ETHICS OPINION 273
NUMBER 273 1929
Question. Prompted by a realization that overcrowding in the profession, as well as the activities of trust, insurance, and title companies, and the investment and commercial banking houses, have narrowed the field of endeavor for the younger attorney of average ability, several of my colleagues and myself have decided to enter the field of investment banking.
We propose to conduct what is to be identified as a lawyers’ investing service. The organization may or may not be corporate in form. It will have as its objects the dissemination of advice and counsel on the subject of investments, From time to time recommendations that certain securities be purchased will be made, Those associated with the enterprise will be known as “Founders” and it will also be generally known that such Founders will share in the proceeds derived from the distribution of securities which are recommended by the service and in which it has an interest. The Founders will deal with other members of the profession, as well as with friends and clients, and will make purchases for their own account through the service. Since the selection of an investment necessarily involves, among other things, an investigation of its legal soundness, it may be deemed advisable for the service to make or cause to be made such investigation. This item, however, will not be featured- It is not proposed to render legal advice nor to solicit the employment, by any one, of the legal services of any one or more of the Founders.
My associates and myself are desirous of ascertaining whether or not, in the opinion of the Committee, a connection by a member of the profession with an enterprise of this nature, would be considered unethical.
Answer. This Committee has already expressed the opinion in answering Opinion 179 that a lawyer may, without impropriety and while continuing to practice law, engage in business. It carefully guards this expression by referring to its answer in Opinion 114 previously published and saying:
In that answer the Committee has expressed its opinion, to which it adheres, that there is not in this country any accepted standard of professional propriety which warrants condemnation of a lawyer for engaging in business, while in active practice; but that if he does so he must conduct his business with due observance of the standards of conduct required of him as a lawyer; that the business must not be inconsistent with his duties as a member of the legal profession; and that it is improper either to make the business a means for the solicitation tor professional employment, or to put the solicitation of business upon the ground that he is a lawyer.
In the opinion of the Committee there is nothing inherently unethical in a group of lawyers becoming actively interested in an organization, whether incorporated or not, the purpose of which is to render advice with respect to investments, provided such advice is not legal advice, and provided further that such business is kept entirely distinct and apart from the professional practice of the lawyers interested therein, and is not used as means for attracting legal business to such lawyers.