Contractor Hired by Local Government Entity to Collect Unpaid Taxes and Other Debts Also Providing Legal Counsel to Appear in Court on Behalf of Entity.

You have indicated that a county, either directly or through its treasurer or director of finance, seeks to hire a contractor to collect unpaid taxes and non-tax debts owing to the county. You indicate that a county is authorized to hire an “agent??? to “assist??? the treasurer with the collection of taxes under Va. Code §58.1-3919.1. You further indicate that the county desires that the contractor “serve as or provide an eligible party to serve as legal counsel in court cases for the collection of debt??? and that such cases may include cases that “may be initiated by the county??? under the provisions of Va. Code §58.1-3919 which allow a non-lawyer deputy treasurer to appear and prosecute tax collection cases in courts not of record. Finally, you advise that the county does not seek to have legal counsel, provided by the contractor, enter into a separate agreement of employment with either the county treasurer or the governing body of the county. Similarly, the county does not seek to have the contractor appointed as a deputy treasurer or a deputy director of finance. The practice of law in Virginia is defined as a non-lawyer’s (1) advising another, not his regular employer, for direct or indirect compensation, in any matter involving the application of legal principles to factors or purposes or desires; (2) preparation for another, not his regular employer, with or without compensation, of legal instruments of any character; or (3) representing the interest of another, with or without compensation, before any tribunal — judicial, administrative, or executive. Part Six: Section I: (B), Rules of the Supreme Court of Virginia.

Furthermore, since the Committee believes that the arrangement you have described is analogous to the local government entity’s contracting with a collection agency, the Committee is of the opinion that Unauthorized Practice Rule 3 is applicable. That Rule, in pertinent part, precludes a collection agency from preparing legal documents and from routinely referring claims to a lawyer without first offering the client the opportunity to select either his own lawyer or a lawyer from a list provided by the collection agency.

The Committee has previously issued UPL Opinion 57 which was approved by the Supreme Court on December 2, 1983. That Opinion concluded that no lay corporation may employ lawyers who would provide legal services to the corporation's customers.

Thus, in the circumstances you describe, based upon the Unauthorized Practice Rules and the Court's approval of UPL Opinion 57, the Committee is of the opinion that it would constitute the unauthorized practice of law for the non-lawyer contractor to provide legal counsel to appear in court in the collection of unpaid taxes or other debts owing to the county.

Committee Opinion
November 9, l992


Updated: Aug 28, 2006