This episode of Remotely Ethical is the third installment of a three-part series on doing business with clients.
In Part 3, below, we discuss other types of business transactions with clients, outside of the attorney-client relationship.
In this episode we address:
- Ethical issues for lawyers to consider when going into business with clients.
- Determining whether Rule 1.8(a) of the New York Rules of Professional Conduct applies to your business transaction with your client.
- Complying with Rule 1.8(a), if applicable, including ensuring that:
- the transaction is "fair and reasonable" to the client;
- the terms of the transaction are fully disclosed and transmitted in writing in a manner that can be reasonably understood by the client;
- the client is advised in writing of the desirability of seeking, and be given a reasonable opportunity to seek, the advice of independent legal counsel on the transaction; and
- the client gives written "informed consent" to the essential terms of the transaction and the lawyer’s role in the transaction, including whether the lawyer is representing the client in the transaction.
- Starting a business with a client may also implicate Rule 5.7 – the “ancillary business rule” – which requires the lawyer to consider whether the services being provided by the business are “distinct” from the attorney’s legal services.
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It's very important to make sure that, if you're going to provide nonlegal services . . . that they are very distinct [from your legal services] . . . That you may need to put into some kind of disclosure to customers to say: "by the way, even though I'm a lawyer, these are not legal services you're getting from me."