When a New Jersey lawyer applies for a casino license, can the lawyer let regulators examine the law firm's books and client accounts?

Plain-English summary

An attorney, a member of a law firm organized as a professional corporation, applied to the New Jersey Gaming Control Commission for a casino license. The Enforcement Commission sought to examine all bank accounts and books of corporations in which the applicant had an interest, including the law firm. The question was whether the firm or the applicant could permit that examination without first obtaining the approval of the clients whose accounts and activities are recorded in the firm's records.

The Committee observed that a law firm's books, records, and accounts typically contain client names, addresses, occupations, the legal activities pursued, statements and payments, trust-account funds, and records of clients' assets and their location. Information about clients in such records is presumed made in professional confidence (N.J.S.A. 2A:84A-20(3)), and DR 4-101 requires the attorney to protect both the confidences and the secrets of a client, an obligation broader than the evidentiary attorney-client privilege.

Applying those principles, the Committee held that the inquiring attorney and his firm must refuse to disclose the firm's books, records, and accounts containing privileged information and the confidences and secrets of clients, without client consent, except where the DR 4-101(C) exceptions apply. It cautioned that nothing in the opinion interprets the Gaming Control Commission's own powers to demand and receive information; if the applicable regulations require disclosure the applicant may not ethically make, his obvious course would be to withdraw his application for a license.

Currency note

This opinion was issued in 1979, 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. It applied DR 4-101 and the statutory privilege at N.J.S.A. 2A:84A-20(3); in current New Jersey terms the confidentiality duty corresponds to RPC 1.6. Treat this page as historical context, not current guidance.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: Could the lawyer hand the firm's records to casino regulators?

A: No, not without client consent. The opinion held the attorney and firm must refuse to disclose records containing privileged information or clients' confidences and secrets, absent a DR 4-101(C) exception.

Q: What if the regulations require disclosure?

A: The opinion said the applicant's obvious course would be to withdraw his license application, because he cannot disclose what his ethical obligations protect.

Q: Does the opinion limit the regulators' powers?

A: No. The Committee expressly declined to interpret the Gaming Control Commission's authority to demand and receive information; it addressed only the lawyer's ethical duty.

Background and rules framework

The opinion applied DR 4-101 (confidences and secrets), which is broader than the evidentiary attorney-client privilege codified at N.J.S.A. 2A:84A-20(3). In current New Jersey terms the confidentiality duty corresponds to RPC 1.6. The holding placed the lawyer's confidentiality obligation ahead of his personal interest in the license: disclose only with consent or under an exception, and otherwise withdraw the application.

Citations and references

Rules of Professional Conduct:

• MR 1.6 / NJ RPC 1.6 (confidentiality of information)
• DR 4-101, DR 4-101(C) (as in effect 1979)

Statutes:

• N.J.S.A. 2A:84A-20(3) (attorney-client privilege; presumption of confidence)

Other authorities:

• ABA Code of Professional Responsibility, Canon 4, Ethical Considerations

See also

• NJ ACPE Op. 439: Confidential Zoning Violations in a Real Estate Sale
• NJ ACPE Op. 445: Returning the File After Being Paid in Full

Source

• Full text (Justia mirror): https://law.justia.com/cases/new-jersey/advisory-committee-on-professional-ethics/2004/acp431-1.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.

104 N.J.L.J. 193, August 30, 1979

OPINION 431

Attorney Applicant for Casino License - Disclosing Law Firm's Records

An attorney has applied to the New Jersey Gaming Control Commission for a casino license. The Enforcement Commission seeks to examine all bank accounts or books of corporations in which the applicant attorney has an interest. He is a member of a law firm organized as a professional corporation. The question is whether or not the law firm or the attorney applicant may permit the Enforcement Commission to examine the books, records and bank accounts of the applicant's law firm without first obtaining the approval of clients whose accounts and activities are recorded there.

A law firm's books, records, and bank accounts usually contain information as to names, addresses and occupations of clients, legal activities pursued for the clients, statements rendered and payments made for legal services, clients' monies passing through trust accounts and records of clients' assets and their location.

The information pertaining to clients in such records of the law firm is presumed to have been made in professional confidence. N.J.S.A. 2A:84A-20(3). DR 4-101 requires the attorney to protect both the confidences and the secrets of a client. Further, the "attorney client privilege is more limited" than the obligation to guard confidences and secrets. Hence, a lawyer must take care not only to preserve the evidentiary privilege, but his clients' "confidences and secrets" as well. See ABA Code of Professional Responsibility Canon 5, Ethical Considerations, par. 4.

In the application of the above we hold that the inquiring attorney and his firm must refuse to disclose the firm's books, records and accounts containing information within the "attorney client" privilege and those which constitute the confidences and secrets of the client without the consent of clients except where the exceptions in DR 4-101(C) apply. Nothing in this opinion should be construed as an interpretation of the powers of the New Jersey Gaming Control Commission to demand and receive appropriate information. Thus, if the appropriate regulations require the disclosure of information which the applicant may not disclose consistently with his ethical obligations, his obvious course would be to withdraw his application for a license.