This is a really good question, and the replies have been very astute. But I think we're trying to apply modern-day experiences in law enforcement and surveillance to circumstances of the Forties and Fifties:
For example, the judge in Gotti's last trial barred his long-time lawyer, Bruce Cutler, from representing Gotti because FBI surveillance tapes (obtained legally through a court order) provided clear evidence that Cutler and his partner, Gerald Shargel, were acting as "house counsel" to Gotti. But in Michael and Tom's day, the FBI was largely uninterested in organized crime (Hoover didn't put the Mob on the front burner until after the Valachi hearings in '62). Surveillance techniques sucked in those days, and judges (particulary those that Vito and Michael would have had in their pockets) would be reluctant to authorize wiretaps or pen registers that would stand up as evidence in a trial.

Tom had a solid front as a lawyer, which made him "an officer of the court." Excluding him, attempting to use him as a witness against his client, or prosecuting him, in those days could have made for a serious protest by the state or federal Bar Associations, and would have provided Michael with a basis for an appeal of any conviction obtained in any part by Tom's testimony. Any prosecutorial office would have to work uphill to prove that Tom was not acting in a client/counsel privileged situation. And, as has been pointed out here, he was deliberately excluded from certain negotiations specifically to preserve his "legitimate" front.

Finally, if Michael was as careful as Vito had been in giving orders to others through Tom--with no other witnesses--he couldn't have been convicted on Tom's testimony alone: a corroberating witness is required in most felony cases. That's why I find the penultimate boathouse scene an anomaly: it made for good drama, but Michael ordering Frankie's and Roth's deaths with Tom, Rocco and Neri present was a serious breach of security.