On petition for review of an opinion of the Supreme Court Committee on the Unauthorized Practice of Law.
For reversal -- Justices Sullivan, Pashman, Clifford, Schreiber, Handler and Pollock. For affirmance -- None. The opinion of the Court was delivered by Pashman, J.
R. 1:21-1(c) generally prohibits corporations from practicing law in this State.*fn1 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.
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.*fn2 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 education 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 ...