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Rule 5.7. ResponsibilitiesRegarding Law-Related Services.

(a) A lawyer shall be subject to the Rules of Professional Conductwith respect to the provision of law-related services, as defined in paragraph(b), if the law-related services are provided:

(1) by the lawyer in circumstances thatare not distinct from the lawyer's provision of legal services to clients; or

(2) in other circumstances by an entity controlled by the lawyerindividually or with others if the lawyer fails to take reasonable measures toensure that a person obtaining the law-related services knows that the servicesare not legal services and that the protections of the client-lawyerrelationship do not exist.

(b) The term "law-related services" denotes servicesthat might reasonably be performed in conjunction with and in substance arerelated to the provision of legal services, and that are not prohibited asunauthorized practice of law when provided by a nonlawyer.

Comment

[1] When a lawyer performs law-related services or controls anorganization that does so, there exists the potential for ethical problems.Principal among these is the possibility that the person for whom thelaw-related services are performed fails to understand that the services maynot carry with them the protections normally afforded as part of theclient-lawyer relationship. The recipient of the law-related services mayexpect, for example, that the protection of client confidences, prohibitionsagainst representation of persons with conflicting interests and obligations ofa lawyer to maintain professional independence apply to the provision oflaw-related services when that may not be the case.

[2] Rule 5.7 applies to the provision of law-related services by alawyer even when the lawyer does not provide any legal services to the personfor whom the law-related services are performed and whether the law-relatedservices are performed through a law firm or a separate entity. This Ruleidentifies the circumstances in which all of the Rules of Professional Conductapply to the provision of law-related services. Even when those circumstancesdo not exist, however, the conduct of a lawyer involved in the provision oflaw-related services is subject to those rules that apply generally to lawyerconduct, regardless of whether the conduct involves the provision of legalservices. See, e.g., Rule 8.4.

[3] When law-related services are provided by a lawyer undercircumstances that are not distinct from the lawyer's provision of legalservices to clients, the lawyer in providing the law-related services mustadhere to the requirements of the Rules of Professional Conduct as provided inparagraph (a)(1). Even when the law-related and legal services are provided incircumstances that are distinct from each other, for example, through separateentities or different support staff within the law firm, the Rules ofProfessional Conduct apply to the lawyer as provided in paragraph (a)(2) unlessthe lawyer takes reasonable measures to ensure that the recipient of thelaw-related services knows that the services are not legal services and thatthe protections of the client-lawyer relationship do not apply.

[4] Law-related services also may be provided through an entitythat is distinct from that through which the lawyer provides legal services. Ifthe lawyer individually or with others has control of such an entity'soperations, this Rule requires the lawyer to take reasonable measures to ensurethat each person using the services of the entity knows that the servicesprovided by the entity are not legal services and that the Rules ofProfessional Conduct that relate to the client-lawyer relationship do notapply. A lawyer's control of an entity extends to the ability to direct itsoperation. Whether a lawyer has such control will depend upon the circumstancesof the particular case.

[5] When a client-lawyer relationship exists with a person who isreferred by a lawyer to a separate law-related service entity controlled by thelawyer, individually or with others, the lawyer must comply with Rule 1.8(a).

[6] In taking the reasonable measures referred to in paragraph(a)(2) to ensure that a person using law-related services understands thepractical effect or significance of the inapplicability of the Rules ofProfessional Conduct, the lawyer should communicate to the person receiving thelaw-related services, in a manner sufficient to ensure that the personunderstands the significance of the fact, that the relationship of the personto the business entity will not be a client-lawyer relationship. Thecommunication should be made before entering into an agreement for provision ofor providing law-related services, and preferably should be in writing.

[7] The burden is upon the lawyer to show that the lawyer hastaken reasonable measures under the circumstances to communicate the desiredunderstanding. For instance, a sophisticated user of law-related services, suchas a publicly held corporation, may require a lesser explanation than someoneunaccustomed to making distinctions between legal services and law-relatedservices, such as an individual seeking tax advice from a lawyer-accountant orinvestigative services in connection with a lawsuit.

[8] Regardless of the sophistication of potential recipients oflaw-related services, a lawyer should take special care to keep separate theprovision of law-related and legal services in order to minimize the risk thatthe recipient will assume that the law-related services are legal services. Therisk of such confusion is especially acute when the lawyer renders both typesof services with respect to the same matter. Under some circumstances the legaland law-related services may be so closely entwined that they cannot bedistinguished from each other, and the requirement of disclosure andconsultation imposed by paragraph (a)(2) of this Rulecannot be met. In such a case a lawyer will be responsible for ensuring thatboth the lawyer's conduct and, to the extent required by Rule 5.3, that of nonlawyer employeesin the distinct entity that the lawyer controls complies in all respects withthe Rules of Professional Conduct.

[9] A broad range of economic and other interests of clients maybe served by lawyers engaging in the delivery of law-related services. Examplesof law-related services include providing title insurance, financial planning,accounting, trust services, real estate counseling, legislative lobbying,economic analysis, social work, psychological counseling, tax preparation, andpatent, medical or environmental consulting.

[10] When a lawyer is obliged to accord the recipients of suchservices the protections of those rules that apply to the client-lawyerrelationship, the lawyer must take special care to heed the proscriptions ofthe rules addressing conflict of interest (Rules 1.7 through 1.11, especiallyRules 1.7(a)(2) and 1.8(a), (b) and (f)), and toadhere scrupulously to the requirements of Rule 1.6 relating to disclosure ofconfidential information. The promotion of the law-related services must alsoin all respects comply with Rule 7.1, dealing with advertising. In that regard,lawyers should take special care to identify the obligations that may beimposed as a result of a jurisdiction's decisional law.

[11] When the full protections of all of the Rules of ProfessionalConduct do not apply to the provision of law-related services, principles oflaw external to the Rules, for example, the law of principal and agent, govern the legal duties owed to those receiving theservices. Those other legal principles may establish a different degree ofprotection for the recipient with respect to confidentiality of information,conflicts of interest and permissible business relationships with clients. Seealso Rule 8.4 (Misconduct).

Effective February 5, 2021