Can a Florida lawyer charge a client the public rate for title insurance while keeping an undisclosed discount?

Plain-English summary

The committee was asked two questions. First, where an attorney orders title insurance from a commercial company at a discounted rate (below the rate charged the general public), may the attorney charge the client at the general-public rate without disclosing the attorney's actual cost? Second, may the attorney list the title-insurance cost on the real estate closing statement at the general-public rate without disclosing the actual cost?

The committee answered "no" to each. It concluded that an attorney may not receive money from a third party that is charged to and, directly or indirectly, paid by the client without full disclosure to the client.

The bar's published note records that the opinion was later modified by Opinion 70-13, which added the requirement that the client receive the benefit of the referral fee, or that the attorney credit the client with the fee against the attorney's own fees.

Currency note

The bar's note records that this opinion was modified by Opinion 70-13. It was issued in 1977, before The Florida Bar's adoption of the 2006 revisions to the Rules of Professional Conduct, and applied the former Code of Professional Responsibility. Treat this page as historical context, not current guidance. Verify against current Rules 4-1.5 and 4-1.8 and the later opinion before relying on any specific requirement mentioned here.

Common questions

Q: Could a Florida lawyer bill the client the public title-insurance rate while keeping a discount?

A: The opinion concluded no, not without full disclosure to the client of the attorney's actual cost.

Q: Did it matter whether the charge appeared on the closing statement?

A: No. The opinion concluded the answer was "no" both for charging the client and for listing the public rate on the closing statement without disclosing the actual cost.

Q: What did the later modification add?

A: Per the bar's note, Opinion 70-13 added the requirement that the client receive the benefit of the referral fee or be credited with the fee against the attorney's fees.

Background and rules framework

The opinion turned on the duty of full disclosure to the client when an attorney receives money from a third party in connection with the client's matter. The conduct corresponds to Model Rule 1.5 (fees; current Florida Rule 4-1.5) and Model Rule 1.8 (a lawyer's business dealings and a third party's payment touching the representation; current Florida Rule 4-1.8). The opinion itself rested on the disclosure principle rather than a numbered Disciplinary Rule.

Citations and references

Other opinions cited:

• Florida Ethics Opinion 70-13 (modifying note): client must receive the benefit of the referral fee or be credited against the attorney's fees

See also

• FL Bar Ethics Op. 02-8: Referral Fees, Ancillary Business
• ABA Formal Op. 474: Referral Fees and Conflicts

Source

• Landing page: https://www.floridabar.org/etopinions/etopinion-76-36/
• Original PDF: https://www-media.floridabar.org/uploads/2017/04/FL-Bar-Ethics-Op-76-36-2.pdf

Original opinion text

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

FLORIDA BAR ETHICS OPINION
OPINION 76-36
June 15, 1977
Advisory ethics opinions are not binding.
An attorney may not ethically receive money from a third party which is charged to and directly or indirectly paid by his client without full disclosure to the client.
Note: This opinion was modified by opinion 70-13, which adds the requirement that the client receive the benefit of the referral fee or that the attorney credit the client with the fee against the attorney's fees.
Vice Chairman Taylor stated the opinion of the committee:
The Committee has been asked two questions:
1. Where an attorney orders title insurance from a commercial company at a discounted rate from that charged the general public, may the attorney charge his client at the rate charged the general public without disclosing the attorney's actual cost?
2. May the attorney, on the real estate closing statement, list the cost for title insurance at the rate charged the general public without disclosing the attorney's actual cost?
The answer to each question is "no."
An attorney may not ethically receive money from a third party which is charged to and directly or indirectly paid by his client without full disclosure to the client.