NJ’s Bonafide Office Rule Would Have Me Doubled Over With Laughter Except That It Will Double the Cost of Legal Services

I wish that I hadn’t chosen April Fools’ Day to post about ACPE 718/CAA 41, the joint opinion by two New Jersey judicial advisory committees ruling that virtual office arrangements, outsourced or shared receptionist services and even working outside of the office for more than a few hours violate New Jersey’s “bonafide office requirement.”  Because the New Jersey ruling is simply so moronic that it could readily be mistaken for a joke.

By way of New Jersey’s bonafide office rule, Rule 1:21:

For the purpose of this section, a bona fide office is a place where clients are met, files are kept, the telephone is answered, mail is received and the attorney or a responsible person acting on the attorney’s behalf can be reached in person and by telephone during normal business hours to answer questions posed by the courts, clients or adversaries and to ensure that competent advice from the attorney can be obtained within a reasonable period of time. For the purpose of this section, a bona fide office may be located in this or any other state, territory of the United States, Puerto Rico, or the District of Columbia (hereinafter “a United States jurisdiction”).

The New Jersey advisory committees concluded that “virtual offices” – where lawyers can rent space part time to meet clients or use as a mail drop – are not a bona-fide office within the meaning of Rule 1:21 because lawyers use the space part time — they do not keep files on site or employ staff who can assist walk-in client.  Here’s a quick run down of what’s wrong with the ruling:

1.  Apparently, the authors of the New Jersey decision not familiar with the concept of email or texting or voice mail.  If they were, they’d have realized that these tools afford a far quicker, not to mention, less expensive way to contact a lawyer to obtain a response or advice within a reasonable amount of time than a receptionist and physical office space.

2.  Likewise, many lawyers don’t keep physical files in their office, but instead house them in the cloud while storing paper files off site.  Does keeping files in the cloud mean that a law office is not “bonafide” within the meaning of New Jersey’s rules.

3.   Many lawyers, even those with full time space, like to spend time outside of the office.  Back in the day when I had full time space, I often worked at the library, on site at one of my client’s offices and occasionally from home.  This too, would have violated the bonafide office rule unless I had someone babysitting the office, since the opinion states that: “If the attorney is regularly out of the office during normal business hours, then a responsible person must be present at the office.”

4.   Essentially, the New Jersey ruling requires full time office space and a full time receptionist.  Assuming $500 a month for space, and $20,000 for staff, that’s $26,000 per year compared to the $3000-$5000 cost of a virtual office.  It’s clients who will absorb that cost.

5.  Moreover, the added cost of complying with the bonafide office rule is even higher if a lawyer has children.  There, the lawyer will have to pay for child care so she can spend time at her physical location.  And while the New Jersey ruling does allow a home office to meet the “bonafide office” requirement, most lawyers (particularly women) who work from home are loathe to use that address for security reasons, a point I made in this article.

Throwing up barriers to the burgeoning number of unemployed lawyers who may want to rent a virtual office to test the waters of starting a law firm doesn’t make any sense.  Nor does increasing the cost of running a law firm at a time when consumers are struggling to hire lawyers and are so fearful of holding down a job that they’d do anything to avoid taking time off to meet lawyers during business hours.  In short, few clients have the desire, let alone the luxury of meeting a lawyer during business hours – and appreciate the flexibility that meetings by phone or via internet can afford.

If you practice from a virtual office – no matter your location – or if you’re otherwise adversely impacted by this rule, I urge you to contact the New Jersey authorities with your story.  Let’s bring the New Jersey bar into the 21st century.

For others who’ve covered this story, see Josh King’s post at the Avvo Blog, George Conk, Otherwise: Blackstone Today.