The federal Fair Debt Collection Practices Act [15 U.S.C.A. Section 1692 et seq] compels lawyers who engage in debt collection to state that they are "debt collectors". But that doesn't satisfy the Rules of Professional Conduct say the New Jersey Supreme Court's Advisory Committee on Professional Ethics and its Committee on the Unauthorized Practice of Law in joint opinions UCPL 48 and ACPE 725. Lawyers may not simply lend their names and letterhead to demands to pay, the Committees have ruled, echoing their own opinions and the ABA 's 1976 Informal Ethics Opinion 1368 on mailing mass form letters:
[T]he lawyer must “accept full professional responsibility” for the collection effort; “independent judgment [is] required to see that each letter sent is accurate and appropriate as to the account of the debtor when it is sent.” The UPLC and ACPE agree with this ABA opinion.Brushing aside the suggestion that compliance with the FDCPA suffices, the Committees declared:
Exercising independent professional judgment is a fundamental and indispensable
element of the practice of law. A lawyer who fails to exercise independent professional
judgment has abdicated the practice of law, has demonstrated a lack of competence, and has committed gross negligence, in violation of RPC 1.1(a).
While the FDCPA arguably permits a law firm to send debt collection letters in a lay capacity, New Jersey ethics rules have always prohibited the practice. The ACPE, in Opinion 657, 130 N.J.L.J. 656 (February 24, 1992), 1 N.J.L. 129 (February 17, 1992), found that a lawyer may engage in both a legal and a nonlegal business provided the two businesses are entirely separate, in physically distinct locations, and there is no joint advertising or marketing or demonstration of a relationship between the two businesses. Hence, while a lawyer may engage in a nonlegal or lay debt collection business, a lawyer may not operate that nonlegal business from a law firm. Therefore, a New Jersey law firm may not engage in the lay debt collection business.The Committees' published opinions are binding on all New Jersey lawyers, but are subject to discretionary review upon petition by any affected lawyer or bar association.