Exhibit 8.1


                        [Shearman & Sterling Letterhead]







                                September 4, 2001


Legg Mason, Inc.
100 Light Street
Baltimore, Maryland 21202


                     Liquid Yield Option(TM) Notes Due 2031
                     --------------------------------------

Ladies and Gentlemen:

            We have acted as special United States federal income tax counsel
("Special Federal Tax Counsel") to Legg Mason, Inc. (the "Company") in
connection with the preparation and filing with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended, of
the Registration Statement on Form S-3 filed with the Commission on the date
hereof (the "Registration Statement"), of which the prospectus forms a part (the
"Prospectus"). The Registration Statement relates to the Liquid Yield OptionTM
Notes due 2031 (the "LYONs") in an aggregate principal amount at maturity of
$567,285,000 issued by the Company (as described in the Prospectus). The LYONs
were sold subject to the terms and conditions set forth in the Purchase
Agreement dated May 31, 2001 (the "Purchase Agreement") between the Company and
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch"), and were issued under an Indenture, dated as of June 6, 2001
(the "Indenture"), between the Company and The Bank of New York, as indenture
trustee.

            In our capacity as Special Federal Tax Counsel, we have reviewed the
Prospectus, the Purchase Agreement, the Indenture and such other documents and
corporate records as we have deemed necessary or appropriate (the "Transaction
Documents"). In this regard, we have assumed that all disclosures,
representations and warranties in the Transaction Documents were

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(TM) Trademark of Merrill Lynch & Co., Inc.



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true, correct and complete when made, and continue to be true, correct and
complete as of the date hereof, and that there has been, and will continue to
be, full compliance with all agreements and covenants contained in the
Transaction Documents. Additionally, we have relied upon the statements of
employees and representatives of the Company as to certain factual matters, and
upon financial data, calculations and projections provided to us by Merrill
Lynch, including estimates of the net present value of all payments of
contingent interest that may be made by the Company over the term of the LYONs.

            Based upon the foregoing, in reliance thereon and subject thereto,
and based further upon the United States Internal Revenue Code of 1986, as
amended (the "Code"), Treasury regulations promulgated thereunder,
administrative pronouncements of the United States Internal Revenue Service (the
"IRS") and judicial decisions, all is in effect on the date hereof (and all of
which may be subject to change, possibly on a retroactive basis), we are of the
opinion that:

            (1)   the LYONs will be treated as indebtedness for United States
                  federal income tax purposes;

            (2)   the LYONs will be subject to the rules governing contingent
                  payment debt instruments under section 1.1275-4 of the
                  Treasury regulations (and, in particular, paragraph (b)
                  thereof);

            (3)   in applying such Treasury regulations to the LYONs, the term
                  "comparable yield" means the yield at which the Company would
                  issue, as of the issue date of the LYONs, fixed-rate,
                  non-convertible debt instruments providing for no contingent
                  payments, but with terms and conditions otherwise comparable
                  to those of the LYONs; and

            (4)   the discussions contained in the Prospectus under the captions
                  "Summary - The Offering - Tax Original Issue Discount" and
                  "Certain United States Federal Income Tax Considerations,"
                  insofar as such discussions constitute statements of United
                  States federal income tax law or legal conclusions, subject to
                  the assumptions, limitations and conditions set forth therein,
                  accurately describe the material United States federal income
                  tax consequences of the LYONs to holders thereof.

You should be aware that, depending on the identity of the persons to whom the
LYONs were marketed or sold, there may be a presumption that the comparable
yield is the "applicable federal rate," as such term is used in Treasury
regulation section 1.1275-4(b)(4). This presumption may



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be overcome only with clear and convincing evidence that the comparable yield
should be a specific yield other than the applicable federal rate.

            No opinion is expressed as to any matter not specifically addressed
above, including the tax consequences of the issuance of the LYONs under state,
local or non-United States tax laws, and the reasonableness of the assumptions
relied upon by us in rendering our opinion above. Moreover, this opinion of
counsel is based upon current United States federal income tax law and
administrative practice, and we do not undertake to advise you as to any changes
in such law or practice unless we are specifically retained to do so.
Furthermore, the conclusions set forth in this opinion of counsel are not
binding on the IRS or the courts, and no assurance can be given that the IRS
will not take contrary positions upon an examination, or that a court will agree
with such conclusions if litigated.

                                                Very truly yours,



                                                 /s/ Shearman & Sterling
                                                ------------------------
                                                Shearman & Sterling