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New York State Bar Association
Committee on Professional Ethics
Opinion #813 – 05/07/2007 - Clarifies:
N.Y. State 803 (2006)
Topic: Unauthorized
practice of law; debt collection; letterhead
Digest: A lawyer who
provides debt collection services as a non-legal service may not use law
firm letterhead in doing so, but a lawyer who, as a lawyer, represents
clients in collecting debts may use law firm letterhead.
Code: DR 1-106(A),
1-102(A)(4), EC 3-6.
QUESTION
- A lawyer in New York has been retained by several
debt collection agencies, both in New York and out of state, to assist
in the collection of debts. The lawyer has hired employees of the
debt collection agencies to assist in this work, including preparing
letters to debtors. The employees are located in New York and out
of state. May the lawyer use the lawyer’s letterhead in
sending letters to the debtors?
OPINION
- We see no impediment in the New York Code of
Professional Responsibility to a New York lawyer, acting as a lawyer,
using law office letterhead in seeking to collect a debt, assuming no
violation of any other jurisdiction’s rules. In N.Y. State
803 (2006) we addressed an inquiry in which a lawyer wished to engage in
a debt collection business outside of New York without engaging in the
practice of law in the state where that business was conducted.
The lawyer was not admitted in that state. Rather, the inquirer
there sought to assist clients in collecting debts as a non-legal
service, which we assumed was permitted by the rules of that other
state. Our opinion focused primarily on the requirements of DR
1-106(A) where a law firm is offering both legal and non-legal services,
and in particular the requirement that the lawyer advise the client in
writing that the protection of the attorney-client relationship does not
exist with respect to the non-legal services.
- In addition, in paragraph 4 of the opinion we
addressed the implications of DR 1-102(A)(4), which prohibits a lawyer
from engaging in “conduct involving dishonesty, fraud, deceit, or
misrepresentation.” We said:
Similarly, the firm must avoid misleading debtors with
whom it communicates pursuant to the collection activities [citing DR
1-102(A)(4)]. For example, it may not use its law firm letterhead
in communicating with debtors and must otherwise avoid suggesting to
debtors in such communications that the firm or its representatives are
functioning as lawyers engaged in the representation of the
creditor-client or that the firm or its representatives might undertake
legal action on the creditor-client’s behalf.
- This discussion of the use of firm letterhead related
only to the conduct of a collection business as a non-legal activity in
a state where that was permitted. Our concern was that the lawyer
not mislead debtors as to the capacity in which the lawyer is acting, so
as to suggest, for example, that a lawyer has considered the merits of
the claim or is preparing to sue the debtor.
- In the present inquiry, a lawyer proposes to offer
legal services to the lawyer’s
debt-collection-agency clients. In that situation, the
lawyer is acting as a lawyer in seeking to collect the debt, and can use
law office letterhead in doing so.
- We caution that in conducting such a debt-collection
practice, the lawyer must adequately supervise his or her non-lawyer
employees.[1] A lawyer must retain full professional responsibility
and meaningful involvement in supervising the activities of law firm
employees. As we said in N.Y. State 179 (1971), “It would
not be improper to permit a stenographer in the office of the client to
type the collection letters in the form prepared by the attorney and to
forward them to the attorney, who would read, sign and mail the letters
to the debtors in the event the letters met with the attorney’s
approval.” But it would be a violation were the lawyer to
turn the sending of the lawyer’s collection letters over to the
collection agency or to the lawyer’s debt-collection employees
without any meaningful involvement by the lawyer.[2]
- As in N.Y. State 803, we express no opinion on any
question arising out of the rules relating to the unauthorized practice
of law. We do not opine on the law or ethics rules of any other
jurisdiction.[3]
CONCLUSION
- The New York Code of Professional Responsibility does
not prevent a lawyer offering legal services from using the
lawyer’s law firm letterhead in the course of representing clients
in collecting a debt. If the law firm undertakes to offer debt
collection services as a non-legal service in places where doing so is
otherwise permitted, the lawyer should not use law firm letterhead in
doing so, as that would suggest that the lawyer is offering legal
services.
(10-07)
[1]
See EC 3-6 (delegation of tasks to clerks,
secretaries and other nonlawyers “is proper if the lawyer
maintains a direct relationship with the client, supervises the
delegated work, and has complete professional responsibility for the
work product”).
[2]
Cf. Clomon v. Jackson, 988
F.2d 1314, 1320 (2d Cir. 1993) (finding violation of federal law
prohibition on use of “false, deceptive or misleading”
representations or means in debt collection where lawyer did not
determine to whom letters over his name should be sent, did not see,
review or approve letters before they were sent, and did not know to
whom they were sent).
[3]
Indeed, we do not opine on what constitutes unauthorized practice of law
in New York either, because the rules governing unauthorized practice of
law in New York are matters of law, not the Code of Professional
Responsibility. New York Judiciary Law §§ 476-a, 476-b,
478, 484-486.
Related Files
Opinion 813 (Adobe PDF File)
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