Employer/Employee Relationship while H1B transfer Question

[soul_]

I am currently working for company A as a contractor via a preferred vendor Company B, and my employer is Company C. Now my client company (Company A)has offered me a permanent position with them, thus would there be any hassles while doing an H1B transfer to my client company(Company A) from my employer(Company C) due to the employer/employee relationship memo.? If the above does not pose any problem, could you please point out some documentation that states the above is perfectly alright, as the Client Company (Company A)'s lawyer believes that the above case is an issue, and the lawyer says that for transferring H1B to the client company(Company A), employer/employee relationship should be satisfied with my employer(Company C).