Crawford v. State Bar of California
7 Cal. Rptr. 746, 54 Cal.2d 659, 355 P.2d 490 (1960)
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Rule of Law:
An attorney violates the Rules of Professional Ethics by forming a partnership with a disbarred attorney, sharing fees derived from legal services, and using a firm name that suggests the disbarred individual is a practicing lawyer, as these actions constitute aiding the unauthorized practice of law.
Facts:
- Petitioner Phil N. Crawford was an attorney admitted to the bar in 1953.
- In May 1954, after the Board of Governors recommended the disbarment of his father, Howard G. Crawford, the two formed a partnership to practice law and split profits equally.
- Howard was officially disbarred on September 16, 1954, but remained in the same office to work as a 'tax consultant.'
- The office sign was changed to 'Crawford & Crawford—Attorney at Law-Tax Consultant,' and new stationery used the firm name with Phil listed as 'Attorney at Law' and Howard as 'Tax Consultant.'
- All receipts from Phil's law practice and Howard's tax practice were deposited into a single set of 'Crawford & Crawford' bank accounts.
- Signature cards for the new bank accounts, signed by both men, stated they were 'co-partners' and constituted 'all the members of the partnership.'
- Both Phil and Howard withdrew funds from the accounts as needed with an understanding that withdrawals would be kept as even as possible.
- Howard continued to confer directly with clients on matters such as probate, escrows, deeds, and partnership dissolutions, and referred his tax clients to Phil for other legal work.
Procedural Posture:
- The State Bar of California initiated a disciplinary proceeding against petitioner, Phil N. Crawford.
- A local administrative committee investigated the matter and recommended that no disciplinary action be taken.
- The Board of Governors of The State Bar reviewed the recommendation and adopted a resolution, by a vote of eight to thirteen, that the petitioner be publicly reproved.
- The petitioner filed a petition in the Supreme Court of California seeking the annulment of the Board of Governors' resolution.
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Issue:
Does an attorney violate the Rules of Professional Ethics by forming what appears to be a partnership with a disbarred attorney, using a joint firm name, depositing all income into a shared bank account, and equally splitting profits from both the law practice and the disbarred attorney's tax consulting business?
Opinions:
Majority - The Court
Yes. An attorney violates the Rules of Professional Ethics by entering into such an arrangement. The evidence, including the use of a firm name, declarations of co-ownership on bank accounts, and the equal sharing of profits, demonstrates that the petitioner and his disbarred father held themselves out as and functioned as partners. Such a partnership between a member of the bar and a layman is prohibited by the fee-splitting proscriptions of Rule 3, as it tends to encourage the unauthorized practice of law by a layman and compromises the attorney's professional independence. Further, the petitioner aided and abetted the unauthorized practice of law by allowing his father to independently handle client matters of a legal nature, such as escrows and probate matters, beyond the scope of a law clerk's duties. The court overruled Johnson v. Davidson to the extent it was inconsistent with the principle that paying a lay employee a percentage of profits constitutes improper fee-splitting.
Analysis:
This decision reinforces the strict prohibition against attorneys forming partnerships or sharing legal fees with non-lawyers, particularly those who have been disbarred. The court emphasizes a substance-over-form analysis, finding that arrangements that function like a partnership will be treated as such for disciplinary purposes, regardless of the formal titles used. By overruling prior precedent that was more permissive of profit-sharing with lay employees, the court signaled a stricter interpretation of ethical rules designed to prevent the unauthorized practice of law and maintain the independence of the legal profession. This case serves as a strong warning that filial devotion or other personal motivations do not excuse clear violations of professional conduct rules.
