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ALTHOUGH A LAWYER MAY BE PAID FOR SPECIALIZED LEGAL SERVICES RENDERED
IN BEHALF OF A PLANNER OF REAL ESTATE, HE, HOWEVER, MAY NOT DIVIDE
HIS FEE IN ANY MANNER WHATSOEVER WITH THE PLANNER, NOR CAN HE BECOME
A MEMBER OF A PARTNERSHIP OR CORPORATION WITH HIM, NOR ASSIST IN
THE PROMOTION OF SAID PROJECTS OF THE PLANNER, NOR PERFORM LEGAL
SERVICES FOR HIM IN A STATE TO WHICH HE HAS NOT BEEN ADMITTED TO
THE PRACTICE OF LAW.
DISCIPLINARY
RULES CITED
DR 3-101 (A) A lawyer shall not aid a non-lawyer
in the unauthorized practice of law.
DR 3-101 (B) A lawyer shall not practice
law in a jurisdiction where to do so would be in violation of regulations
of the profession in that jurisdiction.
DR 3-103 (A) A lawyer shall not form a partnership
with a non-lawyer if any of the activities of the partnership consist
of the practice of law.
DR 1-102 (A) A lawyer shall not violate a Disciplinary Rule or circumvent
a Disciplinary Rule through actions of another.
DR 2-103 (E) A lawyer shall not accept employment when he knows
or it is obvious that the person who seeks his services does so
as a result of conduct prohibited under these disciplinary rules.
FACTUAL SITUATION
John Doe expected to graduate from the College of Law, University
of Nebraska, last month. He also has an undergraduate degree in
architecture. A planner has requested him to write zoning and subdivision
regulations for the former's firm. Doe will open his own law office.
The planner would obtain a contract from a county or municipality
to prepare a comprehensive plan. The firm then would contract with
Doe to prepare the zoning and subdivision regulations, on a case
by case basis. Payment would be made either on the basis of the
work done or on a monthly basis. It is assumed that Doe is not a
licensed architect but that he is, or will become, a duly licensed
practicing attorney.
QUESTIONS
PRESENTED
(1) Would this type of arrangement be ethically
permissible?
(2) If so, would it be ethically permissible
if the firm would require services of Doe in States where he is
not admitted to the practice of law?
(3) Would it be ethically permissible in
this situation for Doe to become a member of a partnership, general
or limited, or of a corporation with this planner as a co-owner?
(4) Would it be ethically permissible for
Doe to do promotion work in connection with any of these projects?
(5) Would any of the foregoing actions violate
any Canon other than Canon 3?
DISCUSSION
If properly conducted, this arrangement could be ethically permissible.
So long as the planner, himself, entered into contracts with public
agencies and he then contracted with Doe for legal services to write
the zoning and subdivision regulations for the firm and these two
activities were kept separate, especially as to payments, nothing
improper need result from such activity. This would be analogous
to a real estate broker contracting to sell property and requesting
an attorney to prepare the contract and other instruments required
in order to consummate the transaction. The real estate broker charges
a fee of his client and he then pays the attorney for legal services
rendered. This would not constitute the sharing of legal fees in
contravention of Canon 3. However, if that broker and attorney agreed
to split the fee in some manner, two violations would result: (1)
Improper sharing of legal fees with a layman; and (2) Direct or
indirect solicitation of legal work.
Doe states that he has an undergraduate degree in architecture.
If he were licensed as such, he could not utilize that profession
as a "feeder" to his law business, since this would represent,
at least, indirect solicitation of legal work. Again, analogously,
if one were a lawyer and a real estate broker, he could not permit
the two offices and activities to be carried on in conjunction with
each other. Thus, if the planner sought his services because he
was a licensed architect AND a licensed attorney, and the two activities
were combined as a means of obtaining employment by the lawyer from
the planner, Doe would ethically be in difficulty. (See Informal
Opinions No. 571 (a) and (b) & No. 775 & No. C-803 &
No. 896).
Except in the most unusual situation, Doe, who would not be admitted
to the practice of law in a foreign state, should not be permitted
to prepare zoning and subdivision regulations in that state. This
is considered legal work. It involves the preparation, not only
of regulations, but in most cases, of ordinances, legal notices,
resolutions, advice on legal procedure involved, and other matters
which only a lawyer would, or should, handle for the planner. Some
extraordinary situation could be visualized, as, for instance, a
municipality, a part of which may extend across a state line. Some
leniency in such a situation is conceivable, but, generally speaking,
Doe should not perform this type of work in a state where he is
not admitted to the practice of law, simply because it consists
of services which are essentially legal in character, unless he
becomes associated with a licensed attorney in that jurisdiction.
(See Opinion 316, issued in 1967).
Doe should not be permitted to enter into a partnership with this
firm carrying on this activity or as a member of the corporation,
so involved. This clearly would be a case of fee splitting with
the members of the partnership or with the stockholders and officers
of the corporation. It certainly would involve his law practice
in another business and would be considered an indirect means of
soliciting law business.
And, a fortiori, Doe should not be permitted to do promotion work
in connection with these projects. Again, this would be analogous
to a lawyer, who is also a licensed real estate broker, selling
the real estate and then, doing all of the legal work in connection
with the transaction. This kind of combination of activity has been
consistently condemned as violative of ethical principles.
Of course, there is nothing wrong with one having several businesses
or professions, so long as one keeps them separate. Henry S. Drinker,
in his Legal Ethics, pages 221, 222, and approved in Informal Opinion
No. 775, issued February 15, 1965, stated, in part: "Where,
however, the second occupation, although theoretically and professedly
distinct, is one closely related to the practice of law, and one
which normally involves the solution of what are essentially legal
problems, it is inevitable that, in conducting it, the lawyer will
be confronted with situations where, if not technically, at least
in substance, he will violate the spirit of the Canons, particularly
that precluding advertising and solicitation. The likelihood of
this is the greatest when the collateral business is one which,
when engaged by a lawyer, constitutes the practice of law, and when
it is conducted from his law office. Thus, there is apparently no
doubt as to the impropriety of conducting, from the same office,
a supposedly distinct and independent business of collection agent,
stock broker, estate planning, insurance adjusters bureau, tax consultant,
or mortgage service, or to organize and operate under a trade name,
even though in an adjacent office, a corporation conducting servicing
business - drafting charters and other corporate papers ***".
Also, Opinion No. 31, issued March 2, 1931, stated, in effect, that
a lawyer should not under any circumstances, as employee or otherwise,
engage in the "corporation service" business because his
legal skills necessarily would have to be applied and because the
solicitation by him or his employer of work which, at least, when
the lawyer did it, constituted the practice of law". Opinions
234 and 272, however, have set, as a basic criteria, a more liberal
view from whether the business or activity would be such as to "readily
lend itself", or "can be used" as a feeder to law
practice to the test of whether business or other activity "will
inevitably serve" as a feeder to a law practice. From the nature
of the activity, described by Doe, the formation of a business enterprise
and the promotion thereof would "inevitably serve" as
a feeder to his desired type of law practice.
Doe should be reminded of disciplinary rules in other Canons, such
as DR 1-102 which prohibits a lawyer from violating a disciplinary
rule or circumventing a disciplinary rule through actions of another
and DR 2-103 (E) which states that a lawyer shall not accept
employment when he knows or it is obvious that the person who seeks
his services does so as a result of conduct prohibited under these
disciplinary rules.
CONCLUSIONS
REACHED
Answers to the questions presented are as follows, viz:
(1) Permissible within prescribed limitations.
(2) Prohibited, except in rare and unusual
situations.
(3) Prohibited.
(4) Prohibited.
Canons DR 1-102 and DR 2-103 (E).
73-6
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