Can a company's in-house lawyer perform legal services for the company's customers and let the company bill the customers for that work?

Currency note

This opinion was issued in 1983, before Tennessee's adoption of the 2003 Rules of Professional Conduct, which replaced the former Code of Professional Responsibility. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Plain-English summary

In-house corporate counsel asked whether the corporation could bill its customers for legal services counsel performed.

The opinion explained that corporations may use lawyer-employees to conduct their own legal affairs but may not use them to perform legal services for others, because that would constitute the practice of law by a non-lawyer (the corporation). It concluded that any participation by corporate counsel in performing legal services for corporate customers violates Disciplinary Rule 3-101(A), which prohibits a lawyer from aiding a non-lawyer in the unauthorized practice of law, and that any participation by corporate counsel in allowing the corporation to collect money for performing legal services violates Disciplinary Rule 3-102(A), which prohibits a lawyer from sharing legal fees with a non-lawyer.

Common questions

Q: Can a company's in-house lawyer do legal work for the company's customers?

A: No. The opinion stated corporations "may use lawyer employees to conduct its own legal affairs but may not use them to perform legal services for others," because that "would constitute the practice of law by a non-lawyer."

Q: Why does billing customers for counsel's work violate the rules?

A: The opinion held that performing legal services for customers violates DR 3-101(A) (aiding the unauthorized practice of law), and that letting the corporation collect money for those services violates DR 3-102(A) (sharing legal fees with a non-lawyer).

Background and rules framework

The opinion applied Disciplinary Rule 3-101(A) (aiding the unauthorized practice of law) and Disciplinary Rule 3-102(A) (sharing legal fees with a non-lawyer) of the Tennessee Code of Professional Responsibility. The modern correlates are Model Rule 5.5 (unauthorized practice of law) and Model Rule 5.4 (professional independence; sharing fees with non-lawyers), noted here as navigational cross-references rather than rules the opinion itself applied. The Board addressed a related franchise-marketing scenario in the clarification 83-F-44(a).

Citations and references

Rules of Professional Conduct:

• DR 3-101(A) (aiding the unauthorized practice of law) and DR 3-102(A) (sharing legal fees with a non-lawyer), Tennessee Code of Professional Responsibility
• Model Rule 5.5 (unauthorized practice of law) and Model Rule 5.4 (professional independence of a lawyer), modern correlates

See also

• Tennessee Op. 83-F-44(a): Franchise-Marketing Services and the Practice of Law
• Tennessee Op. 84-F-74: In-House Counsel Billing the Corporation's Customers
• Tennessee Op. 83-F-52: In-House Counsel Serving Affiliated Companies

Source

• Landing page: https://www.tbpr.org/ethic_opinions/83-f-44

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

83-F-44 - Corporation billing clients for in-house counsel services

BOARD OF PROFESSIONAL RESPONSIBILITY OF THE SUPREME COURT OF TENNESSEE

FORMAL ETHICS OPINION 83-F-44

Inquiry is made by in-house corporate counsel about the propriety of allowing the corporation to bill its customers for legal services performed by corporate counsel.

Corporations may use lawyer employees to conduct its own legal affairs but may not use them to perform legal services for others. This would constitute the practice of law by a non-lawyer.

Any participation by corporate counsel in performing legal services to corporate customers is in violation of Disciplinary Rule 3-101(A) of the Code of Professional Responsibility which prohibits a lawyer from aiding a non-lawyer in the unauthorized practice of law.

Any participation by corporate counsel in allowing the corporation to collect money for the performance of legal services is in violation of Disciplinary Rule 3-102(A) which prohibits a lawyer from sharing legal fees with a non-lawyer.

This 14th day of April, 1983.

ETHICS COMMITTEE:

F. Evans Harvill

Oscar B. Hofstetter, Jr.

William R. Willis

APPROVED AND ADOPTED BY THE BOARD