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Petition for Review of Opinion 475 of Advisory Committee on Professional Ethics and DR 2-102

Decided: April 28, 1982.

ON PETITION FOR REVIEW OF OPINION 475 OF THE ADVISORY COMMITTEE ON PROFESSIONAL ETHICS AND DR 2-102(C)


On petition for review from the Advisory Committee on Professional Ethics.

For affirmance -- Chief Justice Wilentz and Justices Pashman, Schreiber, Handler, Pollock and O'Hern. For reversal -- None. The opinion of the Court was delivered by Pashman, J. Handler, J., concurring in part and dissenting in part. Handler, J., concurring in the result and dissenting in part.

Pashman

New Jersey law firms have always included only the names of New Jersey lawyers. That custom is now enforced by Disciplinary Rule 2-102(C), which forbids the use of law firm names "unless all those named are or were members of the bar in New Jersey." The purpose of the rule is obvious. It is reasonable to expect that those listed in a law firm name are licensed to practice in this State. If those persons are not so licensed, the firm name is deceptive to consumers of legal services. To the extent law firm names with unlicensed lawyers defeat consumers' reasonable expectations, the disciplinary rule protects the public against deception.

Jacoby & Meyers, a law partnership with offices in California and New York, seeks review of an opinion of the Advisory Committee on Professional Ethics which prohibited it from opening a New Jersey office under the name "Jacoby & Meyers." Neither of petitioner's named partners is or has ever been a member of the New Jersey bar. Petitioner challenges the constitutionality of DR 2-102(C) and urges this Court either to revise the rule or to grant Jacoby & Meyers an exemption from the rule's coverage.

We find that DR 2-102(C) does not invade petitioner's constitutional rights. We therefore deny the relief requested and affirm the Advisory Committee's opinion. At the same time, we have concluded that the effects of the rule and its benefits should be studied further. Our traditional method of rule evaluation is by reference to Supreme Court Committee, report and recommendation by that committee, and finally, a decision by this Court. We will follow that procedure in this case.

Moreover, to permit a full evaluation of DR 2-102(C), we have decided that our ban on television advertising in DR 2-101(D) should also be reconsidered. Jacoby & Meyers uses television advertising in New York that reaches consumers of legal services in this State. Allowing Jacoby & Meyers to affiliate with a New Jersey firm and advertise its name here while using

television in New York would give its New Jersey affiliates an unfair advantage compared to other New Jersey firms. That unfair advantage would exist even if Jacoby & Meyers did not advertise the fact of its New Jersey affiliation on television, and even if the New Jersey firm used only advertising which our rules permit.

Therefore, after the release of this opinion, the Court will refer both rules to a special Supreme Court Committee for its report and recommendations. Given the importance of the matter being considered, we will ask that Committee to subject these issues to intensive study. This will include hearings where all points of view may be expressed. We will ask the Committee to report by January 1, 1983, if possible. We express no view on the merits of this reevaluation.

The Court's responsibility in regulation of the state bar is fundamental. We have plenary and exclusive control over both admission to the bar and the practice of law. We seek to exercise that control in the interests of the public. In a rapidly changing world, we should be careful to remain responsive to the public's needs. However, it would be wrong to alter existing rules, and the legitimate expectations they create, without an understanding of what effects the changes may have. We therefore need a thorough review and study.

Finding no constitutional infirmity in DR 2-102(C), we deny the relief requested by petitioner and affirm the Advisory Committee's opinion.

I

In 1972 Leonard Jacoby and Stephen Meyers, members of the California bar, formed a profit-making law firm to serve a large middle-class clientele with basic, standardized legal services. Beginning in California, the firm expanded considerably during the 1970's using media advertising and operating out of many neighborhood law offices staffed by local attorneys. In 1979 the firm opened neighborhood offices in New York under its California

name, Jacoby & Meyers. A third partner, licensed to practice law in New York, oversees its operations there. Jacoby & Meyers currently has 75 offices. The firm states that it interviews over 500 clients per day, accepting about 600 new matters each week.

Petitioner has indicated its desire to open a New Jersey office. On September 10, 1980, Jacoby & Meyers requested an opinion from this Court's Advisory Committee on Professional Ethics on whether DR 2-102(C) allowed the use of its name in connection with its anticipated practice here. The Committee decided in N.J. Advisory Comm. on Professional Ethics, No. 475, 107 N.J.L.J. 283 (Apr. 2, 1981) (Ethics Opinion 475), that the plain language of DR 2-102(C) forbade the use of Jacoby & Meyers as a New Jersey law firm name because neither Leonard Jacoby nor Stephen Meyers had ever been licensed to practice law in New Jersey. On April 3, 1981, Jacoby & Meyers petitioned this Court for review of the Advisory Committee opinion, pursuant to R. 1:19-8.*fn1

II

The initial question is whether Jacoby & Meyers has "standing" under R. 1:19 to petition this Court for review of the Advisory Committee decision. Petitions for Supreme Court review can be filed by "any aggrieved member of the bar, bar association or ethics committee," R. 1:19-8. NJSBA concedes that the words "member of the bar" do not clearly exclude lawyers from other states, but correctly notes that R. 1:19-8 must be read in conjunction with R. 1:19-2, which defines the Advisory Committee's original jurisdiction. The latter rule allows the Committee to accept inquiries "only from the state bar association, from any county or local bar association, or from any member of the New Jersey bar." R. 1:19-2. Strict application

of the Committee's jurisdictional limitations would compel us to dismiss the petition for review and vacate Ethics Opinion 475.

In view of the public importance of this matter, we choose not to take such a course. This Court has inherent power under R. 1:1-2 to relax any rule to prevent injustice. Granting petitioner's request for review is consistent with the intention of R. 1:19-8, if not its language. The Court adopted R. 1:19-8 contemporaneously with its decision in Higgins v. Advisory Comm. on Professional Ethics, 73 N.J. 123 (1977), which noted that no mechanism existed for appealing Committee decisions. The Court explained that "[u]nder the rule, any proper person in interest, on notice, may petition this Court for review of an Advisory Committee opinion." 73 N.J. at 127 (emphasis added). As a law firm actively seeking to open offices in this State, Jacoby & Meyers is clearly a "proper person in interest." Denying the petition for review on jurisdictional grounds would not be consistent with "fairness in administration and the elimination of unjustifiable expense and delay." R. 1:1-2. Petitioner raises important constitutional questions concerning a rule prohibiting out-of-state attorneys seeking to use their firm names in New Jersey. Petitioner's stake in the outcome is clear and the issues presented are sufficiently defined for our resolution.

The Advisory Committee ruled in Opinion 475 on petitioner's inquiry despite the wording of R. 1:19-2 which excludes Messrs. Jacoby & Meyers from its original jurisdiction. The Committee's action was appropriate under the circumstances. Likewise, pursuant to R. 1:1-2 this Court will relax the jurisdictional requirements of R. 1:19-8 to hear petitioner's claim, because strict application of the rule would both needlessly delay the resolution of an important issue and "result in an injustice." R. 1:1-2.

III

At the outset, we hold that the Advisory Committee correctly applied DR 2-102(C) to the petition of Jacoby &

Meyers. There is no question that the use in New Jersey of the firm name Jacoby & Meyers would violate our Code of Professional Ethics.

Disciplinary Rule 2-102(C) provides that

A lawyer or a professional corporation shall not hold himself or itself out as having a partnership with one or more lawyers or professional corporations unless they are in fact partners. A partnership shall not be formed or continued between or among lawyers licensed in different jurisdictions unless all enumerations of the members and associates of the firm on its letterhead and in other permissible listings make clear the jurisdictional limitations on those members and associates of the firm not licensed to practice in all listed jurisdictions; provided, however, a firm name may not be used in New Jersey unless all those named are or were members of the bar in New Jersey. [Emphasis added].

This disciplinary rule clearly prevents petitioner from using its name in New Jersey. Leonard Jacoby and Stephen Meyers have never been licensed to practice law in this State. The Code provision could not be more explicit in banning the use of their names in a New Jersey law firm. The Committee, limited as it must be to interpretation of the Code of Professional Ethics, correctly applied the existing disciplinary rule.

IV

We now address petitioner's contentions that the provision in DR 2-102(C) barring use of the firm name Jacoby & Meyers unconstitutionally infringes upon the firm's First Amendment rights and violates the Commerce, Privileges and Immunities, and Equal Protection Clauses of the United States Constitution.

A. First Amendment

Petitioner argues that the firm name restriction in DR 2-102(C) violates the First Amendment. Jacoby & Meyers concedes that the use of a law firm name is a form of commercial speech and nothing more.*fn2 We are therefore asked to determine

whether this rule deprives petitioner of its right to engage in commercial expression.

In the past decade, the United States Supreme Court has repudiated the notion that commercial speech does not warrant constitutional protection. The landmark case of Virginia Pharmacy v. Va. Citizens Consumer Council, 425 U.S. 748, 96 S. Ct. 1817, 48 L. Ed. 2d 346 (1976), held that a state could not prohibit all advertising by pharmacists of the prices of prescription drugs. The Court stated that, just as commercial speech "is indispensable to the proper allocation of resources in a free enterprise system, it is also indispensable to the formation of intelligent opinions as to how that system ought to be regulated or altered." 425 U.S. at 765, 96 S. Ct. at 1827. In Bates v. State Bar of Arizona, 433 U.S. 350, 97 S. Ct. 2691, 53 L. Ed. 2d 810 (1976), the Court extended the reasoning of Virginia Pharmacy to protect the advertising of prices of routine legal services.

However, the Supreme Court has never equated commercial speech with political expression. Our society values political expression as an inherent part of the democratic process. Commercial speech, in contrast, is valued and constitutionally protected only to the extent that it conveys facts which facilitate honest commercial transactions. With that in mind, both the U.S. Supreme Court and this Court have said "there can be no constitutional objection to the suppression of commercial messages . . . more likely to deceive the public than inform it." In re Professional Ethics Opinion 447, 86 N.J. 473, 477 (1981), quoting Central Hudson Gas v. Public Service Comm'n, 447 U.S. 557, 563,

100 S. Ct. 2343, 2350, 65 L. Ed. 2d 341 (1980). Moreover, "a different degree of protection is necessary to insure that the flow of the truthful and legitimate commercial information is unimpaired." Virginia ...


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