Mr Hemming had asked for the investigation
A law firm has been found "in contempt" of the Commons for suggesting an MP could face legal action for criticising its client in Parliament.
The standards and privileges committee said Withers LLP should have realised Lib Dem MP John Hemming was protected by parliamentary privilege.
It follows a row over a development in his Birmingham Yardley constituency.
But the committee said, as the firm had since apologised "unreservedly", no further action would be taken.
Parliamentary privilege gives MPs the right to speak freely in Parliament without fear of being gagged or sued for libel.
Mr Hemming had called for the investigation into Withers LLP after the firm emailed him asking him not to repeat "defamatory" claims about its client - made in a Liberal Democrat leaflet - in the Commons.
In the email it said without an undertaking to do so it would "have no alternative but to issue proceedings".
The Clerk of the Commons, Malcolm Jack, wrote to the firm in November advising it that its email "might well be regarded by the House as a contempt" but Withers disagreed, replying that its client was exercising his right to protect his reputation.
But after taking advice from "leading counsel", the law firm wrote to the committee in January to say it had been "mistaken", adding: "Accordingly I would like unreservedly to apologise to the House and to Mr Hemming."
In its ruling, the standards and privileges committee said the evidence was "clear" that Withers LLP was "in contempt" for threatening Mr Hemming with legal proceedings for statements he intended to make in Parliament.
It added the firm had not withdrawn the threat when Mr Jack wrote to it, and did not accept it was in contempt even when MPs agreed to back an investigation.
"We are surprised that a firm of the standing of Withers LLP should have taken so long to understand the scope of Parliamentary privilege," it added.
'Freedom of speech'
But it said: "It has long been accepted that the House should assert its privileges sparingly. In the light of the apology the House has received, we make no recommendation for further action."
Mr Hemming said it was the job of MPs to speak up for their constituents, adding: "Parliament today has stood up for freedom of speech".
In a statement, the law firm said it was pleased the committee had accepted its apology but added: "Parliamentary privilege is a complex area and the legal profession, MPs and the public would benefit from the clarification recently called for by the Law Society and others."
It said there was a "tension between Parliamentary privilege and the rights of citizens to defend themselves against defamatory allegations".
It is unusual for a non-politician to be investigated for contempt of Parliament - the last similar case involving a law firm was in 1981-2.
The last time anyone was fined was in 1666 and the Commons Speaker can issue a warrant to take someone into custody, or call them to the Bar of the House to be reprimanded.
The last person who was not a politician to be reprimanded was the then Sunday Express editor John Junor, in 1957.
Earlier this week, a separate contempt investigation was approved against the head of the Equality and Human Rights Commission, Trevor Phillips, who was accused of attempting to influence a committee investigating him - something he denies.