Can a corporation's in-house lawyer provide legal services to the general public when the corporation markets those services and keeps the fees?

Plain-English summary

Opinion E-83-5 addressed whether a lawyer employed as full-time, in-house counsel for a community economic development corporation may provide legal services to the general business public, where the corporation offers the lawyer's services to the public as part of its business and collects and retains the fees as its revenue. The committee answered no.

The committee identified several problems under the former Code. SCR 20.09(4)(a) provided that a lawyer may not knowingly assist an organization that furnishes legal services to promote the use of the lawyer's services, except cooperation with certain enumerated organizations; because a community economic development corporation is not among the enumerated organizations, it would be improper for its in-house counsel to assist it in the proposed activities. The proposed activities might also constitute the unauthorized practice of law by the corporation, and a lawyer may not aid a nonlawyer in unauthorized practice (SCR 20.18(1)) or practice law in association with a layman (SCR 20.17(8)). A lawyer also may not share legal fees with a nonlawyer except in circumstances not present here (SCR 20.19). The committee further stressed that professional judgment must be exercised solely for the client's benefit, free of compromising influences and loyalties (SCR 20.23(1)); that a lawyer employed by a corporation owes allegiance to the corporation, not to its stockholders, officers, or others (SCR 20.23(3)(e)); and that a lawyer may not permit a person who recommends, employs, or pays the lawyer to direct or regulate the lawyer's professional judgment (SCR 20.30(2); see also SCR 20.23(4)(d)). The committee concluded the proposed activities could place the in-house counsel in situations where professional judgment would not be free of compromising influences and loyalties, and so would be improper.

Currency note

This opinion was issued in 1983, before Wisconsin's July 1, 2007 adoption of the revised Rules of Professional Conduct for Attorneys (the state's Ethics 2000 update), and it applies the former Code (SCR 20.09, 20.17, 20.18, 20.19, 20.23, 20.30). Aiding unauthorized practice, fee sharing with nonlawyers, and professional independence are now governed by SCR 20:5.5, 20:5.4, and related rules / Model Rules 5.4 and 5.5. 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.

Common questions

Q: Could in-house counsel serve outside clients through the employer?

A: No, on these facts. The committee held that an in-house counsel may not provide legal services to the general public where the corporation markets the services and keeps the fees.

Q: Why was the arrangement improper?

A: The committee pointed to aiding the corporation's possible unauthorized practice (SCR 20.18(1)), the bar on sharing fees with a nonlawyer (SCR 20.19), and the risk that the lawyer's professional judgment would be directed by the employer (SCR 20.30(2)).

Q: To whom does a corporation's lawyer owe allegiance?

A: Per the opinion, a lawyer employed by a corporation owes allegiance to the corporation itself, not to a stockholder, director, officer, employee, or other connected person (SCR 20.23(3)(e)).

Background and rules framework

The opinion interpreted the former Code's provisions barring assistance to organizations promoting a lawyer's services (SCR 20.09(4)(a)), aiding unauthorized practice and associating with laymen (SCR 20.18(1), 20.17(8)), sharing fees with nonlawyers (SCR 20.19), and allowing third parties to direct professional judgment (SCR 20.23, 20.30(2)). These now correspond to SCR 20:5.4 and 20:5.5 / Model Rules 5.4 and 5.5.

Citations and references

Rules of Professional Conduct:

• Wis. SCR 20.18(1), 20.17(8) / Model Rule 5.5 (aiding unauthorized practice; associating with laymen) (former Code provisions)
• Wis. SCR 20.19, 20.30(2), 20.23(1), 20.23(3)(e) / Model Rule 5.4 (fee sharing with nonlawyers; professional independence) (former Code provisions)
• Wis. SCR 20.09(4)(a) (assisting organizations that promote a lawyer's services) (former Code provision)

See also

• WI Ethics Op. E-95-2: In-House Counsel Providing Legal Services to Third Parties
• WI Ethics Op. EF-18-02: In-House Counsel Aiding Unauthorized Practice
• WI Ethics Op. E-84-1: Lay Consulting Service in Personal Injury Cases

Source

• Landing page: https://www.wisbar.org/formembers/ethics/pages/formal-opinions.aspx
• Original PDF: https://www.wisbar.org/formembers/ethics/Ethics%20Opinions/E-83-5.pdf