96 N.J.L.J. 1239
October 25, 1973
OPINION 264
Intermediaries - Unauthorized
Practice Reviewing Deeds for Realtors
Our advisory opinion is sought concerning the propriety of a
procedure set forth in the following inquiry.
The question involved deals with the propriety
of reviewing a deed which has been typed out
by the secretary for the real estate agent,
upon the conclusion of which I approve the
deed and type on the deed "Prepared By (name
of our firm)." The deed is then returned to
the agent whereupon it is delivered to the
title company at settlement. Payment for the
review services is paid directly by the real
estate agent and not by the seller.
We are informed that the deed is a "Standard New Jersey
Special Warranty Deed form"; that the information is taken from the
title report and the deed and the title report are submitted to the
inquirer for review; that, assuming the deed is in proper order,
the name of the law firm is typed thereon preceded by the words
"Prepared By" and then returned to the real estate agent; and that
there is no direct contact with the seller.
The question brings under consideration DR 5-107(B) and DR 3-
101(A) of the Code of Professional Responsibility dealing with
intermediaries and aiding a non-lawyer in the unauthorized practice
of law. The Canons of Professional Ethics, Canon 35 and Canon 47,
now superseded by the Disciplinary Rates of the Code of
Professional Responsibility, contained similar provisions. These
ethical problems are discussed in Wise, Legal Ethics 207-228 (2d
ed.
1970). Mr. Wise, in his summary, beginning on page 226 says in
part, the following:
The relationship between attorney and
client should come about without direct or
indirect solicitation or advertising on the
part of the attorney. It results most properly
from recommendation or personal acquaintance.
Once established, it should be a confidential
relation of undivided loyalty.
No intermediary should intervene. A
fortiori the intervener should not exploit the
attorney's services to enable the intervening
entity to engage in unauthorized practice.
In some cases, the intermediary calls
upon the lawyer to aid it in performing
services it cannot legally perform, such as
the real estate broker who has the lawyer make
out legal documents for specific transactions,
which the broker uses to "close" a deal. The
aid takes more subtle forms, as in the case of
the attorney who permits a bank to use his
name as an attorney in "ads" soliciting legal
work to be done by the bank, or the
lawyer-trust officer who displays his legal
diplomas or certificates in his office in the
bank.
A question similar to the one propounded here was the subject
matter of an informal decision by the A.B.A. Comm. on Professional
Ethics, Opinion 508 (1962).
In that case the inquirer asked:
whether or not it is proper for an
attorney, in connection with real estate
transactions, to prepare deeds, contracts and
mortgages for a real estate broker or title
insurance company when the information
pertaining thereto is forwarded by the latter
with the request that the attorney prepare and
return the appropriate legal documents for
execution by the parties.