SBM - State Bar of Michigan


October 13, 1981


    The disciplinary rules vehemently proscribe the performance by an attorney of legal or even questionably legal duties under the pretense of layman-performed activities, and such a determination will depend upon the facts and circumstances of each individual transaction.

    An attorney may not commingle receipts and expenses for work constituting the practice of law with a CPA practice in which the attorney is a partner, but is required to keep the two businesses separate and distinct.

    References: DR 2-102(B), DR 3-102(A), DR 3-103(A); C-130, C-158; CI-21, CI-204, CI-208, CI-302, CI-436; State Bar v. Cramer, 399 Mich 116 (1976); Ingham County Bar Ass'n v. Neller Co., 342 Mich 214 (1955); Grand Rapids Bar Ass'n v. Denkema, 290 Mich 56 (1939); MCLA 600.916.


A lawyer became a partner in a CPA firm, none of the other partners being attorneys. About 90-95 percent of the lawyer's time is spent on strictly accounting and tax work. The other 5 percent is spent in specialized work for corporations which includes incorporating businesses, dissolving corporations, drafting corporate minutes, and drafting promissory notes. The attorney inquires as to the propriety of commingling receipts and expenses for legal work with the CPA practice. Receipts for legal work would be deposited to the CPA partnership bank account, and payment of legal services will be paid by the partnership. Receipts and expenses will be run through the draw account during the year, so that any profits from legal work will show only on the attorney'' business records.

It is undoubtedly true that the practice of law is not limited to conducting litigation, but rather includes giving legal advice and counsel, rendering services that require the use of legal knowledge or skill, and preparing instruments and contracts by which legal rights are secured. State Bar v. Cramer, 399 Mich 116 (1976); Ingham County Bar Ass'n v. Neller Co., 342 Mich 214 (1955); Grand Rapids Bar Ass'n v. Denkema, 290 Mich 56 (1939); MCLA 600.916

"Functionally, the practice of law relates to the rendition of services for others that call for the professional judgment of the lawyer. The essence of the professional judgment of the lawyer is his or her educated ability to relate the general body and the philosophy of law to a specific legal problem of a client." ABA Special Committee on Evaluation of Ethical Standards, Code of Professional Responsibility (1969).

The clerical task of filling out skeletal blanks or drawing instruments of generally recognized stereotyped forms such as notes and papers of incorporation may be regarded as the legitimate right of any layman to act on behalf of another. The situation here however, is more complicated. The performance of these duties may constitute the practice of law, depending upon the complexity and nature of the transaction. MCLA 600.916 provides in part:

    "It is unlawful for any person to practice law, or to engage in the law business, or in any manner whatsoever to lead others to believe that he or she is authorized to practice law or engage in the law business, or in any manner whatsoever to represent or designate himself or herself as an attorney and counselor, attorney at law, or lawyer unless the person so doing is regularly licensed and authorized to practice law in this state."

When a CPA would be precluded from rendering legal services, the attorney would not be foreclosed from rendering them in the capacity as a lawyer, provided that the attorney makes it known that the attorney is acting as a licensed attorney authorized to practice law and not in the capacity as a CPA.

An admonition is warranted here. Where an attorney performs any of the above duties while holding himself/herself out as an attorney, the attorney is engaged in the practice of law, whether such duties clearly constitute the practice of law or whether such performance is of a questionable nature. The public is not required to draw such fine line distinctions between what is the practice of law and what is questionably the practice of law. One thing is clear the disciplinary rules vehemently proscribe the performance by an attorney of legal or even questionably legal duties under the pretense of layman performed activities, i.e., the performance of laymen-performed activities must not be a sham.

Because we are not here confronted with the particulars of any transactions, it is impossible to render a precise answer to these questions.

In CI-302 the Committee held that the propriety of a lawyer becoming a minority shareholder in a title insurance company depends upon the physical situation and whether the two businesses are kept separate and distinct. The primary concern is:

    "That the other profession or business would serve as a feeder of the law practice and that this is an impermissible form of solicitation under the code . . . . This Committee has never held that an attorney may indiscriminately or otherwise combine his or her two professions, allowing one to gee the other." CI-433.

ABA Op 328 concerning a lawyer/CPA stated:

    "Perhaps because of the terms 'indirect solicitation' and 'feeding the law practice' are vague as well as overbroad, they were entirely omitted from the Code of Professional Responsibility. The Code's draftsman thus indicated an intent to rely on those vague phrases as standards by which to judge the outside activities and occupations of lawyers. Instead, the underlying evils were attacked in the Code by means of several comprehensive but specific disciplinary rules, particularly DR 2-101 through DR 2-105. Accordingly this committee cannot condemn any activity today on the basis of 'indirect solicitation' or 'feeding a law practice."

The ABA in i1422 has restated this position as recently as September 11, 1978. The ABA's position in this matter, however, is by no means a blanket approval of a dual practice. On the contrary the Committee points out that it would be very difficult to practice certain occupations in conjunction with the practice of law especially within the same office. As the ABA Committee states in i1755 and i328:

    "While . . . the committee does not consider it to be necessarily unethical to practice law and concurrently but in different transactions engage in another business, the Committee is of the opinion that to do so in accordance with the Canons is so difficult that suspicions of unethical conduct are almost inevitable. For that reason alone, it is our opinion that only a very few lawyers will expose themselves to such suspicions on the part of their brother lawyers and the public. The lawyer who does so must be willing to undertake the tremendous burdens of conducting his or her other business ethically under our Canons."

This proposition is by no means surprising as it is implicitly stated in the Code at DR 2-102(E), "A lawyer who is engaged both in the practice of law and in other professional business shall not so indicate on his or her letterhead, office sign or professional card, nor shall he or she identify him/herself as a lawyer in any publication in connection with his or her profession or business."

In CI-329, we held it would be proper for a lawyer to conduct his or her law practice and a second occupation not law-related from one office, and a lawyer may conduct his or her law practice in a law-related profession or occupation such as accounting from the same office, provided he/she complies with all of the provisions of the Code of Professional Responsibility.

"Among other things, however, . . . it would not be proper for your accounting activities to serve as a feeder for the law practice. Nor would it be proper to recommend employment of yourself to a nonlawyer who has sought your advice regarding accounting matters."

We think that opinion adequately reflects the current feeling of the Committee on the propriety of engaging in two professions or businesses from the same office. While it would not be technically improper for an attorney to conduct legal business from a CPA business it would be very difficult for the attorney to comply with the Code from a practical standpoint. Many ethics opinions have held that it is improper to form any business which combines the practice of law and business by a layperson, e.g., CI-436, CI-302, CI-208, CI-204, CI-21, CI-158 and C-130. DR 3-103 prohibits a lawyer from forming a partnership with a nonlawyer if any of the activities of the partnership consist of the practice of law.

The commingling of receipts and expenses from legal work with the CPA partnership is clearly proscribed by past opinions and the Code itself, e.g., CI-436, CI-208, DR 2-102(B), DR 3-102(A), DR 3-103(A). The practice of commingling funds that is suggested would unavoidably give the appearance of impropriety and thus would be unethical.