Can a lawyer who is also a CPA practice both professions together and list both titles on legal letterhead?

Plain-English summary

A member of the Arizona Bar who was also a licensed CPA asked whether he could practice both professions within a single professional corporation under A.R.S. section 10-2211(B), and whether any special advertising restrictions applied. He gave no detail about how he would run the dual practice.

The Committee surveyed a long line of Arizona opinions on lawyers in ancillary businesses (real estate, securities, collection agencies, insurance) and the ABA/BNA Lawyer's Manual. The recurring theme is that, although a lawyer may simultaneously engage in another business and the practice of law, the two must be kept independent in operation and practice; the question is whether the proposed structure compromises that separation and independence. The Committee noted that ABA Model Rule 5.7 on law-related services has not been adopted in Arizona, but drew on its caution that a lawyer should keep law-related services separate to minimize the risk that a client assumes they are legal services.

From the authorities, the Committee distilled the governing principles for dual-practice situations: the lawyer may practice both professions from one location if protections such as separate phone numbers, letterheads, and books and records, and confidentiality of legal files, are in place; the lawyer must protect the client's ability to choose providers independently and may not use the ancillary business as a feeder to solicit legal work, disclosing in writing the client's right to seek another provider and obtaining written consent to any dual role; advertising for the multiple practices must be kept distinct, though ER 7.1 lets a lawyer list other professional licenses on legal stationery; conflicts and confidentiality risks are acute and must be guarded against; and under ER 5.4 a lawyer may not form a partnership with a non-lawyer if any partnership activity is the practice of law. The Committee concluded there is no express prohibition on the arrangement, so the lawyer may proceed if he can comply with these requirements, which it called a daunting task that holds dual-practice lawyers to a very high standard.

Currency note

This opinion was issued in 1997, before the State Bar of Arizona's adoption of the 2003 revisions to the Rules of Professional Conduct. 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: Can a lawyer-CPA run both practices from the same office?

A: Yes, the opinion concluded, if appropriate protections ensure separateness and independence, such as separate phone numbers, letterheads, and books and records, and confidential treatment of legal files.

Q: Can the lawyer list the CPA credential on legal letterhead?

A: Yes. The opinion concluded ER 7.1 permits a lawyer to list other professional licenses on legal stationery and advertising, while advertising for the multiple practices must otherwise be kept distinct.

Q: Can the accounting business send clients to the law practice?

A: Not as a feeder. The opinion concluded the lawyer may not use the ancillary business to solicit legal work, and should disclose in writing the client's right to choose another provider and obtain written consent to any dual role, while telling referred clients the attorney-client privilege does not cover the accounting work.

Background and rules framework

The opinion construed ER 5.4 (professional independence; non-lawyer partnerships), ER 7.1 and 7.5 (advertising, fields of practice, and letterheads), ER 1.6 (confidentiality), and ER 1.7 through 1.9 (conflicts), against A.R.S. section 10-2211(B) on combined professional corporations. It noted ABA Model Rule 5.7 (law-related services) is not adopted in Arizona and relied on numerous prior Arizona and out-of-state opinions.

Citations and references

Rules of Professional Conduct:

• MR 1.6 (confidentiality of information)
• MR 1.7 (conflict of interest: general rule)
• MR 1.8 (conflict of interest: prohibited transactions)
• MR 5.4 (professional independence of a lawyer)
• MR 7.1 (communications and advertising)
• MR 7.5 (firm names and letterheads)

Statutes:

• A.R.S. section 10-2211(B) (professional corporations rendering two or more categories of professional service)

Other opinions cited:

• Arizona Ops. 77-16, 78-19, 80-16, 84-16, 85-05, 88-05, 92-09, and 93-01: lawyers in ancillary businesses and required separation
• Pennsylvania Op. 93-01; South Carolina Ops. 93-37 and 93-05; Michigan Op. RI-212: dual-practice and law-related services

See also

• Arizona Ethics Op. 96-11: A Lawyer Employed by a Non-Lawyer Referral Business
• RI EAP Op. 2010-02: Part-Time Municipal Zoning Official May Run a Private Land-Use Law Practice, Share Office Space With a Developer

Source

• Landing page: https://tools.dev.azbar.org/RulesofProfessionalConduct/ViewEthicsOpinion.aspx?id=484

Original opinion text

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

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]

FACTS

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.

QUESTIONS PRESENTED

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?

RELEVANT ETHICAL RULES

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

PRIOR OPINIONS

The answer to the present question necessarily calls for reference to earlier Arizona opinions and other opinions to provide the necessary analytical backdrop. 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.

Opinion

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.

Conclusion

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).