In the United States, a law firm (companies whose remit is to practice law) has various restrictions. For example, in Missouri, if I'm not mistaken, it must be owned by a lawyer and is restricted as to how it can market to potential new clients.

Other firms have lawyers on staff. For example, a major cosmetics manufacturer may have tort, intellectual property, and employment lawyers on its payroll. But it is not subject to the restrictions noted above.

So it seems someone could do as follows: Start a company whose remit is to make its clients money, or to keep its clients out of jail, or to support its clients in the face of theft. And hire a bunch of plaintiffs' lawyers, or criminal defense lawyers, or intellectual property lawyers (respectively). And then advertise freely because, after all, it's not a law firm. And the vast majority of the work done by the company is legal, all done by its in-house lawyers. (Some non-legal, administrative paperwork will also be necessary, to connect the company's clients with the lawyers.)

Would that be legal? If so, is it done? If not, why not?

  • 3
    I think the issue would be that a company's in-house counsel is expected to act on behalf of the company, not the company's clients. If the company provides legal services to its clients then the company is a law firm, whether it wants to call itself that or not, and will be subject to the regulations on such firms. – Nate Eldredge Aug 10 at 1:57
  • Regulations on a type of business are based on whether a particular person is engaged in that type of business, not whether they tend to use the label normally applied to people in such business. – Nij Aug 10 at 6:23

That would not be legal.

The restrictions on advertising legal services and soliciting clients come from the ABA's Model Rules of Professional Conduct, which impose those restrictions on both lawyers and those working on their behalf, whether that's another lawyer, a law firm, or some other corporate entity. Whatever kind of organization employs the lawyer, the lawyer remains bound to refrain from the activities you're describing.

Would that be legal? If so, is it done? If not, why not?

This would not be legal.

In house counsel has one client, the employer.

When third-party clients are served, you start to be treated as a law firm subject to all rules that apply to them, and not as in house counsel.

This said, there is some work which is classified as the practice of law in some places but not others.

For example, in New York State, a determination that there is marketable title to real estate in advance of a purchase and sale or mortgage financing transaction is considered to be the practice of law and if it is done for third-parties must be done by a law firm.

But, in Colorado, the same work is not considered to be the practice of law and can be performed by a non-law firm title company (which still is subject to title company licensing requirements imposed and administered by the state government) with the assistance of an in house general counsel (who is, strictly speaking, representing the title company in making a decision to insure or not insure title to real property, rather than directly representing the title company).

There are a variety of circumstances that are gray areas concerning the issue of whether or not something constitutes the practice of law. For example, consider the following:

  • Selling generic legal forms or law books or legal research materials is generally not considered to be the practice of law.
  • Helping people fill out court forms without providing legal advice or guidance on how to do so is often not considered to be the practice of law.
  • Notarizing a document is not considered to be the practice of law.
  • Serving people with legal process is not considered to be the practice of law.
  • Non-legal research, even in connection with a court case (e.g. by a private investigator or skip tracer), is usually not considered to be the practice of law.
  • Court reporting (i.e. making verbatim transcripts of oral court or deposition proceedings) is not considered the practice of law.
  • Many of the judgments informed by legal knowledge, and documents with legal effect, that are made or prepared by real estate agents, property managers, securities brokers, financial planners, insurance agents, car dealers, finance company employees, bankers, collection agency employees, accountants, surveyors, bail bondsmen, bounty hunters, and law enforcement officers in the course of their occupations is not considered the practice of law even though lawyers make judgments on the same issues, or draft documents, using the same resources in their legal practices.
  • Mediation and arbitration services are not necessarily the practice of law.

Local custom and practice is a much a factor concerning what constitutes the practice of law as any rational legal standard that can be meaningfully applied.

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