Opinion 128

Our committee has been asked to answer three questions which were presented to and answered by the American Bar Association's Committee on Professional Ethics and grievances. The questions deal with the practice of some accounting firms who maintain legal counsel on their staffs to render legal services to clients of the accounting firms, whether employed on salary or compensated in some other manner.

The three questions are taken from a portion of Opinion No. 272 of the American Bar Association committee as follows:

"2. (a) Is it ethical for a lawyer to be employed by a firm of accountants ON A SALARIED OR OTHER COMPENSATORY BASIS and to practice law for the clients of the accounting firm? "

"The last paragraph of Canon 33 is as follows:

"'Partnerships between lawyers and members of other professions or nonprofessional persons should not be formed or permitted where any part of the partnership's employment consists of the practice of law.'

"Canon 35 provides:

"'The professional services of a lawyer should not be controlled or exploited by any law agency personal or corporate, which intervenes between client and lawyer. A lawyer's responsibilities and qualifications are individual. He should avoid all relations which direct the performance of his duties by or in the interest of such intermediary. A lawyer's relation to his client should be personal, and the responsibility should be directed to the client. . . '

"A lawyer may properly be employed by a firm of accountants on a salaried basis to advise the accounting firm, but such employment may, under no circumstances, be used to enable the accounting firm to render legal advice or legal services to its clients.

"Should a lawyer be employed by a firm of accountants on the basis of receiving a percentage of the firm profits or fees, this would result in such close professional association between them as to be equivalent, for the purpose of Canon 35, to a partnership between them; and under our Opinion 269 would necessitate the subsequent confinement of the lawyer's activities to such as were permitted the lay accountants.

"2. (b) Does it make any legal difference if the services of the lawyer are billed to the client separately, and the accountant firm participates in no way in the compensation received for legal services?
"No such artificial device would, in our opinion, change the result.

"2. (c) Does it make any ethical difference if, by leave of absence or other temporary arrangement, the lawyer considers he is rendering the legal services on his own time, and the lawyer bills the client independently?
"Our answer is the same as that to 2(b),"