Can a lawyer who is also a licensed insurance agent sell insurance to legal clients and collect a referral commission for sending a client to another agent?
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This page answers the general question as of 1989. Ezel answers yours: whether it's allowed on your facts, under the current Illinois Rules of Professional Conduct, with citations.
Plain-English summary
A lawyer was licensed both to practice law in Illinois and as a life insurance agent, operating a law office and an insurance office in separate locations with separate cards and letterhead. He asked whether he could perform legal services and insurance services for the same client, and whether he could perform legal services for a client and then refer that client to a life insurance agent in another office and receive a commission from the agent who wrote the policy.
On the first question, the committee relied on Opinion 85-3 (permitting the practice of dual professions), and concluded that practicing law and transacting insurance business in separate offices with separate letterhead and cards is permitted, subject to the same concerns about preserving client confidences, avoiding improper division of fees, and exercising independent professional judgment.
On the second question, the committee applied the rules on independent professional judgment. Because the referral and potential commission arise from the attorney-client relationship, the lawyer is doing business with the client and may receive something of value from a third party as a result. Former Rule 5-101(a) required the client's consent after full disclosure where the lawyer's judgment may be affected by his own financial interest, and former Rules 5-104(a) and 5-107(b) required consent after full disclosure for the business transaction and the third-party payment. The committee, citing Opinions 227 and 563 (disclosure of title-insurance commissions), concluded the lawyer should disclose his interest in any commissions and obtain the client's consent, suggesting the disclosure and consent be in writing; it distinguished Opinion 799, which barred retaining an arbitrary fixed title-insurance commission unrelated to a reasonable legal fee.
Currency note
This opinion was issued in 1989, under the former Illinois Code of Professional Responsibility and before Illinois adopted the 1990 (and later 2010) Rules of Professional Conduct. The ISBA Board of Governors affirmed the opinion in May 2010 as generally consistent with the 2010 Rules (Rules 1.7, 1.8(a), and 5.4(c)), while cautioning that the specific standards referenced may differ from the 2010 Rules. 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 or requirement mentioned here.
Common questions
Q: Can a lawyer who is also an insurance agent sell insurance to legal clients?
A: The opinion concluded the lawyer may serve the same client in both capacities, subject to safeguarding confidences, avoiding improper fee division, and keeping independent professional judgment.
Q: Can the lawyer take a referral commission for sending a client to another insurance agent?
A: The opinion concluded the lawyer may, provided he discloses his interest in the commission and obtains the client's consent, because the transaction arises from the attorney-client relationship.
Q: Should the disclosure and consent be in writing?
A: The opinion suggested that the disclosure and consent process be in writing.
Background and rules framework
The opinion applied the former Code provisions on a lawyer's financial interest and business dealings with clients (Rules 5-101(a), 5-104(a), 5-107(b)), which the Board later mapped to the conflict and independence rules on personal-interest conflicts, business transactions with clients, and payment by a third party (Model Rules 1.7, 1.8(a), 5.4(c)).
Citations and references
Rules of Professional Conduct:
- Former Illinois Code Rules 5-101(a), 5-104(a), 5-107(b) / current Model Rules 1.7, 1.8(a), 5.4(c)
Other opinions cited:
- ISBA Opinion 85-3 (dual professions permissible); Opinions 227 and 563 (disclosure of insurance commissions); Opinion 799 (distinguished).
See also
- ISBA Ethics Op. 90-32: Lawyer Also Selling Insurance and Investments
- ISBA Ethics Op. 23-03: Fee for Referring a Client to an Investment Adviser
- ISBA Ethics Op. 90-16: Operating a Nonlawyer Business From a Law Office
Source
- Landing page: https://www.isba.org/ethics/opinions/8914
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