OPINION 167
March 1958

FIXING THE AMOUNT OF FEES—EMPLOYMENT ON SALARY BASIS—An attorney may accept employment by a company on a straight salary basis and may maintain offices in the building of the employing company.

INTERMEDIARIES- An attorney may accept employment by insurance company, mercantile business or other lay agency to write collection letters, defend them in lawsuits, prosecute their claims, or perform other legal services which show no evidence of the employing company improperly controlling or exploiting the attorney.

Canons 11, 32.

Question

A national insurance company employs several attorneys on a regular salary basis to defend lawsuits and to prosecute subrogation cases. These attorneys maintain their offices with the branch office of the insurance company in a Texas city and such attorneys are not listed under the Attorney’s section of the classified pages of the telephone directory in such city.

A company engaged in the retail merchandising business employs an attorney on a salary who writes collection letters for the company on a letterhead showing that he is an Attorney-at-Law. He also files suits to collect delinquent accounts and tries them for the company. He has an office in the company's building.

Is there a violation of Canon 11 of the State Bar because the charges of such attorneys for services rendered by them are not determined according to the provisions of said Canon? Is there a violation of Canon 32? 

Opinion

The committee is of the opinion that there is no violation of the Canons of Ethics of the State Bar by the attorneys under the situations presented in question. The companies have the right to employ attorneys on a salary basis and such attorneys may accept such employment and maintain offices in the building of the employing company. There is no violation of Canon 11 if an attorney agrees to perform services for a client on a straight salary basis. The defending of lawsuits, prosecution of subrogation cases, filing of suits for the collection of debts owing to his clients and the trying thereof, as well as the writing of collection letters do not in any way come within any prohibition of Canon 32. That Canon merely prohibits any attorney from permitting his professional services to be exploited by a lay agency, personal or corporate, which intervenes between the client and a member of the State Bar. The performing of the legal service referred to above by the attorneys for the companies employing them is not any evidence of their being controlled or exploited by a lay agency in the manner referred to in Canon 32. (9-0)