Can a lender's lawyer contact a borrower who already has counsel and pitch to represent the borrower too in the same loan?

Plain-English summary

A customer applied for a home loan, was approved, and told the savings-and-loan he had hired Attorney B for the closing. Attorney A, who represented the S&L, then contacted the customer directly, said he represented the S&L, suggested the customer retain him too for $150 to $250, noted he already received $75 to $100 from the S&L on each such matter, and said his fee would be more reasonable than Attorney B's.

The opinion concluded Attorney A's conduct violated two rules. First, under Rule 7.3, the opinion found an improper solicitation: assuming the customer was not a relative, close friend, or prior client, Attorney A solicited professional employment when a significant motive was pecuniary gain. Second, under Rule 4.2, the opinion found Attorney A communicated about the subject of the representation with a party he knew was represented by Attorney B (the very subject was the comparative cost of the two lawyers' services), without the consent Rule 4.2 requires.

The opinion flagged two further issues it was not asked to decide. It cautioned that joint representation of a lender and borrower raises substantial conflict-of-interest concerns under Rule 1.7, citing Opinions 644 and 86-15, and, consistent with its longstanding policy, it made no comment on whether the proposed fees satisfied Rule 1.5's reasonableness requirement.

Currency note

This opinion was issued in 1999, before Illinois adopted the 2010 Illinois Rules of Professional Conduct. The ISBA Board of Governors affirmed the opinion in January 2010 as generally consistent with the 2010 Rules (referring to Rules 1.5, 1.7, 4.2, and 7.3), while noting the specific standards referenced may differ from the 2010 Rules. 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 Treat this page as historical context, not current guidance.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 or requirement mentioned here.

Common questions

Q: Can a lender's lawyer contact the borrower directly when the borrower has counsel?

A: No. The opinion concluded that contacting a party the lawyer knows is represented by another lawyer, about the subject of that representation, violates Rule 4.2 absent the other lawyer's consent.

Q: Why was the pitch also an improper solicitation?

A: The opinion held that under Rule 7.3 the lawyer solicited professional employment when a significant motive was pecuniary gain, and the borrower did not fall within the rule's exceptions (relative, close friend, or prior client).

Q: Did the opinion address representing both the lender and the borrower?

A: It flagged but did not decide the issue, cautioning that joint lender-borrower representation raises substantial conflict-of-interest concerns under Rule 1.7, citing Opinions 644 and 86-15.

Background and rules framework

The opinion interpreted Illinois Rule 4.2 (communication with a represented person; Model Rule 4.2) and Rule 7.3 (direct contact with prospective clients; Model Rule 7.3). It referenced Rule 1.7 (conflict of interest; Model Rule 1.7) for the lender-borrower conflict and Rule 1.5 (reasonable fees; Model Rule 1.5), on which it declined to comment.

Citations and references

Rules of Professional Conduct:

• Model Rule 4.2 (communication with a represented person) / Illinois Rule 4.2
• Model Rule 7.3 (solicitation of clients) / Illinois Rule 7.3
• Model Rule 1.7 (conflict of interest) / Illinois Rule 1.7
• Model Rule 1.5 (fees) / Illinois Rule 1.5

Other opinions cited:

• ISBA Advisory Opinion No. 644: conflicts in representing a lender and borrower in a mortgage loan
• ISBA Advisory Opinion No. 86-15: representing both buyer and seller in a real estate transaction

See also

• ISBA Ethics Op. 99-07: Lawyer for Lender Compensated by Borrower
• ISBA Ethics Op. 99-01: Concurrent Representation in Related Family Matters

Source

• Landing page: https://www.isba.org/ethics/opinions/9903