Legal Ethics Opinion No. 1412

Attorney/Client Relationship--Limiting Liability:
Attorney/Researcher Attempting to Limit Liability to
Attorney/Clients and to Third Parties

You have indicated that an attorney, as Sole Proprietor, intends
to contract with another attorney for the provision of legal
research and brief writing services.   

Under the terms of the Agreement, Sole Proprietor attempts to
limit his professional liability through the division of his
services into two classes.  The Agreement describes Sole
Proprietor's Class 1 category of services as:  

     Research of statutes, cases, treatise articles or other
     authorities that have been cited to [Sole Proprietor] by
     Attorney, or research according to an outline prepared by
     Attorney or other specific instructions from Attorney; and
     the writing of briefs and papers by either rewriting drafts
     prepared by Attorney or by following an outline prepared by
     Attorney or other specific instructions from Attorney; and
     other research or writing of briefs and other papers that
     does (sic) not require the exercise of legal knowledge or
     skill or other professional legal judgement (sic) by [Sole
     Proprietor].  
The Agreement describes Class 2 services as:

     Research of issues or an area of law without specific
     instructions from Attorney; and the drafting of papers
     without specific instructions from Attorney; and other
     research or preparation of briefs or other papers that
     requires (sic) the exercise of legal knowledge or skill or
     other professional legal judgment by [Sole Proprietor].

The Agreement recites that, under the Rules of the Supreme Court
of Virginia (1991) and in the opinion of the Legal Ethics
Committee of the Virginia State Bar, "the services provided by
[Sole Proprietor] that may fairly be described in the Class 1
category of services do not constitute the practice of law".  In
addition, Agreement states that where Sole Proprietor provides
services in the Class 1 category, he is not bound by Sections
54.1-3906 and 26-5 of the Code of Virginia (1950) as amended, and
Attorney agrees to limit Sole Proprietor's liability for
negligent practice of law for services provided which fall into
those described within Class 1.  Attorney further agrees that
Sole Proprietor shall not be professionally liable to Attorney
for the negligent practice of law in performing services that are
indicated by the parties to be or may fairly be described in the
Class 1 category of services.  The Agreement specifically
indicates that Attorney assumes the risk of any injury arising
from the performance of said services by Sole Proprietor. 
However, the Agreement finally states that where services are
provided that "are indicated by the parties to be or may fairly
be described in the Class 2 category of services, [Sole
Proprietor] is by ethical rules and by statute professionally
liable to Attorney for the negligent practice of law in
performance of said services.

Finally, under the terms of the Agreement, Sole Proprietor does
not contract with any clients of Attorney to provide services to
said clients, nor does Sole Proprietor contract with Attorney to
benefit clients of Attorney in any way or to serve as a
co-counsel with Attorney in the representation of Attorney's
clients.
 
You have asked the committee to opine whether, under the facts of
the inquiry, (l) the distinction made in the agreement between
what does and does not constitute the practice of law is
accurate, and (2) such distinction may be properly placed in a
services contract for the purpose of limiting an attorney's
liability. 

The appropriate and controlling Disciplinary Rule related to your
inquiry is DR 6-102(A). Disciplinary Rule 6-102(A) states that  
a lawyer shall not limit his liability to his client for his
personal malpractice.

The Rules of Court provide that the relation of attorney and
client exists, and one is deemed to be practicing law whenever he
furnishes to another advice or service under circumstances which
imply his possession and use of legal knowledge and skill. The
Rules further state, in pertinent part, that the relation of
attorney and client exists, and one is deemed to be practicing
law whenever one undertakes for compensation, direct or indirect,
to advise another, not his regular employer, in any matter
involving the application of legal principles to facts or
purposes or desires and whenever one, other than as a regular
employee acting for his employer, undertakes, with or without
compensation, to prepare for another legal instruments of any
character.  See Part Six: Section 1: Rules of the Supreme Court
of Virginia: Unauthorized Practice Rules- Practice of Law in the
Commonwealth of Virginia.

The committee believes that, when conducted by a member of the
bar, those activities described as either Class l or Class 2
services provided to other attorneys by Sole Proprietor would
constitute the practice of law by Sole Proprietor.   It is the
opinion of the committee that Sole Proprietor would be preparing
legal instruments for a client, under circumstances which imply
his possession and use of legal knowledge and skill, irrespective
of the fact that his client is another attorney.  

Thus, the committee opines that where an attorney-client
relationship exists, the plain language of DR 6-l02(A) does not
permit a lawyer to limit his professional liability to that
client. 6-102(A).  See LEOs #877, #1211, #1364.

The committee is not opining as to the legality of the contract
for services which you have provided or any of its component
provisions. However, the committee does advise that the statement
contained in the Agreement, speaking to the Rules of the Supreme
Court of Virginia and the opinion of the Legal Ethics Committee
as having determined that certain services do not constitute the
practice of law, is incorrect.

Committee Opinion
May 14, 1991

Committee Reconsideration and Affirmation
June 12, 1991