Can a lawyer employed by an insurance company use a firm name that makes the practice look like an independent law firm?

Plain-English summary

The opinion addresses whether an attorney who is an employee of an insurance company, and who in that capacity represents the company's insureds, may use a law firm name that appears to be that of an independent law firm or otherwise state or imply that he or she practices as an independent firm.

The opinion concludes that an attorney who is an insurance-company employee but states or implies that he or she practices in a separate, independent law firm makes a material misrepresentation of fact and violates HRPC 7.1. Using a firm name, letterhead, business card, or other professional designation to that effect also violates HRPC 7.5. Stating or implying practice in a partnership or other organization, such as a corporation or limited liability company, when that is not the fact violates HRPC 7.5(e).

The opinion states that compliance is achieved if the attorney's letterhead, business card, and other professional designations communicated to clients and the public clearly and accurately describe the attorney's relationship to the insurance-company employer and specify that all personnel associated with the attorney are employees of the insurance company.

In practice

Under this opinion, a Hawaii lawyer who is on an insurer's payroll and represents its insureds must not present the practice as an independent firm, partnership, or company; the name and designations have to disclose the employment relationship to the insurer. The opinion holds that the rules are satisfied when the letterhead and cards accurately describe that relationship and state that the associated personnel are employees of the insurance company.

Common questions

Q: Can insurance staff counsel in Hawaii use a name that looks like an independent law firm?

A: No. The opinion concludes that stating or implying an independent law firm when the lawyer is an insurance-company employee is a material misrepresentation that violates HRPC 7.1 and 7.5.

Q: What about implying a partnership or corporation?

A: The opinion concludes that stating or implying practice in a partnership or other organization, such as a corporation or LLC, when that is not the fact violates HRPC 7.5(e).

Q: How can the lawyer comply?

A: Per the opinion, the letterhead, business card, and other designations must clearly and accurately describe the lawyer's relationship to the insurance-company employer and specify that the associated personnel are employees of the insurer.

Background and rules framework

The opinion interprets HRPC 7.1 (a lawyer shall not make a false or misleading communication about the lawyer or the lawyer's services, including a material misrepresentation of fact) and HRPC 7.5 (a lawyer shall not use a firm name, letterhead, or other professional designation that violates Rule 7.1), including HRPC 7.5(e) on stating or implying practice in a partnership or organization. These correspond to Model Rules 7.1 and 7.5.

Citations and references

Rules of Professional Conduct (Hawaii; cf. Model Rules):

• HRPC 7.1 (false or misleading communications; material misrepresentation of fact) (cf. Model Rule 7.1)
• HRPC 7.5 (firm names and professional designations) (cf. Model Rule 7.5)
• HRPC 7.5(e) (stating or implying practice in a partnership or organization)

See also

• ABA Ethics Op. 03-430: Insurance Staff Counsel Representation and Naming
• ABA Ethics Op. 01-421: Lawyer Under Insurance Company Guidelines

Source

• Landing page: https://dbhawaii.org/legal-ethics-advice-for-hawaii-lawyers/
• Original PDF: https://dbhawaii.org/wp-content/uploads/FO_42.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.
Board M embers

Disciplinary Board of the Hawai#i Supreme Court
201 Merchant Street, Suite 1600
Honolulu, Hawai#i 96813
Telephone (808) 599-1909
www.odchawaii.com

James L. Branham, Esq.
Gary M . Farkas, Ph.D., M BA
Diane D. Hastert, Esq.
Philip D. Hellreich, M .D.
Shelton G.W. Jim On, Esq.
Harrilynn K. Kame#enui, Esq.
Hon. Evelyn B. Lance (Ret.)
Philip H. Lowenthal, Esq.
Jeffrey P. M iller, Esq.
Carolene N. Kawano Neely, M .S.W., M .Ed.
Jeffrey S. Portnoy, Esq.
Irwin J. Schatz, M .D.
Judith A. Schevtchuk, Esq.
Asst. Chief Eugene Uemura, (Ret.), M A.Ed.

Chairperson

Hon. Clifford L. Nakea (Ret.)
Vice Chairperson

Hon. Leslie A. Hayashi
Secretary

Nathan J. Sult, Esq.
Treasurer

Joy M . M iyasaki, Esq.
Filing Clerk

Faye F. Hee
Board Counsel

Bradley R. Tamm, Esq.

FORMAL OPINION NO. 42
CAPTIVE LAW FIRMS
This Opinion concerns whether an attorney who is an employee
of an insurance company, and, in that capacity, represents insureds
of the insurance company, may use a law firm name that appears to
be that of an independent law firm, or otherwise state or imply
that he or she practices as an independent law firm.
HRPC 7.1 provides in part as follows:
A lawyer shall not make a false or misleading
communication about the lawyer or the lawyer's services.
A communication is false or misleading if it:
(a) contains a material misrepresentation of
fact or law, or omits a fact necessary to make
the statement considered as a whole not
materially misleading.
HRPC 7.5 specifies that a lawyer shall not use a firm name,
letterhead, or other professional designation that violates HRPC
7.1.
An attorney who is an employee of an insurance company, but
states or implies that he or she practices in a separate
independent law firm violates HRPC 7.1 by making a material
misrepresentation of fact.
An attorney who is an employee of an insurance company, but
uses a firm name, letterhead, business card, or other professional
designations that state or imply that he or she practices in a
separate independent law firm also violates HRPC 7.5.
Additionally, an attorney who is an employee of an insurance
company, but states or implies that he or she practices in a
partnership or other organization, such as a corporation or limited
liability company, violates HRPC 7.5(e) (lawyers may state or imply
that they practice in a partnership or other organization only when
that is the fact).
Compliance with the above-cited rules can be achieved if the
attorney's letterhead, business card, and other professional
designations communicated to clients and the general public clearly
and accurately describe the attorney's relationship to the
insurance company employer and specify that all personnel
associated with the attorney are employees of the insurance
company.
DATED:

Honolulu, Hawai#i, March 28, 2002
Carroll S. Taylor
Chairperson, Disciplinary Board

UPDATED:

Honolulu, Hawai#i, March 19, 2015

Hon. Clifford L. Nakea (Ret.)
Chairperson, Disciplinary Board

The Disciplinary Board's mission is to maintain the integrity of the legal profession
and protect the public from professional misconduct by attorneys.