Can salaried in-house attorneys employed by an insurance company practice under a firm name that makes them look like an independent law firm?

Plain-English summary

The Professional Ethics Committee had received several inquiries about the relationship among insurers, insureds, and the attorneys who represent insureds at the insurer's expense. The committee took up whether salaried staff attorneys employed by an insurer to work in an "in-house law firm" could use a firm name that appeared to be a separate, independent law firm.

The opinion concluded that they could not. It applied Rule 4-7.1 (no false, misleading, or deceptive statements about the lawyer or the lawyer's services), Rule 4-7.7(f) (a lawyer may not state or imply practice in a partnership or organization unless it is a fact), and Rule 4-8.4(c) (no conduct involving dishonesty, fraud, deceit, or misrepresentation). The committee noted that a lawyer had been disciplined for practicing under a partnership name without an actual partnership (The Florida Bar v. Hastings) and that the Tennessee Supreme Court in In re Petition of Youngblood had criticized holding out in-house insurer attorneys as a distinct, autonomous firm.

The committee concluded that the nature of the relationship between the attorneys and the insurer had to be fully disclosed to the client and appear on the lawyer's letterhead and business card, and that lawyers who are employees of insurance companies had to indicate their employment status and affiliation. In reaching this conclusion the committee withdrew Opinion 78-6 (which had permitted in-house counsel to use letterhead without the corporate identification). The committee did not address any unlicensed-practice-of-law issues the arrangement might raise.

Currency note

This opinion was issued in 1998, before The Florida Bar's adoption of the 2006 revisions to the Rules of Professional Conduct. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here. (The opinion itself notes that the Supreme Court of Florida later adopted what is now Rule 4-7.21(g), allowing captive in-house insurance defense counsel to practice under a law firm name where the "firm" is functionally and physically separate from the insurer.)

Common questions

Q: Could insurer staff attorneys use a firm name like "Smith & Associates" without identifying the insurer?

A: Under this opinion, no. The committee concluded that using a firm name implying a separate, independent firm was impermissible and that the insurer relationship had to be disclosed and shown on letterhead and business cards. (The opinion's own note records that the Florida Supreme Court later adopted a rule, now 4-7.21(g), permitting a captive firm name where the firm is functionally and physically separate from the insurer.)

Q: Which rules did the committee rely on?

A: The opinion applied Rule 4-7.1 (false or misleading communications), Rule 4-7.7(f) (implying a partnership or organization that is not a fact), and Rule 4-8.4(c) (dishonesty, fraud, deceit, or misrepresentation).

Q: Did the opinion change any earlier guidance?

A: Yes. The committee withdrew Opinion 78-6, which had allowed in-house counsel to use letterhead that did not contain the corporate identification.

Background and rules framework

The opinion interpreted The Florida Bar's advertising and misrepresentation rules as they stood in 1998: Rule 4-7.1 (Model Rule 7.1, communications concerning a lawyer's services), Rule 4-7.7(f) (firm names and letterhead, comparable to Model Rule 7.5), and Rule 4-8.4(c) (Model Rule 8.4, misconduct involving dishonesty). The question was whether a name implying an independent firm was a false or misleading statement when the attorneys were salaried insurer employees.

Citations and references

Rules of Professional Conduct:

• Model Rule 7.1 / Fla. Rule 4-7.1 (false or misleading communications) [the opinion notes current Rule 4-7.13]
• Model Rule 7.5 / Fla. Rule 4-7.7(f) (firm names; partnership representations) [the opinion notes current Rule 4-7.21(f)]
• Model Rule 8.4 / Fla. Rule 4-8.4(c) (dishonesty, fraud, deceit, misrepresentation)

Cases:

• The Florida Bar v. Hastings, 523 So. 2d 571 (Fla. 1988), discipline for practicing under a partnership name without a partnership
• In re Petition of Youngblood, 895 S.W.2d 322 (Tenn. 1995), holding out in-house insurer counsel as a separate firm is deceptive

Other opinions cited:

• Fla. Ethics Ops. 93-6, 93-7, 94-6; California Op. 1987-91; Tennessee Op. 93-F-132; Ohio Op. 95-14; Virginia Op. 775; Pennsylvania Formal Op. 96-196; Oklahoma Op. 309

See also

• FL Bar Ethics Op. 02-7: Insured Client's Rights
• FL Bar Ethics Op. 97-1: Insurer Instructions and Summary Judgment
• FL Bar Ethics Op. 98-2: Set Fee for Insurance Defense

Source

• Landing page: https://www.floridabar.org/etopinions/etopinion-98-3/
• Original PDF: https://www-media.floridabar.org/uploads/2017/04/FL-Bar-Ethics-Op-98-3-2.pdf

Original opinion text

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

FLORIDA BAR ETHICS OPINION
OPINION 98-3
June 18, 1998
Advisory ethics opinions are not binding.
It is impermissible for in-house attorneys who are employed to represent insureds to state
or imply that they practice in a separate independent law firm. The relationship between the
attorney and the insurer should be disclosed to the client and appear on the letterhead and
business card of the attorney.
Note: Affirmed by the Board of Governors on February 12, 1999.
Note: Subsequent to the adoption of this opinion, the Supreme Court of Florida adopted
subdivision (g) of Rule 4-7.9 [then Rule 4-7.10; current Rule 4-7.21(g)], allowing in-house
insurance defense counsel in captive law firm to practice under a law firm name such as
“Smith & Associates” or “Law office of Smith” if the “firm” is functionally and physically
separate from the insurance company. Amendments to Rules Regulating The Florida Bar
Re: Rules of Professional Conduct, 838 So.2d 1140 (Fla. 2003).
RPC: 4-7.1 [See current 4-7.13], 4-7.7(f) [See current 4-7.21(f)], 4-8.4(c)
Opinions: 93-6; 93-7; 94-6; California Ethics Opinion 1987-91; Tennessee Ethics Opinion
93-F-132 and Ohio Opinion 95-14; Virginia Opinion 775; Pennsylvania Formal
Opinion 96-196
Cases: The Florida Bar v. Hastings, 523 So.2d 571 (Fla. 1988); In re Petition of
Youngblood, 895 S.W.2d 322 (Tenn. 1995)
Recently the Professional Ethics Committee has been asked several questions concerning
the relationship between insurers, insureds and attorneys representing insureds who are paid by
the insurer. In connection with those inquiries, the committee has become concerned with the
question whether salaried staff attorneys who are employed by an insurance company to
participate in an “in-house law firm” may use a “firm name” that appears to be that of a separate
and independent law firm.
The ethics rules clearly indicate that attorneys may not hold themselves out as practicing
in a law firm unless the firm itself, and the relationships implied by the name, are bona fide.
Rule 4-7.1 of the Rules Regulating The Florida Bar [See Rule 4-7.13] prohibits an attorney from
making false, misleading, or deceptive statements about the lawyer or the lawyer’s services.
Additionally, Rule 4-7.7(f) [See Rule 4-7.21(f)] prohibits attorneys from stating or implying that
they practice in a partnership or other organization unless it is a fact. Finally, Rule 4-8.4(c)
prohibits an attorney from engaging in conduct involving dishonesty, fraud, deceit or
misrepresentation.
An attorney has been disciplined for practicing under a partnership name without actually
having a partnership. The Florida Bar v. Hastings, 523 So.2d 571 (Fla. 1988). This committee
itself has expressed disapproval of the use of firm names which mislead the public as to the
actual nature of the relationship between the attorneys or the firm’s practice. Florida Opinions
94-6; 93-7; 93-6.
Concerning this particular issue, the Supreme Court of Tennessee has criticized the
practice of holding out in-house attorneys as a distinct autonomous law firm which is
independent of the employer insurer. In re Petition of Youngblood, 895 S.W.2d 322 (Tenn.
1995). In this case the Supreme Court of Tennessee found that the holding out of an in-house
attorney-employee as a separate and independent law firm constitutes an unethical and deceptive
practice. The court stated that “false, misleading fraudulent and deceptive representations are by
their very nature harmful to the profession whose credibility is dependent upon its integrity.” Id.
at 332.
Ethics committees in other states have specifically found that it is unethical and deceptive
for salaried in-house attorneys, employed by an insurance company, to represent themselves to
be outside counsel. Oklahoma Opinion 309; Virginia Opinion 775; Ohio Opinion 95-14;
Tennessee Ethics Opinion 93-F-132; California Ethics Opinion 1987-91. The use of the
fictitious firm name misleads the public and the insured client as to the true relationship between
the insurance company and its attorneys. California Opinion 1987-91. For this reason the nature
of the relationship between the attorneys and the insurer should be disclosed on the letterhead.
Pennsylvania Formal Opinion 96-196; California Opinion 1987-91.
We therefore conclude that it is impermissible for in-house attorneys who are employed
to represent insureds to state or imply that they practice in a separate independent law firm.
Furthermore, the relationship between the attorney and the insurer should be fully disclosed to
the client and appear on the letterhead and business card of the attorney. Lawyers who are
employees of insurance companies must indicate their employment status and affiliation to their
employer on their letterhead. In reaching this conclusion the committee withdraws Opinion 78-6
which permits in-house counsel to use letterhead that does not contain the corporate letterhead.
Additionally, the committee does not address any unlicensed practice of law issues that may be
raised by this arrangement.