BAR ASSOCIATION OF NASSAU COUNTY
COMMITTEE ON PROFESSIONAL ETHICS

Opinion No. 1994-9

(Inquiry No. )

Topics:
Attorney functioning as commission salesman f or collection agency.
Digest:
An attorney may, subject to stated qualifications, act as a commission salesman for a collection agency.
Code Provisions:
DR 2-101(A)
Facts Presented:
An out-of-state corporation functioning as a nationwide collection agency has solicited inquiring counsel to act (in a “licensee” capacity) as a salesman for it. Inquiring counsel’s responsibility would be to advertise for and sign up clients for the collection agency.

The collection agency does not specifically seek out attorneys to act as salesmen for their services, and their written materials specifically and expressly state that this collection agency does not provide legal services of any kind.
Inquiry:
May inquiring counsel operate as a commission salesman for this out-of-state non-legal collection corporation? If so, may inquiring counsel advertise and operate under his own name as an attorney, under a corporate named entity, or otherwise?
Determination:
The attorney may act as a commission salesman for the collection agency, and may so advertise.
Analysis:
Even prior to the United State Supreme Court Decision in Bates v. State Bar of Arizona, 433 U.S. 350 (1977), there was no prohibition against an attorney engaging both in the practice of law and another profession or business. The only prohibition was against the attorney’s advertisement on his letterhead, office sign, or professional card of his other profession or business, or his identification of himself as a lawyer in any publication in connection with his other profession or business. See, e.g., Nassau County Opinions ## 89-31 and 90-1. Since the Bates decision, even this prohibition has gone by the boards. Id.

This Committee, in Nassau County opinion #87-4, specifically opined:

“Of course, a lawyer is not prohibited from having an interest, as shareholder or officer or director in a collection agency.”

Accord, N.Y. State Opinion #549 (1983) (holding that lawyer may, with certain limitations, accept referrals from collection agency of which he is a principal, and may refer clients to the collection agency with informed consent). If there is no prohibition against an attorney’s acting as an officer, shareholder, director or principal of a collection agency, this Committee can perceive of no prohibition to the attorney’s acting as a commission salesman for a collection agency’s services.

Thus, there is no ethical prohibition against inquiring counsel entering into the relationship proposed with the collection agency, and there is no ethical prohibition against inquiring counsel’s advertising for clients in such capacity, whether utilizing his own name or that of a corporate entity set up for the purpose, as long as the content of the advertisement comports with the requirements of DR 2-101(A), and is not false or deceptive.

However — although inquiring counsel has not raised the issue in his inquiry — inquiring counsel should be mindful of potential problems with conducting his non-legal business out of his law office should he hire additional employees to assist him in his non-legal capacity (see, Nassau County opinion #89-31); and inquiring counsel should be mindful of potential conflicts of interest and prohibitions against solicitation should he desire to accept as legal clients any collection clients signed up by him for the agency. See, e.g., Nassau County Opinion #92-12.

[Approved by the Executive Subcommittee on 3/23/94; approved by the Full Committee on 3/30/94]