The New Jersey Supreme Court on July 2 cleared the way for more lawyers to take on pro bono bankruptcy work, especially those from larger firms.
The court overturned an ethics opinion which found that lawyers who do pro bono work for Chapter 7 debtors without any assets have a conflict of interest if their firms happen to represent any of the debtor’s creditors, even in an entirely unrelated matter.
Volunteer Lawyers for Justice (VLJ), a Newark-based pro bono organization, challenged the opinion because the requirement for a conflict waiver was deterring lawyers who wanted to participate, especially those from large law firms that represent large institutional creditors such as banks, phone companies and utilities, to whom the low-income debtors it served often owe money.
The New Jersey state bar association also argued as an amicus for reversal, along with the Pro Bono Institute and clinics at Rutgers-Newark and Rutgers-Camden law schools.
The court has now concluded that there is no conflict and that “this valuable pro bono effort can continue to operate with appropriate safeguards.”
The state bar’s lawyer, Susan Feeney of McCarter & English in Newark, called the court’s decision “critical in helping us mobilize the private bar to take on more work.” If the ACPE opinion stood, “many lawyers would not do the work and others who tried to get the waiver might run into roadblocks.”