SOLICITATION -- INTERMEDIARIES -- LOAN PAPERS PREPARED BY INTERESTED FIRM -- Notwithstanding a borrower's desire to utilize his own attorney, it is not improper for a building and 1oan association to demand that all papers incidental to its loan transactions be prepared by a law firm of its choice even though one of the firm's members is an officer of the loan association, and the costs of the preparation are charged as part of the transactions.
Canons 24, 32.
Where a Building and Loan Association has selected as its own attorneys a law firm which owns stock in said association, and one of whose members is an officer in said Association, but whose law offices are separate and apart from said Association, and said Association requires before it will make a loan that only its own attorneys prepare all papers in connection with all loans made by it, it is a violation of the canons of ethics for the attorneys thus selected to prepare, and to charge for the preparation of, such loan papers, where the borrower is very desirous that his own attorney prepare such papers?
A majority of the members of the committee are of the opinion that a Building and Loan Association has the right to select its own attorneys and to require that its own attorneys prepare all papers in connection with any loan made by it, and that such selected attorney does not violate any canon of ethics in accepting employment to prepare such loan papers. One member so voting thinks, however, there would be a violation of Texas Canon 24 and possibly of Texas Canon 32 if any member of said law firm, as a director in said Association, participated in establishing such policy. All committee members agree that the interpretation given by the committee in this instance must be confined strictly to the facts stated in the question. (5-3)