May a lawyer also work as a mortgage broker from the same office, and solicit that brokerage business from current and former clients?

Plain-English summary

A lawyer described employment by a mortgage company in which the lawyer would obtain potential mortgage sellers, gather data about the mortgage, and present the information to the company; the company would then authorize the lawyer to make an offer to the mortgage holder, discounting a broker's fee for the lawyer. The committee addressed several points:

• First, the lawyer would need to disclose to the parties involved that the lawyer is not acting as an attorney for them.
• The lawyer could engage in both the practice of law and the brokerage business from the same office, but if doing business with a current client must comply with RPC 1.7, and if with a former client, with RPC 1.9(d).
• The lawyer would need separate letterhead for each business.
• The lawyer could solicit business from present or former clients so long as the lawyer complies with RPC 1.8 and 1.9, and in particular could not use client secrets, such as that a client was in financial straits which might permit the lawyer to take advantage of that client or former client.

Currency note

This opinion was issued in 1989, before the Washington State Bar Association's adoption of the 2006 revisions to the Washington 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 Treat this page as historical context, not current guidance.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 lawyer also run a mortgage-brokerage business from the same office?

A: Under this 1989 opinion, yes, but the lawyer must disclose to the parties that the lawyer is not acting as their attorney and must use separate letterhead for each business.

Q: What rules apply when the brokerage deals with the lawyer's clients?

A: RPC 1.7 for current clients and RPC 1.9(d) for former clients; solicitation of present or former clients must comply with RPC 1.8 and 1.9.

Q: What use of client information did the committee prohibit?

A: Using client secrets, such as that a client was in financial straits, to take advantage of that client or former client.

Background and rules framework

RPC 1.7 (ABA Model Rule 1.7) governs conflicts with current clients; RPC 1.8 (ABA Model Rule 1.8) governs specific transactions, including business dealings with clients; and RPC 1.9 (ABA Model Rule 1.9), with subsection 1.9(d) in Washington's numbering, governs duties to former clients. The committee applied these rules to a lawyer operating a separate mortgage-brokerage business, requiring disclosure of non-attorney status, separate letterhead, compliance with the conflict rules when dealing with current or former clients, and a bar on exploiting client secrets.

Citations and references

Rules of Professional Conduct:

• ABA Model Rule 1.7 (conflicts of interest: current clients)
• ABA Model Rule 1.8 (current clients: specific rules, including business transactions)
• ABA Model Rule 1.9 (duties to former clients)
• Washington RPC 1.7; RPC 1.8; RPC 1.9(d)

See also

• WA Ethics Op. 1289: Pro Bono Work Adverse to the Firm's Current Clients

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=375

Original opinion text

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

The Committee reviewed your inquiry regarding employment of you by a mortgage company in which you would obtain potential mortgage sellers, gather data about the mortgage, and present the information to the company. The company would then authorize you to make an offer to the mortgage holder, discounting a broker's fee for yourself. The Committee is of the opinion that first, you would need to disclose to the parties involved that you are not acting as an attorney for the parties. Further, the Committee was of the opinion that you could engage both in the practice of law and the brokerage business from the same office, but if you were doing business with a current client, you must comply with the requirements of RPC 1.7, and if with a former client, with RPC 1.9(d). The Committee is further of the opinion that you would need separate letterhead for each business, and that you could solicit business from present or former clients so long as you comply with RPC 1.8 and 1.9, and in particular noting that you would not be able to use client secrets, such as, for example, that a client was in financial straits which might permit you to take advantage of that client or former client.