Can a lawyer co-own a corporation with a nonlawyer that handles a landlord's entire eviction process and hires the lawyer to do the legal work?

Plain-English summary

Opinion E-80-9 addressed an attorney and a nonattorney who proposed to form a corporation that would take charge of a landlord's entire eviction process under an agency agreement for a fee. The corporation would see that notices were served and would hire an attorney, who would separately bill the corporation for legal services, and the attorney and nonattorney would share in the corporation's profits.

The committee framed the question around three issues: whether the corporation would be engaged in the practice of law, whether the attorney would be assisting it to do so, and whether the attorney as co-owner would be dividing fees with a nonlawyer. Although whether the corporation practices law is a legal issue outside the committee's authority, the committee said serious consideration must be given to that question when a corporation contracts to handle a third party's entire eviction process including court proceedings, and that the attorney appeared to be "skating on thin ice" under the Code. It cited the duties to help prevent the unauthorized practice of law (SCR 20.17), the bar on aiding a nonlawyer's unauthorized practice (SCR 20.18(1)), and the bar on forming a partnership with a nonlawyer where any activity is the practice of law (SCR 20.20). It also pointed to Opinion E-61-1, which barred an attorney from accepting employment from a lay collection agency where the arrangement involved fee payment or division with the agency, agency control, solicitation, or aiding the agency's unauthorized practice.

The committee identified a further problem: when the attorney commences an eviction action, it is unclear whether the client is the landlord or the corporation, which conflicts with the duty to exercise independent professional judgment on behalf of a client and to know who has the primary claim on that judgment (SCR 20.23). It noted the risk that the corporation's financial interests could conflict with the landlord's representation, the rule against acquiring an interest in litigation (SCR 20.26), and the admonition to avoid even the appearance of impropriety (SCR 20.48). For those reasons, the committee concluded a lawyer may not ethically enter the arrangement.

Currency note

This opinion was issued in 1980, before Wisconsin's July 1, 2007 adoption of the revised Rules of Professional Conduct for Attorneys (the state's Ethics 2000 update), and it applies the former Code provisions cited in the opinion. The professional-independence and nonlawyer fee-sharing limits are now in SCR 20:5.4 / Model Rule 5.4, the unauthorized-practice limits in SCR 20:5.5 / Model Rule 5.5, and conflicts in SCR 20:1.7 / Model Rule 1.7. 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: Could the lawyer co-own the eviction corporation with a nonlawyer?

A: No. The committee concluded a lawyer may not enter the arrangement, given the risks of aiding unauthorized practice and forming a fee-sharing law partnership with a nonlawyer.

Q: Why did sharing the corporation's profits matter?

A: The committee treated profit-sharing as dividing fees with a nonlawyer and forming a partnership whose activities include the practice of law, both barred under the rules then in force.

Q: What was the conflict-of-interest concern?

A: The committee questioned whether the lawyer's client was the landlord or the corporation, and warned that the corporation's financial interests could conflict with the landlord's representation, undermining the lawyer's independent judgment.

Background and rules framework

The opinion applied the former Wisconsin rules on preventing and not aiding unauthorized practice (SCR 20.17, 20.18(1)), barring law partnerships with nonlawyers (SCR 20.20), requiring independent professional judgment (SCR 20.23), and avoiding acquisition of an interest in litigation (SCR 20.26). The current counterparts are SCR 20:5.4 / Model Rule 5.4 (professional independence and nonlawyer fee-sharing), SCR 20:5.5 / Model Rule 5.5 (unauthorized practice), and SCR 20:1.7 / Model Rule 1.7 (conflicts).

Citations and references

Rules of Professional Conduct:

• Wis. SCR 20.17, 20.18(1) (preventing and not aiding unauthorized practice) (former Code)
• Wis. SCR 20.20 (no law partnership with a nonlawyer) (former Code)
• Wis. SCR 20.23, 20.26 (independent judgment; no interest in litigation) (former Code)
• Model Rules 5.4, 5.5, 1.7 (professional independence; unauthorized practice; conflicts)

Other opinions cited:

• State Bar of Wisconsin Opinion E-61-1: attorney may not accept employment from a lay collection agency on terms involving fee division, control, or aiding unauthorized practice

See also

• WI Ethics Op. E-82-11: Dual Business Practice (Lawyer-Owned Collection Agency)
• WI Ethics Op. E-83-14: Dual Practice in a Service Organization and Law Office
• WI Ethics Op. E-87-7: For-Profit Lawyer Referral Services

Source

• Landing page: https://www.wisbar.org/formembers/ethics/pages/formal-opinions.aspx
• Original PDF: https://www.wisbar.org/formembers/ethics/Ethics%20Opinions/E-80-9.pdf