State Bar of Arizona Ethics Opinions

97-08: Business Activities; Accountants; Sharing Office Space

A lawyer who is also an accountant may indicate both professional titles on his legal stationery, but: (1) the business must remain separate (financially and for advertising purposes although they may "reside" in the same physical location); (2) the non-legal business may not be used as a "feeder" for the law firm (i.e. clients of the non-legal business should not be solicited for legal work); (3) clients who are referred to the non-legal business must be advised of the lawyer's interest in the accounting firm and that the attorney-client privilege does not extend to the accounting work; (4) appropriate safeguards must be in place to assure against breaches of confidentiality and conflicts for the legal practice; and (5) the lawyer should not indicate that he is a lawyer in his accounting advertisements unless he complies with the Ethical Rules on advertising. [ERs 1.6, 1.7, 1.8, 5.4, 7.1, 7.5]



The inquiring attorney is a member of the Arizona Bar and a licensed CPA.  The attorney requests this Committee's guidance on the issue of whether he may practice both professions within one professional corporation, pursuant to A.R.S. § 10-2211(B), which provides that a corporation may elect professional corporation status for the purpose of rendering professional services in two or more categories of professional service unless the combination is expressly prohibited by an applicable licensing law of this state.  He presents no facts regarding how he would conduct the dual practice.  He also would like guidance regarding any advertising restrictions that may apply.




Under what circumstances, if any, is it ethically permissible for a licensed lawyer/CPA to practice both professions within one professional corporation?  Are there any peculiar advertising restrictions under such circumstances?




ER 1.6             Confidentiality of Information

ER 1.7             Conflict of Interest:  General Rule

ER 1.8             Conflict of Interest:  Prohibited Transactions

ER 1.9(b)         Conflict of Interest:  Former Client

ER 5.4             Professional Independence of a Lawyer

ER 7.1             Communications and Advertising Concerning a Lawyer's Services

ER 7.3             Direct Contact with Prospective Clients

ER 7.4             Communication of Fields of Practice

ER 7.5             Firm Names and Letterhead




The answer to the present question necessarily calls for reference to earlier Arizona opinions and other opinions to provide the necessary analytical backdrop.[1]  Given the recurring nature of these types of questions and the clear need for guidance, these opinions are discussed in detail below.


Arizona Opinion 77-16 (June 20, 1977) - Discussion of nature of separation required where attorney proposes to actively practice law concurrently with proposed real estate business.  Requirements include: separate telephone numbers with separate listings (77-01); separate office and telephone number (75-10, 76-04); and no common reception area (73-30).


Arizona Opinion 78-19 (May 3, 1978) - Separation of location of dual businesses/professions is necessary where business is related to practice of law; proposed dual practice and combined offices with common entrance, reception area and receptionist permissible where there is a clear distinction in the operations.  Opinion reiterates that arrangement cannot be used as a "feeder" for law practice and cautions regarding confidentiality concerns of common receptionist.


Arizona Opinion 80-16 (June 5, 1980) - Attorney/CPA may show both professional licenses in his legal advertisements.


Arizona Opinion 84-16 (November 13, 1984) - Attorney/securities broker may engage in dual professions if the activities were appropriately separated and client/investor clearly knows what services are what and what the charges for each service are.


Arizona Opinion 85-05 (April 1, 1985) - ER 1.8 requires careful separation of legal and business activities, not so much by focusing on physical separation as by imposing fiduciary duty of disclosure and obtaining consent.  A lawyer acting as a salesman for an insurance company would violate ER 7.3 by selling a prepaid legal insurance where sales activity would also promote his availability as a lawyer.


Arizona Opinion 88-05 (October 27, 1988) - An attorney may show on legal letterhead and business card that attorney also possesses a real estate broker's license, and may use such letterhead so long as it complies fully with ERs relating to solicitations.  Conversely, he, as a realtor, may solicit real estate business as long as he makes no reference to the fact that he is also a lawyer, or does nothing calculated to make that fact known to potential clients.  If he does so, he must comply with ER 7.1 and other rules.


Arizona Opinion 92-09 (June 22, 1992) - Lawyer/owner of licensed collection agency may run into ethical problems when the dual careers are not kept separate and independent and as a result the non-law business serves as a conduit of clients to the lawyer's law practice.  Such a lawyer cannot solicit clients either directly or through others, including employees of his non-law business.


Arizona Opinion 93-01 (February 18, 1993) - ER 5.4 prohibits a lawyer from forming a partnership with a non-lawyer if any of the activities of the partnership consist of the practice of law to protect lawyer's independent judgment.   "Partnership" is construed broadly, even, for example, where attorney planned to be a salaried employee, not a shareholder or officer.




The ethical propriety of attorneys conducting simultaneous dual professions or businesses has been the subject of much discussion at all levels of our national legal system.  Those Arizona Ethics Opinions listed above represent only a few of the many opinions of local, state and ABA committees on the various aspects of the situation.  The major theme gleaned from these opinions is that, although simultaneous engagement in a business career and the practice of law is permissible (see Ariz. Op. 85-05), the businesses/professions must be kept independent in operation and practice.  Thus, the precise issue presented is:  Does the proposed form of business compromise the separation and independence required by prior opinions?


The ABA/BNA Lawyer's Manual on Professional Conduct notes the following with respect to lawyers and their ancillary businesses:


          (a)      The fact that a lawyer holds an interest in a business does not usually prevent him from sharing office space with the business if certain precautions are followed.  The lawyer must maintain separation between his law practice and the operation of the business so that they do not appear to operate together or to be related (91:605, 609).


          (b)      The business may not be used as a feeder for his law business, in violation of solicitation rules (Model Rule 7.2; DR 2-103); he may not share or divide legal fees with a non-lawyer (Model Rule 5.4, DR 3-102); may not form a partnership with a nonlawyer if any of its activities include the practice of law (Model Rule 5.4, DR 3-103), or aid in the unauthorized practice of law (Model Rule 5.5, DR 3-101) (Id.)


ABA Model Rule 5.7, which has not been adopted in Arizona, requires that a lawyer who provides law-related services (e.g., title insurance, accounting, financial planning and others) must comply with the Rules of Professional Conduct, unless the lawyer makes it clear to the client or customer that the law-related services are not legal services and that the protections of the attorney-client relationship do not apply to the law-related service.


The Comment to this Rule advises that the lawyer "should take special care to keep separate the provision of law-related services in order to minimize the risk that the recipient will assume that the law-related services are legal services.  The risk of such confusion is especially acute when the lawyer renders both types of services with respect to the same matter."


Based on the above, the following summarizes the generally accepted principles that govern dual practice situations regardless of the nature of the business entities involved:


1.       A lawyer/CPA (or other ancillary business) may simultaneously practice dual professions out of the same physical location as long as appropriate protections are enforced to insure the separateness and independence of the services.  Those practices are set forth above in the discussion of the various opinions and include, for instance, separate phone numbers, letterheads, books and records as well as assuring that all legal files will remain confidential.


2.       The dual professional must take every precaution to protect the clients' ability to independently select professional service providers.  He/she cannot use the independent business as a "feeder" for the law business; i.e., the lawyer cannot solicit legal work from the ancillary business.  At a minimum, the professional should disclose to the client in writing that they have every right to seek services from another provider and obtain the client's written consent to any dual role.


3.       There are peculiar advertising problems that face a dual professional as explained by the above-discussed opinions.  Essentially, advertising multiple practice areas must be kept distinct, with the exception that ER 7.1 permits a lawyer to list other professional licenses on his legal stationery and advertising.


4.       The potential for conflicts of interest and compromising confidentiality are acute and must be guarded against.


5.       A lawyer may not form a "partnership" with a non-lawyer if any of the partnership's activities include the practice of law pursuant to ER 5.4.




Although operating dual professions is fraught with potential problems, there is no express prohibition against such an arrangement, and thus this Committee concludes that the inquiring attorney may proceed as desired, IF he/she can find a way to comply with the requirements discussed in this opinion.  The Committee believes that this is a daunting task and the Committee reminds any attorney who is considering such a course of action that although lawyers are not prohibited from engaging in ancillary business activities "those who choose to do so [are held] to a very high standard.  This high standard involves paying particular attention to conflicts of interest, exercising independent legal judgment, fully disclosing any adverse relationships, avoiding fee-splitting or solicitation and protecting confidentiality. . .  "[Such an attorney] must take great care to gain [the] client's consent to representation . . . . and must take care not to mislead clients as to the role of the agency and the role of the law firm in [the] proceeding. . . .[He] must also advise them that they may obtain independent counsel if they so desire."  (Penn. Op. 93-01).



[1] Wisconsin Ethics Op. E-82-11 (December 1982) - Lawyer who owns collection agency may not so state on legal business card because involves improper solicitation of legal business due to recommending his own employment.


Pennsylvania Opinion 93-110 (September 19, 1993) - A lawyer, who is president, secretary and treasurer as well as an employee, may set up his office in a building, whose only other tenant is his father's accounting practice.  The lawyer must insure that the public has no reason to infer any affiliation between the law office and accounting firm.  For example, the law office must occupy separate space, keep client files isolated from accounting personnel, and must have its own letterhead and phone line.  If the law office and accounting business share a reception area, special measures are needed to insure confidentiality.  The lawyer may not share fees with the accounting business, nor may he use that business as a feeder to his law practice.


South Carolina Opinion 93-37 (December 1993) - A lawyer, who is also a CPA, may move his two separate offices into the same building, being careful to maintain the separation between the two practices, including different letterhead, separate offices with different entrances and different telephone numbers.


South Carolina Opinion 93-05 (1993) - Law firm's plan to own an interest in and to refer clients to an ancillary business co-owned by an accounting firm was not inherently unethical.  The business would prepare retirement plans for customers, but would refer questions of law to the law firm unless the customer preferred another attorney.  Cautioned of the danger that the business' activities in  preparing retirement plan documents, preparing and filing documents securing tax-exempt status, and proposing plan amendments could constitute the unauthorized practice of law.  Moreover, warned that the law firm could not provide value to the business in the form of capital, management advice, employee compensation or client referral in exchange for referrals of customers to the law firm.


Michigan Opinion RI-212 (June 1, 1994) - A lawyer may indicate dual professions on letterhead, business card and advertising but the advertising must not create any unjustified expectations.  The lawyer may not solicit legal business from non-law clients, but may refer clients to non-law business and accept referrals from non-law business as long as interests are disclosed and client is advised that they may seek services from independent service providers.  The lawyer must assure that client confidences are protected, and that independent judgment is preserved.


Nassau County Bar Opinion 92-12 (May 20, 1992) - A lawyer who is also an insurance broker may not act as an insurance broker and lawyer in the same transaction.  (See also South Dakota Op. 94-20; Pa. 95-41 (March 27, 1995) - a lawyer may provide services as a broker separate and distinct form the lawyer's practice of law to non-clients only).


North Dakota Opinion 92-17 (February 9, 1993) - A lawyer may not establish a professional service corporation in which the lawyer would act as both a licensed real estate broker and a licensed attorney.


Philadelphia Bar Opinion 92-13 (September 1992) - A lawyer who practices employment law and also operates a human resources business may not recommend his legal services to customers of the other business.


Pennsylvania Opinion 95-105 (August 29, 1995) - A lawyer may act as a real estate broker while practicing law in a separate office.  Areas of concern include: confidentiality of information regarding current or former clients in brokerage transactions; limitation of law client representations by conflicts of interest arising from the brokerage; brokerage transactions for law clients would be prohibited unless the client received full written disclosure, was advised to obtain independent legal counsel, was given the opportunity to do so and consented to the representation in writing; the lawyer may not use information regarding the representation of a former law client to the client's disadvantage in a brokerage transaction; no legal fees may be shared with brokerage employees; the lawyer should be sensitive to broker activities that can be considered the unauthorized practice of law and should realize that some activities are considered the practice of law when performed by a lawyer, although they would not be so considered when performed by a non lawyer; any advertising must distinguish the law practice from the brokerage business; and, brokerage employees cannot recommend the law firm.


Utah Opinion 146A (revised) (April 28, 1995) - A lawyer who is employed as a life insurance agent may not, in the course of selling insurance products, suggest to customers the need for estate planning and then provide those legal services where the customer did not initially contact the lawyer/insurance agent for legal advice.  The lawyer may sell insurance products to current legal clients so long as disclosure and consent requirements are met.


Pennsylvania Ethics Opinion 93-01 (1993) - The opinion begins by noting that although lawyers are not prohibited from engaging in ancillary business activities "those who choose to do so [are held] to a very high standard.  This high standard involves paying particular attention to conflicts of interest, exercising independent legal judgment, fully disclosing any adverse relationships, avoiding fee-splitting or solicitation and protecting confidentiality."  The opinion goes on to state that "[Y]ou must take great care to gain your client's consent to representation by your firm and you must take care not to mislead clients as to the role of the agency and the role of the law firm in {the} proceeding. . . .  You must also advise them that they may obtain independent counsel if they so desire."

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