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Opinion Number 569
QUESTION QUESTION NO. 569
I would appreciate an answer to the following query:
May a firm of lawyers organize a business corporation for the purpose of conducting investigations in cases which the firm handles?
The officers, stockholders and directors of such corporation would be comprised of members of the law firm.
The Canons do not expressly prohibit an attorney from engaging in any business venture beyond the ambit of his professional activities. In pursuing such business ventures, however, the Canons do require that an attorney assume certain proscriptions which are deemed to be consistent with his threefold responsibility to his clients, the Bar and the general public.
In this connection, he is thus required to avoid any form of solicitation which could redound to his professional advantage (Canon 27); to refuse to associate in the practice of law with others who are not members of the Bar (Canons 33 and 47); and, to refrain from entering into any arrangement which might interfere with the intimacy of his relationship to his clients or the unfettered exercise of his discretion with respect to their affairs (Canon 35).
Against these standards we must measure the proposed venture.
First, we note that the corporation will handle only matters which are then pending in the offices of the inquiring attorneys. Thus, in concept, there should be no opportunity for an improper solicitation.
Second, the investigatory services to be performed by the corporation do not in any way appear to require the practice of law and should not, therefore, run afoul of either Canons 33 or 47.
Third, since it does not appear that the corporation will exercise any dominion over the professional activities of the inquiring attorneys , there is no reason to suspect that this arrangement will interfere with their attorney-client relationships.
While we find no ethical impropriety in the arrangement as stated, we would remind the inquiring attorneys that the business operations of the corporation must be completely separate from that of the law firm; that the proprietary relationship of the law firm to the corporation must be fully disclosed to their clientele; and, that throughout the members of the firm will be held answerable under the Canons for the misdeeds of their agents.
May 28, 1969.