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A LAWYER MAY SIMULTANEOUSLY HOLD HIMSELF OUT AS A REAL ESTATE BROKER
OR SERVE AS A CLERK AT THE AUCTION OF REAL ESTATE. WHILE IT IS NOT
IMPROPER PER SE FOR A LAWYER TO ENGAGE IN A SECOND OCCUPATION, EVEN
THOUGH CLOSELY RELATED TO THE PRACTICE OF LAW, NEVERTHELESS, A HEAVY
BURDEN MUST BE ASSUMED BY HIM TO ENSURE COMPLIANCE ON HIS PART,
OF ALL OF THE PROVISIONS OF THE CODE OF PROFESSIONAL RESPONSIBILITY.
HIS ACTIONS, WHILE SO ENGAGED, ARE DEEMED TO BE THOSE, NOT OF A
LAYMAN, BUT OF A LAWYER.
QUESTIONS PRESENTED
1. May
an attorney agree to clerk a sale of real estate at public auction,
with his client's broker, and perform the services outlined, for
a fee of 1% of the sales price, if he does so in his capacity as
the seller's attorney which is fully disclosed to all interested
parties?
2. If
an attorney is prohibited from acting as such a clerk under Real
Estate commission rules and regulations, may he act as such a clerk
if he were to further qualify and become licensed as a broker?
3. May
attorney engage in real estate business while in open practice and,
if so, what principles should be followed?
DISCUSSION
These questions raise the propriety of engaging in so-called "dual
occupations". The Code of Professional Responsibility seems
to eliminate the original complaint that such practice resulted
in "indirect solicitation of law business" or a "feeder
to a law practice", or, at least, they have little relevance
under the Code. See Informal Opinion 1248 (11/7/72). Formal Opinion
328, issued in August, 1972, involved a situation closely related
to the instant one. That opinion was based principally upon the
applicability of DR 2-102(E).
From the foregoing, it seems that it is not per se improper for
a lawyer simultaneously to hold himself out as a lawyer and as a
real estate broker. However, his office sign may not so indicate;
at least, it would be improper under DR 2 102(E). This applies not
only to the office sign but to the letterhead and the professional
card of the lawyer. It appears further that, if the lawyer would
completely separate the practice of law from his real estate brokerage
business AND would comply with DR 2-102(E), the two professions
could be engaged in simultaneously, even though he holds himself
out publicly as a lawyer and as a real estate broker.
Reference is made to two situations, viz: (1) where the second occupation
is NOT "law related"; and (2) Where the second occupation
IS "law related". The previous situation hardly ever presents
any ethical questions but the second one does. Informal opinion
709 (1964) stated:
"A real estate brokerage business is so closely related to
the practice of law that, when engaged in by a lawyer, it constitutes
the practice of law."
In Opinion
272 (1946), it was stated that "in every case where a lawyer
performs services for a client which could be performed by one not
a member of the bar, nevertheless, in performing them in the course
of his legal services, he is acting as a lawyer and subject to the
Canons". In said Formal opinion 328 (1972), it is stated: "If
the second occupation is so law-related that the work of the lawyer
in such occupation will involve, inseparably, the practice of law,
the lawyer is considered to be engaged in the practice of law while
conducting that occupation. Accordingly, he is held to the standards
of the bar, while conducting that second occupation from his law
offices. With this qualification, he may carry on a law-related
occupation, ***, from the same office." However, it appears
further that this qualification is a substantial one. Carrying on
such second occupation, simultaneously, requires conformity with
DR 2-106. Publicity in seeking such business must conform with DR
2-101, DR 2-103 and DR 2-104. Under DR 4-101, he has the duty to
preserve confidences. He may also owe a duty as a fiduciary, pursuant
to DR 5-101, 104, and 105. He, therefore, may carry on the second
occupation, provided that he complies with DR 2-102(E) as well as
all of the provisions of the Code of Professional Responsibility,
and he cannot avoid this obligation simply by dividing this activity
physically into two separate offices.
This is the cautionary language found in Informal Opinion 775 (1965)
which states:
"While ... the Committee does not consider it to be necessarily
unethical to practice law and concurrently, but in different transactions,
engage in the real estate business, the Committee is of the opinion
that, to do so in accordance with the Canons, is so difficult that
suspicions of unethical conduct are almost inevitable. For that
reason alone, it is our opinion that only a very few lawyers will
expose themselves to such suspicions on the part of their brother
lawyers and the public. The lawyer, who does so, must be willing
to undertake the tremendous burdens of conducting his real estate
business ethically under the Canons ."
Applying the foregoing principle to the queries at hand, it would
appear that there would be no prohibition per se against the lawyer
serving as a clerk of the sale of the real estate of his client,
provided, however, that:
1. His employment as clerk of the sale came
solely and absolutely from the client and in no manner whatsoever
from the broker.
2. He scrupulously complied with all of the
provisions of the Code of Professional Responsibility since, while
so serving, he is performing services as a lawyer and not as a mere
layman.
3. Payment for his services must come from
the employer; there must be no division of fees with the layman
auctioneer. Also, it must be emphasized that, no longer, is there
a "minimum fee schedule" in Nebraska and there must be
no reference made to it in making the charges for his services as
clerk of the sale.
4. The
layman auctioneer shall have no authority over the lawyer clerk
in these situations.
5. There
must be no evidence of continued reciprocity between the auctioneer
and the lawyer in future dealings.
CONCLUSION
The
answer to Question No. 1, is "Yes" with the qualifications
above set forth.
The
answer to Question No. 2, is "Yes" with the proviso that,
when serving as a real estate broker, his actions must be considered
those as a lawyer subject to all of the provisions of the Code of
Professional Responsibility.
The
answer to Question No. 3, is "Yes", provided that there
be compliance with all of the provisions of the Code of Professional
Responsibility.
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