Alternative Dispute Resolution.
Alternative Dispute Resolution. (Shutterstock)

The New Jersey Supreme Court has agreed to consider whether alternative dispute resolution service JAMS should be allowed to operate in the state free of ethics rules on trade names, trust accounts and other issues.

The court on Oct. 4 agreed to review a joint determination by three of its panels—the Advisory Committee on Professional Ethics, the Committee on the Unauthorized Practice of Law and the Committee on Attorney Advertising—finding that JAMS, since it provides legal services, must abide by the Rules of Professional Conduct.

That determination, issued last May 1, means Irvine, California-based JAMS would have to maintain a business operating account, a trust account and a bona fide office if it is to conduct business in the state. JAMS would also likely have to operate officially under a different name, one that more accurately reflects the identity of the person in charge of the New Jersey office.

JAMS is comprised largely of lawyers and retired judges, and offers third-party dispute resolution services. It also offers continuing legal education courses for attorneys.

JAMS, founded in 1979 in California as Judicial Arbitration and Mediation Services, merged with New York’s Endispute in 1994, forming JAMS/Endispute, the largest ADR company in the nation. Five years later, the name was shortened to JAMS.

JAMS has offices in New York and Philadelphia; parties in dispute in New Jersey that wish to use JAMS’ services must travel to those offices.

James Margulies of Margulies Wind in Jersey City, an attorney representing JAMS, said the company is hoping to expand its services within the state’s borders.

In its letter request to the court’s committees, JAMS said it should be treated as something akin to a lobbying firm that, while staffed by lawyers, does not provide traditional legal services. JAMS, unlike other law firms, does not represent specific clients, the letter contended, but instead offers services to multiple parties in the same dispute.

All three committees agreed that the business of offering legal services is changing rapidly, but disagreed with JAMS’ arguments.

“[W]hen a lawyer serves as a third-party neutral, the lawyer is engaged in the practice of law,” the committees said in their joint letter.

As such, that lawyer is bound by the RPCs, the committee said.

“The committees find that a company offering third-party neutral services by lawyers and retired judges and a company offering lobbying services by lawyers and non-lawyers are not analogous,” the committees said.

“JAMS, in its marketing materials, touts the legal acumen and skills of the lawyers and retired judges associated with it,” the committees added. “The clients who retain a JAMS lawyer or retired judge certainly expect the professional to abide by the ethical standards and are entitled to rely on the basic protections and ethical conduct mandated by” the RPCs.

Contact the reporter at mbooth@alm.com.

Trenton Bureau Chief New Jersey Law Journal American Lawyer Media 856-220-8821 mbooth@alm.com