# Lawyer corporations? **URL:** \ **Category:** Factual Questions\ **Created:** [August 13, 2006, 12:14am UTC](https://boards.straightdope.com/t/lawyer-corporations/368499 "2006-08-13T00:14:37Z")\ **Posts on this page:** 15\ **Page:** 1
**Author:** ![friedo](https://avatars.discourse-cdn.com/v4/letter/f/8edcca/32.png) [@friedo](https://boards.straightdope.com/u/friedo)\ **Post date:** [August 13, 2006, 12:14am UTC](https://boards.straightdope.com/t/lawyer-corporations/368499/1 "2006-08-13T00:14:37Z")
It seems to me that all lawfirms are organized as partnerships, with the revenues being divided up among the partners and some of the rest going to pay the associates and staff. What’s to stop a non-lawyer from getting some venture capital, starting a corporation, hiring a bunch of lawyers as regular employees and pimping them out? Is there a law that lawfirms must be partnerships? ---
**Author:** ![Sevastopol](https://avatars.discourse-cdn.com/v4/letter/s/cdc98d/32.png) [@Sevastopol](https://boards.straightdope.com/u/Sevastopol)\ **Post date:** [August 13, 2006, 12:22am UTC](https://boards.straightdope.com/t/lawyer-corporations/368499/2 "2006-08-13T00:22:06Z")
Yes, there are such laws. The rationale for such laws is that lawyers should not be able to limit their liability. ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [August 13, 2006, 12:57am UTC](https://boards.straightdope.com/t/lawyer-corporations/368499/3 "2006-08-13T00:57:11Z")
Most states have laws or ethical rules for lawyers (or both) that prohibit: 1. Lawyers sharing their fees with non-lawyers. [legal ethics | Wex | US Law | LII / Legal Information Institute](http://www.law.cornell.edu/ethics/mi/code/MI_CODE.HTM#Rule_5.4) 2. Corporations owned by non-lawyers engaging in the practice of law. [Michigan Legislature - Page Not Found](http://www.legislature.mi.gov/(zisysfeow0idm545bbh1vw45)/mileg.aspx?page=getObject&objectName=mcl-450-225) These two rules together make what you have described illegal. ---
**Author:** ![Random](https://avatars.discourse-cdn.com/v4/letter/r/57b2e6/32.png) [@Random](https://boards.straightdope.com/u/Random)\ **Post date:** [August 13, 2006, 1:07am UTC](https://boards.straightdope.com/t/lawyer-corporations/368499/4 "2006-08-13T01:07:49Z")
[QUOTE=Sevastopol] Yes, there are such laws. The rationale for such laws is that lawyers should not be able to limit their liability. [/QUOTE] **Gfactor** has, of course, correctly answered the question. This is (a) non-responsive (the question asked about non-lawyers forming a corporation), and (b) not accurate. Lawyers can form professional corporations. ---
**Author:** ![Moirai](https://avatars.discourse-cdn.com/v4/letter/m/96bed5/32.png) [@Moirai](https://boards.straightdope.com/u/Moirai)\ **Post date:** [August 13, 2006, 1:10am UTC](https://boards.straightdope.com/t/lawyer-corporations/368499/5 "2006-08-13T01:10:01Z")
Why did you post that, **Random**? ---
**Author:** ![psychloan](https://avatars.discourse-cdn.com/v4/letter/p/4bbf92/32.png) [@psychloan](https://boards.straightdope.com/u/psychloan)\ **Post date:** [August 13, 2006, 1:35am UTC](https://boards.straightdope.com/t/lawyer-corporations/368499/6 "2006-08-13T01:35:42Z")
[QUOTE=EJsGirl] Why did you post that, **Random**? [/QUOTE] I don’t speak for Random, but people ought to know that Sevastopol is wrong. ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [August 13, 2006, 1:50am UTC](https://boards.straightdope.com/t/lawyer-corporations/368499/7 "2006-08-13T01:50:14Z")
[QUOTE=Sevastopol] Yes, there are such laws. The rationale for such laws is that lawyers should not be able to limit their liability. [/QUOTE] Lawyers are barred in many states from prospectively limiting their malpractice liability: > [@](#): > > (h) A lawyer shall not: > > (1) make an agreement prospectively limiting the lawyer’s liability to a client for malpractice unless permitted by law and the client is independently represented in making the agreement; [legal ethics | Wex | US Law | LII / Legal Information Institute](http://www.law.cornell.edu/ethics/mi/code/MI_CODE.HTM#Rule_1.8) But as \*\*Random \*\* has already noted: 1. I don’t see the connection between non-lawyers forming a corporation that provides legal services (which would arguably prevent the employee-lawyers from exercising independent legal judgment) and the rule against agreements limiting lawyer liability. 2. As \*\*Random \*\* points out lawyers can form professional corporations, professional limited liability companies, and limited liability partnerships. [http://www.lectlaw.com/files/buo04.htm](http://www.lectlaw.com/files/buo04.htm) . All of those entities limit the liability of the principals. ---
**Author:** ![Moirai](https://avatars.discourse-cdn.com/v4/letter/m/96bed5/32.png) [@Moirai](https://boards.straightdope.com/u/Moirai)\ **Post date:** [August 13, 2006, 3:37am UTC](https://boards.straightdope.com/t/lawyer-corporations/368499/8 "2006-08-13T03:37:51Z")
Ack. I was reading too quickly and then picked up the snark factor. My apologies. ---
**Author:** ![Sevastopol](https://avatars.discourse-cdn.com/v4/letter/s/cdc98d/32.png) [@Sevastopol](https://boards.straightdope.com/u/Sevastopol)\ **Post date:** [August 13, 2006, 6:20am UTC](https://boards.straightdope.com/t/lawyer-corporations/368499/9 "2006-08-13T06:20:57Z")
[QUOTE=psychloan] I don’t speak for Random, but people ought to know that Sevastopol is wrong. [/QUOTE] In fact that is probably true in the jurisdiction the OP inhabits. Although the prior responses are not specific to that jurisdiction. However the US is not the world, or indeed the entirety of the common law world. And such rules and rationales as I have outlined exist in its parts. ---
**Author:** ![Polycarp](https://avatars.discourse-cdn.com/v4/letter/p/82dd89/32.png) [@Polycarp](https://boards.straightdope.com/u/Polycarp)\ **Post date:** [August 13, 2006, 8:54am UTC](https://boards.straightdope.com/t/lawyer-corporations/368499/10 "2006-08-13T08:54:59Z")
The problem is, **Sevastopol** , that your answer is not fully accurate even as restricted. There are jurisdictions which insist that lawyers not be permitted to limit their liability (other than normal methods like buying stock available to anyone). And there are other jurisdictions which permit PLLCs (Professional Limited Liability Companies) for any practice, medical or jurisprudential. ---
**Author:** ![Sevastopol](https://avatars.discourse-cdn.com/v4/letter/s/cdc98d/32.png) [@Sevastopol](https://boards.straightdope.com/u/Sevastopol)\ **Post date:** [August 13, 2006, 12:50pm UTC](https://boards.straightdope.com/t/lawyer-corporations/368499/11 "2006-08-13T12:50:31Z")
Let’s review: > [@friedo](#): > > …What’s to stop a non-lawyer from getting some venture capital, starting a corporation, hiring a bunch of lawyers as regular employees and pimping them out? Is there a law that lawfirms must be partnerships? > [@Sevastopol](#): > > Yes, there are such laws. The rationale for such laws is that lawyers should not be able to limit their liability. > [@Polycarp](#): > > …There are jurisdictions which insist that lawyers not be permitted to limit their liability (other than normal methods like buying stock available to anyone). And there are other jurisdictions which permit PLLCs (Professional Limited Liability Companies) for any practice, medical or jurisprudential. Doesn’t _“jurisdictions insist that lawyers not be permitted to limit their liability”_ mean the same as _“there are such laws… lawyers should not be able to limit their liability”?_ Why yes it does. Is there a nexus between the policy that lawyers should not be able to limit their liability in the same manner as corporations and the prevalence of lawyer partnerships? Why yes there is. Are the laws concerned found in every jurisdiction and with equal force? No. Is the control on lawyers limiting their liability an absolute and overriding principle? No. What more need be said? The response was both responsive and correct as a general proposition: However, as yet the particular laws pertaining to Brooklyn have not been stated. ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [August 13, 2006, 3:11pm UTC](https://boards.straightdope.com/t/lawyer-corporations/368499/12 "2006-08-13T15:11:38Z")
[QUOTE=Sevastopol] In fact that is probably true in the jurisdiction the OP inhabits. Although the prior responses are not specific to that jurisdiction. However the US is not the world, or indeed the entirety of the common law world. And such rules and rationales as I have outlined exist in its parts. [/QUOTE] Are you thinking of a specifc jurisdiction. I’d be interested in knowing which one if you are. ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [August 13, 2006, 3:22pm UTC](https://boards.straightdope.com/t/lawyer-corporations/368499/13 "2006-08-13T15:22:55Z")
[QUOTE=Sevastopol] What more need be said? The response was both responsive and correct as a general proposition: However, as yet the particular laws pertaining to Brooklyn have not been stated. [/QUOTE] Your wish: > [@](#): > > DR 3-102 [1200.17] Dividing Legal Fees with a Non-Lawyer. > > A. A lawyer or law firm shall not share legal fees with a non-lawyer, except that: > > 1. An agreement by a lawyer with his or her firm, partner, or associate may provide for the payment of money, over a reasonable period of time after the lawyer’s death, to the lawyer’s estate or to one or more specified persons. > > 2. A lawyer who undertakes to complete unfinished legal business of a deceased lawyer may pay to the estate of the deceased lawyer that proportion of the total compensation which fairly represents the services rendered by the deceased lawyer. > > 3. A lawyer or law firm may compensate a non-lawyer employee, or include a non-lawyer employee in a retirement plan, based in whole or in part on a profit-sharing arrangement. [legal ethics | Wex | US Law | LII / Legal Information Institute](http://www.law.cornell.edu/ethics/ny/code/NY_CODE.HTM#3-102) Here is the statute permitting the formation of professional service corporations. > [@](#): > > § 1504. Rendering of professional service. > (a) No professional service corporation may render professional > services except through individuals authorized by law to render such > professional services as individuals. > (b) Each final plan and report made or issued by a corporation > practicing professional engineering, architecture, landscape > architecture or land surveying shall bear the name and seal of one or > more professional engineers, architects, landscape architects, or land > surveyors, respectively, who are in responsible charge of such plan or > report. > (c) Each report, diagnosis, prognosis, and prescription made or issued > by a corporation practicing medicine, dentistry, podiatry, optometry, > ophthalmic dispensing, veterinary medicine, pharmacy, nursing, > physiotherapy or chiropractic shall bear the signature of one or more > physicians, dentists, podiatrists, optometrists, ophthalmic dispensers, > veterinarians, pharmacists, nurses, physiotherapists, or chiropractors, > respectively, who are in responsible charge of such report, diagnosis, > prognosis, or prescription. > (d) Each record, transcript, report and hearing report prepared by a > corporation practicing certified shorthand reporting shall bear the > signature of one or more certified shorthand reporters who are in > responsible charge of such record, transcript, report, or hearing > report. > (e) Each corporation practicing public accounting or certified public > accounting shall maintain records indicating the identity of each public > accountant or certified public accountant, respectively, who was > responsible for each report or statement which is issued prepared or > examined by such corporation. > (f) Each opinion prepared by a corporation practicing law shall bear > the signature of one or more attorneys and counsellors-at-law who are in > responsible charge of such opinion. > (g) In addition to the requirements in subdivisions (b) through (f), > inclusive, each document prepared by a corporation which under the > rules, regulations, laws or customs of the applicable profession is > required to bear the signature of an individual in responsible charge of > such document, shall be signed by one or more such individuals. Website of a New York law firm operating as an LLP. [http://www.shearman.com/Home.aspx](http://www.shearman.com/Home.aspx) Here is one operating as an LLC in New York: [http://appsext5.dos.state.ny.us/corp\_public/CORPSEARCH.ENTITY\_INFORMATION?p\_nameid=2824283&p\_corpid=2812404&p\_entity\_name=morgan%20lewis&p\_name\_type=A&p\_search\_type=BEGINS&p\_srch\_results\_page=0](http://appsext5.dos.state.ny.us/corp_public/CORPSEARCH.ENTITY_INFORMATION?p_nameid=2824283&p_corpid=2812404&p_entity_name=%6D%6F%72%67%61%6E%20%6C%65%77%69%73&p_name_type=%41&p_search_type=%42%45%47%49%4E%53&p_srch_results_page=0) Here is one operating as a professional corporation: [http://www.bragarwexler.com/coleman.html](http://www.bragarwexler.com/coleman.html) ---
**Author:** ![Polycarp](https://avatars.discourse-cdn.com/v4/letter/p/82dd89/32.png) [@Polycarp](https://boards.straightdope.com/u/Polycarp)\ **Post date:** [August 13, 2006, 3:24pm UTC](https://boards.straightdope.com/t/lawyer-corporations/368499/14 "2006-08-13T15:24:50Z")
Well, Brooklyn is the former city, now borough of NYC, comprising Kings County, New York State. Considering I know of a PLLC in Adams, New York (oddly enough, comprised of a father and two sons, all lawyers), and one in Watertown, New York, I believe that PLLCs are legal in Brooklyn – perhaps just not yet very common. ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [August 13, 2006, 4:38pm UTC](https://boards.straightdope.com/t/lawyer-corporations/368499/15 "2006-08-13T16:38:50Z")
[QUOTE=Polycarp] Well, Brooklyn is the former city, now borough of NYC, comprising Kings County, New York State. Considering I know of a PLLC in Adams, New York (oddly enough, comprised of a father and two sons, all lawyers), and one in Watertown, New York, I believe that PLLCs are legal in Brooklyn – perhaps just not yet very common. [/QUOTE] Here is a lawyer operating as a PLLC in Brooklyn: [http://www.divorcenet.com/Members/eroyzman](http://www.divorcenet.com/Members/eroyzman) And here are two operating as a PCs: [http://www.lawinfo.com/expert/brooklyninjurylawyer/](http://www.lawinfo.com/expert/brooklyninjurylawyer/) [http://www.newyork-injury-lawyer.com/](http://www.newyork-injury-lawyer.com/)