Crossing the line: what CPAs need to know about the unauthorized practice of law.

• Author: McCollough, Todd

Accountants are indeed a multi-talented group. Clients use CPAs for various services because CPAs have vast knowledge in many technical areas. However, CPAs need to be aware of just how far they can go with--and what kind of services they can provide to--a client. Venturing too far into some areas can constitute the practice of law, and that will get a CPA into serious trouble.

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Bar associations are very protective on this topic, and are watching to ensure that CPAs do not step over the line into the practice of law. The Supreme Court of Ohio is also stepping up enforcement, and has issued a substantial number of new opinions imposing sanctions for the unauthorized practice of law (UPL). The Supreme Court issued 16 UPL opinions in 2005 in which it imposed sanctions, compared with one opinion in 2004 and two opinions in 2003.

Although UPL enforcement may look like a turf battle between CPAs and attorneys, UPL provisions and enforcement are ultimately designed to protect the public. "CPAs and attorneys are charged with the responsibility of policing the practice of their professions," says Steven A. Martin, JD, CPA (inactive), partner of Blaugrund, Herbert & Martin and legal counsel for The Ohio Society of CPAs. "Attorneys and CPAs have an ethical duty to assist the Supreme Court or the Accountancy Board, respectively, with the prevention of the unauthorized practice of their professions. This includes reporting unauthorized practice."

"The purpose of the UPL provisions, whether in statute or by rule, is for the protection of the public," says William K. Weisenberg, assistant executive director for public affairs and government relations with the Ohio State Bar Association (OSBA). "The provisions ensure that the public receives legal services by those who are trained, qualified and competent, and who have been tested and are subject to regulatory mechanisms. The beneficiary is the public--the client. That's who we serve."

Although few CPAs openly profess to practice law as part of their accountancy practice, it is not unheard of for CPAs to provide services that fall within the practice of law. Things can become fuzzy in everyday practice, and CPAs can cross the line if they are unaware of the types of services that constitute the practice of law.

What is the practice of law?

Rule VII, [section]2(A), of the Governance of the Bar prohibits UPL, which is the "... rendering of legal services for another by any person not admitted to practice in Ohio under Rule I and not granted active status under Rule VI, or certified under Rule II, Rule IX, or Rule XI of the Supreme Court Rules for the Government of the Bar of Ohio." Ohio case law attempts to define the practice of law as "not being limited to appearances in court, but also includes giving legal advice and counsel and the preparation of legal instruments and contracts by which legal rights are preserved."

Despite this definition, knowing exactly where to draw the line...