QUESTION: Attorney is considering hiring a Professional Employer Organization. Employees would be hired by the organization and leased back to Attorney. This would allow Attorney to provide benefits that Attorney could not otherwise provide. Attorney would maintain complete supervisory control over the daily activities and responsibilities of the leased back employees. The only power Attorney could not exercise is the right to unilaterally terminate or discipline an employee. Would an arrangement like this be allowed under the Rules of Professional Conduct?

ANSWER: Under the circumstances Attorney has described, the proposed arrangement for nonlawyer staff would create a situation in which Attorney could not fulfill the requirements of Rule 4 dash–5.3. It would be necessary for Attorney´s firm to have unilateral authority to terminate or discipline an employee for violating an obligation under the Rules of Professional Conduct. Attorney would not need the authority to terminate their employment by the professional employer organization, but Attorney would need the authority to discipline or unilaterally terminate the lease back of an employee. As proposed, the arrangement would violate Rules 4 dash–5.4 and 4 dash–5.5.

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