Does Vicarious Liability Exist Among Lawyers Sharing an Office?

partnershipPerhaps, according to a March 11, 2016, United States District Court opinion in Wildasin v. Mathes, Civ. No. 3:14-cv-2036 (M.D. Tn. Mar. 11, 2016). In Wildasin, three Nashville lawyers formed a limited-liability company to share business expenses. They owned all office equipment equally, including a conference table, chairs, fax/copy machines, and office furniture. They also shared letterhead, the cost of office space, and the salary of a single receptionist.  “Despite some appearance otherwise,” the lawyers lawyers contended that they were not a law firm or law partnership, but “an association of attorneys” with “no shared bank account, nor . . . shared tax returns for business expenses.” Id.

When the “firm” was sued, it moved for summary judgment, arguing that it and its members could not be vicariously liable for an alleged tort committed by one its lawyers. In denying summary judgment, the court ruled that under Tennessee law, an “unincorporated association” is a “legal entity capable of being sued.” Moreover, the court observed that Tennessee law holds for-profit unincorporated associations liable “when a member violates a state statute or regulation,” and when a member breaches a contract or fails to pay a debt. Because “liability can attach when a member of an unincorporated association violates a statute or breaches a contract,” it may also attach when “a member commits a tort.” Id.

A comment to ABA Model Rule 1.0(c), which defines the term “firm,” notes that whether two or more lawyers constitute a “firm” turns on all of the facts. “For example, two practitioners who share office space and occasionally consult or assist each other ordinarily would not be regarded as constituting a firm. However, if they present themselves to the public in a way that suggests that they are a firm or conduct themselves as a firm, they should be regarded as a firm for purposes of the Rules.” See ABA Model Rule of Prof’l Conduct 1.0, cmt. 2.

The district court’s opinion in Wildasin is a cautionary tale that a lawyer who shares office space with others should go to great lengths to assure that no one—particularly the lawyer’s actual and potential clients—believes that the lawyer practices with others in a “firm.” Among other things, each office-sharing lawyer should:

  • Clarify in the lawyer’s engagement agreement that the lawyer does not practice law with others.
  • Refrain from sharing any letterhead, website, or email host/domain name.
  • Assure that all office signage reflects that the lawyers are not associated in a firm.