Can a lawyer who is also a licensed insurance broker sell insurance products to the public and to her own legal clients?
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This page answers the general question as of 2001. Ezel answers yours: whether it's allowed on your facts, under the current rules of professional conduct in your state, with citations.
Plain-English summary
Opinion 306 (adopted February 2001) responded to a D.C. lawyer who was also a licensed insurance broker and wanted to practice law and sell insurance from the same office, including to her legal clients. Building on Opinion 226, the Committee concluded the Rules do not bar a lawyer from running a separate business, so long as doing so does not violate the Rules, and that a lawyer wearing two "hats" must comply with the applicable Rules regardless of which role she is in.
When selling insurance to non-clients, the lawyer was not acting as a lawyer, but as a Bar member she still had to follow the Rules that apply to lawyers in non-lawyer capacities, principally Rule 8.4's bar on dishonesty, fraud, deceit, or misrepresentation. The opinion concluded she should make clear she was acting only as an insurance broker, not as a lawyer, so as not to inadvertently create an attorney-client relationship or an expectation that she was exercising legal judgment.
When selling insurance to an existing client, the lawyer was entering a business transaction with the client, governed by Rule 1.8(a). The opinion concluded she had to ensure the terms were fair and reasonable and disclosed in writing, advise the client of the right to seek independent counsel and give a reasonable opportunity to do so, and obtain the client's written consent. She also had to satisfy Rule 1.7(b)(4): she could not let the prospect of an insurance commission cloud her judgment about whether the client actually needed the insurance, and could proceed only after full disclosure of her own interest (including that she would earn commissions) so the client could give informed consent under Rule 1.7(c). If a duty to the insurer prevented full disclosure to the client, or if her confidentiality duty under Rule 1.6 or honesty duty under Rule 8.4 could not be reconciled with the sale, she could not proceed. The opinion noted the weight of authority from other jurisdictions agreed.
Currency note
The D.C. Bar flags this opinion with the note: "See how Opinion 306 has been substantively affected by the amendments to the D.C. Rules of Professional Conduct that became effective on February 1, 2007." Several of the conflict rules on which this opinion relied were revised in that amendment, which postdates this 2001 opinion. Treat this page as historical context, not current guidance, and verify against the current D.C. Rules of Professional Conduct before relying on any specific requirement described here.
Common questions
Q: Can a lawyer who is also an insurance broker sell insurance to the public?
A: The opinion concluded yes. The Rules do not bar a lawyer from a separate business; when selling to non-clients she still had to follow the Rules that apply to lawyers in non-lawyer roles, chiefly Rule 8.4's bar on dishonesty, and make clear she was not acting as a lawyer.
Q: What did the lawyer have to do to sell insurance to her own legal client?
A: The opinion concluded that selling to a client is a Rule 1.8(a) business transaction: fair and reasonable terms disclosed in writing, advice of the right to and a chance to seek independent counsel, and the client's written consent.
Q: Could the prospect of an insurance commission affect the advice?
A: The opinion concluded the lawyer had to ensure under Rule 1.7(b)(4) that her professional judgment would not be impaired; she could not let the chance to earn a commission cloud her judgment about whether the client actually needed the insurance, and had to disclose her financial interest.
Q: What if a duty to the insurer conflicted with the duty to the client?
A: The opinion concluded that if the lawyer's obligation to the insurer precluded full disclosure to the client, or required disclosing the client's confidences, she could not proceed with the insurance transaction.
Background and rules framework
The opinion interpreted D.C. Rule 1.8(a) (business transactions with a client: fair terms, written disclosure, opportunity for independent counsel, written consent), Rule 1.7(b)(4) and 1.7(c) (conflicts from the lawyer's own financial interest, and consent after full disclosure), Rule 1.6 (continuing duty of confidentiality), and Rule 8.4 (misconduct, including dishonesty in a non-lawyer role). It built on prior D.C. Opinion 226 and cited ethics opinions from New York, New Hampshire, and other jurisdictions.
Citations and references
Rules of Professional Conduct:
- D.C. RPC 1.8(a) / Model Rule 1.8(a) (business transactions with a client)
- D.C. RPC 1.7(b)(4), 1.7(c) / Model Rule 1.7 (own-interest conflicts; consent after disclosure)
- D.C. RPC 1.6 / Model Rule 1.6 (confidentiality)
- D.C. RPC 8.4 / Model Rule 8.4 (misconduct; dishonesty)
Other opinions cited:
- D.C. Ethics Opinion 226 (1992)
- N.Y. State Bar Opinions 619 (1991) and 687 (1997); N.H. Bar Op. 1998-99/14
- South Carolina Op. 98-29; Utah Op. 146A; Michigan Op. RI-135; Illinois Op. 90-32
See also
- AL Ethics Op. 1987-161: Lawyer-Realtor Closings
- ABA Formal Op. 00-418: Taking Equity in a Client
- DC Ethics Op. 319: Buying a Legal Claim From a Nonlawyer
Source
- Landing page: https://www.dcbar.org/for-lawyers/legal-ethics/ethics-opinions-210-present/ethics-opinion-306
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