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Issue  59  Article  123
Published:  6/1/2000

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Revised Proposed 99 Formal Ethics Opinion 13: Attorney’s Supervision of Closing - with comment
Chris Burti, Vice President and Legal Counsel

After a great deal of heated debate and discussion, the North Carolina State Bar has handed down a revised proposal for FEO 99-13. The original proposal would have permitted non-lawyers to close residential real estate transactions without an attorney present. This original proposal caused a furor within the real property bar. After receiving input from the Real Property Section of the North Carolina Bar Association, over seventy attorneys and other organizations, the Council revised the opinion. The Section, and most of the attorneys, took the position that the actual presence of an attorney was indispensable in closing real property transactions.

These views are articulated in the opinion where it states that the "closing conference is the primary opportunity that the lawyer has to meet with the parties, to explain the closing documents, to define the client's rights and obligations, and to answer questions. More importantly, the closing conference may be the only opportunity that the lawyer has to intercede when the interests of the clients are threatened. Many, if not all, of these activities involve—and competent representation should require—the giving of advice and opinion upon the legal rights of the clients. The giving of such advice and opinion is the practice of law."

The proposed opinion goes further in permitting non-lawyers to supervise the execution of the documents, after the closing conference, without the immediate presence of the attorney. In addition, the opinion discusses the requirements of supervision of non-lawyers and recommends considerations for the attorney en carrying out that supervision. It states that a "lawyer should give such nonlawyers appropriate instruction and supervision concerning the ethical aspects of their employment…and should be responsible for their work product. The measures employed in supervising nonlawyers should take account of the fact that they do not have legal training and are not subject to professional discipline."

Most attorneys in residential, real property practice are under pressure to streamline the process while the workload in a given transaction increases and the operating margin decreases. In order to meet these demands and remain profitable, attorneys must become more efficient. One highly effective way to do this is to utilize non-lawyer staff appropriately. In a busy practice, it is difficult to avoid over-reliance on paralegals as we are caught up in the hustle and bustle meeting all of these conflicting demands. When this over-reliance crosses the line into virtually practicing law, it produces problems in more ways than just those ethical issues stated in the opinion.

Placing too much responsibility on paralegals almost invariably leads to premature burnout. We are in daily contact with paralegals all across the state. We see many of the best and brightest quit doing real property work at the point where their training and experience make them the most valuable. When asked why, stress is usually the reason given. If they are willing to discuss it in more depth, time pressure and the assignment of responsibilities they feel belong strictly to the attorney are most often cited as the cause of the stress.

Another significant problem arises in the public’s perception of legal practice. In numerous articles, we have emphatically stated our convictions concerning the role of the attorney in real property transactions and do not have space to repeat it here. There should be no question among informed, rational people about the very real protection competent, legal representation provides to all participants in the process. Over-utilization of paralegals gives the erroneous perception to non-lawyers that "anyone can do it". Thus, it appears to provide ammunition to those who argue for permitting non-lawyers to do title examinations and closings without the supervision of attorneys.

In conclusion, we believe the proposed opinion should be adopted as a consumer protection measure that all practitioners can agree with. For those properly concerned with efficiency, we urge appropriate utilization of technology. The full text of the opinion follows.

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