Code of Professional Conduct

CHAPTER VII.  OUTSIDE INTERESTS AND THE PRACTICE OF LAW

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RULE

The lawyer who engages in another profession, business or occupation concurrently with the practice of law must not allow such outside interest to jeopardize the lawyer's professional integrity, independence or competence.¹

Commentary

Guiding Principles

1. The term "outside interest" covers the widest possible range and includes activities that may overlap or be connected with the practice of law, such as engaging in the mortgage business, acting as a director of a client corporation, or writing on legal subjects, as well as activities not so connected such as a career in business, politics, broadcasting or the performing arts.   In each case the question of whether the lawyer may properly engage in the outside interest and to what extent the lawyer will be subject to any applicable law or rule of the governing body.²

2. Whenever an overriding social, political, economic or other consideration arising from the outside interest might influence the lawyer's judgement, the lawyer should be governed by the considerations declared in the Rule relating to conflict of interest between lawyer and client.³

3. Where the outside interest is in no way related to the legal services being performed for clients, ethical considerations will usually not arise unless the lawyer's conduct brings either the lawyer or the profession into disrepute,⁴  or impairs the lawyer's competence as, for example, where the outside interest occupies so much time that clients suffer because of the lawyer's lack of attention or preparation.

4. The lawyer must not carry on, manage or be involved in any outside business, investment, property or occupation in such a way that makes it difficult to distinguish in which capacity the lawyer is acting in a particular transaction, or that would give rise to a conflict of interest or duty to a client.⁵   When acting or dealing in respect of a transaction involving an outside interest in a business, investment, property or occupation, the lawyer must disclose any personal interest, must declare to all parties in the transaction or to their solicitors whether the lawyer is acting on the lawyer's own behalf or in a professional capacity or otherwise, and should adhere throughout the transaction to standards of conduct as high as those that this Code requires of a lawyer engaged in the practice of law.

5. The lawyer who has an outside interest in a business, investment, property or occupation:

1. must not be identified as a lawyer when carrying on, managing or being involved in such outside interest; and
2. must ensure that monies received in respect of the day-to-day carrying on, operation and management of such outside interest are deposited in an account other than the lawyer's trust account, unless such monies are received by the lawyer when acting in a professional capacity as a lawyer on behalf of the outside interest.

6. In order to be compatible with the practice of law the other profession, business or occupation:

1. must be an honourable one that does not detract from the status of the lawyer or the legal profession generally; and
2. must not be such as would likely result in a conflict of interest between the lawyer and a client.

NOTES

1. Cf. CBA-COD 6; B.C. B-8; N.B. F-3; IBA D-1.   This Rule is closely connected with the Rule relating to conflict of interest between lawyer and client.  (Return to Rule)
   
   
2. In Quebec, s. 122(1)(b) of the Bar Act provides that a person shall become disqualified from practising as an advocate when "he holds a position or an office incompatible with the practice or dignity of the profession of advocate."

   Sask. 7 and Que. 4.01.01(c) prohibit lawyers from having an interest in collection agencies.   Cf. Orkin at pp. 188-90.   (Return to Commentary 1)
   
   

3. B.C. B-8 identifies the dangers "...that make it difficult for a client to distinguish in which capacity [the lawyer] is acting in a particular instance or which could give rise to a conflict of interest or duty to a client."

   For a discussion of "independent judgment" as it may be impaired by outside interests, see Weddington, "A Fresh Approach to Independent Judgment" (1969) 11 Ariz. L.R. 31.  (Return to Commentary 2)
   
   

4. In Re Weare (1893), 2 Q.B. 439 (C.A.) the striking off of a solicitor who had knowingly rented his premises for use as a brothel was sustained by the court.   (Return to Commentary 3)
   
   
5. Further examples of outside interests that could, unless clearly disclosed and defined, confuse or mislead persons dealing with a lawyer engaging in them include:
   • professions such as accountancy and engineering;
   • occupations such as those of merchant, land developer or speculator, building contractor, real estate, insurance or financial agent, broker, financier, property manager, or public relations adviser.  (Return to Commentary 4)

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