Education Law Center, Inc., Matter of

• Decision Date: 20 May 1981
• Citation: 86 N.J. 124,429 A.2d 1051
• Parties: , 26 A.L.R.4th 601 In the Matter of EDUCATION LAW CENTER, INC., Appellant.
• Court: New Jersey Supreme Court

Page 124

86 N.J. 124

429 A.2d 1051, 26 A.L.R.4th 601

In the Matter of EDUCATION LAW CENTER, INC., Appellant.

Supreme Court of New Jersey.

Argued Feb. 24, 1981.

Decided May 20, 1981.

Jeffrey W. Lorell, Teaneck, for appellant (Clapp & Eisenberg, Newark, attorneys).

C. Michael Bryce, Asst. Deputy Public Advocate, for amicus curiae New Jersey Dept. of the Public Advocate (Stanley C. Van Ness, Public Advocate, attorney; Arthur Penn, Asst. Com'r, Trenton, and C. Michael Bryce, on the brief).

Erminie L. Conley, Asst. Atty. Gen., for amicus curiae Attorney General (Judith A. Yaskin, Acting Atty. Gen., attorney).

Gilbert S. Leeds, Morristown, for respondent Committee on the Unauthorized Practice of Law (Richard J. Engelhardt, Trenton, Secretary).

Frank Askin, Newark, submitted a brief on behalf of amici curiae American Civil Liberties Union, American Civil Liberties Union of New Jersey, and Center for Constitutional Rights (Frank Askin, attorney; Elizabeth M. Schneider, Charles Sims, Bruce J. Ennis, New York City, members of the New York bar, and Morton Stavis, Hoboken, of counsel).

Waldron Kraemer, Newark, submitted a brief on behalf of amici curiae Council for Public Interest Law, Center for Law and Social Policy, Center for Public Representation, Inc., Children's Defense Fund, Equal Rights Advocates, Inc., Institute for Public Representation, Mental Health Law Project, National Health Law Program, National Housing Law Project, National Veterans Law Center, NOW Legal Defense and Ed. Fund, Puerto Rican Legal Defense and Ed. Fund, Inc., Women's Law Project, and Women's Legal Defense Fund (Kasen & Kraemer, Newark, attorneys; David B. Isbell, Fred D. Hutchison and William M. Paul, Washington, D. C., members of the District of Columbia bar, of counsel).

The opinion of the Court was delivered by

PASHMAN, J.

R. 1:21-1(c) generally prohibits corporations from practicing law in this State. ¹ In this case we must decide whether this rule applies to a non-profit corporation operating for charitable and benevolent purposes which, as part of its activities, maintains a staff of full-time attorneys to represent private parties without charge in litigation affecting the public interest.

Applying the literal language of R. 1:21-1(c), the Committee on the Unauthorized Practice of Law held that petitioner, Education Law Center, Inc., is engaged in the unauthorized practice of law. For the reasons and subject to the limitations set forth below, we believe the rule should be modified. Further, we call upon the Civil Practice Committee to revise R. 1:21-1(c) to permit the practice of law by non-profit corporations operating for charitable and benevolent purposes in accordance with the guidelines in this opinion.

I

Petitioner, Education Law Center, Inc., (ELC) is organized as a charitable corporation under the laws of this State and is recognized as tax exempt under federal tax laws. ELC was founded in 1973 with a grant from the Ford Foundation and has since continued to receive considerable funding from that source, as well as from several other charitable organizations, government agencies and for-profit corporations.

ELC's area of concern is public elementary and secondary education in New Jersey and Pennsylvania. According to its annual report, it seeks by various means "to insure that all children receive an equal educational opportunity, that no child is denied the benefits of a 'thorough and efficient system of free public schools,' and that educational decision-making is open and responsive to the interests of public education consumers."

Overall responsibility for ELC rests with its Board of Directors, comprised of 25 members, of whom roughly half are lawyers at present, the remainder being educators and others active in community affairs. ELC's paid staff includes an executive director, six lawyers, two paralegals and administrative and support personnel.

ELC's activities include both non-legal and legal work, but the latter predominates. ² ELC's legal services, all of which are provided without charge, are of three types: (1) provision of advice and information to members of the public concerning legal aspects of education issues; (2) intervention on behalf of individuals and organizations in ongoing litigation raising education issues; and (3) representation of members of the public in private litigation or administrative proceedings involving education issues.

ELC's Board of Trustees, while setting overall program priorities for the organization, does not make decisions about individual cases. These decisions are made by the Litigation Review Committee, comprised of six attorney members of the Board of Trustees chosen annually by the Chairman of the Board to oversee legal-policy decision-making for ELC. This committee selects cases based on general, non-confidential information provided by ELC staff. Although ELC does not charge clients for its services, the financial status of the client is not a factor in the selection of cases. Rather, a case will be taken solely on the basis of whether it raises important educational issues.

According to the affidavit of ELC's executive director, once a case has been accepted and an ELC staff lawyer begins to work on it, the Litigation Review Committee has no further involvement in the matter. Instead, according to this affidavit,

The traditional attorney-client relationship exists between the lawyer and the particular client, and the lawyer recognizes an absolute duty of loyalty to the client. Once a lawyer is retained by a client, the client's particular interests guide all decisions made by the lawyer.... (T)he actual conduct of the litigation is under the complete and exclusive control of the lawyer retained by the client. (Emphasis in original)

These general observations are followed in the affidavit by examples intended to illustrate that once an ELC lawyer commences work on a case, that lawyer will "unhesitatingly act in the best interests" of the client, all cases being "aggressively prosecuted long after law reform issues have evaporated." ³

In 1979, ELC's activities were brought to the attention of this Court's Committee on the Unauthorized Practice of Law in a complaint filed with the Committee, R. 1:22-5. ELC submitted two memoranda to the Committee in which it argued strenuously that ELC lawyers maintain full and unfettered attorney-client relationships with persons they represent, and that such relationships are in no way compromised or interfered with by any other ELC personnel or board members. Nonetheless, the Committee found, as expressed in its brief opinion, that "the attorneys employed by E.L.C. are agents of the corporation whose prime consideration may be their employer's interests rather than the interest of the client." Consequently, the Committee held that ELC "is engaged in the unauthorized practice of law by acting contrary to the provisions of Rule 1:21-1(c)," which prohibits the practice of law by corporations. We granted ELC's petition for review of the Committee's decision, R. 1:19-8, and stayed that decision pending our review.

We share the Committee's concern that the provision of legal representation by staff attorneys of a corporation creates the danger that those attorneys may be subject to pressures from the corporation and that the attorney-client relationship may be interfered with. However, we are satisfied that because of the scrupulous care taken by ELC to avoid these dangers, they are not present in this case. Furthermore, we recognize the important role which charitable and benevolent organizations such as ELC play in pursuing legal questions of public importance, thereby benefiting groups or individuals who might otherwise go unrepresented.

Consequently, we hold that ELC is engaged in the practice of law but that such practice is not unauthorized under our Rules.

II

Our principal concern in this case derives from our responsibility to insure that the highest standards of integrity and professional responsibility are maintained in the relations between attorneys and their clients. We have recently endorsed the following views on this subject:

There are few of the business relations of life involving a higher trust and confidence than that of attorney and client, or, generally speaking, one more honorably or faithfully discharged; few more anxiously guarded by the law, or governed by sterner principles of morality and justice; and it is the duty of the court to administer them in a corresponding spirit, and to be watchful and industrious, to see that confidence thus reposed shall not be used to the detriment or prejudice of the rights of the party bestowing it. (In re Loring, 73 N.J. 282, 289-90, 374 A.2d 466 (1977), quoting Stockton v. Ford, 52 U.S. (11 How.) 232, 247, 13 L.Ed. 676, 682-83 (1850))

See also In re LiVolsi, 85 N.J. 576, 428 A.2d 1268 (1981).

The attorney-client relationship must rest upon the principle that "an attorney owes complete and undivided loyalty to the client who has retained him. The attorney should be able to advise the client in such a way as to protect the client's interests, utilizing his professional training, ability and judgment to the utmost." In re Dolan, 76 N.J. 1, 9, 384 A.2d 1076 (1978). Cf. DR 5-105 (lawyers must avoid conflicts of interest in representation); DR 5-107 (lawyers must avoid being influenced by others than their clients).

It is our constitutional duty to regulate "the admission to the practice of law and the discipline of persons admitted," N.J.Const. (1947), Art. 6, § 2, par. 3. In our exercise of this duty we are guided not by any desire to confer upon lawyers "a professional monopoly, but rather to serve the public right to protection against unlearned and unskilled advice in matters relating to the science of the law," Auerbacher v. Wood, 142 N.J.Eq. 484, 486, 59 A.2d 863 (E & A 1948), and to ensure, insofar as possible, that the highest standards...