Can a law firm hire a CPA to handle clients' tax work, including IRS and Tax Court appearances, without any supervision by one of the firm's lawyers?

Plain-English summary

The inquiry asked whether a law firm could employ a certified public accountant, not licensed to practice law, to perform federal tax services for clients without supervision by a lawyer, including counseling on tax matters, preparing returns, and appearing for clients before the Internal Revenue Service and the United States Tax Court, while related legal services like wills and contracts would be lawyer-supervised. The accountant would be identified as a non-lawyer on firm letterhead and business cards, paid a salary, and possibly given a bonus.

The Committee acknowledged that a law firm may employ a CPA or other non-lawyer to assist with legal services under a lawyer's supervision and responsibility. The critical added element here was that the accountant would perform tax services directly for clients without any lawyer supervision, including representation before the IRS and the Tax Court. The opinion assumed these services either would not constitute the practice of law or could in any event be performed by non-lawyers under applicable federal statute or regulation.

Even so, the Committee reasoned that because the services are similar to or the same as services lawyers perform, there is a substantial risk that clients would be misled into believing the accountant's services were legal services performed or at least supervised by a responsible lawyer (citing EC 3-6 and EC 3-3). Holding out a non-lawyer employee to perform unsupervised services frequently performed by lawyers would unavoidably be a false or misleading communication about the firm's services, and identifying the accountant as a non-lawyer on letterhead and business cards could not eliminate that risk. The Committee concluded the arrangement would violate DR 2-101(A) and is not permissible.

Currency note

This opinion was issued in 1987, under the former Texas Code of Professional Responsibility, which the Texas Disciplinary Rules of Professional Conduct replaced effective January 1, 1990. The Disciplinary Rules have since been amended, and Texas never adopted the ABA's Ethics 2000 framework. The current Texas rules on misleading communications and supervision of non-lawyer assistants are Rules 7.02 and 5.03, with closest ABA analogs Model Rules 7.1 and 5.3. Subsequent rule changes 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 law firm employ a non-lawyer CPA at all?

A: Yes, for assisting with the firm's legal services under a lawyer's supervision and responsibility. The Committee said that is beyond question; the problem was the accountant performing tax services directly for clients without any lawyer supervision.

Q: Why is unsupervised non-lawyer tax work for clients not allowed?

A: The Committee concluded that holding out a non-lawyer to perform unsupervised services lawyers frequently perform creates a substantial risk that clients believe they are getting lawyer-performed or lawyer-supervised legal services, making a false or misleading communication about the firm's services under DR 2-101(A).

Q: Does labeling the accountant a non-lawyer on letterhead fix it?

A: No. The Committee found that identifying the accountant as a non-lawyer on letterhead and business cards could not eliminate the substantial risk of public misunderstanding inherent in the arrangement.

Background and rules framework

The opinion interprets DR 2-101(A) of the former Texas Code of Professional Responsibility (a lawyer shall not make a false or misleading communication about the lawyer or the lawyer's services), informed by EC 3-6 and EC 3-3 on the use of non-lawyer assistants. The closest current concepts are Texas Rules 7.02 and 5.03 and Model Rules 7.1 and 5.3 on misleading communications and supervision of non-lawyer assistants. The analysis turns on the misleading impression created by an unsupervised non-lawyer doing work clients would expect from a lawyer.

Citations and references

Rules of Professional Conduct:

• MR 7.1 (communications concerning a lawyer's services must not be misleading)
• MR 5.3 (responsibilities regarding non-lawyer assistants)
• DR 2-101(A), Texas Code of Professional Responsibility

See also

• TX Ethics Op. 437: Listing a Non-Lawyer Business Administrator on a Firm Sign
• TX Ethics Op. 440: Specialization Claims on Firm Letterhead and Business Cards

Source

• Landing page: https://www.legalethicstexas.com/resources/opinions/opinion-438/
• Original PDF: https://tcle-web.s3.amazonaws.com/public/documents/Opinion_438.pdf

Original opinion text

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

QUESTION PRESENTED

Under the Texas Code of Professional Responsibility, may a law firm employ a certified public accountant, who is not licensed to practice law, to perform for clients without supervision by a licensed attorney various services relating to federal taxes? Such services would include counseling on tax matters, preparation of tax returns, and appearances on behalf of clients before the Internal Revenue Service and before the United States Tax Court. Related legal services, such as the preparation of wills or contracts, would be supervised by a licensed attorney. The accountant would be identified as a non-lawyer or as performing non-legal services on the firm letterhead and business cards. The accountant would be paid a salary by the law firm and the law firm might in its discretion grant a bonus to the accountant.

DISCUSSION

It is beyond question that a law firm may employ a certified public accountant or other non-lawyer to perform certain services for the law firm and to assist in the performance of legal services by the law firm under the supervision and the responsibility of a lawyer admitted to practice law in the state. However, the arrangement that is the subject of this opinion involves the critical additional element that the accountant employed by the law firm would perform services in the tax area directly for clients of the law firm without any supervision by a lawyer. Such services would be similar to or the same as services performed by lawyers and would include representation of clients before the Internal Revenue Service and the United States Tax Court. For purposes of this opinion, it is assumed that all of the services that the accountant would perform directly for clients without a lawyer's supervision would be services that either would not constitute the practice of law or could in any event be performed by non-lawyers under applicable federal statute or regulation.

Since the services that would be performed by the accountant are similar to or the same as services that are performed by lawyers, there is a substantial risk that clients or potential clients of the law firm would be misled by the arrangement into believing that the accountant's services were legal services performed by, or at least supervised by, a lawyer responsible for such services. See Ethical Consideration ("EC") 3-6; see also EC 3-3. By holding out to the public and to clients a non-lawyer employee to perform unsupervised services that are frequently performed by licensed lawyers, the law firm would unavoidably be making a false or misleading communication about the services performed by the law firm. Identification, on the law firm's letterhead and business cards, of the accountant as a non-lawyer or as performing non-legal services could not in this situation eliminate the substantial risk inherent in the arrangement for public misunderstanding of the extent of legal services performed by the law firm. Accordingly, such an arrangement would involve with respect to the law firm a false or misleading communication about the law firm's services in violation of Disciplinary Rule 2-101(A): "A lawyer shall not make, on behalf of himself, his partner, associate, or any other lawyer, any false or misleading communication about the lawyer or the lawyer's services."

CONCLUSION

It is not permissible under the Texas Code of Professional Responsibility for a law firm to employ a non-lawyer accountant who would perform for law firm clients tax services that are not supervised by a licensed attorney.

Tex. Comm. On Professional Ethics, Op. 438 (1987)