2014 Formal Ethics Opinion 10: Lawyer Owned Adoption Agency

North Carolina State Bar Building Photo Courtesy of the North Carolina State Bar

View the Formal Ethics Opinion in Full Here

The Formal Ethics Opinion 2014 FEO 10, republished during the April 2015 meeting, rules that a lawyer who handles adoptions as part of her or his law practice and also owns a financial interest in a for-profit adoption agency may, with informed consent, represent an adopting couple who is utilizing the services of his or her adoption agency.  However, the lawyer may not represent the biological parents, just the adoptive parents.

In such a situation, the attorneys own a limited liability company adoption agency.  They have two separate spaces for the firm and the adoption agency.  They have separate phone numbers, signage, etc.  An unaffiliated social worker conducts a home study of an adopting couple, and if the study is approved, the couple engages a lawyer to represent their interests.  This couple may not be a client of the attorneys associated with the adoption agency.  In the instances where the attorneys meet with an adopting couple and they discuss the process, if the services of an adoption agency are needed, they will refer to another adoption agency, not affiliated with the lawyers.

The attorneys involved in the adoption agency may co-manage and accept compensation as managers as their adoption agency and provide legal services to the adopting couple and to their adoption agency.  In this instance, the attorneys must just recognize and manage conflicts of interest.  One type of concurrent conflict of interest that may exist under the comments of Rule 1.7 is that the lawyers own interests should not be permitted to have an adverse effect on reputation of a client and they may not allow related business interests to affect representation.  Before the lawyers can get involved with an adopting couple, the agency must determine the attorneys can adequately protect the interests of the adopting couple and that their professional judgment on behalf of the adoption couple will not adversely affect the agency.

The opinions states that the lawyers must comply with Rule 1.8 regarding business transactions with clients, and Rule 5.7 regarding when a client-lawyer relationship exists with a person who is referred by a lawyer to an ancillary business controlled by the lawyer.  A lawyer must make disclosures and secure the requisite consent before providing legal related services to the client.

It is important to note that the lawyers may not simultaneously represent the adopting couple, the agency, and the birth parents.  That would be a concurrent conflict of interest that is impermissible and the inherent conflicts cannot be reconciled.  Any communication had between the attorneys and the birth parents must be dealt with by Rule 4.3 in dealing with a client who is not represented by counsel where they cannot give legal advice or state or imply that the lawyer is disinterested.  Any communication must be limited to providing or collecting information to be used to complete the forms required by the agency.

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About Regan Gatlin, Ethics Editor (42 Articles)
Regan Gatlin is a 2016 graduate and served as the Ethics Editor for the Campbell Law Observer for the 2015-2016 academic year. Regan graduated from North Carolina State University in 2013 with a Bachelor of Arts in Political Science and a minor in Sociology. Regan has previously clerked for the Insurance Section of the North Carolina Department of Justice, The General Counsel of The Select Group, and Safran Law Offices. During her experiences clerking, she gained civil litigation and research experience in the areas of insurance, construction law, labor and employment, and compliance. She also competed on a Campbell Law Trial Team in the Buffalo-Niagara Mock Trial Competition and the American Association for Justice (AAJ) Mock Trial Competition. Regan is from Smithfield, North Carolina.
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