Could a consulting company’s lawyer give legal services to its customers while disclaiming a lawyer-client relationship with them?
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This page answers the general question as of 1991. Ask about yours and see what the current Vermont Rules of Professional Conduct say for your facts, with citations.
Plain-English summary
A lawyer was an officer and director of a business consulting company while also working at a law firm. The lawyer performed legal work for the consulting company's customers, including entity formation and contracts, but told them that only the company was the client and invited them to hire separate counsel.
The committee concluded that customers for whom the lawyer performed legal services were the lawyer's clients despite the disclaimer. It said the lawyer could not avoid responsibilities to those clients by working through a corporation. The company and lawyer's roles raised concerns about unauthorized practice, solicitation, independent judgment, conflicts, and fee sharing.
The opinion said third-party payment required client consent after full disclosure under DR 5-107(A), but the committee was reluctant to treat disclosure and consent as a complete answer to all conflicts. It also warned that DR 3-102 barred sharing legal fees with the nonlawyer company and that the company's compensation for legal services could not exceed what was paid to the lawyer.
Currency note
This opinion was issued in 1991 under Vermont's former Code of Professional Responsibility. The Vermont Supreme Court's rules history says the Rules of Professional Conduct replaced the Code and applied to lawyer conduct after September 1, 1999; the court later made comprehensive amendments in 2009. 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 Treat this page as historical context, not current guidance.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.
Common questions
Q: Did the customer acknowledgment prevent a lawyer-client relationship?
A: No. The committee treated customers receiving the lawyer’s legal work as the lawyer’s clients despite the disclaimer.
Q: Could consent resolve every conflict with the consulting company?
A: The committee was reluctant to find disclosure and client consent sufficient for all conflicts because the lawyer’s independence could be affected by ties to the company.
Q: What fee issue did the committee identify?
A: It said DR 3-102 prohibited fee sharing with a nonlawyer and addressed the company’s compensation for legal services.
Background and rules framework
The committee discussed former Code DR 5-107(C) on corporate practice, DR 2-103(C) on solicitation, DR 5-107(A) and (B) on third-party payment and independent judgment, and DR 3-102 on fee sharing.
Citations and references
Vermont Code of Professional Responsibility:
- DR 5-107(C), DR 2-103(C), DR 5-107(B), DR 5-107(A), DR 3-102
Cases:
- Grassman v. State Bar, 553 P.2d 1147 (Calif. Sup. Ct. 1976), nonlawyer fee sharing
Other opinions cited:
- Maine Board of Bar Overseers Professional Ethics Committee Opinion 79 (May 6, 1987)
See also
Source
- Landing page: VBA conflict of interest opinions
- Original PDF: Vermont Advisory Opinion 91-12
- Rules history: Vermont Rules of Professional Conduct, “These rules apply to lawyer conduct after September 1, 1999.”
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