Can a lawyer who is president of an abstract company let it issue certified 'Property Reports' on land titles without aiding the unauthorized practice of law?

Plain-English summary

A lawyer was president of a corporation that owned and operated an abstract plant, though he took no active part in its operation. The company was asked to complete a "Property Report" on a tract of land listing mortgages, judgments, and liens (other than taxes), tax information, and remarks, ending with a certification that the preparer had searched all the public records and that the information was true and correct, with no liens, judgments, or encumbrances except as noted. The inquiry asked whether completing such a report, including the certification, was the practice of law.

The Committee said whether the company's acts amounted to the practice of law would ordinarily be a question for the Committee on the Unauthorized Practice of Law, but because the corporation's president was a lawyer, the Ethics Committee could rule on whether his acting for the company aided the unauthorized practice of law under Canon 43. It found nothing wrong with the certificate itself if attached to an abstract. The concern was that the "Property Report" was not an abstract and did not make clear whether it sought a full list of recorded instruments or only currently valid ones. If only currently valid instruments were sought, the form in substance asked the company to certify that prior ones were barred or released, and omitting recorded instruments as legally ineffective would be giving a legal opinion as to title. If instead the company listed all recorded instruments without passing on their effect, it had not given legal advice.

The Committee concluded that use of the form did not necessarily mean the company was practicing law, but that the entire form was so conducive to the unauthorized practice of law that it would be unwise for an abstract company to use it, and that, to remove any question of contributing to unauthorized practice, the better practice was for the lawyer not to permit its use by an abstract company with which he was associated. The ruling was 9-0.

Currency note

This opinion was issued in 1962, under the former Texas Canons of Ethics, which the Texas Disciplinary Rules of Professional Conduct replaced effective January 1, 1990. 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 Treat this page as historical context, not current guidance.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: Is preparing a title "Property Report" the practice of law?

A: The Committee said it depends. If the company lists all recorded instruments without passing on their legal effect, it has not given legal advice; but if it omits instruments as legally ineffective or otherwise opines on what is currently valid, it is giving a legal opinion as to title.

Q: Why could the Ethics Committee rule on an abstract company's form?

A: The Committee said the practice-of-law question would ordinarily go to the Committee on the Unauthorized Practice of Law, but because the company's president was a lawyer, it could decide whether his acting for the company aided unauthorized practice under Canon 43.

Q: What did the opinion advise the lawyer-president to do?

A: The Committee said the form was so conducive to unauthorized practice that, to avoid any question of contributing to it, the better practice was for the lawyer not to permit the abstract company he was associated with to use that form.

Background and rules framework

The opinion interprets former Texas Canon 43, which addressed a lawyer's duty not to aid the unauthorized practice of law, as applied to a lawyer associated with a non-lawyer abstract business. The modern analogs are ABA Model Rule 5.5, on unauthorized practice and assisting it, and Model Rule 5.7, on a lawyer's responsibilities regarding law-related services.

Citations and references

Rules of Professional Conduct:

• MR 5.5 (unauthorized practice of law; assisting), as the modern analog
• MR 5.7 (responsibilities regarding law-related services), as the modern analog
• Texas Canon 43 (former canon)

See also

• TX Ethics Op. 276: Out-of-State Lawyer as Law Clerk
• TX Ethics Op. 343: Corporate Counsel for Related Cos.
• TX Ethics Op. 319: Multi-State Firm Name in Texas

Source

• Landing page: https://www.legalethicstexas.com/resources/opinions/opinion-253/
• Original PDF: https://tcle-web.s3.amazonaws.com/public/documents/Opinion_253.pdf

Original opinion text

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

QUESTION PRESENTED

A member is president of a corporation owning and operating an abstract plant, but he takes no active part in the operation of the plant. His company has been requested to complete a "Property Report" upon a tract of land, which report asks for Mortgages, Judgments, and Liens (other than taxes), Tax Information, and Remarks, and concludes with the following certification:

At the request of the party listed above undersigned certifies that on date of [ ], 19[ ], I/we searched all the public records of affecting title to above property and that the above information is true and correct based on my personal examination of such records. There are no liens, judgment or encumbrances of record against above described property unless specifically noted herein.

Signature and address of Person Preparing Report Title of Person Preparing Report

Date Report Prepared

Would it constitute the practice of law for the abstract company to complete this Property Report, including the certification at the end thereof?

18 Baylor L. Rev. 329 (1966)

MEMBER PARTICIPATING IN AN ACT CONDUCIVE TO UNAUTHORIZED PRACTICE OF LAW
If a member is president of a corporation owning and operating an abstract company (though he takes no active part in the operation of the company) which prepares for its clients "Property Reports" on tracts of land, which reports consist of a list of Mortgages, Judgments and Liens (other than taxes), Tax Information and Remarks, and conclude with the following Certificate:

"At the request of the party listed above, undersigned certifies that on date of [ ], 19[ ] , I/we searched all the public records of [ ] affecting title to above property and that the above information is true and correct based on my personal examination of such records. There are no liens, Judgments or encumbrances of record against above described property unless specifically noted herein.

Signature and address of Person Preparing Report

Title of Person Preparing Report

Date Report Prepared

Said member may not necessarily be contributing to the unauthorized practice of the law, but the use by an abstract company of such form of Property Report and Certification is so conducive to the unauthorized practice of law that it would be unwise for a member to permit their use in an abstract company with which he is associated.

Canon 43.

Whether or not certain acts by an abstract company constitute the practice of law would ordinarily be a question for the Committee on the Unauthorized Practice of Law. However, inasmuch as the President of the corporation owning and operating the abstract company is a lawyer, the members of the Ethics Committee feel that they may properly rule on whether this lawyer's acting for the abstract company is aiding the unauthorized practice of law in violation of Canon 43.

The committee finds nothing wrong with the certificate itself, if attached to an abstract. In fact, it would be expected of an abstractor to bind himself that he had given a full record. No doubt, what prompted the inquiry is the fact that the "Property Report" itself is not an abstract and, as it is not made clear in the form whether a full list of recorded instruments or only a list of currently valid instruments is being requested, the report could be merely the conclusion or ultimate opinion of the abstractor. If the report is construed to mean that only the currently valid or effective judgments, mortgages, liens, etc. are being asked for, the form is, in substance, asking the abstract company to certify that prior ones are barred, released or otherwise invalidated. If there are, in fact, other liens or instruments which the abstract company omits as not being legally effective, it seems to the committee that the abstract company is giving a legal opinion as to title, or part of title.

On the other hand, if the abstract company lists all judgments, liens and other instruments which are of record and makes no attempt to pass upon their legal effect, it has not, in the opinion of the committee, given legal advice, unless in summing up the information as to type of lien, etc. some legal conclusion is formed as to the nature and effect of the recorded instruments.

The committee believes that use by an abstract company of the form of Property Report and Certificate submitted does not necessarily mean that the abstract company is practicing law, but the committee does think that the entire form is so conclusive to the unauthorized practice of law that it would be unwise for an abstract company to use it; and, further, in order that there be no question as to the member's contributing to the unauthorized practice of law, it would be much the better practice for the member not to permit the use of such form of Property Report and Certification by an abstract company with which he is associated. (9-0.)

Tex. Comm. On Professional Ethics, Op. 253 (1962)