NUMBER 380 1948
Question. A, an attorney practicing in New York, is one of the principal officers of X real estate corporation. Said corporation, as broker, arranges for the sale of property to Y. Y desires to retain A as counsel in connection with this purchase. Brokerage commissions are earned by the corporation and paid by the seller, an account of the X real estate corporation.
May A act as counsel for Y, the purchaser of this realty, the broker being a realty corporation in which A is a principal officer, or is there a conflict of interest which prevents his employment?
Answer. In the opinion of the Committee, the proposed conduct is approved conditionally as follows:
This situation presents a serious question of conflict of interest. However, the mere existence of such conflict does not bar the attorney from representing the purchaser. By the express provision of Canon 6, an attorney may represent conflicting interest “by express consent of all concerned given after a full disclosure of the facts.”
In the opinion of the Committee, therefore, A may represent as counsel the purchaser of realty, which purchase was brought about by a brokerage corporation in which such attorney is a principal officer, after and only after said attorney makes a full, disclosure of his adverse interests both to the seller, the X real estate corporation and the purchaser if, after such disclosure, the seller and all other parties consent to his representing the purchaser as counsel.
Where an attorney acts qua broker as well as qua attorney, his conduct qua broker must conform to the high standards of professional conduct imposed by the Canons of Professional Ethics.