OBA Ethics Counsel
Ethics Opinion No. 284
Adopted February 17, 1975
Is it ethically proper for an attorney to accept employment from a prospective purchaser of state revenue bonds to render an opinion approving the validity of such bonds, when the state agency selling the bonds requires all bidders, as a condition of their bid, to agree to obtain such an opinion from the aforementioned attorney and to pay him a specified fee prior to their purchase, should they be the successful bidder?
The answer to the inquiry is in the negative, for the reasons set out below.
An agency of the State of Oklahoma is authorized to sell revenue bonds for purposes of financing the construction of public projects. In order to assure investors as to the validity of such bonds, this agency has customarily required an opinion of counsel approving their legality. Although state law forbids the employment of private attorneys by this agency, the agency requires all bidders on such bonds, as a condition of their bid, to agree to pay a named attorney a specified fee for his opinion approving the legality of such bonds prior to their purchase should they be the successful bidder.
This committee has been requested to render an opinion concerning the propriety of this procedure. In view of the legal prohibition against the attorney in question representing the state agency directly, the resolution of this inquiry is then dependent upon the ethical propriety of the manner in which an attorney-client relationship is created between the attorney and the bond purchaser.
In other areas of legal problems, professional ethics have recognized that a client has the right to be represented at all times by counsel of his own selection. Drinker, Legal Ethics 198 (1953); A.B.A. Formal Opinion 10 (1926).
In view of the fact that the bond purchaser is usually an underwriter purchasing with a view towards reselling some or all of the bonds, the legality of such bonds is obviously a matter of great interest and concern to such purchaser. It would therefore appear to be uniquely the prerogative of the bond purchaser to choose its own legal counsel in whose opinion it has confidence and in whom it believes its customers will have confidence. So long as the agency receives the purchase price of the bonds, it should have no concern with respect to whom the purchaser chooses to retain as counsel to render an opinion on their legality.
Disciplinary Rule 2-103(D) provides as follows:
"A lawyer shall not knowingly assist a person or organization that recommends, furnishes, or pays for legal services to promote the use of his services or those of his partners or associates."
Discplinary Rule 2-103(E) prevents an attorney from accepting employment resulting from conduct prohibited under this disciplinary rule. This rule provides:
"A lawyer shall not accept employment when he knows or it is obvious that the person who seeks his services does so as a result of conduct prohibited under this Disciplinary Rule."
Without suggesting in any way that an attorney has requested that the state agency require the prospective bond purchaser to employ him as its attorney (which would, of course, violate Disciplinary Rule 2_103(C)1), if an attorney were to know that such a requirement has been made, as would seem probable if the inclusion of the requirement is a continuing practice of the state agency, his acceptance of the employment under such circumstances would constitute assisting conduct proscribed by the Code of Professional Responsibility.2
Therefore, to summarize the foregoing, a request by an attorney to a state agency that it require purchasers of bonds issued by such agency to employ him, or any one associated with him, to pass upon the legality of such bonds, would be a violation of Disciplinary Rule 2-103(C). Furthermore, an attorney with knowledge that an agency is making such a requirement on a continuing basis who nevertheless accepts such employment would violate Disciplinary Rules 2_103(D) and (E).
1 "A lawyer shall not request a person or organization to recommend employment, as a private practitioner, of himself, his partner, or associate, except that he may request referrals from a lawyer referral service operated, sponsored, or approved by a bar association representative of the general bar of the geographical area in which the association exists and may pay its fees incident thereto."
2 The situation here presented is entirely different than in instances, generally accepted in the underwriting profession, whereby an underwriter, in submitting a bid for a proposed issue, conditions his bid contingent upon the approving opinion of a specific attorney named in the underwriter's bid. In such instances the client (the underwriter) has chosen his own attorney.