Opinion ID: 853748
Heading Depth: 3
Heading Rank: 2

Heading: The Corporate Practice of Law

Text: Under long-settled Anglo-American law, corporations and other organizational entities have been prohibited from practicing law. [7] This black-letter law has governed the practice of law in Indiana, presumably since the state was founded. [8] Just over eleven years ago, Chief Justice Shepard, writing for this Court, stated: A corporation is a creature of statute and can neither practice law nor act in person. Out of court it must act through its agents, and in court it must generally act only through an agent who is a licensed attorney. The fundamental principles regarding the authority of an agent of a corporation are substantially the same as those applicable to agents generally. Indiana Dep't of Public Welfare v. Chair Lance Service, Inc., 523 N.E.2d 1373, 1377 (Ind.1988). This Court has also said: The practice of the law is personal. It is open only to individuals proved to the satisfaction of the court to possess sufficient general knowledge and adequate special qualifications as to learning in the law and to be of good moral character.... A dual trust is imposed on attorneys at law: they must act with all good fidelity both to the courts and to their clients. They are bound by canons of ethics which have been the growth of long experience and which are enforced by the courts. Practice of law under modern conditions consists in no small part of work performed outside of any court and having no immediate relation to proceedings in court.... Although these transactions may have no direct connection with court proceedings, they are always subject to become involved in litigation. They require in many aspects a high degree of legal skill, a wide experience with men and affairs, and great capacity for adaptation to difficult and complex situations. These `customary functions of an attorney or counsellor at law' ... bear an intimate relation to the administration of justice by the courts. No valid distinction ... can be drawn between that part of the work of the lawyer which involves appearance in court and that part which involves advice and drafting of instruments in his office. The work of the office lawyer is the groundwork for future contests in courts.... The underlying reasons which prevent corporations, associations and individuals other than members of the bar from appearing before the courts apply with equal force to the performance of these customary functions of attorneys and counsellors at law outside of courts.  Fink, 214 Ind. at 590-91, 17 N.E.2d at 97-98 (quoting In re Opinion of the Justices, 289 Mass. 607, 612, 194 N.E. 313, 316-17 (1935)) (internal citations omitted) (emphasis added). Simply put, corporate and other organizational entities are unable to satisfy the admission requirements and thus are unable to be duly admitted as ... attorney[s]-at-law by the supreme court of this state. [9] See IND.CODE § 33-1-5-1. Numerous reasons have been offered in support of this body of law, including primarily the concern that harm would come to the public as corporate business interests invade the attorney-client relationship, as the independence of professional judgment is eroded, and as the trust and confidence placed in attorneys is threatened. [10] Corporations may employ attorneys in connection with matters that arise in the course of business, but the scope of their representation is limited. [11] This principle was well-stated by the Committee on Unauthorized Practice of Law for the American Bar Association in an informative opinion: While a corporation may employ legal counsel to render legal services to the corporation, such services are not the subject of barter on the market place by the corporate principal. This constitutes unauthorized practice of law by the corporate principal. ABA Comm. on Unauthorized Practice of Law, Informative Op. A (1967) (citing Land Title Abstract & Trust Co. v. Dworken, 129 Ohio St. 23, 1 O.O. 313, 193 N.E. 650 (1934); Steer v. Land Title Guarantee & Trust Co., 113 N.E.2d 763 (Ohio Ct.C.P.1953); Hexter Title & Abstract Co. v. Grievance Com., 142 Tex. 506, 179 S.W.2d 946 (1944)), reprinted in RES GESTAE, May 1967, at 31, 32. Under Indiana law, every person is entitled to act as his or her own attorney both in and out of court and to assume the consequences of those acts so performed. State ex rel. Indiana State Bar Ass'n v. Indiana Real Estate Ass'n, Inc., 244 Ind. 214, 226 n. 2, 191 N.E.2d 711, 717 n. 2 (1963). This right, however, is possessed only by those who are the parties to the transaction. Id. at 226, 191 N.E.2d at 717. Only qualified, licensed attorneys may appear for other persons. Matter of Estate of Rondinelli, 692 N.E.2d 915, 918 (Ind.Ct. App.1998) (only persons duly admitted to practice law in this state may appear on behalf of other persons) (citing Butler v. State, 668 N.E.2d 266, 268 (Ind.Ct.App. 1996)). See also Simmons v. Carter, 576 N.E.2d 1278, 1279 (Ind.Ct.App. 1991) ([W]hile any natural person may appear in court on his or her own behalf, only persons duly admitted to practice may appear on behalf of other persons.). This Court has discussed the application of these rules to organizational entities involved in out-of-court actions that have legal consequences: We find no reason or authority for holding that a trust company, authorized by law to act as executor, administrator, guardian, or trustee, may not execute such trusts in the same manner and through the same agencies that may be resorted to by a natural person in the same situation, except, of course, that a natural person may act in propria persona, while a corporation must act through some natural person. If a natural person, who is not admitted to practice law, may do the things which the appellee has done without illegally practicing law, so can the trust company. If it is unwise to permit a corporation to act in a fiduciary capacity, the remedy is with the Legislature and not with the courts. The practice of law is restricted to natural persons who have been licensed upon the basis of established character and competence as a protection to the public against lack of knowledge, skill, integrity, and fidelity. Disbarment procedure is available in the case of those who do not conform to proper practice. The practice of law involves advising or rendering services for another. A natural person may plead his own case in court or do any of the things for himself which if done for another would constitute practicing law. He may discuss the legal aspects of his affairs with other interested parties or with strangers. Either a natural person or a corporation may employ lawyers to do these things. A corporation may choose its own attorney as freely as a natural person may do so. Where the services of an attorney are necessary in the execution of a trust, the trustee is charged with the responsibility of selecting an attorney and with the duty to exercise reasonable care in the selection, and a corporate fiduciary has the same duty and the same right as a natural person. A natural person acting as executor, administrator, guardian, or trustee, may choose his own personal attorney, employed by him on an annual salary basis, to perform services for his trust, without expense to the trust, or he may employ such a personal attorney at the expense of the trust, or he may employ some attorney with whom he has no business or professional connection. No reason is seen why a corporate fiduciary may not do the same.... Groninger, 220 Ind. at 206-208, 41 N.E.2d at 141-42. We have also explained: When a corporation becomes a party to a civil action its status to represent itself in that proceeding differs from that of an individual. The individual has a personal stake in the outcome of the litigation and can readily be identified as both a party litigant and an individual person. A corporation, however, although a person in the eyes of the law, cannot be wholly identified with any individual person and thus, by necessity, must be represented by its agents. Those agents can only have an indirect stake in the case for the reason that a corporation exists as an independent legal entity, separate and distinct from its shareholders, officers or any agents.... State ex rel. Western Parks, Inc. v. Bartholomew County Court, 270 Ind. 41, 44, 383 N.E.2d 290, 292-93 (1978). To this general rule, we have created a single, limited exception that presently applies in claims arising out of the business of the corporation that do not exceed $1,500 and that are filed as small claims, but then only after the corporation has designated an employee and satisfied specified filing requirements. Ind. Small Claims Rule 8(C). [12]