Can law firm partners who also own a real estate closing business locate that business in the same building as the law firm?

Currency note

This opinion was issued in 1982, before Tennessee's adoption of the 2003 Rules of Professional Conduct, which replaced the former Code of Professional Responsibility. 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 Treat this page as historical context, not current guidance.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, deadline, or requirement mentioned here.

Plain-English summary

Some partners in a law firm were also partners in a separate, non-lawyer-operated business that closed real estate transactions for owners and lending institutions, and that business wanted to establish an office in the same building as the law firm.

The opinion framed the question as part of the broader issue of attorneys conducting another business while associating with non-lawyers, citing a series of ABA Formal and Informal Opinions. It quoted ABA Formal Opinion 328's observation that practicing law while concurrently conducting a real estate business, in different transactions, is not necessarily unethical, but is so difficult to do in accordance with the Canons that suspicion of unethical conduct is almost inevitable, so only a few lawyers should expose themselves to it, and that a lawyer who does so must be willing to bear the burden of conducting the real estate business ethically. It read Formal Opinion 328 as holding that a lawyer may practice law and conduct a non-law-related business from the same office so long as the Code, particularly DR 2-102(E), is followed.

Applying that reasoning, the opinion concluded the Code would not necessarily prohibit the real estate closing business from being located in the same building as the law firm, but that the divorcement between the offices must be sincere and complete, with no common use of stationery, cards, announcements, or names on doors. It cautioned that even such a separation may still expose the lawyers to the suspicions described in Opinion 328, and for that reason it would be preferable for the business and the law firm to remain in separate buildings.

Common questions

Q: Can law firm partners' outside real estate closing business share a building with the firm?

A: The Code does not categorically forbid it, but the opinion requires strict separation: "the divorcement between the office must be sincere and complete with no common use of stationary, cards, announcements, names on doors, etc."

Q: Does complete separation eliminate all ethical risk?

A: No. The opinion warns "even such a separation may still expose the lawyers involved to the suspicions noted in Opinion 328 and, therefore, it would be preferable if the business and the law firm remained in separate buildings."

Background and rules framework

The opinion applied Disciplinary Rule 2-102(E) of the Tennessee Code of Professional Responsibility and adopted the ABA Committee on Professional Ethics and Professional Responsibility's Formal Opinion 328 framework for lawyers conducting a law-related second business. The modern correlate is Model Rule 5.7 (responsibilities regarding law-related services), noted here as a navigational cross-reference rather than a rule the opinion itself applied.

Citations and references

Rules of Professional Conduct:

• DR 2-102(E) (identification of a lawyer's second business), Tennessee Code of Professional Responsibility
• Model Rule 5.7 (law-related services), modern correlate

Other opinions cited:

• ABA Committee on Professional Ethics and Professional Responsibility, Formal Opinion 328: framework for a lawyer conducting a real estate business alongside a law practice
• ABA Formal Opinions 54, 57, 233, 234, 297, and 305 and related Informal Opinions, cited within the dual-practitioner discussion

See also

• Tennessee Op. 82-F-36: A Law Partner's Management-Training Company Is a Law-Related Business
• Tennessee Op. 94-F-135: Trust-Account Rules Apply to Lawyers' Law-Related Businesses
• AL Ethics Op. 1987-161: Lawyer Also Acting as a Real Estate Broker

Source

• Landing page: https://www.tbpr.org/ethic_opinions/82-f-34

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

82-F-34 - Law Related Services

BOARD OF PROFESSIONAL RESPONSIBILITY OF THE SUPREME COURT OF TENNESSEE

FORMAL ETHICS OPINION 82-F-34

Inquiry is made concerning the propriety of locating a business dealing with the closing of real estate transactions in the same building as a law firm when the same partners of the firm are also partners in the previously mentioned business.

Some partners in a law firm are also partners in a business operated by a non-lawyer that performs the service of closing real estate transactions both for owners and lending institutions. This business is seeking to establish an office in the same building as the law firm.

This question involves the much discussed issue of attorneys conducting another business and associating with non-lawyers. See ABA Formal Opinions 54, 57, 233, 234, 297, 305

and 328; ABA Informal Opinions 238, 682, 775, 860 and 1316.

It is appropriate to quote from ABA Formal Opinion 328:

While ... the Committee does not consider it to be necessarily unethical to practice law and concurrently, but in different transactions, engage in the real estate business, the Committee is of the opinion that to do so in accordance with the Canons is so difficult that suspicions of unethical conduct are almost inevitable. For that reason alone, it is our opinion that only a very few lawyers will expose themselves to such suspicions on the part of their brother lawyers and the public. The lawyer who does so must be willing to undertake the tremendous burdens of conducting his real estate business ethically under our Canons ....

The above quoted opinion holds that a lawyer may practice law and conduct a non-lawrelated business from the same office as long as all provisions of the Code of Professional Responsibility, particularly DR 2-102(E), are complied with. See also ABA Informal Opinion 775.

As indicated in the above opinion, the Code of Professional Responsibility would not necessarily prohibit the real estate closing business from being located in the same building as the law firm. However, the divorcement between the office must be sincere and complete with no common use of stationary, cards, announcements, names on doors, etc. Even such a separation may still expose the lawyers involved to the suspicions noted in Opinion 328 and, therefore, it would be preferable if the business and the law firm remained in separate buildings.

This 17th day of September, 1982.

ETHICS COMMITTEE:

Jack C. Raulston

G. Wilson Horde

John T. Henniss

APPROVED AND ADOPTED BY THE BOARD