Can a Florida lawyer take a cut of a title insurance fee for endorsing a title company's commitment without telling the client?

Plain-English summary

A title insurance company approached a lawyer to establish a program under which the lawyer would ask the title company for a commitment; the company would prepare and sign a title commitment in usual form and send it to the attorney with a photocopy of its search; the attorney would spend whatever time he wished looking at the search, add a stamped or typed endorsement stating the title appears as the company says and sign his name; and the title company would then remit a substantial percentage of the title insurance fee to the lawyer. The lawyer asked whether he could properly participate.

The committee found the program improper for at least two separate reasons. First, the program did not provide for notice to the client of the lawyer's financial interest and motivation in using the particular title company, and full disclosure to the client is mandatory. Second, the "fee" paid to the lawyer bore no relationship to the services performed and, depending on the circumstances, might be little more than a kickback; lawyers may accept compensation only for services rendered, and charges for services must comply with DR 2-106. (The opinion's headnote points to Opinion 75-27, which later addressed a disclosed version of the practice.)

Currency note

This opinion was issued in 1975, 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. The committee later revisited related title-company fee arrangements in Opinions 75-27 and 75-40. Treat this page as historical context, not current guidance. Verify against current Rules 4-1.8 and 4-1.5 before relying on any specific requirement mentioned here.

Common questions

Q: Can a lawyer take a title company's fee for endorsing its commitment?

A: The opinion concluded the lawyer may not do so without full notice to the client, and that a fee bearing no relationship to services performed may be little more than a kickback.

Q: Why was the arrangement improper?

A: Per the opinion, it gave no notice to the client of the lawyer's financial interest in using that title company, and the fee was unrelated to services; lawyers may accept compensation only for services rendered under DR 2-106.

Q: Did The Florida Bar ever approve a version of this?

A: The headnote references Opinion 75-27; the committee later addressed disclosed title-examination fee arrangements in Opinions 75-27 and 75-40.

Background and rules framework

The opinion applied DR 2-106 of the former Code of Professional Responsibility, governing fees, against the requirement of full disclosure where the lawyer has a financial interest. Those subjects correspond to Model Rule 1.8 (a lawyer's interests adverse to the client) and Model Rule 1.5 (fees); the current Florida counterparts are Rules 4-1.8 and 4-1.5.

Citations and references

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

• CPR DR 2-106 (fees; compensation only for services rendered)

Other opinions cited:

• Florida Bar Opinion 73-1; the headnote references Opinion 75-27

See also

• FL Bar Ethics Op. 75-27: Examining Title Work for a Fee
• FL Bar Ethics Op. 75-40: Title Company Fee to Lawyer
• FL Bar Ethics Op. 76-36: Undisclosed Title Discount

Source

• Landing page: https://www.floridabar.org/etopinions/etopinion-74-50/
• Original PDF: https://www-media.floridabar.org/uploads/2017/04/FL-Bar-Ethics-Op-74-50-1.pdf

Original opinion text

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

FLORIDA BAR ETHICS OPINION
OPINION 74-50
March 26, 1975
Advisory ethics opinions are not binding.
A lawyer may not participate in an arrangement with a title company whereby the title company prepares a title commitment to which the lawyer adds an endorsement and the title company remits a substantial percentage of the title insurance fee to the lawyer without full notice to the client.
Note: See Opinion 75-27
CPR: DR 2-106
Opinion: 73-1
Vice Chairman Daniels stated the opinion of the committee:
A lawyer was contacted by a title insurance company seeking to establish a program whereby the following would occur:
1. The lawyer would ask the title company for a commitment.
2. The title company then prepares and signs by its authorized in-house agent a title commitment in usual form and sends same to the attorney, accompanied, however, by a photocopy of the title company's search.
3. The lawyer then spends whatever time he wishes "looking at the search."
4. The attorney adds a stamped or typed endorsement to the commitment stating that the title appears to be the way the title company says it is and signs his name.
5. Finally, the title company "remits a substantial percentage of the title insurance fee" to the lawyer.
We are asked whether a lawyer may properly participate in such a program. The program as outlined above is improper for at least two separate and distinct reasons. First, the program does not provide for notice to the client of the lawyer's financial interest and motivation in using the particular title company. Full disclosure to the client is mandatory. Cf. Opinion 73-1.
Secondly, the "fee" paid to the lawyer by the title company bears no relationship to the services performed and, depending on the circumstances, might be little more than a "kickback." Lawyers can only accept compensation for services rendered and the charges for services must comply with the provisions of DR 2-106.