Opinion ID: 2391351
Heading Depth: 1
Heading Rank: 3

Heading: supporting authorities

Text: Although we deem the cited canons and decisions in this State controlling, in view, first, of the division in the court and, secondly, of the importance to the profession of the issues raised, it seems desirable to supplement these authorities by reference, without attempting to be exhaustive, to pertinent decisions in other states, to the interpretation of the canons by authorized committees of the bar, to the practice set up in codes of conduct entered into by the bar with various related callings, and to legal writers on the subject. It should be noted at the outset that relatively few cases concerning the canons reach the courts, first, because the canons are clear and, secondly, because the bar in general respects them. It is only where the necessities are overwhelming or the stakes great that a lawyer in his right senses is tempted to violate them. The Canons of Professional Ethics are based on the fundamental premise that the practice of law is a profession and not a business. It is a profession notwithstanding the fact that lawyers make a living out of their practice. Dean Roscoe Pound has with his customary clarity set forth the fundamental characteristic of a profession: What we mean by the term profession when we speak of the old recognized professions (medicine, the law, ministry). We mean an organized calling in which men pursue a learned art and are united in the pursuit of it as a public service  as I have said, no less a public service because they may make a livelihood thereby. Here, from the professional standpoint there are three essential ideas  organization, learning, and a spirit of public service. The gaining of a livelihood is not a professional consideration. Indeed, the professional spirit, the spirit of a public service, constantly curbs the urge of that instinct. (Address before Nebraska State Bar Association, October 20, 1949, p. 2.) Dean John H. Wigmore has stressed the fact that a profession involves a way of living and therefore the canons are much more than rules of ethics: For lawyers, the most important truth about the law is that it is a profession.    As a profession, the law must be thought of as ignoring commercial standards of success  as possessing special duties to serve the state's justice  and as an applied science requiring scientific training. And, if it is thus set apart as a profession, it must have traditions and tenets of its own, which are to be mastered and lived up to. This living spirit of the profession, which limits yet uplifts it as a livelihood, has been customarily known by the vague term `legal ethics.' There is much more to it than rules of ethics. There is a whole atmosphere of life's behavior. What is signified is all the learning about the traditions of behavior that mark off and emphasize the legal profession as a guild of public officers. And the apprentice must hope and expect to make full acquaintance with this body of traditions, as his manual of equipment, without which he cannot do his part to keep the law on the level of a profession. (Foreword to Carter's, The Ethics of the Legal Profession, 1915) The result of these considerations on the lawyer is epitomized by Chief Judge Cardozo with characteristic felicity: Membership in the bar is a privilege burdened with conditions, People ex rel. Karlin v. Culkin, 248 N.Y. 465, 467, 162 N.E. 487, 489, 60 A.L.R. 851 ( Ct. App. 1928). Many of these conditions are set forth in the Canons of Professional Ethics. Our best courts have consistently adhered to these principles. Thus in In re Disbarment of Tracy, 197 Minn. 35, 38, 266 N.W. 88, 91, 267 N.W. 142 (1936), the Minnesota Supreme Court stated: The point is in the fundamental difference between any commercial business and a profession. The vocation of a lawyer is a profession.    his conduct    is to be measured not by the indefinite, still developing and largely unwritten standards of trade and counting house, but by those of his profession which, while they have not reached their ultimate state, have yet attained the development and degree of formulation evidenced by the Canons of Ethics. No infringements of the canons, other than those involving sheer dishonesty, have called forth stronger judicial and professional denunciation than violations of Canon 27 prohibiting advertising and soliciting. In In re Cohen, 261 Mass. 484, 486, 159 N.E. 495, 497, 55 A.L.R. 1309 (1928), the Supreme Judicial Court of Massachusetts in a case involving a lawyer who advertised for business stated: The foundation on which this principle of conduct rests is that attorneys at law practice a profession; they do not conduct a trade. It is incompatible with the maintenance of correct professional standards to employ commercial methods of attracting patronage. Advertising such as that disclosed on this record is commonly designed to stimulate public thought and challenge popular attention to the end that the business of the advertiser may be increased.    Whatever may be his constitutional rights, a member of the bar must conduct himself as an officer of the court in such manner as not to offend against reasonable rules of propriety established by the court for the general welfare. Courts are solicitous for the rights of one duly admitted to practice law.    They owe an equal duty to see to it that the public interests are conserved by observance on the part of lawyers of proprieties indicative of a due appreciation of their responsibilities to the court and to the community, even though purely selfish tendencies and profit may be thereby restrained. The courts of New York have been equally emphatic. In In re Schwarz, 175 App. Div. 335, 339, 161 N.Y.S. 1079, 1083 ( App. Div. 1916), the court, in dealing with an attorney who had by the use of letters, circulars and newspaper advertisements solicited patronage for his collection business, said: They are typical of modern advertising business methods, and would be appropriate to the exploitation of patent medicines or other proprietary articles, but are utterly abhorrent to professional notions or standards. Unless the ancient and honorable profession of the law, whose practitioners are officers of the court of the highest fiduciary character, under obligations of service to the state, to the community, and to the court, is to be degraded to the rank of a quack medicine business enterprise, the advertising and business solicitation methods here under review must be emphatically and absolutely condemned.    It is precisely because of the `business' emphasis which the respondent attaches to his professional title of attorney and counselor at law that his methods and practices are so offensive.    The court has no disciplinary supervision of business enterprises. It has jurisdiction over its own officers, and is authorized to discipline any attorney who is guilty of professional misconduct. We are of the opinion that by using the methods, letters, circulars, and advertisements here under consideration the respondent is guilty of professional misconduct. If respondent wishes to retain and carry on the business which he claims is so valuable to him, he may do so outside of the profession whose standards and rules of conduct he has violated; he cannot remain a member of the bar of this state, and, while such member, indulge in such practices. The same attorney was later disbarred in In re Schwarz, 195 App. Div. 194, 197, 186 N.Y.S. 535, 538 ( App. Div. 1921), affirmed 231 N.Y. 642, 132 N.E. 921 ( Ct. App. 1921), the court adopting the opinion below which contained these pertinent observations: It is evident that the respondent has no conception of the ethics of the profession, and is obsessed by the notion that self-advertisement is a proper means of obtaining professional employment, and that his efforts are directed to so shaping his letters and circulars as to obtain the results of such advertisement and at the same time escape judicial condemnation. He had fair warning, but has deliberately violated the spirit of our former decision, while asserting that he has observed its letter. The court told him plainly that if he wished to continue his business, for that is what he then claimed it was, in the manner and by the methods employed, he must do it as a business man, and not masquerade as a professional man, while violating the fundamental ideals and principles of the profession. The opinions of the Committee on Professional Ethics and Grievances of the American Bar Association are equally explicit, e.g., in Opinion No. 62, dated March 19, 1932, the committee was concerned with the application of Canon 27 to an attorney's acquiescence in a newspaper's repeated publication of laudatory announcements regarding him and his legal practice. In its opinion the committee stated: The assumptions in questions one and two stretch credulity almost to the breaking point. The facts stated in the preamble clearly disclose improper advertising of the most flagrant nature. We cannot believe that the newspaper's repeated publication of the attorney's picture and announcement could have occurred without his request or consent. But if it be true that such publication has been made as suggested in question one, nevertheless, it was the duty of the lawyer, as soon as his attention was called thereto, to request and require the publisher to discontinue publication of the article. The failure so to do would permit him to be `advertised' by indirection contrary to the provisions of Canon 27. Such advertising we disapprove. ( Opinions of the Committee on Professional Ethics and Grievances (1946), pp. 156-157) To the same effect is Opinion No. 44-2 of the Committee on Professional Ethics of the Chicago Bar Association: It is the opinion of the Committee that such advertising, whether it mentions the attorney or not, if it is with his knowledge or consent, or if he participates in the results of such solicitation, constitutes a violation of Canon 27 `Advertising, Direct or Indirect.' Violations of Canon 27 concerning advertising and soliciting are likely to be interwoven, as here, with violations of Canons 35 and 47 dealing with intermediaries and aiding in the unauthorized practice of the law. Thus, Opinion No. 122, dated December 14, 1934, of the Committee on Professional Ethics and Grievances of the American Bar Association states: There never could have arisen in this country any widespread lay practice of the law without the assistance (and we may say the suggestion and inventive genius) of intelligent, but highly unprofessional lawyers. It may fairly be said now that no lawyer can urge unfamiliarity either with the ethical or legal improprieties of such misconduct. It must cease or be stopped by the activities of the organized profession. Drastic action should hereafter be taken against any lawyer participating therein. See also Opinion No. 31 of the committee, dated March 2, 1931, in which it was said: In our opinion, it is improper for an attorney to aid a corporation to practice law, or in any way to participate in or sanction such practice, and it is, therefore, improper for him to allow his name to be displayed on the letterheads or advertising matter of such a corporation. Furthermore, the solicitation of `law practice' is contrary to Canon 27, not only when it is done by the lawyer but also when he acquiesces in the use of his name in connection with such solicitation by others. The conclusion would not be different if he were a full time salaried officer of a corporation soliciting `law practice.' An attorney may properly, for a salary, devote his entire time to the performance of legal services for a corporation, provided the legal services performed concern only the corporation's own affairs, but when he allows it to sell his professional services, he violates Canon 35. The decisions are to the same effect. In re Tuthill, 256 App. Div. 539, 10 N.Y.S. 2 d 643, 649 ( App. Div. 1939), was a disciplinary action under Canon 35 in which an attorney for one of the so-called heir hunting companies was disbarred. The corporation had been found to be engaged in the unlawful practice of law. The respondent-attorney advised the formation of a New Jersey corporation to evade criminal prosecution in New York and otherwise aided the corporation in its unlawful practice of law. In its opinion the court stated: The record leaves no doubt that respondent was aware of the fact that the corporation obtained its business through solicitation. As an attorney, respondent himself could not so solicit. In accepting engagements from the corporation, respondent was doing indirectly what he could not ethically do directly.    The relationship of attorney and client did not exist between respondent and those for whom he appeared as attorney of record. He was, in reality, the attorney for the corporation which selected and employed him, to which he accounted and which fixed his compensation. He wholly disregarded the 35th Canon of Professional Ethics of the American Bar Association   . Here the mortgage company was engaging in the unauthorized practice of law and the respondents permitted their services and names to be used in aid thereof, contrary to Canon 47. Hexter Title & Abstract Co. v. Grievance Committee, 142 Tex. 506, 179 S.W. 2 d 946, 951 ( Sup. Ct. 1944), where the title company was adjudged guilty of the unlawful practice of law contrary to statute is pertinent. The Supreme Court of Texas in affirming said: According to the facts set out in the agreed statement, and particularly paragraph 3 thereof, the defendant draws deeds, notes, mortgages, and releases relating to the property rights of others. According to paragraph 2 of the stipulation it has been furnishing opinions as to the condition of the title to real estate, and according to paragraphs 7 and 8 it holds itself out as possessing authority to render such services, and advises interested parties as to the purpose and legal effect of the instruments drawn by it. It therefore advises others as to the secular law, and draws deeds and other papers relating to secular rights within the inhibition of the above statute. These acts, when performed for a consideration, constitute the practice of law, both within the terms of the statute above referred to and the decisions of the courts on the subject. These canons do not, however, preclude an attorney from engaging in all business. The line of demarcation is clearly indicated in Opinion No. 57 of the Committee on Professional Ethics of the American Bar Association, dated March 19, 1932, which provides in part: It is not necessarily improper for an attorney to engage in a business; but impropriety arises when the business is of such a nature or is conducted in such a manner as to be inconsistent with the lawyer's duties as a member of the Bar. Such an inconsistency arises when the business is one that will readily lend itself as a means for procuring professional employment for him, is such that it can be used as a cloak for indirect solicitation on his behalf, or is of a nature that, if handled by a lawyer, would be regarded as the practice of law. To avoid such inconsistencies it is always desirable and usually necessary that the lawyer keep any business in which he is engaged entirely separate and apart from his practice of the law and he must, in any event, conduct it with due observance of the standards of conduct required of him as a lawyer. (Emphasis supplied) Some businesses in which laymen engage are so closely associated with the practice of law that their solicitation of business may readily become a means of indirect solicitation of business for any lawyer that is associated with them.    For the reasons stated a lawyer cannot properly devote a portion of his time to managing a bureau for the adjustment of insurance claims nor permit his name to be used on its stationery. Having thus answered the first and third questions in the negative, it is unnecessary to answer the second question. Nevertheless, reference to it is desirable because it so aptly illustrates the necessity of keeping any business in which a lawyer may be engaged entirely separate and apart from his practice of law. If such a business and his law practice should be conducted from the same office, the public could not be expected to distinguish between his dual capacities and know when he is acting in the capacity of a lawyer and when in that of a layman. This problem is further elaborated by Henry S. Drinker in his forthcoming Legal Ethics: There is, of course, nothing in the Canons to prevent this as to an occupation entirely distinct from and unrelated to his law practice. Thus, no one would dispute the right of a lawyer to be a teacher, or a violinist or doctor or a farmer, or to sell rare postage stamps, provided he in no way used such occupation to advertise, or as a feeder to his law practice. As a Michigan Committee aptly said in a recent case: `There is, of course, nothing to prevent a lawyer from adding to his general qualifications by becoming a certified public accountant and using his added skill in appropriate matters as they arise. It is only when the lawyer seeks to publicize the fact that he is also an accountant that the question arises.' (Mich. op. 124) Much, of course, depends on the surrounding circumstances. In small communities where everyone knows what everyone else is doing, and where there is comparatively little remunerative law practice, it is quite the usual thing for lawyers to be engaged in collateral occupations such as licensed broker or insurance agent. If they do so using distinct letterheads and not using the other occupation as a means of solicitation or securing employment as a lawyer, it is not considered improper. Thus a lawyer may properly conduct an independent real estate business in another county (heretofore unpublished op. 38 of A.B.A. Com. now published in App. A), or may offer to manage an apartment house in exchange for the use of an apartment (N.Y. City ops. 344, 475) or may publish a newspaper and write editorials, but not to exploit himself as a lawyer (heretofore unpublished op. 37 of the A.B.A. Com.) or may be the salaried trust officer of a bank (N.Y. County op. 267). 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 (N.Y. City op. 767, income tax service for lawyers), particularly that precluding advertising and solicitation. The likelihood of this is the greatest when the collateral business is one which, when engaged in by a lawyer, constitutes the practice of law (A.B.A. ops. 31, 35, 57, 194, 201, 225, 257, 272; N.Y. City op. 413) and when it is conducted from his law office. (Heretofore unpublished op. 43 of A.B.A. Com.) 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 (N.Y. County op. 260 and ops. cited; N.Y. City ops. 211, 633; N.Y. City ops. 102, 479), stock broker (heretofore unpublished op. 39 of A.B.A. Com.), estate planning (heretofore unpublished op. 43 of A.B.A. Com.), insurance adjusters bureau (heretofore unpublished op. 57 of A.B.A. Com.), tax consultant (A.B.A. op. 57), or mortgage service (N.Y. County op. 344; N.Y. City op. B-106) 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 (N.Y. City op. 768; heretofore unpublished op. 77 of A.B.A. Com.). Clearly a lawyer may not use his legal stationery to solicit business in the collateral line (N.Y. City op. 636). These obvious distinctions are applied by the American Bar Association Committee in Opinion 225 to collection agencies, in Opinion 272 to certified public accountants, and in Librarian v. State Bar, 21 Cal. 2 d 862, 863, 136 P. 2 d 321, 323 ( Sup. Ct. 1943), to an attorney who publicized himself as notary public and tax expert, though not as attorney, although signs on his office showed he was an attorney, where the court held: If the petitioner should choose to continue as a practitioner at the bar of this state, he must comply with the standards of the legal profession. He should appreciate that when he is licensed to practice as an attorney at law, the professional services that he thus performs are performed by him as an attorney, whether or not some of the services could also be rendered by one licensed in a different profession. One who is licensed to practice as an attorney in this state must conform to the professional standards in whatever capacity he may be acting in a particular matter. Jacobs v. State Bar, 219 Cal. 59, 25 P. 2 d 401. As a practicing attorney, he may not solicit employment nor may he advertise contrary to the rules. The restrictions, limitations, and permissible conduct in those respects are familiar both to the lawyer and to the layman. These authorities clearly define the line between the permissible business activities of a lawyer and those which violate the Canons of Professional Ethics. They do not interfere with the customary methods of practicing law. They are aimed only at the sharp practice of a relatively few members of the bar who are seeking to invade the plain intent of the canons to their own personal financial advantage. The first sign of any such intent is likely to be extravagant, extensive advertising, a field in which they have no competitors. The second sign is apt to be the intermingling of the practice of law with the operation of some business that directly and necessarily produces legal work in large volume. Such a set-up, which must be condemned if the canons are not to become a dead letter in protecting legitimate practitioners, is far removed from service as a director or officer of a bank, a savings and loan association or of an ordinary manufacturing or merchandising establishment, or acting as a real estate or insurance broker and the difference is not merely one of degree but it is a difference in intent and methods. The New Jersey State Bar Association, like many other bar associations, has sought to protect the profession and likewise the public by entering into codes with related callings. Thus its code with the collection agencies contains the following: 3. It is held to be improper for an agency to solicit claims for any purpose at the instigation of any attorney. 5. It is held to be improper for an agency to communicate with debtors in the name of an attorney or upon the stationery of any attorney, or to prepare any forms of instrument which only attorneys are authorized to prepare. 8. In the forwarding of claims to a lawyer for collection, an agency shall not intervene between the creditor and attorney in any manner which would exploit the services of the attorney or which would direct those services in the interest of the agency, and shall disclose to the attorney the service charge made by the agency to the creditor if such service charge is greater than the Commercial Law League of America minimum rates. If the attorney corresponds directly with the creditor, the agency may request that copies of such correspondence be sent to the agency. 9. It is held to be improper for an agency to demand or obtain in any manner a share of the proper compensation for services performed by an attorney in collecting a claim or any legal proceedings upon or arising out of such claim, irrespective of whether or not the agency may have previously attempted collection thereof. The same respect for the rules here laid down is also reflected in the Statement of Principles Applicable to Corporate Fiduciaries and Members of the Bar, which statement has been approved by the New Jersey Bankers Association, where we find the following provisions: 5. A corporate fiduciary shall not, directly or indirectly, influence the employment by the prospective testator of any specified attorney at law for the preparation of any will or codicil under which it is to be appointed in any fiduciary capacity. 17. A corporate fiduciary shall not extend by advertisement, or otherwise, an invitation to the public to `bring its legal problems to the fiduciary' or hold itself out as prepared to give legal advice or legal service or to practice law. 18. A corporate fiduciary shall not advertise that it will, or that, through the services of its officers, agents or attorneys, it will draft or prepare or assist in the drafting or preparation of any will, codicil, trust agreement, contract or other legal document. The corporate fiduciaries of this State have recognized the evils in such a situation and voluntarily entered into a code prohibiting such practices on their part. The question of legal services is absolutely divorced from all their advertising, and in fact they are to maintain a hands-off policy when it comes to the question of recommending an attorney who shall perform the legal services for the customer. Certainly this code entered into between the bar association and the corporate fiduciaries goes to great length in furthering the principle of divorcing the legal profession from the lay activities of the banks and trust companies. In the case at bar we have a very serious violation of this principle. We have a situation where a mortgage company and a law partnership, both controlled by the same two men, are feathering each other's nest. The mortgage company's big selling point in its highly competitive business is the tie-up with the law firm, as a result of which more efficient service is offered to the customer. The law partnership allows the mortgage company to use this selling point, and as a result its own business is greatly increased. We have here a flagrant abuse of this principle that is prohibited in the code of the corporate fiduciaries. The respondent-attorneys allowed the mortgage company to extend by advertisement an invitation to the public to come to them because of their speedy and efficient service available to a large extent because of the close tie-up with the law firm. As a matter of fact, there appears to be no doubt that Rothman actively encouraged such advertising, both in newspapers and in the dissemination of this information through the salesmen, while Irving, who undoubtedly had knowledge of same, acquiesced therein. The advertisement of the legal services available helped to increase the business transactions of the mortgage company, which in turn resulted in an increase in business of the law firm. Such advertising a lawyer has never been permitted to do in his own name; to allow the respondents to do so through an intermediary is to place the ethical practitioner at a great disadvantage in competing with those who would turn their profession into a business. The decisions in other states, the opinions of authorized committees elsewhere, and the codes entered into by the New Jersey State Bar Association with related callings all support the conclusions we have reached on the basis of the controlling authorities in this state that the defendants have willfully and for long periods of time violated the 27th, the 35th and the 47th Canons of Professional Ethics.