86 N.J.L.J. 405
Conflict of Interests
Unlawful Practice of Law
Inquiry has been made whether it is improper for an attorney
for a seller or lender to appear in the closing of titles where it
is represented to a buyer or borrower, or he is led to believe by
advertising in newspaper or television announcements, or otherwise,
that no charge for legal services will be made to the buyer or
borrower by the seller or lender by the statement "No Closing
"The advertisement "No Closing Fees" may lead a buyer or borrower to believe that he need not engage independent counsel to represent and protect his interests. Presumably the developer or lender pays the attorney for the services rendered and this sum or its equivalent value is included in the purchase price of the acquired premises or added to the cost of obtaining the mortgage. We are of the opinion that a clandestine conflict of interests exists when an attorney employed by a seller prepares all legal instruments, certifies and closes title, without advising the purchaser fully of the relationship which exists, and that his interests might be better protected by his engagement of independent counsel. Such advice should be given sufficiently in advance of the closing to enable the purchaser to secure independent counsel should he desire to do so.
Canons of Professional Ethics, Canon 27 provides that it is unprofessional to solicit employment by advertisement or through touters.
Canon 47 prohibits an attorney from making possible the unauthorized practice of law by any lay agency. Thus, as was stated in A.B.A. Committee on Professional Ethics and Grievances, Opinion 8 (1925), it is improper
for a lawyer to allow his services to be sold or dealt in by any layman or lay agency. But there is yet another reason why such a practice is abhorrent. The essential dignity of the profession forbids a lawyer to solicit business or exploit his professional services. It follows that he cannot properly enter into any relations with another to have done for him that which he cannot properly do for himself.
Canon 35 is also pertinent to the inquiry propounded. It
The professional services of a lawyer should not be controlled or exploited by any lay agency, personal or corporate, which intervenes between client and lawyer. A lawyer's responsibilities and qualifications are individual. ...A lawyer's relation to his client should be personal, and the responsibility should be direct to the client.
The exploitation of an attorney's services by laymen should be discouraged. A developer maybe engaged in the unlawful practice of law where he engages an attorney whose loyalty is owed to the developer while the attorney performs services as the agent of the purchaser. See New Jersey Bar Ass'n. v. Northern N.J. Mtge. Associates, 32 N.J. 430 (1960), modified 34 N.J. 301 (1961).
The inroads and encroachments upon the practice of law by laymen and the resultant creeping abuses should be stemmed. Trading in the services of lawyers detracts from the essential dignity of our profession and its commercialization is condemned.
While this opinion rests upon the assumption that the attorney has knowledge of all the facts, the Committee is mindful of the obligation of the attorney to inquire fully as to the terms of his employment. It is difficult for the Committee to imagine a situation where this assumption would not be true.
For the reasons set forth, the attorney appearing at the closing under the circumstances outlined in the inquiry, is acting improperly.