Collection Agency Referrals.

You have indicated the following facts:

You are presently in-house General Counsel for affiliated companies, one of which is a collection agency and the other of which is a software development company.  You presently handle general corporate matters for the affiliated companies.  In addition, you are presently engaged in part-time private practice with a law firm.  You propose to conduct your own private part-time (general, civil) practice, renting office space from the collection agency.  You would obtain and maintain a separate business license, separate phone lines, separate phone listing, and separate sign on the front of the building with respect to the private practice.  In addition, you would maintain separate, secure files, office space and word processing for the private practice work.  You would have separate operating and trust accounts and would otherwise comply with requirements for maintaining the same.

The collection agency for whom you are in-house counsel presently, if asked to do so by their client(s), provides a list of several different attorneys/law firms, in Virginia and other jurisdictions.  The client is free to choose an attorney from the collection agency’s list or to retain its own attorney.  The collection agency proposes to add you, its in-house counsel, to that list of attorneys.

Under such an arrangement, any list of attorneys submitted to the collection agency’s client(s), and any other initial correspondence between you and a potential client wishing legal collection efforts for its accounts would disclose the in-house, general counsel relationship between you and the collection agency.  The client would remain free to choose from among the list of attorneys or to choose its own counsel.

The Unauthorized Practice of Law Committee of the Virginia State Bar has considered your questions and has determined that, under the facts presented, neither you nor the collection agency will be engaged in the unauthorized practice of law if you follow the arrangement described in your letter.

Unauthorized Practice Rule 3 sets forth the unauthorized practice of law rules that relate specifically to collection agencies.  It appears that the arrangement you propose will not be prohibited by Unauthorized Practice Rule 3.

Both you and the collection agency should review Unauthorized Practice Rule 3 carefully to make certain that you and they follow its requirements in practice.

Committee Opinion
January 5, 1989