Attorneys Arianna and Alexander share an office that has a sign reading: “A & A, a law firm.” Their billing invoices have both their names on them, and they deposit their earnings and cover the rent from the same account. They do not share profits or have any agreement to be partners. Dexter, a client of Arianna’s for the past two years, sues both Arianna and Alexander, alleging that Arianna committed malpractice. If Dexter wins in court and is awarded $50,000 in damages, who is liable to him?
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The answer to this question could vary widely from state to state. In North Carolina, for example, it is likely that both the attorneys would be held liable, despite the lack of written agreement as partners, because they are publicly presenting themselves as a law firm. (It is actually considered unethical to suggest a partnership on their letterhead if they are not in fact considering themselves one.) The shared space, the common sign on the building, as well as the billing invoices suggest to the public that the two attorneys are one firm. The critical key here is that there is animpliedpartnership. Generally speaking, partnerships do not necessarily require a written contract. In some states, this is enough evidence for a judge to determine that both attorneys are liable. In other states, this might not be enough. This is primarily due to the fact that in a general partnership, both partners can act on behalf of one another, therefore can be held liable for the other's actions. This is why many firms create a "limited liability" partnership or "limited" partnership. Undoubtedly you've seen company signs which are followed by the letters LLC. This stands for Limited Liability Company.
Additionally, in North Carolina one other key factor for determining who is liable is left out of this scenario completely, and that is this: do the two attorneys share client files? If they share client files, in North Carolina, they could both be held liable. If they do not share client files, however, Alexander could be protected in this case.
Below is a link to the North Carolina Rules for Professional Conduct. In order to answer your question the most accurately, you should look up these rules for your specific state.
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