Can a lawyer form a firm with an accountant to provide tax legal and accounting services, share legal fees, and use a joint letterhead?
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This page answers the general question as of 1984. Ezel answers yours: whether it's allowed on your facts, under the current New York Rules of Professional Conduct, with citations.
Plain-English summary
A lawyer who is not an accountant asked whether he could form a "professional relationship" with a nonlawyer accountant to prepare tax returns and give tax-related advice to clients, whether he could share legal fees with the accountant, and whether he could share professional stationery identifying him as a lawyer. The committee treated "professional relationship" as any association in which both the lawyer and the accountant have a proprietary interest, formed to provide tax-related legal and accounting services.
The committee grounded its answers in the policy that legal services be performed only by licensed lawyers governed by the profession's ethical standards (EC 3-1 to 3-5), and in Canon 5's protection of the lawyer's independent professional judgment, which bars practicing in any association where a nonlawyer can control or influence the lawyer's performance of legal services (EC 3-8). It reasoned that services in taxation, when performed by someone holding himself out as a lawyer, constitute the practice of law, and that offering professional services jointly with the accountant would let the accountant hold himself out as offering legal services through the affiliated lawyer. The committee held this would aid the accountant's unauthorized practice of law (DR 3-101(A)), would form a barred partnership with a nonlawyer for activities consisting of the practice of law (DR 3-103(A)), and would run afoul of DR 5-107(C) (no nonlawyer ownership, office, or control over the lawyer's judgment). It also observed, without deciding the legal question, that Judiciary Law sections 495, 478, and 484 restrict entity practice of law, and that assisting an illegal practice would be unethical (EC 1-5; DR 7-102(A)(8)).
On fee sharing, the committee answered no: DR 3-102(A) bars a lawyer from splitting legal fees with a nonlawyer, with exceptions not relevant here. On the joint letterhead, it also answered no: because the lawyer and accountant cannot form the relationship in the first place, sharing stationery identifying both and their professions would be deceptive and misleading under DR 2-101(A) by suggesting they practice together rather than independently. All three questions were answered in the negative.
Currency note
This opinion was issued in 1984, before New York replaced the Code of Professional Responsibility with the Rules of Professional Conduct in 2009 (the bar on sharing fees with and forming partnerships with nonlawyers now appears at Rule 5.4, aiding the unauthorized practice of law at Rule 5.5, and firm names and letterheads at Rule 7.5). 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: Can a lawyer and an accountant form a firm to provide tax legal and accounting services?
A: No. The committee held that doing so would aid the accountant's unauthorized practice of law and form a barred partnership with a nonlawyer (DR 3-101(A), DR 3-103(A), DR 5-107(C)).
Q: Can a lawyer share legal fees with an accountant?
A: No. The committee held that DR 3-102(A) bars splitting legal fees with a nonlawyer, with exceptions not relevant here.
Q: Can the lawyer and accountant share a joint letterhead?
A: No. The committee held a shared letterhead identifying both professions would be deceptive and misleading under DR 2-101(A), suggesting they practice together.
Background and rules framework
The opinion applied DR 3-101(A) (aiding unauthorized practice), DR 3-102(A) (dividing fees with a nonlawyer), DR 3-103(A) (partnership with a nonlawyer), DR 5-107(C) (nonlawyer control of a law practice), and DR 2-101(A) (deceptive public communications), read with Canons 3 and 5. The closest current Model Rule analogues are Rule 5.4 (professional independence; fee sharing and partnership with nonlawyers), Rule 5.5 (unauthorized practice), and Rule 7.5 (firm names and letterheads).
Citations and references
Rules of Professional Conduct:
- MR 5.4 (professional independence of a lawyer)
- MR 5.5 (unauthorized practice of law)
- MR 7.5 (firm names and letterheads)
- NY DR 3-101(A); DR 3-102(A); DR 3-103(A); DR 5-107(C); DR 2-101(A)
Statutes:
- Judiciary Law sections 495, 478, 484 (restrictions on entity practice of law; noted, not decided)
Other opinions cited:
- ABA 297 (1961); ABA 328 (1972): tax services by a lawyer as the practice of law
- N.Y. State 500 (1978): deceptive letterheads
See also
- NY State Bar Op. 565: Marketing-firm solicitation and fee sharing
- NY State Bar Op. 561: Selling an interest in a law partnership
- NY State Bar Op. 556: Dual practice advertising and title insurance
Source
- Landing page: https://nysba.org/opinion-557/
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