UPON THE REQUEST OF A MEMBER OF THE SOUTH CAROLINA BAR, THE ETHICS ADVISORY COMMITTEE HAS RENDERED THIS OPINION ON THE ETHICAL PROPRIETY OF THE INQUIRER’S CONTEMPLATED CONDUCT. THIS COMMITTEE HAS NO DISCIPLINARY AUTHORITY. LAWYER DISCIPLINE IS ADMINISTERED SOLELY BY THE SOUTH CAROLINA SUPREME COURT THROUGH ITS COMMISSION ON LAWYER CONDUCT.
Ethics Advisory Opinion 90-33
Out-of -state company "C" hires out-of-state collection agency "A" to handle an account for materials provided for the construction or repair of a South Carolina property. Agency A is specifically authorized to take steps necessary to comply with statutory limitations and file a mechanic's or material man's lien on behalf of Company "C". Agency A simply hired a South Carolina attorney to file and serve a notice of lien at an agreed fee to be billed to the Agency. A condition of the hiring of the South Carolina attorney is that he is not to contact directly or bill directly Company C. All contact, correspondence, and billing must be directed by the attorney to Agency A. Agency A, by the way, is a corporation, not authorized to do business in South Carolina.
Question:
Is Agency A involved in the unauthorized practice of law and is the South Carolina attorney violating the Rules of Professional Conduct by participating in this activity?
Summary:
If the agency is involved in the unauthorized practice of law the attorney is prohibited from assisting in such activity. Even if the agency is not involved in the unauthorized practice of law the attorney would be violating the Rules of Professional Conduct by undertaking such a representation.
Opinion:
The definition of what constitutes the practice of law, or the unauthorized practice thereof, is a question of substantive law, not ethics, and does not come within the scope of this Committee. In the event that the attorney determines that the activities of Agency A constitute the unauthorized practice of law he is prohibited by Rule 5.5 of the Rules of Professional Conduct from assisting in such activity. (For an analysis of the unauthorized practice of law by collection agency, see State ex. rel. Frierson v. Isner, 168 W. Va. 758, 285 S.E. 2d 641.) Even if the agency is not involved in unauthorized practice of law the attorney would be prohibited from accepting employment under the conditions imposed by the agency. The Rules of Professional Conduct impose strict duties on an attorney concerning both communications with a client and lack of influence from a third party.
Rule 1.2 states that a lawyer shall abide by a client's decisions concerning the objectives of representation and shall consult with the client as to the means by which they are to be pursued. Based on the facts of this question the attorney is not to contact company "C", the client, and is, therefore, unable to fulfill his obligations under this rule. Under Rule 1.4, a lawyer is required to keep a client reasonably informed about the status of a matter and to explain a matter to the extent reasonably necessary to permit the client to take informed decisions regarding the representation. Agency "A"s condition that the lawyer not contact the client would prevent the attorney from complying with this requirement.
It is clear that the representation outlined in the facts of this question is also violative of Rule 1.8(f) which states "A lawyer shall not accept compensation for representing a client from one other than the client unless: (1) the client consents after consultation; (2) there is no interference with the lawyer's independent professional judgment or with the client-lawyer relationship.
Finally, the contemplated employment would also be in violation of Rule 5.4(c) which states: "A lawyer shall not permit a person who recommends, employs, or pays the lawyer to render legal services for another to direct or regulate the lawyer's professional judgment in rendering such legal services."