Issued March 15, 2002
1 Issue: May a lawyer, who is also a certified public accountant employed by an accounting firm, contemporaneously conduct from an office at the accounting firm public accounting services as an employee of the accounting firm and a law practice independent from the accounting firm without violating the Utah Rules of Professional Conduct?
2 Opinion: A lawyer who is a certified public accountant and employed by an accounting firm may not contemporaneously practice law and accounting from the offices of the accounting firm without violating Rule 5.4(b) of the Utah Rules of Professional Conduct. Accounting is a “law-related service,” and, when accounting services are provided by an active lawyer, the lawyer is subject to the Utah Rules of Professional Conduct while engaged in either profession. The lawyer is, therefore, prohibited by Rule 5.4(b) from forming a business association with a non-lawyer to provide the accounting services when the lawyer is contemporaneously engaged in the practice of law.
3 Factual Background: A lawyer (“Lawyer”) who is also a certified public accountant (“CPA”) is employed by an accounting firm owned by other CPAs (“Accounting Firm”). Lawyer is an employee of Accounting Firm, but does not have an ownership interest in the firm. Lawyer desires to conduct the professional practices of accounting and law from his office at Accounting Firm. Lawyer will pay Accounting Firm rent for the fair market value of office space, computer and furniture, receptionist and other Accounting Firm resources used by Lawyer in the legal practice, calculated on an hourly basis. Lawyer will develop his own clients, but may accept referrals from CPAs employed by Accounting Firm. Lawyer will directly and separately bill clients for legal services performed, and will not pay any referral fees to Accounting Firm. Lawyer will maintain confidentiality of law client files by maintaining these files separately from the accounting files of Accounting Firm.
4 Analysis: In the Committee’s prior opinions, we have found that, under certain circumstances, a lawyer engaged in a law-related occupation will be subject to the Utah Rules of Professional Conduct while engaged in either occupation.1These opinions are consistent with opinions issued by the American Bar Association prior to its adoption of ABA Model Rule 5.7 in 1994.2
5 Model Rule 5.7 addresses circumstances under which a lawyer who provides “law-related services” is subject to the ABA Rules of Professional Conduct. Under the rule, if the services are not provided in circumstances that (a) are distinct from the lawyer’s provision of legal services to clients, or (b) are provided by a separate entity, but the lawyer fails to take reasonable measures to assure that persons obtaining the law-related services know that the services of the separate entity are not legal services and that the protections of the attorney-client relationship do not exist.3
6 The Utah Supreme Court has not adopted Model Rule 5.7. While the Committee has noted that Model Rule 5.7 is consistent with its analysis in prior opinions,4 the Committee has not endorsed the rule, as the decision to adopt any new rule is exclusively within the purview of the Utah Supreme Court.5