There is pending before the Supreme Court of New Jersey a petition by JAMS, an organization which provides alternative dispute resolution services, to declare its lawyer and retired judge members exempt from complying with certain rules applicable to practicing attorneys such as having to maintain operating and trust accounts and registering with New Jersey’s IOLTA program. JAMS also seeks a ruling that lawyers and retired judges may carry out their services in a non-law office setting. The basis for the petition is the contention that the organization does not provide legal services nor enter into attorney-client relationships, notwithstanding that many of the members are in fact attorneys or retired judges. JAMS’ position is that it should be allowed to open an office for its ADR services in New Jersey, which office would be used by the lawyers and retired judges whom they designate as neutrals. Seemingly implicit in its petition, although not expressed in so many words, is the desire of JAMS to be able to share in the fees received by its personnel. Under present regulations in New Jersey, such would constitute practicing law without a license and would be proscribed.
JAMS initiated this matter in a letter to the Advisory Committee on Professional Ethics (directed also to the Committee on Attorney Advertising and the Committee on the Unauthorized Practice of Law) in August 2016. On May 1, 2017, the committee responded with an opinion concluding that lawyers and retired judges who offer third-party neutral services as arbitrators or mediators nonetheless are engaged in the practice of law and must therefore abide by the pertinent court rules and rules of professional conduct. JAMS then filed a petition with the Supreme Court of New Jersey seeking an order permitting the operation of an office in New Jersey, free of the constraints upon lawyers referenced by the Advisory Committee on Professional Ethics.
The court will consider whether neutrals practicing ADR may do so outside of a traditional law practice setting and also whether JAMS may advertise its neutral services noting that its personnel include retired judges or persons utilizing the designation “Esq.” JAMS argues that other states permit its operation in the way that it espouses, including the states of Pennsylvania and New York, contending that there is no valid reason why it should not be able to do in New Jersey what it can do in other states. It urges that it conducts business in a way that is analogous to a lobbyist or governmental affairs businesses, and thus should be permitted to have an office in New Jersey, inasmuch as it does not provide traditional legal services.
While we appreciate that JAMS is exclusively functioning as neutrals providing non-traditional legal services, nonetheless it also advertises that its members include attorneys and retired judges, both state and federal. Thus, we think that, its position to the contrary notwithstanding, there is no practicable way that members of the public engaging the services of JAMS would not reasonably believe that those services, provided for the most part by lawyers and retired judges, would not be in the nature of legal services. It strains credulity to think that the public would be able to differentiate between JAMS’ personnel functioning as neutrals and JAMS’ personnel simultaneously functioning as lawyers and retired judges. We therefore believe that the Supreme Court should affirm its committees’ opinions and conclude that lawyers and retired judges who offer third-party neutral services are engaged in the practice of law, and as such must abide by the rules governing the practice of law.
Ronald Chen, Richard Hluchan and Anne Singer recused from this editorial.