Can a municipal attorney do the legal work on a developer's project if the developer deposits the fees with the municipality instead of paying the attorney directly?

Plain-English summary

A builder wanted to develop a tract that would require extensive planning, regulations, agreements, specifications, and documentation. He proposed that the municipality (or the agency concerned) do that legal work through its own annually appointed attorneys, and that he deposit funds with the municipality against which the attorneys' costs and fees would be charged. The attorneys would, by the terms of the proposal, always represent the municipality and never the developer, conferring with the developer only when his acceptance or disapproval of a document was needed.

The Committee analyzed the question under Canon 6, which makes it unprofessional to represent conflicting interests except by express consent after full disclosure, and noted that the consent exception is not available where the public interest is involved. It found that the proposal's words could not be squared with its practicalities: it would be difficult for a municipal attorney to apply for a subdivision approval, building permit, or zoning variance for the builder while representing only the municipality, and difficult to confer with the developer over his approval of documents without effectively advising him.

The Committee concluded the municipal attorney would undoubtedly find it his duty to contend for the municipality that which his duty to the developer would require him to oppose. It treated the relationship between a municipality and a developer, where many statutes, ordinances, and regulations are interpreted and enforced, as a fertile field for conflicting interests, and stressed that when the public is involved the municipal attorney must avoid any semblance of divided loyalty. It is the suspicion engendered in the public's mind by such conduct, the Committee said, that creates the mischief, even if the lawyer's intentions are pure. The same reasoning applied to an attorney for any municipal board, agency, or other public body.

Currency note

This opinion was issued in February 1965, before New Jersey's September 13, 1971 adoption of the Disciplinary Rules (Code of Professional Responsibility), and well before the 1984 Rules of Professional Conduct and all later revisions. It applied Canon 6 of the former Canons of Professional Ethics. Conflicts of interest are now treated under RPC 1.7. 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 municipality route a developer's legal fees through itself so its attorney can do the developer's project work?

A: No. The Committee held that the indirect payment, depositing the fee with the municipality, did not change the proscribed conduct; directly accepting fees from such a developer would be unethical, and routing them through the municipality made no difference.

Q: Does the attorney's promise to "always represent the municipality and never the developer" cure the problem?

A: No. The Committee said the practicalities of the undertaking refute the words, because the attorney could not apply for the developer's approvals or confer on his documents without effectively advising and representing him.

Q: Why couldn't the parties just consent to the arrangement under Canon 6?

A: Canon 6's consent exception was not available because the public interest was involved. The Committee, citing its Opinions 4 and 29, held that where one client is a public body, conflicting representation cannot be cured by consent.

Q: Did the holding apply only to the municipal attorney, or to agency attorneys too?

A: It applied to both. The Committee said everything it said about the municipal attorney applied with equal force to an attorney representing any municipal board, agency, or other public body.

Background and rules framework

The opinion applied Canon 6 of the former Canons of Professional Ethics, which barred representing conflicting interests and permitted consent only outside the public-interest context. In current New Jersey terms, the conflict-of-interest analysis is governed by RPC 1.7. The opinion drew on the Committee's earlier public-body conflict opinions (Opinions 4, 8, 29, and 54), Drinker's Legal Ethics, and the New Jersey Supreme Court's "Notice to the Bar."

Citations and references

Rules of Professional Conduct (as in effect at the time):

• Canon of Professional Ethics 6 (representing conflicting interests; consent unavailable where the public interest is involved)

Cases:

• Ahto v. Weaver, 39 N.J. 418, 431 (N.J. 1963), cited on conflicting interests

Other opinions cited:

• N.J. ACPE Opinion 4, 86 N.J.L.J. 357, 361 (1963): public-body conflicts and incompatible interests
• N.J. ACPE Opinion 8, 86 N.J.L.J. 718 (1963): public image of the profession
• N.J. ACPE Opinion 29, 87 N.J.L.J. 106 (1964): consent unavailable in public-interest conflicts
• N.J. ACPE Opinion 54, 87 N.J.L.J. 689 (1964): municipal-attorney conduct

See also

• NJ ACPE Op. 67: Municipal Attorney Serving as Attorney for Other Municipal Agencies
• NJ ACPE Op. 82: Attorney for a Municipality, Its Agencies, and Developers
• NJ ACPE Op. 90: Municipal Attorney Representing a Builder
• NJ ACPE Op. 161: Associate of a Municipal Attorney Representing a Developer

Source

• Landing page: https://law.justia.com/cases/new-jersey/advisory-committee-on-professional-ethics/2004/acp69-1.html

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

88 N.J.L.J. 97
February 18, 1965

OPINION 69

Municipal Attorney
Fees from Developer

The question here posed for our consideration is best presented in the following words of the inquirer:

A builder desires to develop a tract in a municipality which will require extensive planning, regulations, agreements, specifications and other lengthy documentation in connection with the development. He offers to permit the municipal body or agency which is concerned to do the particular legal work through its own attorney or attorneys, and to deposit such funds as may be required to cover costs and fees with the municipality, against which such costs and fees may be charged.

The attorney or attorneys, who are appointed annually by the municipality or agency, would at all times represent the municipality or agency and at no time represent the developer and would act under the direction and instruction of their respective municipal body or agency, conferring only with the developer at such times as their acceptance or disapproval of the proposal or other document may be required and in most cases, the conference would include the presence of the municipal body or agency employing them.

The answer to the question is governed by Canons of Professional Ethics, Canon 6, which reads in part as follows:

It is unprofessional to represent conflicting interests, except by express consent of all concerned given after a full disclosure of the facts. Within the meaning of this canon, a lawyer represents conflicting interests when, in behalf of one client, it is his duty to contend for that which duty to another client requires him to oppose.

That portion of Canon 6 permitting representation of conflicting interests by express consent after full disclosure is not available where, as here, the public interest is involved. N.J. Advisory Committee on Professional Ethics, Opinion 4, 86 N.J.L.J. 357, 361 (1963); Opinion 29, 87 N.J.L.J. 106 (1964); Drinker, Legal Ethics 120 (1953); Chief Justice Weintraub in "Notice to the Bar," 86 N.J.L.J. 713 (1963); Ahto v. Weaver, 39 N.J. 418, 431 (1963). Thus, we must determine if, in fact, a conflict of interest detrimental to the public would arise if a municipal attorney performed the legal work as here proposed.

Implicit in the proposal, is a desire by the builder to have the municipal attorney obtain for him municipal approval for the "extensive planning, regulations, agreement, specifications, and other lengthy documentation in connection with the proposed development." It would obviously be unethical for a municipal attorney to directly accept fees from such a developer and represent him as well as the municipality. Does the indirect payment of the fee by depositing it with the municipality change the proscribed conduct? We think not. And our view is not changed by the assertion that the attorney "would at all times represent the municipality ... and at no time represent the developer." The practicalities of the undertaking refute the words. It is, for example, difficult to see how a municipal attorney could apply for a subdivision approval, a building permit, or a zoning variance for the builder and be representing the municipality only. And it is equally difficult to understand how the municipal attorney could confer with "the developer at such times as their acceptance or disapproval of the proposal or other document may be required" without being in the position of advising the developer. To say the least, he would undoubtedly find it "his duty to contend for (the municipality) that which duty to (the developer) ... requires him to oppose."

The relationship between the municipality and the developer where the interpretation and enforcement of so many statutes, ordinances, rules and regulations are brought into play, is indeed a fertile field for conflicting interests, and when the public is involved the municipal attorney must avoid any semblance of divided loyalty. The public image of the legal profession as a whole would be detrimentally affected if such a practice, as here proposed, were permitted. And this is so although the lawyer may be guided by the purest of altruistic intentions because it is the suspicion engendered in the mind of the public by such conduct that creates the mischief. See N.J. Advisory Committee on Professional Ethics, Opinion 8, 86 N.J.L.J. 718 (1963), and Opinion 54, 87 N.J.L.J. 689 (1964).

All that we have said concerning the municipal attorney and the municipality he represents applies with equal force to an attorney representing any municipal board, agency or other public body.

We conclude, therefore, that it would be unethical for the attorney for the municipal body or agency to perform the legal services under the facts here presented.