Opinion #149. Lawyer and Nonlawyer in Mediation Partnership

Issued by the Professional Ethics Commission

Date Issued: May 10, 1995

Question

The Commission has been asked the following question:

May a lawyer be a partner with a non-lawyer in an enterprise (referred to below as the Mediation Firm) which engages solely in offering mediation services?

Opinion

In response to the proliferation of alternative dispute resolution techniques, Rule 3.4(h) was adopted in 1993 to address ethical issues encountered when lawyers attempt to act as mediators of disputes between persons. One result was to articulate a relationship between the mediator and consumer different from that of lawyer and client. Rule 3.4(h.)(2) states in relevant part that “The role of mediator does not create a lawyer‑client relationship with any of the parties and does not constitute representation of any of them.” Rule 3.4(h)(4) further specifies that when a mediator prepares documents for “parties” as a mediator, she must remind them that such preparation is not to be understood as legal advice.

It follows that because of the lack of a lawyer-client relationship many Bar Rules simply will not apply to a lawyer acting as a mediator. However, just as clearly Rule 3.4(h) does not supersede or suspend all other Bar Rules where the lawyer is performing mediation services.[1]

Rule 3.2(a)(2) prohibits the formation of a business relationship between a lawyer and non-lawyer when that enterprise includes “the practice of law”. While it is not generally within the jurisdiction of this Commission to determine what constitutes the practice of law, it must necessarily do so when the term appears in the Rules themselves. Thus in Opinion 79 the Commission concluded that the services contemplated by an enterprise consisting of an accountant and lawyers constituted the practice of law and was therefore prohibited by Rule 3.2(a)(2). The question posed necessarily requires the Commission to determine if the services performed by the Mediation Firm constitute the practice of law as envisioned by Rule 3.2(a)(2).

Initially, the Commission is cognizant of the narrow view historically taken by the courts and the Attorney General as to what constitutes the unauthorized practice of law under applicable Maine law. However, Rule 3.2(a)(2) does not limit itself to a prohibition of the unauthorized practice of law. Indeed, were it so limited, Opinion 79 would almost certainly have reached, if not an opposite, at least a much narrower conclusion. Thus, assuming that Rule 3.2(a)(2) intends to prohibit lawyer participation in a wide variety of enterprises where services traditionally performed by lawyers are being offered non-lawyers, the question is whether it prohibits all such arrangements without regard to the scope of services being offered. While there are practical concerns that will be discussed below, the Commission concludes that Rule 3.2(a)(2) does not per se prohibit the proposed arrangement.

As discussed in the Reporter’s Notes, Rule 3.2(a)(2) promotes three underlying policies. The first is to avoid public confusion as to the legitimacy of the services being offered. The second is to maintain clear authority of the Court over the practice of law. The third is to avoid “the difficult problems that would be posed by the substantive law of partnerships under a contrary rule”. None of these policies are threatened or compromised by the Mediation Firm. The clear statement in Rule 3.4(h) that there is no lawyer‑client relationship created by the mediator and the disputing parties and the pains taken to insure that the participants understand this certainly avoids the first concern. If, in fact, all that is being done by the Mediation Firm is to provide an alternative to judicial intervention in resolving a dispute, it is equally hard to see how the Court’s authority over the practice of law is threatened. Nor does the Commission perceive any difficulties posed by the substantive law of partnership when applied to the Mediation Firm. On the other hand since mediation is practiced daily in this State, with the encouragement of courts at all levels, by lay persons working closely with lawyers, it is hard to believe that the Court intended to limit the opportunity of mediators to utilize a variety of talents and experiences to provide alternatives to judicial intervention in a dispute. Thus the Commission concludes that as long as there is no lawyer‑client relationship established during the mediation process, Rule 3.2(a)(2) does not prohibit the creation of the Mediation Firm between lawyers and non-lawyers.[2]

A second question raised is whether Rule 3.3(e) specifically applies to the Mediator Firm. Rule 3.3(e) states “A lawyer...shall not share legal fees with a non‑lawyer” with exceptions not relevant here. The Commission concludes that if the activity is not prohibited by Rule 3.2(a)(2), then Rule 3.3 would not be violated. Rule 3.3(e) specifically limits the scope of its prohibition to the splitting of legal fees. If the services performed by the Mediation Firm are such that Rule 3.2(a)(2) does not apply, then the splitting of the fees received does not constitute the splitting of legal fees.


Footnotes

[1] The fact that the services that the Mediation Firm performs do not have to be performed by a lawyer does not suspend the application of the Rules to the lawyer. This Commission has previously stated that even if the specific service performed by a lawyer for a client is not necessarily one that must be performed by a licensed attorney, the conduct of the lawyer performing that service is nevertheless subject to the Bar Rules, at least where the activity falls within the scope of services lawyers traditionally perform for clients (c.f. Opinion 79 and ABA opinions referred to therein). Performing mediation services certainly is such an activity.

[2] That being said the Commission is well aware that merely labeling the services the Mediation Firm renders to two or more “parties” as “mediation” will not insulate the potential for a violation of Rule 3.2(a)(2). If in fact what the “parties” are seeking is something other than assistance in resolving a live and discrete dispute, then it may well be that the services being rendered constitute legal advice; and in such cases there would be a violation of Rule 3.2(a)(2).


Enduring Ethics Opinion