Can a borrower's lawyer render a legal opinion to the lender bank, and does doing so create an attorney-client relationship or conflict with the bank?
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This page answers the general question as of 1991. Ezel answers yours: whether it's allowed on your facts, under the current North Carolina Rules of Professional Conduct, with citations.
Plain-English summary
A lawyer represented a borrower negotiating a bank loan. The bank's policy required the borrower's counsel to give the bank a legal opinion that the loan and its terms did not violate any laws, including usury or similar interest laws. The inquiry asked whether the borrower's lawyer could ethically render that opinion to the bank.
The opinion concluded that the lawyer may do so with the borrower's consent. Rendering the opinion to the bank does not give rise to an attorney-client relationship between the lawyer and the bank; the lawyer is still representing the borrower only, citing Rule 5.1(a). The opinion stated that it supersedes RPC 101.
Currency note
This opinion was issued in 1991, before the North Carolina State Bar's adoption of the 2003 revisions to the Rules of Professional Conduct. 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 Treat this page as historical context, not current guidance.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, deadline, or requirement mentioned here.
Common questions
Q: Can a borrower's lawyer give the lender bank the legal opinion it requires?
A: Yes, with the borrower's consent. The opinion held the lawyer may ethically render the requested opinion to the bank.
Q: Does rendering the opinion make the bank the lawyer's client?
A: No. The opinion held that rendering the opinion does not create an attorney-client relationship with the bank; the lawyer still represents only the borrower.
Q: Whose consent is needed?
A: The borrower's. The opinion conditioned the lawyer's rendering of the opinion on the borrower's consent.
Background and rules framework
The opinion applied North Carolina Rule 5.1(a), the conflict-of-interest provision then in force (corresponding to Model Rule 1.7), to confirm that providing a third-party loan opinion at the borrower client's request, with consent, does not make the recipient bank a client or create a conflicting representation. It superseded the earlier RPC 101.
Citations and references
Rules of Professional Conduct:
- MR 1.7 (conflict of interest; current clients)
- North Carolina Rule 5.1(a) (conflict of interest)
Other opinions cited:
- North Carolina RPC 101 (superseded by this opinion)
See also
- NC Ethics Op. RPC 9: corporate house counsel; lenders, borrowers, and loan closings
- NC Ethics Op. RPC 131: representing the county while suing its department of social services
Source
- Landing page: https://www.ncbar.gov/for-lawyers/ethics-and-governing-rules/ethics-opinions/opinions/rpc-121/
Original opinion text
Reproduced from the official source for research purposes. The linked source is authoritative.
Inquiry:
Lawyer A represents a borrower in negotiating a loan from a bank. The bank has a policy of requiring that counsel for its borrower render to it (the bank) a legal opinion that the loan in question and the terms of the loan do not violate any laws, including, without limitation, any usury laws or similar laws relating to the charging of interest.
May Lawyer A ethically render such an opinion to the bank?
Opinion:
Yes, Lawyer A may ethically render an opinion to the bank with the borrower's consent. The rendering of an opinion to the bank does not give rise to an attorney/client relationship between Lawyer A and the bank. Lawyer A is still representing the borrower only. Rule 5.1(a).
This opinion supersedes RPC 101.
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