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Are There Legal Risks to Shared Office Space?

By William Vogeler, Esq. on September 22, 2017 3:57 PM

Millennials are driving a trend towards shared office space, as they try to save money while starting new businesses. It's not just a thing; it is "the thing' in commercial real estate.

The supply of shared office spaces has gone from 14 to more than 11,100 in the past ten years. That's an increase of nearly 80,000 percent.

It's exciting for the real estate business, but an issue for general counsel who watch for problems with shared liability. It's like a crowd rushing to an intersection; somebody's going to get hurt.

Not So Fast

It's even sketchier for lawyers who want to share office space. It may be a good idea to cut overhead, but watch out for cutting off your head.

We're talking about partnership liability, where attorneys hang their shingles from the same storefront. The lawyers may think they are practicing separately, but what do clients think?

"If the client reasonably believed that an attorney was practicing in a general partnership with the other attorneys in the office, then there are risks for all of the attorneys no matter how clearly separated the financial and other aspects of their practices may be," observe law partners Randy Evans and Shari Klevens.

They recommend that lawyers avoid confusing advertising, keep client confidences and maintain separate files. The same principles can apply to other businesses sharing office space.

Some Limitations

Corporate counsel may advise clients about the legal downsides of office sharing, such as implied partnerships, premises liability and insurance issues. But the demand for share office space is moving forward and expected to double in the next four years.

If nothing else, attorneys can point out practical limitations. For example, businesses may have less space, less availability and less ability to upgrade with shared office spaces.

Among other concerns, the new age entrepreneur wants to define a corporate culture. And it's hard to define your own culture, if you are sharing space with someone else.

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