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Matter of Opinion No. 653 of Advisory Committee on Professional Ethics

Decided: May 4, 1993.

IN THE MATTER OF OPINION NO. 653 OF THE ADVISORY COMMITTEE ON PROFESSIONAL ETHICS


On review of an opinion of the Advisory Committee on Professional Ethics.

Handler, Wilentz, Clifford, Pollock, O'Hern, Garibaldi, Stein

Handler

The opinion of the court was delivered by

HANDLER, J.

This case raises the issue of whether partners in a law firm may simultaneously serve as County Counsel and as counsel to a County Vocational School Board. The Advisory Committee on Professional Ethics determined that such an arrangement created an inherent risk of conflict of interest and, more important, the appearance of impropriety. Accordingly, the Advisory Committee determined that such an arrangement was prohibited.

Pursuant to Rule 1:19-8, petitioners requested review of Opinion No. 653 by this Court, and we granted their petition. The Advisory Committee stayed the effect of Opinion No. 653 pending our decision.

I

On January 1, 1991, Essex County Executive Thomas J. D'Alessio appointed Stephen Edelstein, Esq., a partner in the Schwartz, Simon and Edelstein firm ("the firm"), as Essex County Counsel ("County Counsel"). Pursuant to N.J.S.A. 40:41A-37, the Essex County Board of Chosen Freeholders ("Freeholders") confirmed Edelstein's appointment. The County Counsel serves as the chief legal adviser to the executive branch of county government. Essex County Administrative Code, § 9.4.3(a). The Department of Law, under the County Counsel's supervision, advises the County Executive and all county agencies under the County Executive's jurisdiction. Id. at § 9.4.3(b)(1). The County Counsel renders legal advice on such issues as the form and sufficiency of contracts, deeds, correspondence, and other documents, and also represents the County Executive and agencies under his or her jurisdiction in litigation. Id. at § 9.4.3(b) (ii) and (iii). The County Counsel also renders advisory opinions when requested. Id. at § 9.4.3(b)(v).

On or about January 12, 1991, the Essex County Vocational School Board ("School Board") appointed Lawrence Schwartz, Esq., also a partner in the firm, as general counsel to the School Board. Schwartz had extensive experience in the field of education law and had previously represented the School Board from 1979 to 1986. Before 1979 and from 1987 to 1990, however, the School Board did not have separate counsel; during those periods the County Counsel represented the School Board as part of his or her duties.

The School Board consists of seven persons appointed by the County Executive with the advice and consent of the Freeholders. See N.J.S.A. 40:41A-37(b); N.J.S.A. 18A:54-16. The School Board's powers include purchasing, selling, and improving school grounds, taking and condemning land and other property for school purposes, employing faculty and administrators, and managing school property. N.J.S.A. 18A:54-20. The School Board's budget is determined in conjunction with the Board of School Estimate, which consists of the County Executive, two members of the Board of Chosen Freeholders, and two members of the Vocational School Board of Education. N.J.S.A. 18A:54-27.

On or before March 25, each year, the School Board delivers to the Board of School Estimate an estimated budget for the upcoming school year. N.J.S.A. 18A:54-28. The Board of School Estimate then determines, at a public meeting, the amount of money to be appropriated for the vocational school district, exclusive of any amount to be received from the State, N.J.S.A. 18A:54-29, and certifies that amount to the School Board and to the county's Freeholders. N.J.S.A. 18A:54-29.1. The Freeholders appropriate the certified amount and, unless other arrangements have been made, the county must assess, levy, and collect the required funds. N.J.S.A. 18A:54-29.2. Slightly less than half of the School Board's budget is derived from the county tax levy; the rest is derived from the State and Federal governments.

In the event the School Board were to appeal its appropriated budget, the appeal would be taken to the State's Commissioner of Education. In 1979, such an appeal was taken. At that time, both the School Board and the Board of School Estimate retained special counsel for the appeal. The County is not a party to budget appeals. The record in this case indicates that the Office of County Counsel has never been asked to represent, nor has it ever represented, the Board of School Estimate, either during or before Edelstein's tenure as Counsel.

As noted above, prior to 1979, and from 1987 to 1990, the School Board and County did not have separate counsel. No objection, however, was raised to the arrangement. On or about March 25, 1991, one of the County freeholders wrote to the Advisory Committee on Professional Ethics ("the Advisory Committee" or "Committee") on behalf of himself and another freeholder. The freeholder asked the Advisory Committee whether it was proper for two partners in the same law firm to hold the positions of County Counsel and Counsel to the School Board.

In response, the Advisory Committee issued Opinion No. 653.129 N.J.L.J. 514 (Oct. 17, 1991). The Committee noted that the Essex County Vocational School Board is appointed rather than elected. The Advisory Committee determined that the appointing authority and the funding source for both the County Counsel's office and the School Board are essentially the same. The opinion further observed that earlier Committee opinions addressing similar situations expressed warnings about the appearance of impropriety. Although the Advisory Committee found that an actual conflict may not exist in such situations, it determined that the representation of both the County and the School Board by members of the same firm posed an unacceptable risk of conflict and appearance of impropriety. It concluded that, in specific instances, disqualification would not be a sufficient remedy to address the overriding ethical considerations presented by a conflict, because ...


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