concurring and dissenting. While I applaud the Court’s tightening of the rules governing multiple representation in real estate transactions by further narrowing its permissible circumstantial basis, I am afraid that its effort to provide an additional safeguard for consumers of legal services simply does not go far enough. The prophylactic rule announced herein will do little to enhance the likelihood that the quality of representation provided in such circumstances will duplicate that which would be provided by counsel with undivided loyalty. Similarly, the Court’s admonition that attorneys must avoid “any penalization or victimization” of clients who, as a result of economic constraints, consent to dual representation will be far from effective to prevent the various abuses endemic in such situations.
*14On two previous occasions I have sought to enumerate the compelling reasons supporting adoption of a per se rule forbidding dual representation in certain situations where an irreconcilable conflict of loyalty so inheres in the circumstances that adequate protection of the interests of each of the multiple clients is precluded. In re Lanza, 65 N. J. 347, 353 (1974) (Pashman, J., concurring); In re Rockoff, 66 N. J. 394, 397 (1975) (Pashman, J., concurring). I write now to reiterate my adherence to those principles and to note my continuing concern with the Court’s present posture in this troublesome area of professional ethics. The result herein continues the Court’s acceptance of dual representation in circumstances where, notwithstanding full disclosure and knowing consent by the derivative client,1 the intrinsic degree of divided allegiance is so intolerable that the proscribed adverse effect on the exercise of the attorney’s independent professional judgment on behalf of that client must ipso facto be conclusively presumed.2 See D.R. 5-105(B). In so doing, the Court relies on the fiction that a lay client can effectively consent to dual representation and perpetuates the cruel myth that adequate representation can be provided in such cases by an attorney who supposedly can simultaneously protect the inevitably adverse interests of his two masters. The reality, of course, is that it is well-nigh impossible for the derivative client to be so well attuned to the numerous legal nuances of the transaction that his *15consent can be said to have been truly informed.3 The propriety of according dispositive effect to consent so obtained is further undermined when it is frankly acknowledged that the consent is induced by the derivative client’s reliance on a promise by the attorney which cannot be fulfilled — the promise of adequate representation of each of his two clients.
Surely the Court is not so naive as to the economic realities of such transactions as its utopian stance would indicate. Any conflicting interests which are potentially disruptive of the ultimate goal • — • the expeditious consummation of the sales transaction — must inevitably be resolved in favor of the primary client and for that same reason will probably not even be brought to the attention of the derivative client. This problem is even more aggravated in circumstances such as those of the instant case where the primary client of the attorney is a developer with whom the attorney has a potentially long-term and profitable relationship. Consequently, the attorney has a substantial economic *16stake in maintaining the continued goodwill of this primary client. As our Advisory Committee on Professional Ethics has observed, in such situations
* * 4 the attorney, either consciously or unconsciously, will be influenced by a desire to maintain his economically profitable, relationship with the seller. The developer has more homes to sell, hence more profitable professional employment for the attorney. The desire to maintain his relationship will make it difficult in any given case for the attorney to devote himself to the interests of a buyer with the same degree of vigor and undivided loyalty which would be the case were such desire not present. This motivation may very probably cause the attorney’s representation of the buyer to be, less searching, less demanding and in general less effective than would be the case were the attorney not reluctant to risk the loss of what for him has become a profitable monopoly.
A second point, interrelated with the first, stems from the fact that the attorney acquires a very extensive intimate knowledge of the developer and of the tract in question as the result of the work he carries out for the owner. If the developer will not be able or willing to construct roads as rapidly as is represented, if a subcontractor is not doing his work well, if drainage problems exist and have not been solved, if there is a question as to when and how all utilities will be introduced, if, as an example only, the masonry foundations of various homes have proven defective, the attorney in each case will perforce possess this knowledge. These are only a few of the possibilities. Anyone who has had direct contact with projects of this sort will be able to add other examples from his own experience. Undertaking a dual representation, the attorney will find himself in an impossibly equivocal position. As representing the seller, he must use all reasonable and proper means to see that the proposed sale of his client’s property is consummated; as representing the buyer, he has an obligation to reveal any information which would be of genuine interest or help to the buyer in determining whether to make the purchase and in protecting his rights after the contract has been signed. It is apparent that this twofold obligation cannot be met in circumstances where the attorney’s knowledge embraces any fact, known to him as the result of his relationship with the seller, which, if known to the buyer, might influence him to reject the purchase or to insist upon terms or conditions less favorable to the seller.
As mentioned above, there is a very definite interrelationship between these two factors the existence of which we have sought to emphasize. In general they will not be present in the ordinary isolated transaction where an attorney represents both buyer and seller. On the other hand they would seem to be endemic in the kind of *17situation we are considering. Accordingly, it seems clear that unless in any given case these factors for some reason fail to exist or unless their influence can be minimized to the point of complete insignificance, they constitute an insurmountable impediment to the kind of dual representation here being considered.
[New Jersey Supreme Court Advisory Committee on Professional Ethics, Opinion 51, 87 N. J. L. J. 705 (1964), (emphasis added)]
Even assuming that dual representation in an “ordinary isolated” real estate transaction should not he per se impermissible, the practice is wholly unsupportable where the attorney involved is the representative of a developer. The attorney’s economic disincentive to be vigilant in safeguarding the buyer’s interests in such a case is too strong, and a per se prohibition is absolutely imperative. Dual representation in these circumstances forces the derivative client to play with a stacked deck. I cannot countenance the Court’s continued tolerance of such farcical and often duplicitous behavior by some members of the legal profession. The injustice of this is heightened by the fact that it occurs in what for most consumers is the transaction of greatest personal and financial moment in their lifetime in which their need for adequate representation is acute. ' ■
I am similarly distressed by this Court’s continuing con-donation of the concept of “limited” dual representation, first sanctioned in In re Kamp, 40 N. J. 588, 595-596 (1963). By securing the derivative client’s consent to such a limitation on his duty, the attorney, in addition to his plenary representation of the primary client, “represents” the derivative client also as to some matters involved in the closing of title but not as to others. In practical terms what this arrangement means is that at the settlement table, moments after having purportedly acted on behalf of the derivative client’s interest, the attorney will turn on his “former” client and act solely as the advocate for the primary client as to the matters reserved from dual representation. One can readily imagine the bewilderment of the derivative client as he sees the *18attorney transformed from ally to enemy in a matter of seconds. He didn’t bargain for that result when he gave his “consent” to the limits of the dual representation he would receive. Agreeing to allow an attorney not to press certain matters on your behalf is not equatable with agreeing to have him press those very matters against you. This incongruous situation would be ludicrous were it not so tragic. Yet the Court sees fit to perpetuate such an arrangement, which in reality is nothing less than a travesty of the attorney-client relationship and mocks the very concept of the professionalism of lawyers. The impropriety of permitting an attorney to act as both the advocate and adversary of a client in a single transaction is too obvious even for statement.
The Court fails to make its position more palatable by noting that meaningful independent representation for the purchasers in the instant transactions would have been unlikely in any event because of the “rigidities” occasioned by the fact-that the-housing program involved was under “federal auspices.” I am not persuaded that inadequate representation should be acceptable because on some occasions adequate representation might not bear any significant fruit.
Moreover, the Court’s assumption that adoption of a per se prohibition of dual representation in a real estate transaction would somehow prevent persons of modest means from being represented at all is unwarranted. The more likely result of a per se rule will be to alert such persons to the gravity of the contemplated transaction and consequently impel them to secure their own counsel. In this regard it is not inappropriate for us to notice the greater access by consumers to information concerning the cost of legal services as a result of fee advertising in this post-Bates4 era. Considering the more than adequate number of attorneys in this state, it is very likely that representation in such relatively uncompli*19cated matters as residential real, estate settlements at moderate fees will be readily available. Furthermore, the cost of obtaining independent counsel is normally only an incremental addition to the cost of the entire transaction and is a cost that most purchasers would willingly bear if they were aware of its potentially significant benefit. The assumption that such persons will totally forego legal representation rather than spending a relatively insignificant additional amount for an attorney is dubious at best. Naturally, many purchasers will leap at the opportunity to avoid a purportedly unnecessary extra expense when they are misled into believing that the seller’s attorney can and will give them equally effective representation for free or at a lesser cost than if they obtained their own representation.5 However, it does not necessarily follow that prohibition of dual representation will deprive most purchasers of the services of an attorney.
Were these purchasers not induced to believe that the quality of the derivative representation they would receive from the seller’s attorney is the equivalent of any representation they could receive from their own counsel, it is reasonable to assume that they would have obtained independent representation. In short, the Court allows dual representation to be a self-justifying practice by accepting the theory that its sine qua non role in the provision of housing to per*20sons of limited means is proven by the fact that so many persons consent to it. I am unable to concur in that assessment. The incidence of exploitation of unsophisticated purchasers as- a result -of the conflicting loyalties of an attorney with “two clients” counsels against our making such tenuous assumptions.
'It is virtually impossible for an attorney to contend for th'át which duty to another client requires him to oppose. This impossible fact pattern prevents the fulfillment of that undivided loyalty owed by a lawyer to his client. We must decisionally or by Canons of Ethics discourage an attorney from taking any chances where such a highly charged potential for conflict exists. Misconduct may be found despite disclosure and consent.
Absent any explicit demarcation of the line beyond which attorneys tread at their peril in this murky area of ethical behavior, I believe it is inappropriate for the Court to broaden the concept of the type of consent required to avoid a finding of impropriety and then to apply it in an ex post facto manner to the conduct of the particular respondent before us. Is it fair to premise a finding of misconduct on a practice whose ethically violative nature has only this day been explicitly defined? I think not, and for that reason dissent frotii the disciplinary action taken against Mr. Dolan for conduct only technically improper under the present state of the law and which would in all likelihood not have occurred if-this Court has provided attorneys with the needed guidance in the first place. By starkly dramatizing the plethora of pitfalls which await attorneys who are foolhardy enough t-o ■chance a misstep in this precipitous area of professional ■ethics, this case underscores the critical need for a per se -prohibition of dual representation which will deter attorneys ;at the threshold of that hazardous journey.
' While I concur in the reprimand of the respondent for the •conduct described in Section II of the Court's opinion, ■ I hasten to add that my comments herein on the issue of mul*21tiple representation are not addressed to Mr. Dolan’s particular conduct. It is an unfortunate fact of life that respondent is not alone in treading at the razor’s edge of ethical behavior. However, as he was in technical compliance with the disciplinary rules as presently formulated, there is no valid basis for imposing any sanction for the multiple representation disclosed in this record.
Pashman, J., concurring in the reprimand.*
For reprimand — Chief Justice Hughes, Justices Mountain, Sullivan, Pashman and Clifford and Judge Con-ford — 6.
Opposed — None.
The derivative client is the client whose representation by the attorney derives from his participation in a transaction with the party who is the primary client of the attorney. The derivative client is the client to whom disclosure is made and from whom consent to the dual representation is sought.
See New Jersey Supreme Court Advisory Committee on Professional Ethics, Opinion 212, 94 N. J. L. J. 553 (1971) (improper for attorney to continue to represent either party to real estate transaction after controversy has arisen between them).
The most frequent topics of controversy at closing are:
A) Difficulties with the quality of title deliverable by the seller.
B) Disputes over alleged structural defects.
C) Warranties.
D) Unfinished work.
E) Leaks.
E) Cellar problems.
6) Construction of roads and sidewalks in the development on schedule.
H) Drainage problems.
I) Problems as to utilities.
J) Defective masonry foundations.
K) Mortgage and tax escrows —■ amount and interest.
L) Escrows of a part of seller’s money to assure compliance with above problems, including schedule for release of funds.
M) Appropriate remedies for compliance with any agreements concerning the above.
There are, of course, innumerable variations of such problems within the above general areas. These are in addition to the many subjects as to which intolerable conflicts of interest result if the attorney provides dual representation at the contract negotiation stage as well as at the closing of title.
Bates v. Arizona State Bar Association, 433 U. S. 350, 97 S. Ct. 2691, 53 L. Ed. 2d 810 (1977).
In this regard it is noteworthy that in the instant case the developer’s standardized agreement of sale contained the following speeially inserted provision:
If purchaser uses seller’s attorney, the seller will pay the legal fee for title examination, recording of deed and mortgage, survey, mortgage title insurance, appraisal and inspection fees.
The substantial saving for the purchasers resulting from their utilization of the seller’s attorney makes this offer quite persuasive, and vitiates the voluntariness of its acceptance. The Court fails ta comment on the ethical implications of this clause although a functionally indistinct practice was condemned in In re Kamp, 40 N. J. 588, 598 (1963).
only as to § II of the. majority opinion.