Committing Firm Resources to a Proposed Ancillary Business: A Checklist

In keeping with Rule 5.7, typical examples of ancillary services would include lobbying, title insurance, financial planning, accounting, trust services, and [appropriate types of] medical and environmental counseling.

Yet ancillary businesses can be in fields that may at first glance seem remote from law. For example, an employment law practice firm that often provides training videos to clients may consider preparing such videos as an ancillary business. Similarly, there are so many legal issues involved in advertising that a firm consulting on those issues may find an ancillary business niche there. On the other hand, Jones suggests it would be too much of a stretch to call a restaurant, limousine service, or office supply company an ancillary business.

Committing Firm Resources to an Ancillary Business

Both in analyzing the viability of an ancillary business and in planning its implementation, a major concern is to assess all ways in which the new enterprise would draw upon the law firm's resources. The following checklist chart can help you perform this analysis systematically.

See checklist on page 7.

The following discussion and checklist are based on guidance provided in Beyond Legal Practice: Organizing and Managing Ancillary Businesses. Thanks are due to The Hildebrandt Institute and author James W. Jones for permission to adapt their material. For details on this currently very popular booklet, see Hildebrandt's website, www.hildebrandtinstitute.com. (We're looking forward to more Hildebrandt advice on ancillary businesses: another topic from this popular booklet will be expanded upon in a future edition of the A&FP newsletter.)

What Makes a Business Ancillary?

As defined by Rule 5.7 of the ABA's Model Rules of Professional Conduct, ancillary businesses are those providing 'law-related services.' Rule 5.7 defines law-related services as those that 'might reasonably be performed in conjunction with and in substance are related to the provision of legal services and that are not prohibited as unauthorized practice of law when provided by a nonlawyer.' Citing Hazard & Hodes book The Law of Lawyering: A Handbook on the Model Rules of Professional Conduct, author Jones suggests that a law-related service is one a layperson might reasonably mistake for legal services if he or she saw a lawyer performing them. [Ed. note: By this clever heuristic, an ethics board would declare a proposed ancillary business legitimate specifically because a reasonable onlooker would misperceive it ' an unusual criterion indeed!]

In keeping with Rule 5.7, typical examples of ancillary services would include lobbying, title insurance, financial planning, accounting, trust services, and [appropriate types of] medical and environmental counseling.

Yet ancillary businesses can be in fields that may at first glance seem remote from law. For example, an employment law practice firm that often provides training videos to clients may consider preparing such videos as an ancillary business. Similarly, there are so many legal issues involved in advertising that a firm consulting on those issues may find an ancillary business niche there. On the other hand, Jones suggests it would be too much of a stretch to call a restaurant, limousine service, or office supply company an ancillary business.

Committing Firm Resources to an Ancillary Business

Both in analyzing the viability of an ancillary business and in planning its implementation, a major concern is to assess all ways in which the new enterprise would draw upon the law firm's resources. The following checklist chart can help you perform this analysis systematically.

See checklist on page 7.