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98 N.J.L.J. 399
May 1, 1975
COMMITTEE ON THE UNAUTHORIZED PRACTICE OF LAW
Appointed by the New Jersey Supreme Court
The Committee has received a request for an opinion on the
May a lawyer admitted in another state, not admitted to
practice in New Jersey, employed by a corporation in an office
in New Jersey, render legal services within and on behalf of
In recent years, an increasing number of corporations have
located in New Jersey. Often lawyers employed as house counsel
have been licensed in other states, but are not admitted in New
Jersey. Generally the business of the corporation is interstate or
national in nature and the involvement of the attorney-employee may
have little or nothing to do with the laws of this state. In many
instances, his work is in a highly specialized area, and he may
have had little contact with other fields of the law since
graduating from law school. This experience may make him a very
valuable employee, but it would obviously diminish his chances of
passing the bar examination.
For the purposes of this opinion, the Committee will assume
that the lawyer engaged as house counsel, whether for a
corporation, partnership, association or an individual, is admitted
to practice in some state or the District of Columbia, performs his
services solely for and is paid only by his employer; and does not
render legal advice or perform legal services for his fellow
employees or others.
Under the New Jersey Constitution, the privilege of practicing
law is limited to persons licensed to do so by the Supreme Court.
Although the courts in New Jersey have the exclusive right to
determine whether specific action and conduct constitute the
practice of law in this state, State v. Bander, 106 N.J. Super. 196
(Mon. Cty. Ct. 1969), rev'd on other grounds, 56 N.J. 196 (1970),
the practice of law does not lend itself to an all-encompassing
precise definition, Auerbacher v. Wood, 139 N.J. Eq. 599 (Ch.
1947), aff'd. 142 N.J. Eq. 484 (E. & A. 1948).
The courts review questions of unauthorized practice on the
particular facts presented with a view toward the policy underlying
the requirement that attorneys be licensed. In re Estate of
Waring, 47 N.J. 367 (1966). A technical finding that a person is
engaged in the practice of law will not necessarily result in a
holding that his actions amount to the unauthorized practice of
law, if "strict adherence to such a thesis is not in the public
interest." Appell v. Reiner, 43 N.J. 313, 316 (1964). The
practice is regulated in the interest of the public "for the
purpose of protecting the unwary and the ignorant from injury at
the hands of persons unskilled or unlearned in the law." N.J.
State Bar Ass'n v. Northern N.J. Mortgage Associates, 22 N.J. 184,
The corporate employer, who is aware of the qualifications and
competency of his attorney-employee, does not require the same
protection as the general public, which, when engaging counsel,
must often rely solely on the fact that the attorney is a licensed
member of the bar.
It is elementary that a layman or a corporation may prepare
instruments to which he or it is a party without being guilty of
the unauthorized practice of law. Title Guaranty Company v. Denver
Bar Association, 135 Colo. 423, 312 P. 2d 1011 (Sup. Ct. 1957). In
N.J. State Bar Ass'n v. Northern N.J. Mtg. Associates, 32 N.J. 430
(1960), the New Jersey Supreme Court reviewed conduct involving the
preparation of documents by a mortgage and title company and
distinguished between transactions to which the corporation was a
party and those in which it was not. In that case, it recognized
that the preparation of bonds, mortgages and affidavits of title by
employees of the corporation in connection with loans made by the
corporation was permitted, provided it imposed no charge on the
mortgagor. This is consistent with the position taken by the
courts in other states. The rules of the Supreme Court of Appeals
of Virginia specifically exclude the activities of employees (other
than court appearances) from the definition of the practice of law.
"[T]he relation of attorney and client exists, and one is
deemed to be practicing law, whenever-
(1) One undertakes for compensation, direct or indirect, to
advise another, not his regular employer, in any matter
involving the application of legal principles to facts or
purposes or desires.
(2) One, other than as a regular employee acting for his
employer, undertakes, with or without compensation, to prepare
for another legal instruments of any character. ...Rules of
the Supreme Court of Appeals of Virginia, Part 6 Rule I.
In New Jersey, as in every other state, employees daily
perform services for their employers that could be considered the
practice of law. Bank employees prepare notes, security agreements
and mortgages in connection with installment loans made pursuant to
R.S. 17:9A-53 et seq.; home repair salesmen negotiate contracts for
home repair contractors under R.S. 17:16C-62 et seq.; and both the
banker and the salesman must act in strict conformance with the
laws that regulate their employers' businesses. It would appear
that if the preparation of legal documents by non-lawyer employees
of a corporation is permitted in circumstances where the
corporation is a party to the transaction, there would be no
compelling reason for prohibiting similar conduct by employees who
have had the benefit of legal training.
For the reasons set forth above, it is the opinion of this
Committee that a lawyer admitted in another state or the District
of Columbia, not admitted to practice in New Jersey, employed by a
person, firm, association or corporation in an office in New
Jersey, is not engaged in the unauthorized practice of law as long
as such lawyer:
1. Is employed solely by such employer.
2. Confines his legal activities only to the business of
such employer and receives his entire compensation only
from the employer.
3. Does not render legal services, for a fee or otherwise,
to others, including other employees of his employer, and
his employer makes no charge to others for his services.
4. Does not appear before any quasi-judicial body or in any
court of this state on behalf of his employer, except
pursuant to R. 1:21-2.
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