Ethics Hotline & Opinions

ETHICS DOCKET NO. 1989-01

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MARYLAND STATE BAR ASSOCIATION, INC.

COMMITTEE ON ETHICS

ETHICS DOCKET NO. 1989-01

Lawyer in Second Law-Related Occupation


You first inquire as to the effect of recent legislation upon Ethics Docket 87-48, an opinion of this Committee published in the Maryland Bar Journal  of December 1987. There, this Committee opined that an attorney would violate Rule 1.15 of the Maryland Rules of Professional Conduct if that attorney disburses funds from his trust account during a real estate settlement without possession and immediate deposit of sufficient funds in the form of cash or certified check. Disbursement based on other forms of funds tendered at settlement, i.e. personal checks, bank check, cashier's checks, or wired funds, would result in an impermissible use of other client's funds in the attorney's trust account.

However, recent legislation in the form of Article 10, Section 44 (a) (5), effective July 1, 1988, states:

""Notwithstanding any other provision of law, an attorney may, at settlement, disburse funds received in a real estate transaction, whether received in the form of checks or otherwise.""

Clearly, this statute makes ""legal"" activity by a lawyer which this Committee has viewed to be ""unethical."" The function of this Committee is to interpret the Maryland Rules of Professional Conduct. Those rules are promulgated by the Court of Appeals for controlling the practice of law and for protection of clients. This Committee has reviewed its opinion in Docket 87-48 and feels its opinion is proper and correct due to the dictates of Rule 1.15. Any issues raised by the subject statute or ethics opinion such as conflict of laws, separation of powers or constitutionality of the statute are well outside the province of this Committee. Because the aim of Ethics Docket 87-48 is protection of the client and its underlying logic appear sound, this Committee would recommend the following of Ethics Docket 87-48 until resolution of the effect of Article 10, Section 44 (a) (5).

Your second inquiry is whether lawyers who own or control title companies are bound by the Maryland Rules of Professional Conduct. This Committee has consistently determined that a lawyer engaged in a law-related occupation is bound by the Maryland Rules of Professional Conduct while engaging in that second occupation. Ethics Docket 88-84, 8623.

 

References: Ethics Dockets 1986-23,  1987-48 and  1988-84


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