The opinion of the court was delivered by: Stein, J.
On review of an opinion of the Committee on the Unauthorized Practice of Law.
In Opinion No. 33 (Opinion 33) the Committee on the Unauthorized Practice of Law (Committee) concluded that "attorneys who are not admitted to practice law in New Jersey are engaged in the unauthorized practice of law when they advise New Jersey governmental bodies in connection with the issuance of state and municipal bonds." We granted the Petition for Review filed on behalf of the Attorney General and the State Treasurer. We hold that the Committee's determination is overbroad and not adequately reflective of the variety of factors that affect the public interest in the regulation of bond counsel services. Accordingly, we modify the Committee's Opinion 33.
The background events that led up to the issuance of Opinion 33, 153 N.J.L.J. 184, 7 N.J.L. 1584 (July 13, 1998), inform the Court's Disposition of this appeal. The unique aspect of this controversy is historical: for most of this century bond counsel services rendered to New Jersey public entities engaged in debt issuance were performed exclusively by out-of-state law firms as a matter of necessity. The New Jersey State Bar Association (NJSBA), which initiated the request for the Committee's advisory opinion, has acknowledged that the "use of foreign law firms and lawyers unlicensed in New Jersey [to perform bond counsel services] was a matter of necessity," observing that in the past "New Jersey lawyers lacked the expertise and national recognition to provide the legal services and render the legal opinions required when the State and its agencies issued bonds."
Within the past two decades, a substantial number of New Jersey law firms have developed the necessary expertise and experience to perform bond counsel services for governmental issuers. We note that The Bond Buyer's Municipal Marketplace Directory, Fall 1998 edition, published by The Bond Buyer's Municipal Marketplace Group (Bond Buyer's Directory or Directory), lists fifty-five New Jersey law firms under the heading of Municipal Bond Attorneys. The requirements for inclusion in the list of municipal bond attorneys are that the law firm, during the two-year period preceding publication, "rendered a sole legal opinion in connection with the sale of state and/or municipal bonds, or served as underwriter's counsel, co-counsel or issuer's counsel for a municipal bond offering." Accordingly, the list of qualified New Jersey municipal bond attorneys undoubtedly reflects substantial variation in the actual expertise and experience among the listed firms. In addition, the Bond Buyers Directory includes a ranking of the top one hundred municipal bond attorneys throughout the country based on the principal amount of long-term issues (maturities of thirteen months or longer) in which the firm was involved. The top-rated firm on the list was involved in 379 bond issues aggregating approximately $24,617,400,000 in principal amount. Three New Jersey law firms were included in the top one hundred firms, and the highest-ranked New Jersey law firm was involved in nineteen bond issues aggregating approximately $1,189,500,000 in principal amount. In addition, six New Jersey law firms were included in the top 100 law firms handling short-term bond issues. The information in the Bond Buyer's Directory suggests that perhaps a group of approximately ten to twenty law firms throughout the country continue to enjoy a significantly greater national recognition for expertise and experience as bond attorneys than that of any New Jersey law firm qualified to perform bond counsel services. The Directory also indicates that of the growing number of New Jersey law firms that have acquired sufficient experience in bond counsel matters to warrant inclusion in the Directory, some of the leading New Jersey law firms appear to have made substantial progress toward achieving broad recognition and stature for their work as bond counsel.
In the mid-1990's, the NJSBA became increasingly concerned about the continued use of out-of-state bond counsel firms by New Jersey public entities. In 1994, Governor Whitman appointed an Advisory Panel on Government Contracting Procedures (Advisory Panel) consisting of the Attorney General, the State Treasurer and the Governor's Chief Counsel. The Governor directed the Advisory Panel to reconsider the State's procedures when engaging in the issuance of bonds as well as the mechanism for selecting underwriters, bond counsel, and other professional advisors. In May 1994, the NJSBA wrote to the Advisory Panel and recommended that the Panel "act to end the retention of out- of-state lawyers to serve as bond counsel to the State of New Jersey and the various state agencies that issue bonds and other obligations." In its Report to the Governor issued in July 1994, the Advisory Panel addressed the issue of out-of-state bond counsel:
"We note with concern the issue raised with respect to the appointment of "out-of-state" firms for bond counsel services. Questions were raised as to the legality or propriety of "out-of-state" firms performing legal services for the State. The Attorney General indicates that a preliminary review of the materials submitted in support of this contention suggests that the law in this area is unsettled. The Attorney General notes that there is no formal opinion that is directly on point in the State of New Jersey. Therefore, the Attorney General has advised that her office will seek a ruling from the New Jersey Supreme Court Committee on the Unauthorized Practice of Law in regard to this issue and that she will prepare submissions to aid the Supreme Court Committee in its review. In any event, we recommend that, in establishing policies and procedures for the selection of bond counsel, issuers provide particular consideration for New Jersey law firms.
It is, therefore, the view of this Panel that counsel be selected pursuant to an established set of criteria that include price as a factor."
In March 1995, the Attorney General promulgated written guidelines for the selection of bond counsel, applicable to the State and its agencies and authorities, that set forth criteria to be used in the selection process including experience with similar transactions, familiarity with relevant state laws, proficiency with relevant federal securities and tax laws, quality of past service, and anticipated fee. Guidelines of the Attorney General for the Selection of Bond Counsel Under Executive Order No. 26 (Guidelines). The Guidelines required that, apart from extraordinary circumstances, only New Jersey law firms be considered in the selection process:
"In the selection of bond counsel each issuer and the Attorney General will provide particular consideration for New Jersey law firms and minority- owned and women-owned law firms. To this end, it is the policy of the Attorney General that, except in extraordinary circumstances, consideration will be given only to those firms with a "bona fide" office in New Jersey, as such term is defined in R. 1:21- 1(a). Each RFP will solicit the following information:
1.The location of each office of the firm noting the number of attorneys resident in each office, whether they are partners or associates and the areas of law they practice; and
2. The participation of women and minorities in the firm, including the number of women partners and associates and minority partners and associates."
However, although the Attorney General's Guidelines were promulgated pursuant to Executive Order No. 26 issued in October 1994, that Executive Order required only that issuers give "particular consideration" to New Jersey law firms, and did not restrict issuers from retaining out-of-state law firms as bond counsel.
Apparently dissatisfied with the response of the State to their concerns about out-of-state bond counsel, the NJSBA in February 1997 formally requested the Committee to render an advisory opinion on the following question: Whether attorneys who are not admitted to the Bar of New Jersey engage in the unauthorized practice of law when they render legal services as bond counsel to governmental units in New Jersey, including the State of New Jersey? In July 1998, the Committee issued Opinion 33 in which it concluded that "attorneys who are not admitted to practice law in New Jersey are engaged in the unauthorized practice of law when they advise New Jersey governmental bodies in connection with the issuance of state and municipal bonds." In reaching that Conclusion, the Committee emphasized that the functions performed by bond counsel for New Jersey issuers primarily involve New Jersey law and that currently no need exists to permit out-of-state lawyers to perform bond-counsel services in New Jersey:
"These are not "multi-state transactions." There are no "inseparable" elements located in different states. There are no "tangled and interwoven elements" from different jurisdictions. On the contrary, the New Jersey bond issues are home-grown, Garden State-only matters. These matters involve only New Jersey -- New Jersey facts, New Jersey governments, New Jersey bonds, New Jersey law. The only non-New Jersey element involved in bond practice is federal tax law. Because New Jersey bond lawyers are equally as skilled in federal tax law as foreign bond counsel -- and federal tax law, by definition, does not vary from state to state -- there is no need for New Jersey to permit the unauthorized practice of law by foreign attorneys whose primary practice is outside the State."
In addition, the Committee noted this Court's observation in In re Opinion No. 26 of the Committee on the Unauthorized Practice of Law, 139 N.J. 323, 340 (1995), that "the determination of whether someone should be permitted to engage in conduct that is arguably the practice of law is governed . . . by asking whether the public interest is disserved by permitting such conduct." The Committee concluded, however, that the "public interest" standard is inapplicable to the performance of bond counsel services in New Jersey by out-of-state law firms. The Committee distinguished the materiality of the public interest standard in In re Opinion 26, supra, noting that in that proceeding the issue concerned a party's right to proceed without any counsel, not with out-of-state counsel, and also that In re Opinion 26 dealt with activities by lay persons that pertained to the practice of law. Accordingly, the Committee declined to apply the public interest standard to test the validity of its Conclusion in Opinion 33.
The Committee also addressed the question whether lawyers unlicensed in New Jersey may perform bond counsel services while employed by a multi-state firm with a New Jersey office:
"Even where an out-of-state firm has opened a New Jersey office, it is still the unauthorized practice of law if the lawyers in that office performing the legal services are not licensed in the State of New Jersey. Opening an office in New Jersey does not grant a license to practice law in this State to the entire legal staff of the out-of- state law firm -- each attorney must be individually licensed to practice law in New Jersey."
During oral argument of this appeal, however, counsel for the Committee acknowledged that out-of-state lawyers properly could be engaged by New Jersey bond counsel to consult on matters relating to New Jersey bond issues and could participate directly in meetings within New Jersey attended by New Jersey counsel and their clients. The Committee's counsel also acknowledged that the Committee's characterization of New Jersey bond counsel practice as involving "Garden State-only matters" was an oversimplification, conceding that certain bond issues involve complex issues of federal law and implicate concerns that require consideration of legal principles not limited to New Jersey law.
The Attorney General, on his own behalf and on behalf of the State Treasurer, filed a Notice of Petition for Review of Opinion 33 and moved to stay application of the Opinion and to remand the matter to the Committee to supplement the record. The application for a stay being unopposed, this Court stayed application of Opinion 33 pending our final resolution of this appeal. We also granted the Petition for Review, and granted the National Association of Bond Lawyers (NABL) and the law firm of Blank, Rome, Comiskey & McCauley leave to appear separately as amicus curiae. We deferred Disposition of the Attorney General's remand motion pending our Disposition of this appeal.
Before we address the legal principles that bear on our resolution of this appeal, we take note of the supplemental factual contentions included in certifications supporting the Attorney General's motion for summary remand and in the briefs filed by amici. The certification of James A. DiEleuterio, Jr., the State Treasurer, described two specific state bond issue transactions of unusual complexity. The first was the $2.8 billion State Pension Funding Bonds, Series 1997A-1997C (the "State Pension Bond Issue"), issued by the New Jersey Economic Development Authority (EDA) to finance the unfunded, accrued pension liability of the State's various retirement systems. The Certification described the State Pension Bond Issue as the largest bond issue ever offered by a state issuer and the first such issue to be distributed worldwide and offered in "retail" denominations of twenty-five dollars per bond. Because of the size, novelty and complexity of the bond issue, State officials retained two law firms, a New Jersey firm and a Philadelphia firm with a New Jersey office. The lead attorney in the Philadelphia firm who performed significant legal services concerning the ...