ISBA January 1, 1984

Can a lawyer who is also a real estate broker, or his law partner, act as the lawyer in a deal where the lawyer earns a brokerage commission?

Short answer: The opinion concluded not without informed consent; the lawyer-broker's commission gives him a financial interest that may impair his judgment, so neither he nor his associate may represent a party to the transaction without consent after full disclosure, and the conduct may also violate the Illinois Real Estate License Act.

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This page answers the general question as of 1984. Ezel answers yours: whether it's allowed on your facts, under the current Illinois Rules of Professional Conduct, with citations.

Disclaimer: Advisory only. Not binding precedent.

About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official ethics opinion. The original opinion (linked on this page) is the authoritative source for any reliance.

Plain-English summary

Two lawyers practiced law together; one of them, Lawyer A, also operated separately as a real estate broker. When a real estate customer of A's brokerage proposed a purchase and sale with a third party, the committee was asked four questions: whether A could act as both broker and lawyer for his customer; whether A could be broker for his customer and lawyer for the other party; and whether A's associate, Lawyer B, could act as lawyer for the customer or for the other party.

The committee answered all four under former Rule 5-101(a), which bars a lawyer, absent the client's consent after full disclosure, from accepting employment where his professional judgment may be affected by his own financial or business interest. As to A representing his customer, the expected brokerage commission could adversely affect his independent judgment (citing Opinion 640). As to A representing the other party, the effect would be even more pronounced because that client's interest is adverse to the customer A represents as broker. As to B, his association with A gave him a financial interest in the transaction that could likewise affect his judgment.

The committee concluded that neither A nor B may represent either party without the client's informed consent, and that in the cross-representation situations the customer's consent should also be obtained, even though the rule literally requires only the client's. It added that in the situations where A would act as both broker and lawyer the ethics question was largely academic, because the conduct would appear to violate section 18(e)(25) of the Illinois Real Estate License Act of 1983, which subjects a licensee to revocation or penalty for acting as lawyer for the seller or buyer in a transaction he brokered. The committee expressed no opinion on whether B's representation could violate that statute.

Currency note

This opinion was issued in January 1984, under the former Illinois Code of Professional Responsibility and before Illinois adopted the 1990 (and later 2010) Rules of Professional Conduct. The ISBA Board of Governors affirmed the opinion in July 2010 as generally consistent with the 2010 Rules (Rules 1.7 and 1.8), while cautioning that the specific standards referenced may differ from the 2010 Rules. The cited Real Estate License Act provisions may also have changed since 1984. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule or requirement mentioned here.

Common questions

Q: Can a lawyer who brokered a real estate deal also be the lawyer on it?

A: The opinion concluded only with the client's consent after full disclosure; the brokerage commission is a financial interest that may impair the lawyer's judgment under former Rule 5-101(a), and the committee noted it would also appear to violate the Illinois Real Estate License Act.

Q: Does the conflict extend to the lawyer-broker's law partner?

A: Yes. Per the opinion, the associate's relationship with the lawyer-broker gives him a financial interest in the transaction that could affect his judgment, so he too needs informed consent.

Q: Whose consent is needed when the lawyer represents one party and brokers for the other?

A: The committee said the rule literally requires only the client's consent, but where a lawyer acts as broker for one party and lawyer for the other, he should also obtain the consent of his brokerage customer.

Background and rules framework

The opinion applied former Illinois Code Rule 5-101(a) (declining employment where the lawyer's own financial or business interest may affect his professional judgment, absent consent after full disclosure) and considered section 18(e)(25) of the Illinois Real Estate License Act of 1983. The Board's 2010 affirmation maps the analysis to current Illinois Rules of Professional Conduct 1.7 (concurrent conflicts, including the lawyer's personal interest) and 1.8 (specific conflict rules), corresponding to ABA Model Rules 1.7 and 1.8.

Citations and references

Rules of Professional Conduct:

Illinois Code Rule 5-101(a) (applied in the opinion)
Illinois RPC 1.7 and 1.8 (2010 equivalents per the Board's affirmation)
MR 1.7 (concurrent conflicts); MR 1.8 (specific conflict-of-interest rules)

Statutes:

Illinois Real Estate License Act of 1983, section 18(e)(25) (Ill. Rev. Stat. ch. 111, sec. 5818(e)(25))

Other opinions cited:

ISBA Opinion 640: a lawyer's expectation of a commission may adversely affect his independent professional judgment

Source

Landing page: https://www.isba.org/ethics/opinions/8414

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