May a lawyer draw a sale or lease contract at a real estate broker's request and be paid by the broker, where the lawyer represents neither party to the contract?

Plain-English summary

The Committee was asked whether an attorney may draw a contract, for either a sale or a lease, at the request of a real estate broker, where the attorney is paid by the broker, represents neither party to the contract, and does not know whether either party will be represented by counsel.

The Committee treated its earlier Opinion 264 as dispositive. That opinion dealt with an almost identical inquiry, except that the document there was a deed rather than a contract of sale or lease, and held that such action was improper and in violation of DR 5-107(B) and DR 3-101(A), the rules on intermediaries directing a lawyer's services and aiding a nonlawyer in the unauthorized practice of law. The Committee concluded that the same result applied to drawing a contract of sale or lease.

Currency note

This opinion was issued in 1975, before New Jersey's adoption of the 2004 revisions to the Rules of Professional Conduct, and predates the 1984 replacement of the Disciplinary Rules by the RPCs. The third-party-direction concern then in DR 5-107(B) is now in RPC 5.4(c), and the prohibition on aiding the unauthorized practice of law then in DR 3-101(A) is now in RPC 5.5. 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 Treat this page as historical context, not current guidance.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 lawyer draft a real estate contract for a broker who pays him, when he represents neither buyer nor seller?

A: No. The opinion concluded that arrangement is improper and violates DR 5-107(B) and DR 3-101(A).

Q: Why is drafting for the broker a problem if the document is routine?

A: Because the lawyer would be serving the broker's purpose without representing either party, which the Committee treated as aiding a nonlawyer in the unauthorized practice of law and allowing a third party to direct the lawyer's services.

Q: Does it matter that the document was a contract rather than a deed?

A: No. The Committee applied Opinion 264, which involved a deed, and held the same conclusion applies to a contract of sale or lease.

Background and rules framework

The opinion applied DR 5-107(B) (a lawyer must not permit a person who pays him to direct or regulate his professional judgment) and DR 3-101(A) (a lawyer must not aid a nonlawyer in the unauthorized practice of law), following Opinion 264. In current New Jersey terms, those concerns are addressed by RPC 5.4(c) and RPC 5.5.

Citations and references

Rules of Professional Conduct:

• DR 5-107(B) (third party directing a lawyer's professional judgment), as in effect 1975; now MR 5.4(c) / NJ RPC 5.4(c)
• DR 3-101(A) (aiding the unauthorized practice of law), as in effect 1975; now MR 5.5 / NJ RPC 5.5

Other opinions cited:

• NJ ACPE Opinion 264, 96 N.J.L.J. 1239 (1973)

See also

• NJ ACPE Op. 337: A Municipal Attorney Reviewing Deeds Required by the Planning Board
• NJ ACPE Op. 740: Nonlegal Companies Furnishing Lawyers (UPL)
• NJ ACPE Op. 716: Loan and Mortgage Modification Services

Source

• Full text (Justia mirror): https://law.justia.com/cases/new-jersey/advisory-committee-on-professional-ethics/2004/acp310-1.html
• Issuing authority: New Jersey Supreme Court Advisory Committee on Professional Ethics, via the NJ Courts Supreme Court Committees page

Original opinion text

Reproduced from a full-text mirror of the official opinion for research purposes. The linked official source controls.

98 N.J.L.J. 534, June 12, 1975

OPINION 310

Intermediaries - Unauthorized Practice - Drawing Contracts for Realtors

Inquiry has been made concerning the propriety of a course of procedures set forth in the following inquiry:

May an attorney draw a contract (for either sale or lease) at the request of a real estate broker, where he is to be paid by the broker, and he does not represent either party to the contract and does not know whether either party will be represented by any attorney?

We refer to our Opinion 264, 96 N.J.L.J. 1239 (1973), as being dispositive of the pending question. In that opinion which dealt with an almost identical inquiry (except that the document involved was a deed rather than contract of sale or lease of real property), we held that such action was improper and in violation of DR 5-107(B) and DR 3-101(A) of the Code of Professional Responsibility, dealing with intermediaries and aiding a nonlawyer in the unauthorized practice of law, for the reasons expressed and the authorities cited therein. The conclusion reached in that opinion applies, as well, to the instant inquiry.