Defining Law-Related Services

Defining Law-Related Services

Rule 5.7(a) governs only “law-related services,” and paragraph (b) says what the phrase means: services that might reasonably be performed in conjunction with, and in substance are related to, the provision of legal services, and that are not prohibited as unauthorized practice of law when provided by a nonlawyer.¹ Paragraph (a) adopts that definition by cross-reference, so the definition works as a gate. A lawyer's side activity must pass through it before either circumstance in paragraph (a) has anything to act on. An activity that fails the definition falls outside Rule 5.7, and if the activity is itself the practice of law, the Rules govern it without any help from this rule.

The definition joins three tests with “and,” so a service must pass all three:

1. Is it a service that might reasonably be performed in conjunction with legal services?
2. Is it, in substance, related to the provision of legal services?
3. Could a nonlawyer provide it without committing unauthorized practice of law?

The first two tests measure how close the service sits to legal work, and closeness is what breeds a customer's confusion about the lawyer's role. The third test keeps the definition from swallowing the practice of law, because services reserved to lawyers already fall under the Rules.

A service that passes all three tests moves on to the two circumstances in paragraph (a). Those ask how the lawyer delivered the service and what the recipient was told, which are different questions from whether the service qualifies at all. The sections below take the three tests in order.

Reasonably Performed in Conjunction

The first test asks whether the service is of a kind that might reasonably be performed in conjunction with legal services.² It is a question about categories. A service qualifies when it is closely associated with legal services or frequently offered as part of a law practice, so that a holistic practice could fold it in beside the client's legal matter.³ The test looks at the kind of service, and a particular client's decision to buy both is beside the point. The line falls there because of the confusion Rule 5.7 exists to prevent. A client who sees a lawyer offer something lawyers commonly offer alongside legal work may take it for part of the professional relationship, while a service with no natural connection to legal work gives the customer no such signal.

The category is wide. Lawyers regularly offer clients services that range from the routine, such as word processing by secretaries, to the specialized, such as accounting by in-house accountants or by lawyers who hold accounting licenses.⁴ The commentary to Rule 5.7 adds examples such as title insurance, financial planning, trust services, real estate counseling, economic analysis, social work, psychological counseling, and patent, medical, or environmental consulting.⁵ Some of these sit near legal work, such as trust services and real estate counseling, and others, such as psychological counseling, sit farther off. What they share is that a client with a legal problem may also have a problem of that sort, so one practice could reasonably serve both. Some services with a strong legal flavor can shade into the practice of law itself, as the third test shows below.

The category reaches even the most ordinary services in a law office. Typing, copying, and other secretarial work is offered in conjunction with legal services, so it counts as law-related.⁶ The label carries a duty: the lawyer must take reasonable steps to ensure that the employees who do this work act compatibly with the lawyer's professional obligations, such as keeping confidential the documents they type or duplicate.⁷ The person who feeds a client's papers through the copier sees the client's secrets as surely as the lawyer does, which is why supervision follows the service.

Exam questions on this test usually pair a service that lawyers commonly bundle with legal work against one they do not, and ask what separates the two.

The estate lawyer's financial planning passes because it fits comfortably inside a holistic practice. The gutter business fails because no customer could mistake it for part of a lawyer's professional offering, and an activity that fails here is an unrelated business outside Rule 5.7. Passing this test settles only one of three requirements, since the service must also be related in substance to legal services and must be something a nonlawyer could provide without committing unauthorized practice of law.

Related in Substance

The second test asks whether the service, in substance, is related to the provision of legal services.⁹ The first test looked at the kind of service and asked what a law practice could sensibly combine with legal work. This test looks at the service as the lawyer actually provides it and asks whether its content connects to the subject of the legal services the lawyer is offering at the same time.¹⁰ The rule's word “substance” directs the inquiry to what the work consists of and whom it touches. A business is judged by what it does for the customer, and a name or brochure label decides nothing.

The second screen exists because of the confusion Rule 5.7 is meant to prevent. A client whose lawyer is handling a transaction, and who is then offered a related service for that very transaction, has every reason to assume one professional relationship covers both, including confidentiality and loyalty. A customer whose only link to the lawyer is an unrelated purchase has no reason to carry those expectations into it. The test therefore screens out activities that merely share an owner with the law practice. Because it looks to content, a lawyer also cannot move a service outside the rule by giving it a commercial-sounding name.

The title insurance passes because a client would naturally read the lawyer's role in the closing as reaching the policy that protects the same property. The diner at the restaurant has no comparable signal to misread. The restaurant also failed the first test, so at the extremes the two tests point the same way, and an exam stem on this test usually presents either a plain tie to the client's matter or a plain absence of one. Passing here still leaves the third requirement, since a service counts as law-related only if a nonlawyer could provide it without committing unauthorized practice of law.

Not Unauthorized Practice

The third test confines law-related services to those that a nonlawyer could provide without committing unauthorized practice of law.¹² It sorts a lawyer's activities into two groups. The law lets anyone offer some services, and a lawyer who offers one of them may have found something that fits the law-related category. Only licensed lawyers may offer the others, and a lawyer who performs one of those is practicing law in the plainest sense.¹³ The Rules govern that work directly, so Rule 5.7 has nothing to add.

Drafting most legal documents, preparing a will, and advocating in court are the standard examples of reserved work. In most states, under most circumstances, a person without a law license cannot lawfully do them.¹⁴

The exclusion fits what Rule 5.7 is for. The rule serves the middle ground between law practice and unrelated business, where a customer may be unsure whether a lawyer's professional duties travel with the service. When the work is reserved to lawyers, no such uncertainty exists, because every Rule already applies. A second reason is protective. Under Rule 5.7(a)(2), a lawyer who offers law-related services through an entity the lawyer controls, in circumstances distinct from the law practice, escapes the Rules only by taking reasonable measures to assure that the customer knows the services are not legal services and that the protections of the client-lawyer relationship do not exist.¹⁵ If drafting wills or arguing in court could count as law-related, a lawyer could try to strip confidentiality and loyalty from true legal work by posting that notice. Excluding reserved services closes that route.

Services that nonlawyers may lawfully perform complicate the picture, because a lawyer who performs one of them can still be practicing law. Preparing tax returns, preparing certain documents incident to a real estate transaction, and lobbying the legislature on legally permeated matters are services of that kind. Nonlawyers may do them, yet in at least some jurisdictions they count as the practice of law when lawyers do them.¹⁶ What counts as practicing law for a lawyer therefore need not match what would be unauthorized practice for someone without a license. The reason lies in what the client is buying. A lawyer's legal expertise and experience may surface legal issues that an accountant or other nonlawyer would not appreciate, so even simple return preparation can become the occasion for valuable legal advice.¹⁷

No labeling device rescues the lawyer here. A lawyer who runs one place of business called a “law office” and another called a “tax preparation service” is practicing law in both, just as a lawyer who represents tenants against landlords on one side of town and handles personal injury litigation on the other practices law in both.¹⁸

Courts have not agreed on how to classify tax return preparation, and the disagreement surfaces most often in the attorney-client privilege. In the past, communications made to a lawyer to prepare a return, as opposed to communications seeking tax planning advice, were not always treated as related enough to legal practice to be privileged.¹⁹ In United States v. Frederick, a federal court of appeals declared that preparing a return is accountants' work that, even when a lawyer performs it, amounts to nothing more than “lawyers . . . doing nonlawyers' work.”²⁰ The competing view holds that a lawyer who prepares a return provides a legal service within both the duty of confidentiality and the privilege, and that the Rules govern wherever the lawyer does that work, whether in the same building as other law practice or not.²¹

You need not resolve that split to see where the lawyer stands. If the work is the practice of law, the Rules apply directly. If a court instead calls it law-related, Rule 5.7(a) applies, and the lawyer escapes the Rules only by performing the work in a manner distinctly separate from the law practice and by taking reasonable measures to ensure the customer knows the service is not a legal service.²²