In Re Rothman

respondents with various violations *530 of the 27th, 35th

and 47th Canons of Professional Ethics. These violations
involve (1) extensive advertising and direct solicitation of
12 N.J. 528 (1953)
mortgage business by a corporation owned by the
respondents, leading directly and inevitably to the
97 A.2d 621
acquisition by them of a very substantial amount of
professional employment which they would not have
IN THE MATTER OF GEORGE I. ROTHMAN AND DAVID
obtained without such advertising and solicitation, in
IRVING, JR., ATTORNEYS AT LAW.
violation of Canon 27; (2) the receipt by the corporation
owned by them of substantial legal fees, in violation of
The Supreme Court of New Jersey.
Canon 47, forbidding a member of the bar to aid the
Argued March 30, 1953. unauthorized practice of the law by any lay agency, and of
Canon 35 prohibiting the intervention of a lay agency
Decided June 8, 1953. between client and lawyer.

*529 Mr. Milton T. Lasher, by designation of the Ethics and I. THE FACTS
Grievance Committee for Bergen County, argued the cause
for the committee. The facts are not in dispute. The background of the
respondents is summarized in the respondents' brief as
Mr. Samuel Kaufman argued the cause for the respondent follows:
David Irving, Jr.
Irving was admitted to the bar in 1940 after having spent
Mr. Julius E. Kramer argued the cause for the respondent some years in the handling of claims for an insurance
George I. Rothman. company. His partnership for the practice of law with
George I. Rothman was formed in 1945. At that time Mr.
The opinion of the court was delivered by VANDERBILT, C.J. Irving had an independent clientele wholly unrelated to the
mortgage financing or real estate business. His practice
This matter comes before us on the return of an order to consisted of the usual trial work in the negligence and
show cause issued on a presentment filed by the Ethics and compensation fields and in the handling of industrial
Grievance Committee for Bergen County charging the relations.
George I. Rothman, his law partner, was interested solely in practice. Rothman did not practice law to any extent from
the real estate and mortgage field where he and his family 1949 on, but became the president and guiding hand in the
had wide and extensive experience. When he received his mortgage company, the business of which increased
discharge from military service, his home community was tremendously. It had from 45 to 50 mortgage closings a
in the midst of a great building boom which still continues week, and it handled around a quarter of a billion dollars in
unabated. Residential housing and industrial and mortgages in seven years. In 1951 the law partnership had
commercial development were in the midst of an from 15 to 18 employees, while the corporation had
unparalleled growth. The mortgage insurance which another 12 to 20, all in the same offices. Of them six or
underlay G.I. loans presented an outstanding opportunity seven were fieldmen soliciting mortgage business. They
for banks, savings and loans and mortgage lending had a single telephone number and eventually a 16-line
institutions all over the metropolitan area to assist in the switchboard, for the use of both the law firm and the
financing of these large building ventures. Rothman corporation. In answering calls the operator would answer
determined that his opportunity lay in this area. with the number rather than the name of the firm or of the
corporation. The corporation employed two firms of
*531 In 1946 Rothman took over the trade name of accountants. For a time it had a branch office in Newark
Northern New Jersey Mortgage Associates from Irving's and acted as a broker in at least one real estate
brother and began to develop a mortgage business in the development in Burlington County.
same quarters as the law partnership at 12 Engle Street,
Englewood. By 1949 the business had developed to such an The business of the mortgage company and the practice of
extent that they moved to larger quarters at 63 West the law firm were conducted as a single intermingled
Palisade Avenue, Englewood, where the partners formed a enterprise. Thus, prior to June 30, 1951 the law partnership
corporation, Northern New Jersey Mortgage Associates, paid all telephone bills and the salary of the switchboard
whereupon the similar trade name was cancelled of record. operator. From July 1, 1951 to June 30, 1952 the mortgage
Where Rothman had previously owned the trade name, *532 corporation paid the telephone bills and salary of the
each partner then owned 50% of the stock of the switchboard operator. From July 1, 1952 to October 31,
corporation. The mortgage business of the corporation was 1952 the law partnership again paid the telephone bills and
carried on in rooms leased by the partnership. Although switchboard operator's salary. The law partnership,
Irving then had some clients other than the mortgage moreover, paid the entire rent for the premises at 63 W.
company, he devoted most of his time to legal work in Palisade Avenue, Englewood, for the years 1949, 1950, 1951
connection with the mortgage loans of the corporation and and 1952. From July 1, 1951 to June 30, 1952 the mortgage
eventually he abandoned practically all of his other law company paid the partnership rent of $300 a month.
Employees were frequently shifted back and forth between for search fees. These fees were considerable. *533
the two payrolls. Although Rothman did not practice law Rothman testified that on the sale of a house to a G.I. for
during the period from July 1, 1951 to June 30, 1952, yet he $15,000 the mortgage company's fees totalled $483. These
shared in all of the profits of the law partnership from 1945 fees were made up of 1% G.I. discount, recording fees, the
on, including the annual payment from the mortgage cost of the title policy, three months' taxes, the fire
company to the law partnership pursuant to the contract insurance premium, a survey and the closing fee of $150. In
agreement mentioned hereafter. Irving, on the other hand, addition thereto, if the mortgage were a construction
did not engage in the mortgage business, yet as the 50% mortgage the builder was required to pay a construction
owner of the stock of the corporation he was entitled to mortgage fee of $111. While the contract providing for this
one-half of its substantial profits. The accountants seldom annual payment was in force, Rothman received $3,600 and
made any adjustments between the mortgage company Irving received $2,275 as officers of Northern New Jersey
and the law partnership. The ownership of the title plant Mortgage Associates for each of the first two quarters of
was so uncertain that even Rothman himself could not tell 1952.
the committee whether the law firm or the mortgage
company owns it, as a result of the complete commingling Of equal significance is the mortgage company's course in
of the business of the mortgage company and the practice the solicitation of mortgage business. Rothman solicited
of law by the partnership "under one friendly roof," as the work for the mortgage company by letters to builders and
mortgage company aptly phrased it in its advertisements. developers, emphasizing the company's complete and
speedy service, always a telling argument with important
The mortgage company was paid large amounts by real estate developers and mortgage borrowers. The
borrowers for legal fees. On July 1, 1951 the mortgage salesmen of the mortgage company were instructed to take
company made a written contract to pay the law the same theme of speedy service in their selling efforts. In
partnership $42,000 annually, later reduced to $33,000, for addition to the solicitation of mortgage business through
legal services to be rendered by it. An outstanding instance advertising, letters to builders and through salesmen, the
of the interrelatedness of the two enterprises is found in corporation secured 25% of its business from real estate
the fact that while the agreement was in force the brokers to whom it paid commissions. The company
mortgage company received all moneys paid by mortgage employed several advertising firms and public relations
borrowers for services including legal fees. Rothman counsel who aided Rothman in the preparation of large
testified that the law firm also received additional fees newspaper advertisements and press releases extolling the
besides the $33,000 annual payment. The mortgage services of the mortgage company in the highest terms. On
company's closing statement form even included an item at least one occasion the mortgage company made a direct
payment to a newspaper reporter. On December 6, 1952, after hearings had commenced before the Ethics and
even after the hearings in this matter had started before Grievance Committee. At the oral argument before us on
the committee, the mortgage company had three the presentment, Irving offered unreservedly to dispose of
consecutive pages of advertisements and reading matter in his stock in the mortgage company and also, if the court
the Bergen Evening Record announcing the opening of the insisted, of his stock in the company owning the office
new offices at 133 Cedar Lane, Teaneck, in a building building.
owned by a corporation of which the respondents are
equal one-third stockholders. The advertisements and Rothman filed no brief in his own behalf, but at the oral
press releases, which will be discussed later, made it clear argument his counsel "adopted" Irving's brief. Counsel's
that the corporation would furnish complete service to only excuse for not filing a brief was that he had been in
builders, developers, and others. The title facilities and Washington the week before the argument. He stated that
personnel of the *534 corporation were extolled in the Rothman had never read the brief filed by the Committee
highest terms. A great many news items were released to on Ethics and Grievances for Bergen County, although he
the daily press, including the New York Times, the New York had "gone over it" with Rothman. Rothman frequently
Herald Tribune, the New York Post and Telegram in New stated in printed articles, in statements before the
York City and newspapers in Newark and Passaic. Such committee and through counsel before us that he did not
articles appeared once or twice a week for five years. A intend to return to the practice of law when he left the
recurring advertisement was carried in the Bergen Evening armed services, but to engage in the mortgage and real
Record for at least a year. For all of these advertisements, estate business. At one point he testified that if he devoted
which we will discuss later, Rothman assumes five percent of his time in 1951 to the practice of law it was
responsibility. a lot, and at another time he said he had not actively
engaged in the practice of law during the last five years.
On July 1, 1952 the contract between the mortgage Rothman held a real estate *535 broker's license and was
company and the law partnership was abandoned and interested in various building corporations that had offices
thereafter the legal fees were paid by the borrowers with the mortgage company and the law partnership.
directly to the partnership. On November 1, 1952 Irving and
Rothman dissolved their law partnership. Irving still II. THE CONTROLLING AUTHORITIES
continues to do the legal work of the mortgage company
and to own stock in it, one-half up to November 26, 1952 The controlling authorities in the instant case are the 27th,
and one-third since then, when a third stockholder took 35th and 47th Canons of Professional Ethics and the
title to one-third of his and of Rothman's stockholdings, unanimous opinion of this court of less than two years ago
in In the Matter of L.R., an Attorney at Law, 7 N.J. 390 the public. Our citizens have a right to expect from the
(1951). members of a learned profession who are *536 granted by
the State the privilege to practice law that they in return for
The Canons of Professional Ethics of the American Bar this privilege will live up to the standards long recognized at
Association, with the exception of one amendment not common law and in large part codified in the Canons of
pertinent here, were adopted by Rule 1:7-6; they "shall Professional Ethics.
govern the conduct of the judges and the members of the
bar of this State." This rule is grounded not only on the One has but to read the three canons above referred to to
rule-making power of the Supreme Court, but on its see how directly and immediately they apply to the facts of
express jurisdiction over the discipline of members of the this case as summarized herein:
bar, N.J. Const., Art. VI, Sec. II, par. 3.
"27. ADVERTISING, DIRECT OR INDIRECT. It is
The Canons of Professional Ethics undertake to codify in unprofessional to solicit professional employment by
convenient form the traditions and practice that have been circulars, advertisements, through touters or by personal
recognized over the centuries as part of the common law communications or interviews not warranted by personal
with respect to the lawyer's obligations to the courts and relations. Indirect advertisements for professional
the administration of justice, to the public and his clients, employment such as furnishing or inspiring newspaper
and to his profession and his fellow practitioners. They are comments, or procuring his photograph to be published in
as obligatory on him as if cast in statutory form, as indeed connection with causes in which the lawyer has been or is
they are in large part in many states. engaged or concerning the manner of their conduct, the
magnitude of the interest involved, the importance of the
The three canons referred to relate in one aspect to the lawyer's position, and all other like self-laudation, offend
lawyer's duties to his profession and his fellow the traditions and lower the tone of our profession and are
practitioners. If the practice of the law is to remain a reprehensible; but the customary use of simple
profession and not to become a mere trade, it is quite as professional cards is not improper. * * *
important that ethical practitioners be protected from
unfair competition within the profession as from the "35. INTERMEDIARIES. The professional services of a lawyer
unauthorized practice of the law outside the profession by should not be controlled or exploited by any lay agency,
laymen and corporations. But this is not the only aspect of personal or corporate, which intervenes between client and
these canons. Their enforcement is of concern not merely lawyer. A lawyer's responsibilities and qualifications are
to the members of the profession. It is equally essential to individual. He should avoid all relations which direct the
performance of his duties by or in the interest of such customer to engage his own lawyer, although he might do
intermediary. A lawyer's relation to his client should be so if he desired. The respondent paid for complimentary
personal, and the responsibility should be direct to the press notices, featuring biographical sketches of himself
client. * * * and including his photograph, emphasizing the
corporation's volume of business and growing staff, and
"47. AIDING THE UNAUTHORIZED PRACTICE OF LAW. No broadcasting that "the firm has a 1-package system which
lawyer shall permit his professional services, or his name, includes servicing a transaction from its inception to its
to be used in aid of, or to make possible, the unauthorized closing. The corporation has its own legal department
practice of law by any lay agency, personal or corporate." which processes and expedites every mortgage applied for
through the office." We there held that:
Nor do we have to look far afield for a judicial application of
these canons to the facts of the pending case, for in In re "The practice which has been referred to as `a one-package
L.R. supra, we dealt with a similar situation, the chief system' is a system whereby commercial services, including
differences being (1) that in that case the business was a lawyer's fee, are rendered to a person for a single charge.
relatively small, (2) but there the unprofessional scheme This throws the practice of law into a commercial
was nipped in the bud, whereas here the business ran to atmosphere which is wholly foreign to the concept of a
"more than a quarter of a billion dollars worth of loans correct practice and which has been soundly condemned.
since 1945," to quote one of the mortgage company's Stack v. P.G. Garage, Inc., 7 N.J. 118, [decided May 7, 1951];
advertisements, and has been carried on for seven years, In the Matter of A.B.C., an attorney and counselor at law [7
the last two years in the face of the decision of this court in N.J. 388, decided June 4, 1951]."
In re L.R., and (3) that the methods of the respondents here
were somewhat more *537 subtle but no less effective in The similarity between the facts in the earlier case and the
getting business than were those of L.R. facts in the pending case is striking, except that the
violations here proved are far more extensive in amount, in
In the earlier case the respondent operated a realty the length of time pursued and in subtlety than they were
corporation under his family name. Agents of his in the earlier case, and also in willfulness in flaunting the
corporation informed prospective customers that the clearcut declarations of In re L.R. In the earlier case L.R.
corporation would obtain the desired mortgage, make the operated a realty corporation in his family name, while
title search, prepare all the legal papers, and do everything here a trade name totally unrelated to either party was
necessary to close the transaction and that, the respondent purchased by the respondents from a brother of one of
being a lawyer himself, it was not necessary for the them. L.R. testified that he telephoned his complimentary
press notices to the newspaper and did not concern The two cases have these salient points in common: (1) The
himself with making any corrections thereof. Here the use of extensive, extravagant advertising by a corporation
respondent Rothman either *538 wrote the press notices owned by lawyers to produce a large volume of law
or had them written for him by publicity men or public business which they would otherwise not have obtained,
relations counsel and sent them to the newspaper, while and (2) the carrying on of the work of the corporation and
the respondent Irving never disclaimed any of the benefits of the law business as a single interrelated unit.
proceeding therefrom. Neither took any steps to curb the
advertising or press notices or to renounce any statements There is little difference between the advertising done in In
contained therein. While L.R. advertised the unusual re L.R. and here except that here the advertising was done
facilities of his title plant, quick service and a one-package on a much greater scale. The attorney in the earlier *539
deal, the mortgage company here even after the decision in case frankly advertised his one-package deal. Here the
In re L.R. continued to advertise the unusual facilities of its respondents just as effectively advertised their one-
title plant and quick service "under one friendly roof," its package deal "under one friendly roof" through their
equivalent of L.R.'s one-package deal. As far as the salesmen and also through newspaper advertising, through
customer was concerned, everything was being done for their common telephone and their commingled law and
him by the mortgage company. He saw a mortgage mortgage office. A glance at a few newspaper
company and a law firm whose physical set-up and work advertisements and articles, all admittedly printed at the
were so intertwined that it was impossible to separate instigation of Rothman and without repudiation by Irving,
them. Rothman himself could not satisfactorily explain the reveals a continual program of publicity for the company's
arrangement between the corporation and the law firm efficient and quick service in handling mortgage loans. In
under the contract dated July 1, 1951, whereby the law firm addition we find many laudatory articles concerning
agreed to provide legal closing services for all real estate Rothman, in many of which his background as an attorney
and mortgage transactions negotiated by Northern New is mentioned. Such advertising continued, even after the
Jersey Mortgage Associates. Still further proof, if any be complaint was filed by the Ethics and Grievance Committee.
needed, of the fusion of the respondents' professional and Thus on November 8, 1952, there appeared on the first
corporate interests may be found in Irving's explanation of page of the real estate and building section of the Bergen
his rental agreement in the new building in Teaneck: Evening Record a large article headlined "Business Volume
Hits New High, Sets Theme for Firm Expansion." This article
"Q. What is the gist of the agreement? A. Well, on what I can gives a summary of a statement by Rothman to the effect
afford to pay on the income that I will derive. I haven't that he attributes the mortgage company's success to the
arrived at a common denominator yet." "specialized service for builders and technical current
knowledge to do the job correctly," as well as a "complete for new opportunities. He finally chose the mortgage
technical requirement aspects of conventional and business, deciding that his legal background, plus a
Governmental financing, including application procedure in knowledge of the maze of new Government regulations for
accordance with Government regulation, preliminary veterans and nonveterans fitted him for that field."
requirements of local and Government authorities, and
procedure to insure a fast and successful moving project." The article further provides:
Such self-praise is, of course, a clear violation of Canon 27.
"Success and growth of the firm is attributed by Rothman
The three pages of advertisements and articles in the to key personnel, availability of funds even during the most
Bergen Evening Record for December 6, 1952, are stringent periods, technical know-how, and competent
especially significant in view of the fact that at that time the service. * * *
charges here under review had been made by the Ethics
and Grievance Committee for Bergen County and the Another ambitious undertaking of the company has been
hearings before it were under way. The articles are devoted its investments in the ability of a number of young
largely to an enumeration of Rothman's accomplishments. energetic builders who had the experience to go along with
The first page carries two photographs of the new office in their ambitions. The firm backed a number of these
Teaneck, New Jersey, one of the outside of the building and builders financially, Rothman said, and today several are
the other of the title and mortgage analysis department. included in the State's top echelon in the construction
There is also an advertisement for the company in which is field."
a sketch of the *540 new office building. It mentions the
"complete facilities" of the company and further provides On the second page, headlined "Rothman Sees His Dream
"Time Saved ... Expense Avoided Loans are expedited, and Come True," appear several pictures of the new offices, as
expense avoided, by our knowledge of the requirements of well as a photograph of Rothman. Another article on
the various government loan agencies." There is a two- Rothman states:
column spread giving a history of the firm with a
biographical sketch of and a laudatory article on Rothman. "From Columbia Rothman went to New Jersey Law School,
The article states that Rothman is an attorney, a graduate graduating in 1939 and passing his bar examination. Then
of Columbia University and Newark Law School, and that: after a brief period at practicing law, Rothman went into the
service. * * *
"Unwilling to go back to his law practice when he was
handed his service discharge, Rothman scanned the field
While in the service he decided to make a phase of the real regulation, preliminary requirements of local and
estate business his career. He formed Northern New Jersey Government authorities, and procedure to insure a fast and
Mortgage Associates in November, 1945 after receiving his successful moving project. * * *
discharge from the service, and opened an office on Engle
Street in Englewood." `We expect to continue to supply this fine service from our
new building,' says Rothman, `with our entire organization
*541 On the same page an advertisement states, among ready to serve builders, brokers, and modernization
other things: dealers and contractors.'"

"Title and Analysis Depts. The other provides:

Providing a service that helps to assure quick action on loan "The company's Title Departments are headed by Garrett
applications. Title Dept. files contain thousands of detailed Cooper of Clifton and Reginald Dugdale of Totowa. Cooper,
maps for quick reference." who has been in the title business for 25 years, is title
officer for used construction; while Dugdale is title officer
The third page has a picture of the new Modernization Loan for new construction. Both men have large staffs working in
Department of the Mortgage Company, another picture of their departments."
Rothman, and a photograph of the Title Closing Room.
There are also two more articles. One states: These advertisements and accompanying articles, after
charges made and with hearing under way and pending,
"The youthful executive attributes the firm's success in this are patently inconsistent with the assertions of good faith
department to its specialized service for builders and and protestations of innocence made by the respondents.
technical knowledge to do the job correctly. They did nothing that would interfere with their business
enterprise and they obviously resolved all doubts in their
The department offers builders such services as character- own favor and against the Canons of Professional Ethics,
zoning, availability of land, information on price fields in notwithstanding *542 the fact that they must have been
varied types of construction for particular sections and conscious of their precarious position.
areas, house designs best suited for sale and mortgage
purposes, complete technical requirement aspects of Advertising by any professional man inevitably involves
conventional and Governmental financing, including self-praise and puffing. If competitive advertising among
application procedure in accordance with Government lawyers were permitted, the conscientious, ethical
practitioner would be inescapably at the mercy of the The advertisements in the various exhibits in the case are
braggart. An advertisement of the Northern New Jersey replete with similar statements of which the foregoing are
Mortgage Associates of September 13, 1952, in the Bergen merely samples.
Evening Record graphically illustrates this evil. The article
quotes Rothman: The publicity program of the respondents through direct
advertisements and indirect advertisements thinly
"According to the mortgage firm's president, his firm has disguised as newspaper articles, the direct solicitation of
been able to close more than a quarter billion dollars worth business by salesmen in the field, and the commissions
of loans since 1945 when N.N.J.M.A. was first organized in paid real estate brokers combine to produce a tremendous
Englewood. Now regarded as one of the major finance volume of professional legal employment that makes the
companies in the East the Englewood firm is continuing its more familiar offenses of ambulance chasing and the
ambitious program of expansion with construction of a 3- operating of collection *543 agencies as a facade for
story building on Cedar Lane and Red Road, Teaneck. * * * obtaining law work look picayune and amateurish indeed.

It will have approximately 48 offices with facilities to In defense it is urged that the advertising was designed
employ more than 175 persons." (Emphasis supplied) solely to promote the business of the mortgage company
and not to produce law business. It is the nature of a
Again in the Bergen Evening Record for December 6, 1952, mortgage business that it inevitably produces law business
also while the hearings were pending, a press release on each mortgage transaction. That the volume of the law
appeared in a special box as follows: business was substantial is revealed in the number of
employees of each; as we have seen, the law partnership
"Firm's Success Story Revealed By its Figures had from 15 to 18 employees, while the corporation had
from 12 to 20, all operating out of the same offices.
Teaneck: Northern New Jersey Mortgage Associates, which
celebrated its seventh anniversary last month, has financed There are other important points in which the respondents
over 20,000 new homes, multi-family dwellings, commercial here went far beyond L.R. in violating Canons 35 and 47.
and industrial units for a total of $250 million. L.R. billed for and was paid fees for his legal services. Here
for a full year the mortgage company received the fees paid
The Company also financed over 12,000 existing homes for it by its customers and paid the law partnership a flat
the same period with a total mortgage volume of $14 retainer in clear violation of both Canons 35 and 47. We
million." shall have occasion to refer again to his practice later on in
dealing with the specific defenses urged by the defendants. be equally offensive. But such a situation is impossible, not
On the other hand, even though he did no legal work, only with a bank or trust company, but also with a savings
throughout the entire period of the partnership, Rothman and loan association by reason of many factors, including
shared in the profits, obviously as a reward for turning over the official supervision of its activities, which of course does
to the partnership the law business of the mortgage not exist in the case of the defendants' mortgage company
company. It is urged that in performing the legal work in incorporated under the General Corporation Act.
connection with a mortgage loan the law firm was acting
for the financial institutions, such as banks and insurance Second, it is argued that after the publication of In re L.R., a
companies, rather than the mortgage company. This, case originating in Englewood where the respondents had
however, is not so for Rothman makes much of the point their law offices until recently, the respondents took legal
that in many cases the mortgage company itself made the advice of several lawyers and sought to conform to their
mortgage loan and later sold the mortgages to various opinions as to the meaning of In re L.R. The proofs on this
financial institutions. But even where the mortgage was point are not only fatally defective, but they throw grave
taken directly by a financial institution it was the mortgage doubt on the good faith of the respondents in presenting
company as broker that controlled where the legal their defense. Not a single written opinion is produced
business should go. from any member of the bar. Not a single lawyer was put
on the stand to testify to the opinion he is alleged to have
It remains to consider the defenses urged by each of the given to the respondents. There is no testimony as to what
respondents. The respondent Irving in his brief and in the facts were related to each lawyer allegedly consulted on
oral argument in his behalf cited no authorities whatsoever which he might base his opinion. There is no testimony as
but made four general arguments by way of defense or in to what the opinion of each of these lawyers was or what
mitigation of discipline, none of which has any validity. *544 changes he recommended to the respondents in their
First, it was urged that Irving is in the same position as an operation to conform to the decision in In re L.R. If such
attorney for a savings and loan association or of a bank or opinions were given at all, they were "curbstone opinions"
trust company in passing on a mortgage loan. But a savings and worth no more than such opinions traditionally are. All
and loan association is a mutual institution; it is not owned that the testimony with respect to such opinions serves to
by its attorneys but by its stockholders. Nor is a bank or do is to reveal the doubts that were existing in the minds of
trust company in the usual case so owned by an attorney or the respondents as to the propriety of their scheme of
group of attorneys; if it were, and if it were used as a operations.
mortgage company was used here and its business were
commingled with that of the law office, its conduct would
None of the attorneys who are alleged to have given advice Third, it is argued that there are other lawyers in the State,
to the respondents were called as witnesses by the *545 and especially in Bergen County, who are guilty of the same
respondents and their testimony in this respect is entirely offenses. This is, of course, no defense; it merely furnishes
without corroboration. In this view of the facts we are not the information for the institution of disciplinary action
required to pass on the question of the efficacy of the against the offenders.
advice of counsel, save to remark that this is not a suit for
malicious prosecution and it is therefore difficult to Finally, it is urged in behalf of the respondent Irving that if
perceive how the advice of counsel has any bearing upon he were guilty of the offenses charged, they were cured by
the matter. A layman cannot excuse a violation of the law the dissolution of the partnership on November 1, 1952.
by saying that he acted on the advice of counsel, and there Passing over the question of whether the dissolution of the
would appear to be no sound reason for extending such an partnership was the result of the pending proceedings or
immunity to an attorney charged with unethical conduct. rumors thereof, it is quite clear that the present set-up is a
Were the rule otherwise, a more effective means of *546 violation of all three canons. The mortgage company,
circumventing the Canons of Professional Ethics could of which Irving is still a one-third stockholder, is still
hardly be devised. Even more troublesome is the fact that advertising and still soliciting business by exactly the same
the record shows that the respondents did not make the methods as before. The business of Irving as a lawyer and
slightest effort to conform to In re L.R.; on the contrary, the business of the mortgage company are still
they continued their soliciting and their advertising on an intermingled. For example, Irving testified that he did not
enlarged scale even after proceedings were commenced yet know what his rent would be, even though he is a one-
against them. It is important at this point to note the third owner of the corporation. Nor is it to be overlooked
chronology. In re L.R. was decided on June 25, 1951. On July that Irving owes his present legal business to his long
1, 1951, six days later, the contract hereinbefore mentioned continued violations of the three canons relied on herein.
between the law partnership and the mortgage company
was entered into whereby all legal fees were paid by the The respondent Rothman, as we have said, filed no brief
borrowers to the mortgage company, and the mortgage but at the oral argument "adopted" the brief filed in behalf
company paid a fixed annual sum, first of $42,000, later of Irving, which had no special applicability to the case of
reduced to $33,000, to the law firm. It is impossible for us Rothman. At the oral argument Rothman's counsel took the
to comprehend how this can be taken as compliance with position that while Rothman was not practicing law, he was
the ruling laid down in In re L.R. in which the pertinent not bound by the Canons of Professional Ethics although
canons, as here, were quoted at length. still a member of the bar. It is not difficult to imagine the
results which would flow from the acceptance of such a
novel doctrine. Fortunately for the profession and the lawyer's position and all other like self-laudation, offend the
public alike, it has not been and is not now the law. traditions and lower the tone of our profession and are
Obligations of the lawyer are binding upon him as long as reprehensible." He has set up a corporation between the
he remains admitted to the bar. The fact that an attorney is customers he solicited and the former law firm originally
no longer practicing law does not relieve him of the and the respondent Irving now, and he has permitted the
responsibility of living up to the Canons of Ethics. In In re corporation to collect legal fees from these customers
O'Neil, 228 App. Div. 129, 239 N.Y.S. 297, 299 (App. Div. where the real work was done by the law firm or by Irving.
1930), the court stated: Irving likewise has been a party to all of these matters and,
with Rothman, has made possible the unauthorized
"We are of the opinion that respondent, as an attorney, was practice of the law by their mortgage company.
bound to practice good faith and observe the canons of
ethics of his profession as fully when he became vice Both respondents are clearly guilty of violating the 27th, the
president or president of the [insurance] company as when 35th, and 47th Canons of Professional Ethics.
he was its general counsel."
III. SUPPORTING AUTHORITIES
Rothman has gambled for large stakes in business and has
won them, but by reason of his blatent flaunting of the Although we deem the cited canons and decisions in this
Canons of Professional Ethics it should be at the expense of State controlling, in view, first, of the division in the court
his right to practice law. There is scarcely a phrase in Canon and, secondly, of the importance to the profession of the
27 that he has not deliberately and over a long period of issues raised, it seems desirable to supplement these
years consistently violated, by soliciting "professional authorities by reference, without attempting to be
employment, by circulars, advertisements, through touters exhaustive, to pertinent decisions in other states, to the
or by personal *547 communications or interviews not interpretation of the canons by authorized committees of
warranted by personal relations." He has disregarded the the bar, to the practice set up in codes of conduct entered
admonition that "indirect advertisements for professional into by the bar with various related callings, and to legal
employment such as furnishing or inspiring newspaper writers on the subject. It should be noted at the outset that
comments, or procuring his photograph to be published in relatively few cases concerning the canons reach the
connection with causes in which the lawyer has been or is courts, first, because the canons are clear and, secondly,
engaged or concerning the manner of their conduct, the because the bar in general respects them. It is only where
magnitude of the interest involved [here a quarter of a the necessities are overwhelming or the stakes great that a
billion dollars worth of mortgages], the importance of the lawyer in his right senses is tempted to violate them.
*548 The Canons of Professional Ethics are based on the And, if it is thus set apart as a profession, it must have
fundamental premise that the practice of law is a traditions and tenets of its own, which are to be mastered
profession and not a business. It is a profession and lived up to. This living spirit of the profession, which
notwithstanding the fact that lawyers make a living out of limits yet uplifts it as a livelihood, has been customarily
their practice. Dean Roscoe Pound has with his customary known by the vague term `legal ethics.' There is much
clarity set forth the fundamental characteristic of a more to it than rules of ethics. There is a whole atmosphere
profession: of life's behavior. What is signified is all the learning about
the traditions of behavior that mark off and emphasize the
"What we mean by the term profession when we speak of legal profession as a guild of public officers. And the
the old recognized professions (medicine, the law, apprentice must hope and expect to make full
ministry). We mean an organized calling in which men acquaintance with this body of traditions, as his manual of
pursue a learned art and are united in the pursuit of it as a equipment, without which he cannot do his part to keep
public service as I have said, no less a public service the law on the level of a profession." (Foreword to Carter's,
because they may make a livelihood thereby. Here, from The Ethics of the Legal Profession, 1915)
the professional standpoint there are three essential ideas
organization, learning, and a spirit of public service. The The result of these considerations on the lawyer is
gaining of a livelihood is not a professional consideration. epitomized by Chief Judge Cardozo with characteristic
Indeed, the professional spirit, the spirit of a public service, felicity: "Membership in the bar is a privilege burdened
constantly curbs the urge of that instinct." (Address before *549 with conditions," People ex rel. Karlin v. Culkin, 248
Nebraska State Bar Association, October 20, 1949, p. 2.) N.Y. 465, 467, 162 N.E. 487, 489, 60 A.L.R. 851 (Ct. App.
1928). Many of these conditions are set forth in the Canons
Dean John H. Wigmore has stressed the fact that a of Professional Ethics.
profession involves a way of living and therefore the
canons are much more than rules of ethics: Our best courts have consistently adhered to these
principles. Thus in In re Disbarment of Tracy, 197 Minn. 35,
"For lawyers, the most important truth about the law is that 38, 266 N.W. 88, 91, 267 N.W. 142 (1936), the Minnesota
it is a profession. * * * As a profession, the law must be Supreme Court stated:
thought of as ignoring commercial standards of success as
possessing special duties to serve the state's justice and as "The point is in the fundamental difference between any
an applied science requiring scientific training. commercial business and a profession. The vocation of a
lawyer is a profession. * * * his conduct * * * is to be
measured not by the indefinite, still developing and largely community, even though purely selfish tendencies and
unwritten standards of trade and counting house, but by profit may be thereby restrained."
those of his profession which, while they have not reached
their ultimate state, have yet attained the development and *550 The courts of New York have been equally emphatic.
degree of formulation evidenced by the Canons of Ethics." In In re Schwarz, 175 App. Div. 335, 339, 161 N.Y.S. 1079,
1083 (App. Div. 1916), the court, in dealing with an attorney
No infringements of the canons, other than those involving who had by the use of letters, circulars and newspaper
sheer dishonesty, have called forth stronger judicial and advertisements solicited patronage for his collection
professional denunciation than violations of Canon 27 business, said:
prohibiting advertising and soliciting. In In re Cohen, 261
Mass. 484, 486, 159 N.E. 495, 497, 55 A.L.R. 1309 (1928), the "They are typical of modern advertising business methods,
Supreme Judicial Court of Massachusetts in a case involving and would be appropriate to the exploitation of patent
a lawyer who advertised for business stated: medicines or other proprietary articles, but are utterly
abhorrent to professional notions or standards. Unless the
"The foundation on which this principle of conduct rests is ancient and honorable profession of the law, whose
that attorneys at law practice a profession; they do not practitioners are officers of the court of the highest
conduct a trade. It is incompatible with the maintenance of fiduciary character, under obligations of service to the
correct professional standards to employ commercial state, to the community, and to the court, is to be degraded
methods of attracting patronage. Advertising such as that to the rank of a quack medicine business enterprise, the
disclosed on this record is commonly designed to stimulate advertising and business solicitation methods here under
public thought and challenge popular attention to the end review must be emphatically and absolutely condemned. *
that the business of the advertiser may be increased. * * * **
Whatever may be his constitutional rights, a member of the
bar must conduct himself as an officer of the court in such It is precisely because of the `business' emphasis which the
manner as not to offend against reasonable rules of respondent attaches to his professional title of attorney
propriety established by the court for the general welfare. and counselor at law that his methods and practices are so
Courts are solicitous for the rights of one duly admitted to offensive. * * *
practice law. * * * They owe an equal duty to see to it that
the public interests are conserved by observance on the The court has no disciplinary supervision of business
part of lawyers of proprieties indicative of a due enterprises. It has jurisdiction over its own officers, and is
appreciation of their responsibilities to the court and to the authorized to discipline any attorney who is guilty of
professional misconduct. We are of the opinion that by The opinions of the Committee on Professional Ethics and
using the methods, letters, circulars, and advertisements Grievances of the American Bar Association are equally
here under consideration the respondent is guilty of explicit, e.g., in Opinion No. 62, dated March 19, 1932, the
professional misconduct. If respondent wishes to retain committee was concerned with the application of Canon 27
and carry on the business which he claims is so valuable to to an attorney's acquiescence in a newspaper's repeated
him, he may do so outside of the profession whose publication of laudatory announcements regarding him and
standards and rules of conduct he has violated; he cannot his legal practice. In its opinion the committee stated:
remain a member of the bar of this state, and, while such
member, indulge in such practices." "The assumptions in questions one and two stretch
credulity almost to the breaking point. The facts stated in
The same attorney was later disbarred in In re Schwarz, 195 the preamble clearly disclose improper advertising of the
App. Div. 194, 197, 186 N.Y.S. 535, 538 (App. Div. 1921), most flagrant nature. We cannot believe that the
affirmed 231 N.Y. 642, 132 N.E. 921 (Ct. App. 1921), the newspaper's repeated publication of the attorney's picture
court adopting the opinion below which contained these and announcement could have occurred without his
pertinent observations: request or consent. But if it be true that such publication
has been made as suggested in question one, nevertheless,
"It is evident that the respondent has no conception of the it was the duty of the lawyer, as soon as his attention was
ethics of the profession, and is obsessed by the notion that called thereto, to request and require the publisher to
self-advertisement is a proper means of obtaining discontinue publication of the article. The failure so to do
professional employment, and that his efforts are directed would permit him to be `advertised' by indirection contrary
to so shaping his letters and circulars as to obtain the to the provisions of Canon 27. Such advertising we
results of such advertisement and at the same time escape disapprove." (Opinions of the Committee on Professional
judicial condemnation. He had fair warning, but has Ethics and Grievances (1946), pp. 156-157)
deliberately violated the spirit of our former decision, while
asserting that he has observed its letter. The court told him To the same effect is Opinion No. 44-2 of the Committee on
plainly *551 that if he wished to continue his business, for Professional Ethics of the Chicago Bar Association:
that is what he then claimed it was, in the manner and by
the methods employed, he must do it as a business man, "It is the opinion of the Committee that such advertising,
and not masquerade as a professional man, while violating whether it mentions the attorney or not, if it is with his
the fundamental ideals and principles of the profession." knowledge or consent, or if he participates in the results of
such solicitation, constitutes a violation of Canon 27 acquiesces in the use of his name in connection with such
`Advertising, Direct or Indirect.'" solicitation by others.

Violations of Canon 27 concerning advertising and soliciting The conclusion would not be different if he were a full time
are likely to be interwoven, as here, with violations of salaried officer of a corporation soliciting `law practice.' An
Canons 35 and 47 dealing with intermediaries and aiding in attorney may properly, for a salary, devote his entire time
the unauthorized practice of the law. Thus, Opinion No. to the performance of legal services for a corporation,
122, dated December 14, 1934, of the Committee on provided the legal services performed concern only the
Professional Ethics and Grievances of the American Bar corporation's own affairs, but when he allows it to sell his
Association states: professional services, he violates Canon 35."

*552 "There never could have arisen in this country any The decisions are to the same effect. In re Tuthill, 256 App.
widespread lay practice of the law without the assistance Div. 539, 10 N.Y.S.2d 643, 649 (App. Div. 1939), was a
(and we may say the suggestion and inventive genius) of disciplinary action under Canon 35 in which an attorney for
intelligent, but highly unprofessional lawyers. It may fairly one of the so-called "heir hunting" companies was
be said now that no lawyer can urge unfamiliarity either disbarred. The corporation had been found to be engaged
with the ethical or legal improprieties of such misconduct. It in the unlawful practice of law. The respondent-attorney
must cease or be stopped by the activities of the organized advised the formation of a New Jersey corporation to evade
profession. Drastic action should hereafter be taken against criminal prosecution in New York and otherwise aided the
any lawyer participating therein." corporation in its unlawful practice of law. In its opinion the
court stated:
See also Opinion No. 31 of the committee, dated March 2,
1931, in which it was said: "The record leaves no doubt that respondent was aware of
the fact that the corporation obtained its business through
"In our opinion, it is improper for an attorney to aid a solicitation. As an attorney, respondent himself could not
corporation to practice law, or in any way to participate in so solicit. In accepting engagements from the corporation,
or sanction such practice, and it is, therefore, improper for respondent was doing indirectly what he could not ethically
him to allow his name to be displayed on the letterheads or do directly. * * *
advertising matter of such a corporation. Furthermore, the
solicitation of `law practice' is contrary to Canon 27, not "The relationship of attorney and client did not exist
only when it is done by the lawyer but also when he between respondent and those for whom he appeared as
attorney of record. *553 He was, in reality, the attorney for statute above referred to and the decisions of the courts on
the corporation which selected and employed him, to which the subject."
he accounted and which fixed his compensation.
These canons do not, however, preclude an attorney from
"He wholly disregarded the 35th Canon of Professional engaging in all business. The line of demarcation is clearly
Ethics of the American Bar Association * * *." indicated in Opinion No. 57 of the Committee on
Professional Ethics of the American Bar Association, dated
Here the mortgage company was engaging in the March 19, 1932, which provides in part:
unauthorized practice of law and the respondents
permitted their services and names to be used in aid "It is not necessarily improper for an attorney to engage in
thereof, contrary to Canon 47. Hexter Title & Abstract Co. v. a business; but impropriety arises when the business is of
Grievance Committee, 142 Tex. 506, 179 S.W.2d 946, 951 such a nature or is conducted in such a manner as to be
(Sup. Ct. 1944), where the title company was adjudged inconsistent with the lawyer's duties as a member of the
guilty of the unlawful practice of law contrary to statute is Bar. Such an inconsistency arises when the business is one
pertinent. The Supreme Court of Texas in affirming said: that will readily lend itself as a means for procuring
professional employment for him, is such that it can be
"According to the facts set out in the agreed statement, and used as a cloak for indirect solicitation on his behalf, or is of
particularly paragraph 3 thereof, the defendant draws a nature that, if handled by a lawyer, would be regarded as
deeds, notes, mortgages, and releases relating to the the practice of law. To avoid such inconsistencies it is
property rights of others. always desirable and usually necessary that the lawyer
keep any business in *554 which he is engaged entirely
According to paragraph 2 of the stipulation it has been separate and apart from his practice of the law and he
furnishing opinions as to the condition of the title to real must, in any event, conduct it with due observance of the
estate, and according to paragraphs 7 and 8 it holds itself standards of conduct required of him as a lawyer.
out as possessing authority to render such services, and (Emphasis supplied)
advises interested parties as to the purpose and legal effect
of the instruments drawn by it. It therefore advises others Some businesses in which laymen engage are so closely
as to the secular law, and draws deeds and other papers associated with the practice of law that their solicitation of
relating to secular rights within the inhibition of the above business may readily become a means of indirect
statute. These acts, when performed for a consideration, solicitation of business for any lawyer that is associated
constitute the practice of law, both within the terms of the with them. * * *
For the reasons stated a lawyer cannot properly devote a matters as they arise. It is only when the lawyer seeks to
portion of his time to managing a bureau for the publicize the fact that he is also an accountant that the
adjustment of insurance claims nor permit his name to be question arises.' (Mich. op. 124)
used on its stationery. Having thus answered the first and
third questions in the negative, it is unnecessary to answer Much, of course, depends on the surrounding
the second question. Nevertheless, reference to it is circumstances. In small communities where everyone
desirable because it so aptly illustrates the necessity of knows what everyone else is doing, and where there is
keeping any business in which a lawyer may be engaged comparatively little remunerative law practice, it is quite the
entirely separate and apart from his practice of law. If such usual thing for lawyers to be engaged in collateral
a business and his law practice should be conducted from occupations such as licensed broker or insurance agent. If
the same office, the public could not be expected to they do so using distinct letterheads and not using the
distinguish between his dual capacities and know when he other occupation as a means of solicitation or securing
is acting in the capacity of a lawyer and when in that of a employment as a lawyer, it is not considered improper.
layman."
Thus a lawyer may properly conduct an independent real
This problem is further elaborated by Henry S. Drinker in estate business in another county (heretofore unpublished
his forthcoming Legal Ethics: op. 38 of A.B.A. Com. now published in App. A), or may
offer to manage an apartment house in exchange for the
"There is, of course, nothing in the Canons to prevent this use of an apartment (N.Y. City ops. 344, 475) or may publish
as to an occupation entirely distinct from and unrelated to a newspaper and write editorials, *555 but not to exploit
his law practice. Thus, no one would dispute the right of a himself as a lawyer (heretofore unpublished op. 37 of the
lawyer to be a teacher, or a violinist or doctor or a farmer, A.B.A. Com.) or may be the salaried trust officer of a bank
or to sell rare postage stamps, provided he in no way used (N.Y. County op. 267).
such occupation to advertise, or as a feeder to his law
practice. Where, however, the second occupation, although
theoretically and professedly distinct, is one closely related
As a Michigan Committee aptly said in a recent case: to the practice of law, and one which normally involves the
solution of what are essentially legal problems, it is
`There is, of course, nothing to prevent a lawyer from inevitable that, in conducting it, the lawyer will be
adding to his general qualifications by becoming a certified confronted with situations where, if not technically, at least
public accountant and using his added skill in appropriate in substance he will violate the spirit of the Canons (N.Y.
City op. 767, income tax service for lawyers), particularly attorney, although signs on his office showed he was an
that precluding advertising and solicitation. The likelihood attorney, where the court held:
of this is the greatest when the collateral business is one
which, when engaged in by a lawyer, constitutes the "If the petitioner should choose to continue as a
practice of law (A.B.A. ops. 31, 35, 57, 194, 201, 225, 257, practitioner at the bar of this state, he must comply with
272; N.Y. City op. 413) and when it is conducted from his the standards of the legal profession. He should appreciate
law office. (Heretofore unpublished op. 43 of A.B.A. Com.) that when he is licensed to practice as an attorney at law,
Thus there is apparently no doubt as to the impropriety of the professional services that he thus performs are
conducting, from the same office, a supposedly distinct and performed by him as an attorney, whether or not some of
independent business of collection agent (N.Y. County op. the services could also be rendered by one licensed in a
260 and ops. cited; N.Y. City ops. 211, 633; N.Y. City ops. different profession. One who is licensed to practice as an
102, 479), stock broker (heretofore unpublished op. 39 of attorney *556 in this state must conform to the
A.B.A. Com.), estate planning (heretofore unpublished op. professional standards in whatever capacity he may be
43 of A.B.A. Com.), insurance adjusters bureau (heretofore acting in a particular matter. Jacobs v. State Bar, 219 Cal. 59,
unpublished op. 57 of A.B.A. Com.), tax consultant (A.B.A. 25 P.2d 401. As a practicing attorney, he may not solicit
op. 57), or mortgage service (N.Y. County op. 344; N.Y. City employment nor may he advertise contrary to the rules.
op. B-106) or to organize and operate under a trade name, The restrictions, limitations, and permissible conduct in
even though in an adjacent office, a corporation conducting those respects are familiar both to the lawyer and to the
servicing business drafting charters and other corporate layman."
papers (N.Y. City op. 768; heretofore unpublished op. 77 of
A.B.A. Com.). Clearly a lawyer may not use his legal These authorities clearly define the line between the
stationery to solicit business in the collateral line (N.Y. City permissible business activities of a lawyer and those which
op. 636)." violate the Canons of Professional Ethics. They do not
interfere with the customary methods of practicing law.
These obvious distinctions are applied by the American Bar They are aimed only at the sharp practice of a relatively few
Association Committee in Opinion 225 to collection members of the bar who are seeking to invade the plain
agencies, in Opinion 272 to certified public accountants, intent of the canons to their own personal financial
and in Librarian v. State Bar, 21 Cal. 2d 862, 863, 136 P.2d advantage. The first sign of any such intent is likely to be
321, 323 (Sup. Ct. 1943), to an attorney who publicized extravagant, extensive advertising, a field in which they
himself as notary public and tax expert, though not as have no competitors. The second sign is apt to be the
intermingling of the practice of law with the operation of
some business that directly and necessarily produces legal creditor if such service charge is greater than the
work in large volume. Such a set-up, which must be Commercial Law League of America minimum rates. If the
condemned if the canons are not to become a dead letter attorney corresponds directly with the creditor, the agency
in protecting legitimate practitioners, is far removed from may request that copies of such correspondence be sent to
service as a director or officer of a bank, a savings and loan the agency."
association or of an ordinary manufacturing or
merchandising establishment, or acting as a real estate or "9. It is held to be improper for an agency to demand or
insurance broker and the difference is not merely one of obtain in any manner a share of the proper compensation
degree but it is a difference in intent and methods. for services performed by an attorney in collecting a claim
or any legal proceedings upon or arising out of such claim,
The New Jersey State Bar Association, like many other bar irrespective of whether or not the agency may have
associations, has sought to protect the profession and previously attempted collection thereof."
likewise the public by entering into codes with related
callings. Thus its code with the collection agencies contains The same respect for the rules here laid down is also
the following: reflected in the "Statement of Principles Applicable to
Corporate Fiduciaries and Members of the Bar," which
"3. It is held to be improper for an agency to solicit claims statement has been approved by the New Jersey Bankers
for any purpose at the instigation of any attorney." Association, where we find the following provisions:

"5. It is held to be improper for an agency to communicate "5. A corporate fiduciary shall not, directly or indirectly,
with debtors in the name of an attorney or upon the influence the employment by the prospective testator of
stationery of any attorney, or to prepare any forms of any specified attorney at law for the preparation of any will
instrument which only attorneys are authorized to or codicil under which it is to be appointed in any fiduciary
prepare." capacity."

"8. In the forwarding of claims to a lawyer for collection, an "17. A corporate fiduciary shall not extend by
agency shall not intervene between the creditor and advertisement, or otherwise, an invitation to the public to
attorney in any manner which would exploit the services of `bring its legal problems to the fiduciary' or hold itself out
the attorney or which would direct those services in the as prepared to give legal advice or legal service or to
interest of the agency, and shall *557 disclose to the practice law."
attorney the service charge made by the agency to the
"18. A corporate fiduciary shall not advertise that it will, or The respondent-attorneys allowed the mortgage company
that, through the services of its officers, agents or to extend by advertisement an invitation to the public to
attorneys, it will draft or prepare or assist in the drafting or come to them because of their speedy and efficient service
preparation of any will, codicil, trust agreement, contract or available to a large extent because of the close tie-up with
other legal document." the law firm. As a matter of fact, there appears to be no
doubt that Rothman actively encouraged such advertising,
The corporate fiduciaries of this State have recognized the both in newspapers and in the dissemination of this
evils in such a situation and voluntarily entered into a code information through the salesmen, while Irving, who
prohibiting such practices on their part. The question of undoubtedly had knowledge of same, acquiesced therein.
legal services is absolutely divorced from all their The advertisement of the legal services available helped to
advertising, and in fact they are to maintain a hands-off increase the business transactions of the mortgage
policy when it comes to the question of recommending an company, which in turn resulted in an increase in business
attorney who shall perform the legal services for the of the law firm. Such advertising a lawyer has never been
customer. Certainly this code entered into between the bar permitted to do in his own name; to allow the respondents
association and the corporate fiduciaries goes to great to do so through an intermediary is to place the ethical
length in furthering the principle of divorcing the legal practitioner at a great disadvantage in competing with
profession from the lay activities of the banks and trust those who would turn their profession into a business.
companies. In the case at bar we have a very serious
violation of this principle. We have a situation where a The decisions in other states, the opinions of authorized
mortgage company and a law *558 partnership, both committees elsewhere, and the codes entered into by the
controlled by the same two men, are feathering each New Jersey State Bar Association with related callings all
other's nest. The mortgage company's big selling point in its support the conclusions we have reached on the basis of
highly competitive business is the tie-up with the law firm, the controlling authorities in this state that the defendants
as a result of which more efficient service is offered to the have willfully and for long periods of time violated the 27th,
customer. The law partnership allows the mortgage the 35th and the 47th Canons of Professional Ethics.
company to use this selling point, and as a result its own
business is greatly increased. We have here a flagrant IV. THE MEASURE OF DISCIPLINE
abuse of this principle that is prohibited in the code of the
corporate fiduciaries. While the justices subscribing to this opinion differ as to the
extent of the discipline to be imposed on the respondents,
*559 we are all agreed that they are at least deserving of
severe reprimand. The bar is put on notice that similar company. But the "customers" for whom legal services
offenses occurring hereafter will be dealt with more were rendered were primarily the mortgagees who loaned
severely. their money through the agency of the mortgage company,
and I fail to see how the legal services rendered on behalf
WILLIAM J. BRENNAN, JR., J. (dissenting). of the mortgagees could be said to have been performed in
the interest of the supposed intermediary. True, the
The majority finds that the activities of the mortgage mortgagors, almost entirely individuals purchasing homes
company, the advertising and the sales efforts, were carried and apparently most of them G.I.'s, who responded to the
on primarily to produce professional legal employment for opportunity offered them by the advertising to get
the law partnership so that respondents as the law mortgage loans through the mortgage company were often
partners and the owners of the mortgage company are required to pay legal fees *560 charged for the services
guilty of violating Canon 27. But the majority opinion rendered to the mortgagees, and also the other charges for
recognizes that the mortgage company realizes "substantial non-legal services. But that was a condition imposed by the
profits" from brokerage and "percentage point" and mortgagees and is common and accepted practice in all
processing fees incurred by financial institutions which such mortgage transactions and does not make the
acquire the mortgages through the mortgage company, mortgagors the "customers" in any true sense. It may be
which fees are either paid by the institutions or are passed that the mortgagors frequently did not retain their own
on by the institutions to the mortgagors. This income attorneys independently to advise them as to the form and
apparently exceeded by a considerable amount the legal legal significance of the mortgage documents, but it is clear
fees received by the law partnership before its dissolution. that they were entirely free to do so. It is also clear that the
The record, as I read it, clearly supports the inference that mortgagors paid no additional fees to the partnership.
the advertising and sales efforts were directed exclusively
to garnering the mortgage business and the mortgage fees The violation of Canon 47 is rested primarily upon the
which go with it; the professional work obtained by the finding that the mortgage company offered a form of "one
partnership was an incident and not the object of the package deal" comparable to that condemned by this court
mortgage company's activities. in In re L.R., 7 N.J. 390 (1951). This is attempted to be
spelled out of the "publicity for the company's efficient and
The majority also finds that the mortgage company, in quick service in handling mortgage loans," the advertising
violation of Canon 35, was interposed as an intermediary of "the unusual facilities of its title plant and quick service
between the law partnership and those for whom legal `under one friendly roof,'" and, as to some G.I. loans, the
services were rendered, the "customers" of the mortgage inclusion in the down payment of an amount for legal
services. I cannot find that the advertisements anywhere It is to be regretted that all who engage in the practice of
emphasize legal services in the manner highlighted by the the law do not primarily reserve themselves for the practice
practitioner involved in In re L.R. They strike me as being of their profession only. A business man seeking business
more concerned with emphasizing the company's talent for may with complete propriety employ methods which if
cutting through the red tape incident to mortgage financing resorted to by a lawyer desiring professional employment
under governmental auspices, particularly as they involve would be dishonorable because unprofessional. The
G.I. loans. The inclusion of the legal fees in the down profession and the public interest are better served by the
payment was nothing more than part of the program of the lawyers, fortunately the great majority, who do not attempt
federal agencies to liberalize the terms upon which G.I.'s to make the inherently incompatible admixture. But our
could purchase homes. professional code does not require that practitioners
refrain from commercial pursuits while at the same time
In any event, this case involves only questions of actively practicing their profession. Chief Justice Qua of the
professional propriety. There is no suggestion that Massachusetts Supreme Judicial Court has noted that
respondents did anything dishonest or that they imposed "commonly a member of the bar is free to engage in
upon or dealt unfairly with the mortgagees, the borrowers commercial pursuits of an honorable character and to
or the public. The rules they are charged with transgressing advertise and to extend his purely mercantile business
are of the kind which it has been said "have as their main honestly and fairly by ordinary commercial methods." In re
object to secure that no member of the profession shall Thibodeau, 295 Mass. 374, 3 N.E.2d 749, 750, 106 A.L.R. 542
have any but a purely professional interest in his work, by (1936). The business, however, must not be merely a cover
excluding the incentive of speculative profit," and the behind which to solicit professional employment by
incidental object also "to prevent *561 the economic methods denied the lawyer although proper for the
standards of the profession being lowered by unscrupulous business man seeking business for a business.
competition," E.H. Tawney, The Acquisitive Society (1920).
The obligations assumed by the practitioner thereunder When alleged professional conduct concerns only matters
when he joins the profession help preserve and foster the of professional propriety, the attitude of the lawyers under
ideal of the profession, which subordinates the criterion of inquiry toward their obligations under our professional
financial return as the mark of success, and the essence of code is, of course, of first importance. The majority says
which is that "though men enter it for the sake of that the respondents "obviously resolved all doubts in their
livelihood, the measure of their success is the service which own favor and against the Canons of Professional Ethics,
they perform, not the gains which they amass." Tawney, notwithstanding the fact that they must have been
supra. conscious *562 of their precarious position." I do not have
that impression from my reading of the record. I see no and not upon practices or methods which have been
evidence that their effort to live up to their professional abandoned. This was the conclusion reached by the
obligations was and is not sincere. The evidence impresses Massachusetts Supreme Judicial Court in the not dissimilar
me the other way. Mr. Irving first sought advice as far back situation presented in In re Thibodeau, supra, and appeals
as "the early part of 1946 and 1947" when the rapidly to my sense of justice and fairness to practitioners whose
accelerating growth of the mortgage enterprise cramped endeavors to live up to their professional obligations do not
their quarters and the practical difficulties of avoiding the appear, on this record, to be lacking in sincerity. I agree that
mingling of personnel and activities became apparent. the mortgage company's *563 advertisements might be still
Changes were initiated from time to time to accomplish not further revised as regards the references to Mr. Rothman,
only the fact but also the appearance of separateness the lawyer, but I see no reason to question the earnestness
between the mortgage business and the professional of the proffer by respondents at the opening and close of
practice. These changes were made both before and after the hearings and repeated on the oral argument to make
our decision in In re L.R., supra, and culminated in the any additional changes indicated by the committee or the
arrangement which now exists and which existed at the court as desirable in the interest of complete and literal
time of the hearing before the committee. Under that compliance with the canons.
arrangement the partnership of Rothman & Irving has been
dissolved, nothing remotely suggesting legal services is It is, of course, true that Mr. Irving's professional income is
done by the mortgage company or its affiliates, (indeed, I and probably will continue to be realized largely from the
discover no proof that this ever was the case), Mr. Rothman professional work which comes to him from the mortgage
devotes himself exclusively to the management of the company and its affiliates. In that sense the mortgage
mortgage business and has no participation in the company is the "feeder" of his law practice. While he has no
proceeds of the law practice which Mr. Irving carries on part whatever in the management of the mortgage
with his own staff in quarters completely separated from, business he is a one-third owner thereof and perforce
though located in the same building with, the mortgage shares in its success to the extent of the dividends on his
company and its affiliated enterprises. In that posture of stock interest. Is Mr. Irving's present situation, which, in my
affairs it seems to me that, there being nothing whatever to view, is the only just area of inquiry, in truth so "far
indicate that the precautions taken to separate the removed" from that of innumerable past and present
business from the law practice now carried on exclusively leaders of the bar who have been and are identified in
by Mr. Irving are not real or that they cover any subterfuge, executive capacities, as directors, and as owners, with
the respondents should be judged upon whether their building and loan associations, insurance companies,
present arrangement violates the canons or any of them savings and loan associations, banks and trust companies,
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work. If respondents' present arrangement, including Mr.
Irving's retention of his one-third stock interest, is contrary
to the canons, so also are these other arrangements which
the bar knows are commonplace throughout the State. If
these practices are to be prohibited that should be
accomplished by unmistakable rules to be applied
prospectively and equally among all members of the bar.
Upon the plainest principles of simple fairness in the
exercise of our disciplinary powers, these respondents
should not be singled out for punishment.

Justices WACHENFELD and JACOBS join in this dissent.

*564 Guilty and for reprimand Chief Justice VANDERBILT,

and Justices HEHER, OLIPHANT and BURLING 4.

Not guilty and for dismissal Justices WACHENFELD, JACOBS

and BRENNAN 3.Divorce
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