May a lawyer delegate to nonlawyer staff the handling of negotiations with insurance adjusters on the lawyer's clients' claims?

Plain-English summary

The Board of Governors asked the Committee on Professional Ethics to reconsider Opinion 70-7, which had given qualified approval to a lawyer's use of lay personnel in handling contacts and negotiations with insurance adjusters on clients' personal injury claims. The Board reported that lawyers were interpreting that earlier opinion in widely differing ways.

The committee concluded that, as a practical matter, it is doubtful a lawyer may delegate any responsibility for such negotiation to lay employees and avoid the prohibition on aiding the unauthorized practice of law. It reasoned that negotiation of a settlement always involves the exercise of the lawyer's professional judgment, and that even in the simplest personal injury case the negotiation of a settlement most favorable to the client requires the lawyer's judgment and participation. The committee also drew a distinction between a licensed insurance adjuster, who is regulated under Chapter 626, Florida Statutes, and a lawyer's lay employee, who is not.

On that basis the committee held that DR 3-101(A) and the cited ethical considerations do not permit lawyers to delegate to lay persons the handling of negotiations with adjusters on claims handled for the lawyer's clients, and the committee receded from its prior Opinion 70-7 to that extent.

Currency note

This opinion was issued in 1974, before The Florida Bar's adoption of the 2006 revisions to the Rules of Professional Conduct. It applied the former Code of Professional Responsibility, which has since been replaced. Treat this page as historical context, not current guidance. Verify against current Rules 4-5.5 and 4-5.3 before relying on any specific requirement mentioned here.

Common questions

Q: Could a lawyer have lay staff negotiate a client's insurance claim with the adjuster under this opinion?

A: No. The committee concluded that DR 3-101(A) did not permit a lawyer to delegate the handling of those negotiations to lay persons.

Q: Why did the committee treat the negotiation itself as off-limits to lay staff?

A: Because it found that negotiating a settlement always involves the lawyer's professional judgment, so that even in a simple personal injury case the negotiation requires the lawyer's own judgment and participation.

Q: What happened to the earlier Opinion 70-7?

A: The committee receded from Opinion 70-7 to the extent it had approved using lay personnel for adjuster negotiations; the opinion notes 70-7 was since withdrawn.

Background and rules framework

The opinion applied Canon 3 of the former Code of Professional Responsibility and DR 3-101(A), which provided that a lawyer shall not aid a nonlawyer in the unauthorized practice of law, along with Ethical Considerations 3-1 through 3-6 addressing the delegation of tasks to lay employees. Those provisions correspond in current Florida practice to Rule 4-5.5 (unauthorized practice of law) and Rule 4-5.3 (responsibilities regarding nonlawyer assistants), and to Model Rules 5.5 and 5.3. The committee also referred to Chapter 626, Florida Statutes, which regulates licensed insurance adjusters.

Citations and references

Rules of Professional Conduct (as cited, former Code):

• CPR Canon 3; EC 3-1, EC 3-2, EC 3-4, EC 3-5, EC 3-6
• CPR DR 3-101(A) (aiding the unauthorized practice of law)

Statutes:

• F.S. Chapter 626 (regulation of insurance adjusters)

Other opinions cited:

• Florida Opinion 70-7 (receded from; since withdrawn)
• Florida Opinions 70-62, 73-41, 73-43 (delegation to lay employees)

See also

No sibling opinions yet indexed.

Source

• Landing page: https://www.floridabar.org/etopinions/etopinion-74-35/
• Original PDF: https://www-media.floridabar.org/uploads/2017/04/FL-Bar-Ethics-Op-74-35-1.pdf

Original opinion text

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

FLORIDA BAR ETHICS OPINION
OPINION 74-35
September 23, 1974
Advisory ethics opinions are not binding.
Lawyers are not permitted to delegate to lay persons the handling of negotiations with insurance company adjustors regarding claims of the lawyer's clients.
CPR: Canon 3, EC 3-1, EC 3-2, EC 3-4, EC 3-5, EC 3-6; DR 3-101(A)
Opinions: 70-7, 70-62, 73-41, 73-43
Statute: F.S. Chapter 626
Chairman Zehmer stated the opinion of the committee:
The Board of Governors of The Florida Bar has requested the Committee on Professional Ethics to review and reconsider Florida Ethics Opinion 70-7, issued June 2, 1970, in light of the provisions of the Code of Professional Responsibility which became effective October 1, 1970, and related opinions issued since that date concerning the use of "paralegals" or "lay assistants." (See Florida Opinions 70-62, 73-41 and 73-43.)
Opinion 70-7 [since withdrawn] gave qualified approval to a lawyer's use of lay personnel in handling contacts and negotiations with insurance company adjusters in respect to personal injury claims of the lawyer's clients. The opinion cautioned lawyers against permitting such lay employees to assume duties and responsibilities in such negotiations which would amount to unauthorized practice of law, but it did not undertake to define what would constitute the practice of law in respect to such negotiations. The Board of Governors has been confronted with widely differing interpretations of this opinion in respect to activities which the lawyer may ethically delegate to such lay persons. Such negotiations always involve the exercise of the lawyer's professional judgment, so that, as a practical matter, it is doubtful that a lawyer may delegate any responsibility for negotiation to lay employees and avoid the proscription on aiding the unauthorized practice of law.
Canon 3 of the Code of Professional Responsibility and DR 3101(A) implementing that canon specifically require that "A lawyer shall not aid a nonlawyer in the unauthorized practice of law." The ethical considerations underlying this disciplinary rule emphasize "the need of the public for integrity and competence of those who undertake to render legal services" (EC 3-1), and further state that the personal nature of the relationship of client and lawyer must be preserved, because competent professional judgment is the product of a trained familiarity with law and legal processes, a disciplined, analytical approach to legal problems, and a firm ethical commitment (EC 3-2).
Accordingly, EC 3-4 states that proper protection of members of the public demands that no person be permitted to act in the confidential and demanding capacity of a lawyer unless he is subject to the regulations of the legal profession.
Neither the disciplinary rules nor the ethical considerations under Canon 3 of the CPR state whether the negotiation of claims by lay persons amounts to unauthorized practice of law. EC 3-5 provides only some broad guidelines: it is neither necessary nor desirable to attempt the formulation of a single, specific definition of what constitutes the practice of law; functionally, the practice of law relates to the rendition of services for others that call for the professional judgment of a lawyer.
Although EC 3-6 recognizes that lawyers may often delegate tasks to lay employees in order to render legal services more economically and efficiently, the functions that may be ethically delegated are quite limited (see Florida Opinions 70-62, 73-41 and 73-43). Opinion 70-62 specifically states that EC 3-6 does not permit a lawyer to delegate any activity in which the lawyer personally should give his judgment and participation. It seems to us that, even in the simplest of personal injury cases, negotiation of a settlement most favorable to the client necessarily requires the exercise of the lawyer's professional judgment and participation to some extent.
Moreover, there is a valid distinction between the status of a licensed adjuster and that of the attorney's lay employee handling negotiations. The adjuster is hired directly by the insurance company to adjust claims within the limitations permitted by the relevant provisions of Chapter 626, Florida Statutes. The lay employee of an attorney is not a "public adjuster" as defined in that chapter. The client employs the attorney, not a "public adjuster," to prosecute his claim against the wrongdoer and the insurer, and is entitled to the lawyer's participation and judgment in the conduct of negotiations.
For the foregoing reasons, it is the Committee's opinion that DR 3-101(A) and the ethical considerations quoted above do not permit lawyers to delegate to lay persons the handling of negotiations with adjusters in respect to claims being handled on behalf of the attorney's clients. To this extent, the Committee recedes from its prior Opinion 70-7.