ETHICS COMMITTEE OPINION NO. 19-03
THIS OPINION IS ADVISORY ONLY
FACTS
A lawyer licensed to practice law in multiple states, including
North Dakota, would like to obtain a real estate salesperson license
and may pursue a career as a real estate agent. See N.D.C.C. Ch.
43-23 (setting forth the framework and law for licensure of real
estate salespersons in North Dakota). At present, the lawyer does
not actively practice law; the lawyer is not a licensed real estate
salesperson nor has the lawyer submitted an application for licensure.
The lawyer acknowledges hypothetical questions are presented.
While the committee seeks to provide guidance to lawyers, it cannot
provide hypothetical answers to hypothetical questions. With that
said, the committee will generally address the broader question as
to the application of the Rules to a lawyer providing law-related
services.
QUESTIONS PRESENTED
1. Is a licensed active lawyer, who is not currently practicing law,
and who is a licensed real estate salesperson actively working as a
real estate agent, bound by the North Dakota Rules of Professional
Responsibility?
OPINION
I. APPLICABLE NORTH DAKOTA RULES OF
PROFESSIONAL CONDUCT
North Dakota Rules of Professional Conduct, Rule 5.7 is most
applicable in this request. This committee has previously addressed
application of Rule 5.7. See, e.g., Opinion No. 01-03 (addressing a
question of a lawyer performing tax services); Opinion No. 98-07
(addressing a question of a lawyer selling life insurance). The Rule
provides:
(a) A lawyer is subject to these Rules with respect to the provision
of law-related services, as defined in paragraph (b), if the law-
related services are provided:
(1) by the lawyer in circumstances that are not distinct from the
lawyer's provision of legal services to clients; or
(2) in other circumstances by an entity controlled by the lawyer
individually or with others if the lawyer fails to take reasonable
measures to assure that a person obtaining the law-related
services knows that the services are not legal services and that
the protections of the client-lawyer relationship do not exist.
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THE GAVEL
(b) The term “law-related services” denotes services that might
reasonably be performed in conjunction with and in substance
are related to the provision of legal services, and that are not
prohibited as unauthorized practice of law when provided by a
nonlawyer.
N.D.R. PROF. CONDUCT Rule 5.7. Comment 7 to Rule 5.7
provides “real estate counseling” as an example of a law-related
service. Id. It is clear a lawyer working as a real estate salesperson
would be providing a law-related service. Id.; See, e.g., Nebraska
Ethics Advisory Opinion for Lawyers, No. 06-4 (interpreting a
nearly identical version of N.D.R. PROF. CONDUCT Rule 5.7
that “it is clear from both Nebraska Advisory Opinions, as well
as the ethics opinions of other states, that the functions of a real
estate broker or agent are 'law-related services' under the Rules of
Professional Conduct”); Utah Ethics Opinion, No. 17-07 (same).
Rule 5.7 principally exists to protect members of the public from
believing the engagement of a lawyer for a law-related service
provides them “protections normally afforded as part of the client
lawyer relationship.” N.D.R. PROF. CONDUCT Rule 5.7, at cmt.
1. A lawyer may avoid application of some of our Rules by adhering
to Rule 5.7(a)(2) by taking “reasonable measures to assure that a
person obtaining the law-related services knows that the services
are not legal services and that the protections of the client-lawyer
relationship do not exist.” Id. The comments to the Rule provide
some guidance as to what is meant by “reasonable measures”:
“communicat[ing] to the person receiving the law-related services,
in a manner sufficient to assure that the person understands the
significance of the fact, that the relationship of the person to the
business entity will not be a client-lawyer relationship.” Id. at cmt. 5.
This communication should be in writing and done prior to entering
an agreement to provide a law-related service. Id.
II. DISCUSSION
The Rules do not prohibit a lawyer from engaging in law-related
services. Depending on the circumstances, if a lawyer engages in
law-related services the lawyer may be bound by all of the Rules or
may be excepted from some. Id. at cmt. I (citing Rule 8.4 and noting
lawyer conduct, regardless of whether the lawyer is practicing law or
providing only law-related services, would always apply to a lawyer).
The lawyer requesting this opinion, however, has posed hypothetical
scenarios to which this Committee cannot speculate upon.
An active North Dakota lawyer who does not practice law and
engages in the law-related service as a real estate salesperson must
comply with Rule 5.7. Such a lawyer will be bound by the Rules with
respect to providing only real estate services unless the lawyer takes
reasonable measures, under the circumstances, to assure a person
obtaining the real estate services knows that the services are not legal