Obtaining National Consensus on Key Opinion Practices: An Introduction to the Statement of Opinion PracticesPosted: June 6, 2019
Over several years, the Legal Opinions Committee of the American Bar Association’s Business Law Section (the “ABA Legal Opinions Committee”) and the Working Group on Legal Opinions Foundation (“WGLO”) worked jointly on a project to identify key aspects of customary practice and other practices applicable to third-party legal opinions that are commonly understood and accepted throughout the United States. Third-party legal opinions (also known as “closing opinions”) are sometimes delivered at the closing of a business transaction by counsel for one party to satisfy a condition of the other party’s obligation to close. The purpose of the joint project was to foster a national opinion practice that is widely recognized and endorsed, building upon the “Statement on the Role of Customary Practice in the Preparation and Understanding of Third-Party Legal Opinions,” 63 Bus. Law. 1277 (2008), which was approved by over 30 bar associations and other lawyer groups.
The project was undertaken by a committee of more than 25 members, which included representatives of various state bar groups and others interested in opinion practice. The members included both lawyers who give opinions and lawyers who are counsel to opinion recipients, and whose primary practice areas included commercial finance transactions, capital markets and securities, and real estate.
The result of the project was the recent issuance of the “Statement of Opinion Practices” (the “Statement”) and related “Core Opinion Principles,” both described below, and their approval by many bar associations and other lawyer groups, including the Boston Bar Association.
The Statement of Opinion Practices updates the “Legal Opinion Principles,” 53 Bus. Law. 831 (1998), and selected provisions of the “Guidelines for the Preparation of Closing Opinions,” 57 Bus. Law. 875 (2002) (the “Guidelines”). The Statement covers such topics as the application of customary practice to third-party legal opinions, the role of facts and assumptions and the law addressed by opinions, as well as key aspects of the opinion process. By using relatively concise and direct statements, it is designed to be easily understood by those called upon to interpret opinions and to create a common understanding for opinion givers and opinion recipients and their counsel to facilitate the opinion process.
In connection with preparation of the Statement, the project committee also prepared the Core Opinion Principles, which is a more concise document drawn from the Statement and designed to be incorporated by reference in or attached to an opinion letter by those who wish to do so. The Statement and Core Opinion Principles are accompanied by an “Explanatory Note,” which includes a table of sources from the Legal Opinion Principles and the Guidelines and identifies those provisions of the Guidelines that are updated by the Statement.
The completion, approval and publication of the Statement of Opinion Practices and Core Opinion Principles is a significant accomplishment toward establishing and harmonizing a national third-party legal opinion practice. The authors of this introduction hope that the Statement and Core Opinion Principles will serve the purpose of facilitating third-party legal opinion practice.
Stanley Keller is a Senior Partner in the Boston office of Locke Lord LLP. Steven O. Weise is a Partner in the Los Angeles office of Proskauer Rose LLP. Mr. Keller and Mr. Weise were Co-Chair and Reporter, respectively, for the project group responsible for preparing the Statement of Opinion Practices and related Core Opinion Principles.