney’s first duty when confronted with a proposal for perjurious testimony is to attempt to dissuade the client from the unlawful course of conduct”).
18.The ABA Committee on Ethics and Professional Responsibility has even applied Rule 3.3’s disclosure requirements to pretrial matters. “Further supporting the applicability of Rules 3.3(a)(2) and (4) to pretrial discovery situations is the fact that while paragraphs (a)(1) and (3) presuppose false or incomplete statements made to the tribunal, neither paragraph (a)(2) nor (a)(4) expresses any such condition precedent that the tribunal must have been aware of the crime, fraud, or false evidence.” ABA Formal Op. 93-376 (1993). We note the inclusive categorization of deliberate material lies as “crime, fraud, or false evidence.”
19.See, e.g., United States v. Long, 857 F.2d 436 (8th Cir. 1988) (counsel may withdraw only upon showing “a firm factual basis for believing” that false testimony has or will be presented; “it will be a rare case in which this factual requirement is met”).
20.Nix, 475 U.S. at 170-71 & n.6.
21.See discussion supra at notes 7 and 11 & accompanying text.
22.Utah Rules of Professional Conduct 1.6 (1999).
23.The official comment to Utah Rule 1.6 provides that: “Rule 1.6(b)(4) permits revealing information to the extent necessary to comply with Rule 3.3(a).”
24.Disciplinary Counsel v. Greene, 655 N.E.2d 1299, 1301 (Ohio 1995).
25.See Nix, 457 U.S. at 171 (“under no circumstance may a lawyer either advocate or passively tolerate a client’s giving false testimony”).

Ethics Advisory Opinion No. 00-07

(Approved June 2, 2000)
Issue:
Do the Utah Rules of Professional Conduct prohibit a lawyer licensed to practice in Utah from participating in an association of lawyers that would use joint letterhead, with a disclaimer that the association “is an affiliation of independent attorneys-not a partnership?”

Opinion: A lawyer does not violate the Utah Rules of Professional Conduct if he participates in an association or affiliation of individual lawyers and law firms, provided that he adheres to the applicable rules regarding conflicts of interest and disclosure of confidential information. However, it would be misleading, and therefore a violation of the Rules, for the lawyer to participate in such an association or affiliation if its members were to practice under a common firm name and were to use joint letterhead. The inclusion of a partnership disclaimer would not cure the misleading nature of the letterhead concerning the relationship among the attorneys.
Facts: A Utah lawyer desires to associate himself with lawyers who are licensed to practice law in various foreign countries. Under the proposed arrangement, the members of the association would not be partners, but would be independent practitioners. It is not clear from the facts whether the lawyers participating in the association would merely refer clients to each other or whether they would also have some kind of a financial arrangement. The lawyers would use joint letterhead, which would identify the association as follows:
A, B, C & D
International Lawyers
[Address]
Offices: Representative
A, Admitted: State,Country United Kingdom
B, Admitted: Country European Union
C, Admitted: Country Russia
D, Admitted: State, Country Asia
A,B,C & D is an affiliation of independent attorneys—not a partnership.
Analysis: A lawyer’s communications regarding the lawyer’s services, including the designation of the lawyer’s firm and the lawyer’s letterhead, must comply with the requirements of Rules 7.1, 7.4 and 7.5 of the Rules.
Rule 7.1 states that “A lawyer shall not make a false or misleading communication about the lawyer or the lawyer’s services.”1Rule 7.5 governs firm names and letterheads, and subsection (d) is applicable to the analysis in this case: “Lawyers may state or imply that they practice in a partnership or other organization only when that is the fact.”2The obligation of the lawyer not to mislead third parties is further delineated by Rule 7.4, which outlines the limits of the lawyer’s communication of his fields of practice and states that, while allowed to indicate that his practice is limited to specific areas of practice, a lawyer cannot communicate that he is a specialist, unless otherwise permitted by the rule.3
The practice of law has evolved from the traditional model of a partnership with a single law office to various, more fluid forms of relationships among lawyers, which range from structures similar in nature to a partnership to arrangements that merely contemplate mutual referrals. It has now become common practice for lawyers to associate or become affiliated with other lawyers or law firms in different states or countries by way of some form of strategic alliance or participation in national or international networks. While these creative forms of association may provide a legitimate service to clients in a shrinking world, nonetheless they remain circumscribed by the Rules.
The Utah Rules allow an attorney to practice law in association with attorneys licensed in other states or in other countries. In Opinion No. 96-14, we concluded that a “Utah attorney may . . . associate with individuals who are also licensed to practice law in any jurisdiction within the United States or with persons qualified and authorized to engage in the functional equivalent of U.S. legal practice under the laws of a foreign country,” as long as the Utah attorney abides by the prohibitions of Rule 5.5(a) (the attorney cannot practice in a jurisdiction in which the attorney is not licensed in violation of the regulations of the legal profession of that jurisdiction), Rule 5.5(b) (the attorney cannot assist anyone who is not a Utah attorney in engaging in the unauthorized practice of law in Utah), and Rule 7.5(b) (the letterhead of a law firm with offices in more than jurisdiction must disclose the jurisdictional limitations of the attorneys in the firm).4The Committee concluded that under the Rules “there is no ethical prohibition against forming a partnership or sharing revenue from legal practice with non-Utah lawyers,” because “a non-resident lawyer is not considered a ‘nonlawyer’ for purposes of the Utah rules against fee splitting and formation of partnerships with lay persons.”5
However, Opinion 96-14 did not address the issue of whether it would be ethical for the lawyers participating in the association to practice law under a common name and to use joint letterhead in the event that the association did not take the form of a partnership or otherwise operate as a law firm, with sharing of revenues and liabilities and with pooling of resources. The discussion was limited to the propriety of the letterhead used by the lawyers under Rule 7.5(b), which expressly refers to the case of a law firm with offices in more than one jurisdiction. The opinion allows such a law firm to use the same name in each jurisdiction, provided that the letterhead clearly identifies any jurisdictional limitations on each attorney within the firm.
In the present case, on the other hand, the inquirer wishes to join in an affiliation of lawyers that is not in fact a law firm in the traditional sense and whose members are not partners, but independent practitioners. In Formal Opinion 94-388, the ABA Committee on Ethics and Professional Responsibility (the “ABA Committee”) acknowledged the difficulty of defining the exact nature of a relationship among different lawyers or law firms in an era that has witnessed the proliferation “of so many ways in which law firms relate to one another (and with which they describe them).”6The ABA Committee made it clear, however, that, whatever the form of their relationship is and however their relationship is denominated, attorneys who decide to associate with one another in the practice of law must comply with two fundamental ethical obligations: (i) the “obligation not to misstate what a law firm has to offer,” which derives from the provisions of Rule 7.1, 7.5(a) and 7.5(d), and (ii) “the obligation to assure that a client of one firm is aware of the relationship between that firm and any other firms with which it is involved insofar as the relationship may give rise to conflicts of interest, the sharing of fees, or certain other interactions that implicate the Model Rules of Professional Conduct.”7
Thus, a firm may affiliate with another firm if the relationship among the affiliated attorneys is “close and regular, continuing and semi-permanent, and not merely that of forwarder-receiver of legal business.”8However, it may do so only if its representations (such as those in letterhead) do not deceive, and this will be met only “if a full description of any relationship the firm may have used in marketing its services is provided to all prospective clients as to whom the lawyer reasonably believes the relationship may be relevant, and to all present clients to whom the lawyer reasonably believes the relationship may be relevant if at any time any of those relationships change.”9Moreover, in the event that the relationship goes beyond mutual referrals or joint advertising and becomes more substantial, the attorneys must address any conflicts of interest that might arise among the clients of the different attorneys, and they must be sensitive to issues related to disclosure of confidential information.
The arrangement under review presents an additional dimension: The members of the proposed affiliation would not retain their separate identities and simply communicate that they are affiliated with one another, but would instead hold themselves out to the public under a common name and under a joint letterhead.
On more than one occasion, we have concluded that, pursuant the provisions of Rules 7.1, 7.5(a) and 7.5(d), the use of firm names that imply either partnership when in fact there is no partnership or an otherwise misleading relationship among lawyers is not permitted.10The ABA Committee reached a similar conclusion when, in addressing the ethical implications of the use of a licensed name by a network of law firms, it determined that “in contrast to the situation in which several firms are associated but retain their own identities, the use of the same name by all the firms in a network will effectively represent that they are all offices of one and the same firm” and thus will violate both Rules 7.1and 7.5(a).11Furthermore, other states have consistently observed that the listing of the attorneys’ names in the “firm” name and letterhead conveys to the general public the appearance of a partnership and thus is misleading when, in fact, the attorneys are not organized as a partnership.12
In its letterhead, the proposed association attempts to remove the confusion that might be created by the use of a common name by inserting a disclaimer to the effect that “A, B, C, & D is an affiliation of independent attorneys—not a partnership.” The issue is whether such a disclaimer would be sufficient to counter the appearance of a partnership relationship and to eliminate any expectations that (a) the attorneys participating in the association would share liabilities and responsibilities and (b) a client of one of the listed attorneys would also have available the resources and expertise of the other attorneys.
The majority of the states that have considered the use of partnership disclaimers in firms’ letterheads has come to the conclusion that such disclaimers do not cure the impropriety in the use of a common name by attorneys who are not in fact partners.13
Moreover, this Committee has previously determined that, in the context of a franchise arrangement by which law firms would market their services under a common trade name, a disclaimer on the letterhead would not be sufficient to prevent the arrangement from being misleading to the public.14
There are several concerns surrounding the use of a disclaimer as a possible remedy to the misunderstanding created by a misleading letterhead. First, the contrast between, on the one hand, the use of a firm name that comprises the individual names of the attorneys (which has traditionally been associated with the existence of a partnership) and, on the other hand, the disclaimer of partnership may generate more confusion than bring clarity. What has been referred to as the “yes” and “no” quality of the disclaimer15undermines the ability of the disclaimer language to remove the implications of a firm name that is misleading. The Committee declines to assume that everyone would carefully read the disclaimer. Equally as important, not everyone would clearly understand the combined meaning of the firm name and the disclaimer, given the technical aspects of the concept of partnership that are implied by the firm name and the vagueness of the concept of “affiliation of independent attorneys” that is offered to the reader as an interpretation of the relationship among the attorneys.
Furthermore, it has been correctly observed that it would be impossible for the partnership disclaimer to accompany the firm name constantly and everywhere. The firm name would sooner or later appear without disclaimer (for instance, in a telephone book, on a building directory, or in answering the phone), and the misleading effects of the firm name would be left without remedy.16Finally, the Committee notes that a literal interpretation of the Rules does not support the use of a disclaimer as a cure for a communication that is otherwise misleading. Rule 7.5(d) simply provides that “lawyers may state or imply they practice in a partnership or other organization only when that is the fact.”17
Thus, we conclude that the use of a common name and joint letterhead by the proposed association, notwithstanding the presence of the disclaimer, could be interpreted by clients, potential clients and the public in general as representing that the attorneys are all members of the same law firm and that they are prepared to share liability and responsibility. Consequentially, it is misleading and its use would be unethical.18
Another aspect of the letterhead submitted by the inquirer contributes to its misleading nature. The name of the association is accompanied by the words “international lawyers.” Although the expression is unclear, its insertion in the letterhead right below the association’s name seems to refer to an alleged international dimension of the practice of the lawyers belonging to the association, rather than to the mere fact that those lawyers are based and licensed in different countries.
Under Rule 7.4, a lawyer may communicate to the public that his practice is limited to specific areas of the law, if that is in fact the case, but may not “hold himself out publicly as a specialist and shall not indicate any certification or designation as a specialist,” unless he is admitted to practice as a patent attorney or unless indication of a certification or designation as a specialist is “[i]n accordance with any plan regulating lawyer specialization approved and promulgated by the Utah Supreme Court.”19In addition, a lawyer’s communications regarding his fields of practice, on a letterhead or elsewhere, are subject to the “false and misleading” standard of Rule 7.1. Such restrictions are justified by the fact that, as observed by the United States Supreme Court, communications of area of practice are potentially misleading and that “[f]alse claims of expertise are a real danger to those who need and are searching for legal services.”20
The Utah Supreme Court does not recognize attorneys as specialists (with the exception of patent and trademark attorneys) and, more specifically, does not recognize a specialization in international law. Even though the proposed letterhead does not expressly state that the members of the association are “specialists” or “certified” in international law,21which would constitute a direct violation of Rule 7.4, the Committee feels that the designation “international lawyers” implies expertise in the area of international law and could be interpreted as an indication of special competence and experience with respect to transactions involving the relations among different countries and issues governed by different laws. Moreover, such designation would be accurate only if all lawyers in fact practiced in the area of international law and if each lawyer were to be individually responsible for such practice.22Thus, we conclude that the designation appears to be misleading and may violate Rules 7.4 and 7.5(a) by improperly suggesting that all lawyers participating in the proposed association are experts in international law.23
Conclusion: Even though the proposed letterhead attempts to clarify the nature of the relationship among the members of the association by disclaiming partnership, it falls short of meeting the mandate of Rule 7.1 not to deceive the lawyers’ clients and the public in general. The letterhead seems to comply with the provisions of Rule 7.5(b) by identifying the jurisdictional limitations on the individual lawyers participating in the association. However, the Committee concludes that the lawyers’ use of joint letterhead, designating the association by a common name, is misleading and therefore is in violation of Rules 7.1, 7.5(a) and 7.5(d). Furthermore, the designation “international lawyers” suggests that the lawyers participating in the association have a special competence in the area of international law, which appears to violate Rules 7.4 and 7.5.
Appendix
Rule 7.1. Communications concerning a lawyer’s services.
A lawyer shall not make a false or misleading communication about the lawyer or the lawyer’s services. A communication is false or misleading if it:
(a) Contains a material misrepresentation of fact or law, or omits a fact necessary to make the statement considered as a whole not materially misleading;
(b) Is likely to create an unjustified expectation about results the lawyer can achieve, or state or implies that the lawyer can achieve results by means that violate the Rules of Professional Conduct or other law; or
(c) Compares the lawyer’s services with other lawyers’ services, unless the comparison can be factually substantiated.
Rule 7.4. Communications of fields of practice.
A lawyer may communicate the fact that the lawyer will accept employment in specified areas of practice. A lawyer whose practice is limited to specified areas of practice may communicate that fact. A lawyer shall not hold himself out publicly as a specialist and shall not indicate any certification or designation as a specialist, except as follows:
(a) A lawyer admitted to practice before the United States Patent and Trademark office may use the designation “patent attorney” or a substantially similar designation; and
(b) In accordance with any plan regulating lawyer specialization approved and promulgated by the Utah Supreme Court.
Rule 7.5. Firm names and letterheads.
(a) A lawyer shall not use a firm name, letterhead or other professional designation that violates Rule 7.1. A trade name may be used by a lawyer in private practice if it does not imply a connection with a government agency or with a public or charitable legal services organization and is not otherwise in violation of Rule 7.1
(b) A law firm with offices in more than one jurisdiction may use the same name in each jurisdiction, but identification of the lawyers in an office of the firm shall indicate the jurisdictional limitations on those not licensed to practice in the jurisdiction where the office is located.
(d) Lawyers may state or imply that they practice in a partnership or other organization only when that is the fact.
Footnotes
1.Utah Rules of Professional Conduct 7.1. See the Appendix for the full text of the rule.
2.Id. Rule 7.5. The Appendix contains the full text of Rules 7.5(a), (b) and (d).
3.Id. Rule 7.4, which is also given in the Appendix.
4.Utah Ethics Advisory Op. 96-14, 1997 WL 45139 (Utah St. Bar).
5.Id. Rule 5.4(a) prohibits a Utah lawyer from sharing fees with a nonlawyer, and Rule 5.4(b) prohibits the lawyer from forming a partnership with a nonlawyer for the purpose of practicing law.
6.ABA Comm. on Ethics and Professional Responsibility, Formal Op. 388 (1994).
7.Id.
8.ABA Comm. on Ethics and Professional Responsibility, Formal Op. 351 (1984).
9.ABA Comm. on Ethics and Professional Responsibility, Formal Op. 388 (1994).
10.Utah Ethics Advisory Op. No. 95-04, 1995 WL 283027(Utah St. Bar) (use of a trade name by law firms pursuant to a franchise agreement is inherently misleading because it implies partnership); Utah Ethics Advisory Op. No. 139, 1994 WL 579849 (Utah St. Bar) (attorney cannot use firm name that includes the words “& Associates” if his firm does not currently employ any lawyer associates); Utah Ethics Advisory Op. No. 86 (Utah St. Bar 1989) (solo practitioners cannot use common letterhead implying in any way that they are partners); Utah Ethics Advisory Op. No. 34 (Utah St. Bar 1976) (lawyers who are not partners and only share office space cannot use common firm name and telephone number on letterhead).
11.ABA Comm. on Ethics and Professional Responsibility, Formal Op. 388 (1994). See also ABA Comm. on Ethics and Professional Responsibility, Informal Op. 966 (1966) (letterhead referring to “Smith and Smith” implies partnership).
12.E.g., In re Weiss, Healey & Rea, 109 N.J. 246, 268, 536 A.2d 266 (1988) (message conveyed by the firm name “A, B & C” is the practice of law as partners); Mich. Standing Comm. on Professional and Judicial Ethics, Op. No. RI-200, 1994 WL 154942 (Mich. St. Bar 1994) (joint letterhead implies lawyers belong to same law firm); Pa. Ethics Op. 93-124, 1993 WL 851228 (Pa. Bar Ass’n 1993); Ohio Advisory Op. 89-36, 1989 WL 535040 (Ohio St. Bar 1989); New Jersey Ethics Op. 593, 1986 WL 175259 (N.J. St. Bar 1986); Ky. Advisory Op. E-299 (Ky. St. Bar 1985); Ore. Advisory Op. 1991-12 (Or. St. Bar 1991) (“A, B & C, Attorneys at Law” misleading if no partnership among attorneys exists); Neb. Advisory Op. 80-10 (Neb. State Bar Ass’n, undated).
13.See, e.g., Mich. Ethics Op. No. RI-200; Neb. Ethics Op. 80-10; Pa. Ethics Op. 93-124; N.J. Ethics Op. 593, all supra, note 12. See also Pa. Ethics Op. 85-100, 1985 WL 291423 (Pa. Bar Ass’n); Ohio Advisory. Op. 89-36, supra footnote 12 (disclaimers such as “An Association of Independent Attorneys,” “Not a Partnership,” or “A Non-Partnership Association” are confusing and do not clarify misleading nature of common letterhead used by attorneys sharing office space); Or. Ethics Op. 486 (Or. St. Bar 1983). But see Tenn. Ethics Op. 84-F-82, 1984 WL 262049 (Tenn. Bd. Prof. Resp.) (“An Association of Attorneys” following names of members of association properly identifies members of association and additional disclaimer “Not a Partnership” is not necessary); cf. Tex. Ethics Op. 478, 1993 WL 840537 (St. Bar of Tex.1993).
14.Utah Ethics Advisory Op. No. 95-04, 95 WL 283827(Utah St. Bar).
15.See Pa. Ethics Op. 85-100, supra, note 13.
16.See, e.g., Neb. Ethics Op. No. 80-10; Pa. Ethics Op. 85-100; Pa. Ethics Op. 93-124; and N.J. Ethics Op. 593; all supra note 13.
17.A similar observation has been made by the Nebraska Advisory Committee in Op. No. 80-10, supra, note 13, with respect to DR2-102(C), the substantially similar predecessor of Rule 7.5(d).
18.The Committee believes that, in order to comply with the applicable Rules of Professional Conduct, the lawyers participating in the association would have to maintain their independent identities in their communications to the public regarding their services and use separate letterheads. As set forth in ABA Formal Op. 351, the lawyers could indicate in their respective letterheads that they are associated or affiliated with one another, provided that their relationship is “close and regular, continuing and semi-permanent, and not merely that of forwarder-receiver of legal business” and provided further that the lawyers make full disclosure to their clients and prospective clients of the implications of the relationship and that they are sensitive to issues related to confidentiality and conflicts of interest,. Moreover, the lawyers would need to comply with ABA Formal Op. 388, which requires that lawyers who are associated with one another fully and accurately describe in their communications to the public the exact nature of their relationship, since “the use of one or two word shorthand expressions,” such as “affiliation” or “association,” would not prevent the communication from being misleading. ABA Comm. on Ethics and Professional Responsibility, Formal Op. 388 (1994).
19.Utah Rules of Professional Conduct 7.4.
20.See In re R.M.J., 455 U.S. 191 (1982).
21.A specific certification for attorneys that practice in the field of international law has been established by the Florida Bar in 1997. Rule 6-21.2 of the amended Rules Regulating the Florida Bar defines international law as “the practice of law dealing with issues, problems, or disputes arising from any and all aspects of the relations between or among states and international organizations as well as the relations between or among nationals of different countries, or between a state and a national of another state, including transactional business transactions, multinational taxation, customs, and trade. The term ‘international law’ includes foreign and comparative law.”
22.See Tex. Ethics Op. 440, 1987 WL 109870 (St. Bar of Tex.) (designation “personal injury lawyers” in firm letterhead and business cards permissible only if all attorneys practice in that area). Cf. Pa. Ethics Op. 95-04, WL 935621 (Pa. Bar Ass’n 1995) (joint ad of law firm and solo practitioner stating areas of practice implied solo practitioner’s expertise in those areas and was misleading).
23.See S.C. Advisory Op. 96-03, 1996 WL 914246 (S.C. Bar Ass’n) (placement of terms “Master Mariner,” “First Class Pilot,” “Marine Consultant” in letterhead implied attorney’s specialty in admiralty law and was misleading).

Ethics Advisory Opinion No. 00-06

Opinion No. 00-06
(Approved September 29, 2000)

1 Issue:

What are the ethical obligations of an attorney who, unaware his client will lie, hears the client commit perjury or otherwise materially mislead a tribunal?

2 Opinion: Counsel who knows that a client has materially misled the court may not remain silent and continue to represent the client; to do so would be “assisting” the client in committing a fraud on the court. Rather, counsel is obligated to remonstrate with the client and attempt to persuade the client to rectify the misleading or untruthful statements to the court. If this is unsuccessful, counsel must seek to withdraw. If withdrawal is denied, counsel must disclose the fraud to the court.
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