Problem Areas in Legal Ethics:

Cases & Commentaries

Topic 21. The lawyer and the Law Firm

Problem Areas in Legal Ethics

Arellano University School of Law – Arellano Law Foundation
2021-2022

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Choice of a Firm name

Rule 3.01 - A lawyer shall not use or permit the use of any false, fraudulent, misleading, deceptive,
undignified, self-laudatory or unfair statement or claim regarding his qualifications or legal services.
Rule 3.02 - In the choice of a firm name, no false, misleading or assumed name shall be used. The continued
use of the name of a deceased partner is permissible provided that the firm indicates in all its
communications that said partner is deceased.
Rule 3.03 - Where a partner accepts public office, he shall withdrawal from the firm and his name shall be
dropped from the firm name unless the law allows him to practice law currently.

………
The use of a nom de plume, assumed or trade name in law practice is improper.
A representation that a law firm is associated with a law firm not authorized to practice law in the Philippines
is unethical.
Including in the firm name the name of a lawyer not authorized to practice law in the Philippines is
prohibited.
Including in the firm name the name of a non-lawyer is prohibited.
Including in the firm name the name of a suspended or disbarred lawyer is prohibited.
No name not belonging to any of the partners or associates may be used in the firm name for any purpose. -
PP v. Gonzalez, Jr., G.R. No. 139542 June 10, 2003

Negligence of clerks in a law firm

Time and again the Court has admonished law firms to adopt a system of distributing pleadings and
notices, whereby lawyers working therein receive promptly notices and pleadings intended for them, so that
they will always be informed of the status of their cases.
This Court has also often repeated that the negligence of clerks which adversely affect the cases handled by
lawyers, is binding upon the latter. - B.R. Sebastian Enterprises, Inc. v. CA, G.R. No. L-41862 [1992]

Law firm represents the client

Respondent judge should not have accommodated so many Motions for Postponement filed by the then
ailing Atty. Rosendo Castillo Sr. because a law firm (Castillo & Castillo), to which the latter belonged,
was really representing the defendants, there certainly were other competent lawyers who could have
handled the matter. – Sps. Reaport v. Judge Mariano, A.M. No. MTJ-00-1253. July 11, 2001

Main and branch office constitute one personality

Petitioner's counsel was and is the firm of Ledesma, Saludo and Associates (and not any particular member
or associate of that firm) which firm happens to have a main office in Makati and a branch office in Cebu City.
The Court notes that both the main and branch offices operate under one and the same name, Saludo
Ledesma and Associates. Having represented itself to the public as comprising a single firm, LSA
should not be allowed at this point to pretend that its main office and its branch office in effect
constitute separate law firms with separate and distinct personalities and responsibilities. -Ouano
Arrastre Service Inc. v. Judge Aleonor, G.R. No. 97664 October 10, 1991

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Death of a handling lawyer of the firm
Hence, the death of the latter did not extinguish the lawyer-client relationship between said firm and
petitioner. - B.R. Sebastian Enterprises, Inc. v. CA, G.R. No. L-41862 [1992]

Duties of Firms and Lawyers When Someone Leaves

A. Ethical Obligation to Communicate to Certain
clients
B. Trust Account Monies
C. Fee Divisions In General
D. Files
E. Phones

Partners and Associates Leaving Must Abide By Fiduciary Duties to Firm

Contractual withdrawal of benefits if they compete with their former law firm
We granted review to decide whether an agreement between law partners is enforceable if it requires
withdrawing partners to forego certain contractual withdrawal benefits if they compete with their former law
firm. We conclude that an agreement among law partners imposing a reasonable toll on departing partners
who compete with the firm is enforceable. - Howard v. Babcock, 6 Cal. 4th 409 (Cal. 1993)

Subsequent dissolution of the partnership cannot cure his ineligibility to act as counsel in that case
[O]nce a partner is thus vicariously disqualified for a particular case, the subsequent dissolution of the
partnership cannot cure his ineligibility to act as counsel in that case. – American Can Co. v. Citrus Feed Co.,
436 F.2d 1125 (1971)

New partners of a vicariously disqualified partner

However, new partners of a vicariously disqualified partner, to whom knowledge has been imputed during a
former partnership, are not necessarily disqualified: they need show only that the vicariously disqualified
partner's knowledge was imputed, not actual. – American Can Co. v. Citrus Feed Co., 436 F.2d 1125 (1971)

Duty to deal openly and to make full disclosure to the other members of the firm
A fiduciary relationship existed between Mr. Bray and his associates, Messrs. Squires, Walsh, and Tompkins.
Accordingly, during the course of their relationship, each lawyer had a duty to deal openly and to make full
disclosure to the other members of the firm about matters affecting the firm's business. Indeed, this duty was
an incident to the parties' employer-employee relationship. – Bray v. Squires, et. al., 702 S.W.2d 266 (1985)

Ethical Obligation to Communicate to Certain Clients

1) lawyers have a duty to tell “their” clients that they are leaving.
2) clients are not chattels – the firm and departing lawyer cannot decide which clients can stay and which can
go – the clients decide.

Rule of confidentiality in a law firm

Rule 21.04 - A lawyer may disclose the affairs of a client of the firm to partners or associates thereof unless
prohibited by the client.

Duty to notify a client

“The departing lawyer and responsible members of the law firm who remain have an ethical obligation
to assure that prompt notice is given to clients on whose active matters she currently is working.”

Rule 18.04 - A lawyer shall keep the client informed of the status of his case and shall respond within a
reasonable time to the client's request for information.
Lawyer who has had “significant personal contacts”

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A departing lawyer who has had “significant personal contacts” with the client, should inform the client
that the lawyer is leaving the firm.

Note: this does not mean that an associate who met a client once or twice and has prepared discovery
requests has had “significant personal contacts” – the standard is that if the client were asked “which
lawyer(s) at the firm represents you?” the lawyers mentioned would be those that have had“ significant
personal contacts.”

Ethical obligations of departing lawyers

In addition to the ethical obligations departing lawyers have, they also must avoid interfering with the
contracts the firm has with existing clients.

However, the caution to avoid stealing clients must be balanced against the departing lawyer’s ethical
obligation to notify clients that an attorney is departing.
How to tell clients
The preferred method of advising firm clients about the impending departure of an attorney is a joint letter
from the firm and departing lawyer to all clients with whom the lawyer had significant personal contacts.

A letter should advise the clients

When the lawyer is leaving
The client has the option of going with the lawyer, staying with the firm, or getting a new firm
How any advance fee deposit will be treated
A place for the client to sign and return the letter, with instructions on where their file should go.

Separate letters may be sent by the lawyer (or the firm) to clients with whom the departing lawyer
had substantial personal contact as long as:
1) the letters do not disparage the firm or the lawyer; and
2) the letters do not involve improper solicitation

Trust Account Monies

Clients that have given the firm an advance fee or advance cost deposit take the money with them (less
earned fees and costs), if they go with the departing lawyer. While simple in theory, application
sometimes can be problematic.

The “old” firm should write a check, consistent with the written instructions of the client, to either the client
or to the trust account for the departed lawyer’s new firm.

Fee Divisions In General

In contingent fee cases where some or much of the work was performed at the existing firm, but the case is
going with the departing lawyer, the firm and lawyer must agree how the contingent fee will be
apportioned among them, based upon their respective contributions to the case (i.e., quantum meruit) or
based upon terms in the partnership agreement.

But can a departing lawyer keep all of a contingent fee case that came into
the old firm but ultimately settled when the lawyer was at a new firm?
Probably not, according to several cases.
A lawyer may be entitled to only his partnership portion of the fees earned on a case, even if he performed
most of the work after the dissolution of the firm.
Nevertheless, some courts will find that when a lawyer leaves a firm and takes a case with him, he may be
entitled to the quantum meruit value of the work he performed.

Client’s interests not be prejudiced when the attorney/client relationship is terminated

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Do not hold client files hostage, even if the client that is leaving with the lawyer owes the current firm
money.
Model Rule 1.16(d) requires that the client’s interests not be prejudiced when the attorney/client relationship
is terminated. Have the client or a runner from the departed lawyer’s new firm sign for the file, if it is going to
the new firm.
Also, it is appropriate to request in a litigation matter that the departed lawyer file a substitution of counsel
or at least notification of address change with the court, to assure that the old firm is still not listed as
counsel of record.

Client’s file = paper and electronic documents

When a client asks for their file, you must give them both the paper and the electronic documents –
including emails.
And remember that the client file is client property, so you cannot charge the client for the cost of
downloading everything to disks….

Query about a former associate or partner

It is ethically inappropriate to have the receptionist tell callers who are looking for a lawyer who recently
left the firm “we don’t know where he is.” That game is not professional and not acceptable.
Assure that all staff are instructed to provide the departed lawyer’s phone number and mailing address.
Also, assign a partner to answer any client inquiries.
Moreover, mail should be forwarded to the departed lawyer.

Partners and Associates Leaving Must Abide By Fiduciary Duties to Firm

It is worth noting again that lawyers who are leaving a firm have certain fiduciary duties to the firm to not
interfere with the contracts that the firm has with existing clients, to not use firm resources to set up
their new firm, and to not attempt to steal away associates and staff while the lawyers are still working
for the firm. - Lynda C. Shely

A lawyer whose spouse is associated with a firm representing an opposing party

[T]he lawyer should advise the client of all circumstances that might cause one to question the undivided
loyalty of the law firm and let the client make the decision as to its employment. If the client prefers not to
employ a law firm containing a lawyer whose spouse is associated with a firm representing an opposing party,
that decision should be respected.

WON the firm of “Velasquez, Rodriguez, Respicio, Ramos, Nidea, and Prado”may call itself “A law
Firm Of St. Thomas More and Associate Members”.
It implies that St. Thomas More is a Law Firm when in fact it is not it would also convey to the public the
impression that the lawyers are members of the law firm which does not exist. To the public, it would seem
that the purpose or intention of adding “The Law Firm of St. Thomas More and Associates Members” is to
bask in the name of a Saint, although that may not really, be the purpose or intention of the lawyers. The
appellation only tends to confuse the public and in a way demean both the saints and the legal profession
whose members must depend on their own name and record and merit and not on the name/glory of other
persons living or dead. - PP v. Gonzalez, Jr., G.R. No. 139542 June 10, 2003

Duties When Switching Firms

Duties of Lawyers Interviewing With Other Firms
Screening an “Infected” Lateral Hire
Death of a Lawyer

Associates can continue representing the law firm

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The bare fact that Atty. Barrera was already under suspension when De los Santos received the decision of the
trial court did not relieve her of the duty to hand over the decision to any of the associates in the law office. It
bears stressing that the respondent was represented by the J.T. Barrera & Associates, and not by Atty. Joelito
Barrera alone. The attorney-client relationship between J.T. Barrera & Associates and the respondent was not
thereby severed upon the one-year suspension of Atty. Barrera from the practice of law. The law firm
continued to be the counsel of record of the respondent. Any member of the law firm could appear for trial
and sign pleadings for the firm as the respondents counsel in the trial court. – Balgami, et. al. v. Court of
Appeals, G.R. No. 131287. December 9, 2004
……….
As the Court ruled in one case, [w]hen a client employs the services of a law firm, he does not employ the
services of the lawyer who is assigned to personally handle the case. Rather, he employs the entire law firm.
In the event that the counsel appearing for the client resigns, the firm is bound to provide a replacement. We
see no reason why the same principle should not apply to a case where a partner or associate is suspended
from the practice of law, as in this case. – Balgami, et. al. v. Court of Appeals, G.R. No. 131287. December 9,
2004

Associate liable for unauthorized practice of law

There is no question that Atty. Bragas has knowledge of Atty. Era's suspension from the practice of law and
yet, she allowed herself to participate in Atty. Era's unauthorized practice. Clearly, Atty. Bragas violated the
CPR, specifically:

CANON 9 - A lawyer shall not, directly or indirectly, assist in the unauthorized practice of law.
Being an associate in Atty. Era's law firm cannot be used to circumvent the suspension order. The factual
circumstances of the case clearly shows that Atty. Bragas did not act to replace Atty. Era as counsel for his
and/or the law firm's clients during the latter's suspension. Atty. Bragas merely assisted Atty. Era, who
admittedly was the one actively performing all acts pertaining to the labor case he was handling. - Bonifacio
v. Atty. Era & Atty Bragas, A.C. No. 11754, October 03, 2017

It behooves the law firm to value coordination in deference to the conflict of interest rule
As the Court observes, the law firm's unethical acceptance of the criminal case arose from its failure to
organize and implement a system by which it would have been able to keep track of all cases assigned to its
handling lawyers to the end of, among others, ensuring that every engagement it accepts stands clear of any
potential conflict of interest. As an organization of individual lawyers which, albeit engaged as a collective,
assigns legal work to a corresponding handling lawyer, it behooves the law firm to value coordination in
deference to the conflict of interest rule.

…….
This lack of coordination, as respondents' law firm exhibited in this case, intolerably renders its clients'
secrets vulnerable to undue and even adverse exposure, eroding in the balance the lawyer-client
relationship's primordial ideal of unimpaired trust and confidence.
Had such system been institutionalized, all of its members, Atty. Dionela included, would have been wary of
the above-mentioned conflict, thereby impelling the firm to decline FEVE Farms' subsequent engagement.
Thus, for this shortcoming, herein respondents, as the charged members of the law firm, ought to be
administratively sanctioned.

Partners are equally liable

Note that the Court finds no sufficient reason as to why Atty. Dionela should suffer the greater penalty of
suspension. As the Court sees it, all respondents stand in equal fault for the law firm's deficient organization
for which Rule 15.03, Canon 15 and Canon 21 of the CPR had been violated. As such, all of them are meted
with the same penalty of reprimand, with a stern warning that a repetition of the same or similar infraction
would be dealt with more severely. – Anglo v. Atty. Valencia, et. al., A.C. No. 10567, February 25, 2015

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Only a partner is liable
Complainants alleged that a certain Mary Jane Gentugao, the secretary of the Jarder Bancolo Law Office,
forged the signature of Atty. Bancolo.

The complainants did not present any evidence that Atty. Jarder was directly involved, had knowledge of, or
even participated in the wrongful practice of Atty. Bancolo in allowing or tolerating his secretary to sign
pleadings for him. Thus, we agree with the finding of the IBP Board that Atty. Jarder is not administratively
liable. - Rodrigo E. Tapay and Anthony J. Rustia v. Atty. Charlie L. Bancolo and Atty. Janus T. Jarder, A.C. No.
9604, March 20, 2013

A lawyer who appears under a firm name that contains a disbarred lawyer’s name
A lawyer who appears under a firm name that contains a disbarred lawyer's name commits indirect contempt
of court. - David Yu Kimteng, et. al. v. Atty. Young, et. al., G.R. No. 210554, August 05, 2015

Departing solicits a client of the firm

Where contingent fees are not an issue, but the partner prior to departing solicits a client of the firm, he or
she may have violated a fiduciary duty to the firm even if the departing partner brought the client into the
firm and has represented the client for years.-Joseph M. Perillo,The Law of Lawyers' Contracts Is Different, 67
Fordham L. Rev. 443 (1998).

“Unfinished business” doctrine

The “unfinished business” doctrine reflects established partnership law. In the law firm world, the unfinished
business doctrine is frequently referred to as the Jewel doctrine, or then Jewel rule, after the seminal
California case on the subject, Jewel v. Boxer.
Regardless of how it is described, the unfinished business doctrine essentially holds that absent contrary
agreement, partners in a dissolved law firm must account to the firm and its former partners either for all
fees generated from work in progress at the time of the firm’s dissolution, or for the profits made on
that work (depending on the state’s partnership law) in accordance with their percentage interests
in the firm. Pending client matters are uncompleted transactions that require winding up after dissolution,
and are therefore partnership assets subject to post-dissolution distribution.

……
Pending client matters are uncompleted transactions that require winding up after dissolution, and are
therefore partnership assets subject to post-dissolution distribution. As the court in Gull v. Van Epps
explained, “all partners of the dissolved firm are generally entitled to share in fees for pre-
dissolution work in progress earned after dissolution, even if the client has exercised [its] right to
discharge the attorney or attorneys who are sharing in the fees.”
This entitlement exists because dissolution does not terminate the firm’s pre-existing contracts with
its clients, so that partners who perform those contracts do so as fiduciaries for the benefit of the dissolved
partnership.

…….
If partners of a dissolving law partnership stayed together during the wind up of the firm’s business, the
unfinished business doctrine would be of no moment.
But they do not—they scatter to new law firms, taking open client matters with them. The work they or their
colleagues perform on those matters at their new firms produces fees that their new firms wish to collect
and retain, and which they do not want to share with, or surrender to, the dissolved firm. -Douglas R.
Richmond,Whither (Wither?) the Unfinished Business Doctrine, 20 Chap. L. Rev. 283 (2017)

Death of a client
On the other hand, the Solicitor General contends that the Court of Appeals was correct in denying the
motion for extension of time to file a motion for reconsideration. First, such a motion is proscribed under
Rules 40 and 41 of the Rules of Court. Second, petitioner is represented by the Barrera Law Office and not by

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Atty. Barrera alone. Considering this, any one of Atty. Barrera’s partners or associates in the law firm
should have filed the appropriate pleading to protect the interest of petitioner who is still their
client, notwithstanding the death of the handling lawyer, Atty. Barrera. Citing Bernardo v. Court of
Appeals, the Solicitor General contends that the death of a particular attorney does not extinguish the
lawyer-client relationship where the legal representation is by a law firm. Service of a copy of the
decision dated April 18, 2001 on petitioner’s counsel of record, the Barrera Law Office, is service upon the
petitioner. The failure of petitioner’s counsel, the Barrera Law Office, to file the necessary motion for
reconsideration, binds petitioner in this case. – Amatorio v. PP, G.R. No. 150453, February 14, 2003

Not the duty of the courts to inquire during the progress of a case whether the partnership
continues to exist lawfully
It is also established that Atty. Barrera was part of a law firm and had other partners who could have taken
over his cases or settled his professional affairs after he died. The allegation that his partners formed
their own law offices after he died, deserves scant consideration. We reiterate that it is not the duty of
the courts to inquire during the progress of a case whether the partnership continues to exist lawfully, or
whether the partners are still alive or its associates are still connected with the firm. – Amatorio v. PP, G.R.
No. 150453, February 14, 2003

Thank you!