Inquiry is made concerning the propriety of an attorney entering into a
venture with a brokerage firm to provide estate planning services to a
financial brokerage firm's clients commensurate with the brokerage firm's
services of financial planning, investment counseling, money management
and tax counseling services.
The attorney inquires concerning three specific proposed methods of providing the estate
planning services, as follows:
In Proposal One, the attorney will participate in seminars conducted by the brokerage
firm. He will be introduced to the seminar participants as a member of the team of agents
providing services. The seminars include a slide presentation relating to estate planning
containing the attorney's name, firm name, address and telephone number. The brokerage
firm's letterhead contains the attorney's name as counsel.
Agents of the brokerage firm inquire of their clients as to the current existence of an
attorney-client relationship. In the event of no attorney-client relationship and a need for
estate planning, the brokerage agent advises his client that the attorney is a team member
and is available to counsel with the client on estate planning. An appointment is made for
the attorney and the individual to meet at the financial planner's office. The attorney
obtains a written acknowledgment from the individual that the attorney is not giving
investment advice, that the brokerage firm is not giving legal advice, and that an
independent attorney-client relationship has been established with the attorney. The
attorney then reviews the facts and existing documents relating to the proposed estate.
An estate plan is recommended and the attorney proceeds to prepare, review and assist
the client with execution of the estate plan documents. The attorney submits the
statement for his fee to the brokerage firm and the brokerage firm bills the client for the
legal fee and the fee for their services in one lump sum. The brokerage firm remits the
entire legal fee to the attorney.
Proposal Two is the same as Proposal One, except the attorney's name, firm name,
address and telephone number are not included in the seminar slide presentations; the
attorney's name is not included on the brokerage firm's letterhead; and, the attorney's fee
is segregated from the brokerage firm's fees when billed by the brokerage firm.
Proposal Three is the same as Proposal Two, except when the attorney is introduced at a
seminar, or whenever he is introduced to a brokerage
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firm client, there is no reference to him being a team member of the brokerage firm;
execution of the acknowledgment of the attorney-client relationship and all subsequent
matters and transactions are conducted in the attorney's law office in the traditional
manner; and, the attorney bills the client directly for his legal services.
Tennessee Formal Ethics Opinion 83-F-44 prohibits in-house corporate counsel from
allowing the corporation to bill its customers for legal services performed by corporate
counsel. The opinion states that such a practice is in violation of Disciplinary Rule 3-
101(A) of the Code of Professional Responsibility which prohibits a lawyer from aiding a
non-lawyer in the unauthorized practice of law. The opinion also cites DR 3-103 which
prohibits a lawyer from forming a partnership with a non-lawyer if any of the activities of
the partnership consist of the practice of law.
Canon 5 of the Code requires an attorney to exercise independent professional judgment
on behalf of a client. The Ethical Considerations relating to Canon 5 which are material
to this inquiry are as follows:
EC 5-1. The professional judgment of a lawyer
should be exercised ... solely for the benefit of his client
and free of compromising influences and loyalties. Neither
his personal interests, the interests of other clients, nor the
desires of third persons should be permitted to dilute his
loyalty to his client.
EC 5-21. The obligation of a lawyer to exercise
professional judgment solely on behalf of his client requires
that he disregard the desires of others that might impair his
free judgment. The desires of a third person will seldom
adversely affect a lawyer unless that person is in a position
to exert strong economic, political or social pressures upon
the lawyer. These influences are often subtle, and a lawyer
must be alert to their existence ....
EC 5-22. Economic, political or social pressures by
third persons are less likely to impinge upon the
independent judgment of a lawyer in a matter in which he is
compensated directly by his client and his professional
work is exclusively with his client. On the other hand, if a
lawyer is compensated from a source other than his client,
he may feel a sense of responsibility to someone other than
EC 5-23. A person or organization that pays or
furnishes lawyers to represent others possesses a potential
power to exert strong
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pressures against the independent judgment of those
lawyers. Some employers may be interested in furthering
their own economic, political or social goals without regard
to the professional responsibility of the lawyer to his
individual client. ... an employer may seek, consciously or
unconsciously, to further its own economic interests
through the action of the lawyers employed by it. Since a
lawyer must always be free to exercise his professional
judgment without regard to the interests or motives of a
third person, the lawyer who is employed by one to
represent another must constantly guard against erosion of
his professional freedom.
The above aspirational objectives become mandatory in character in Disciplinary Rule 5-
107(B) of the Code.
Finally, Disciplinary Rule 2-103(C) of the Code provides, in part, as follows:
A lawyer shall not request a person or organization to
recommend or promote the use of his services ... as a
private practitioner, ....
The conduct proposed in each of the three proposed methods of providing estate planning
services involves the brokerage firm as a solicitor for legal business and, therefore,
This 18th day of June , 1984.
Henry H. Hancock
W. J. Flippin
Edwin C. Townsend
APPROVED AND ADOPTED BY THE BOARD