Can a Michigan lawyer own a title insurance company and also represent clients who use that company or pass on its title policies?

Plain-English summary

A lawyer was offered an ownership interest in a corporation formed solely to issue title insurance. In private practice, the lawyer advised purchaser or lender clients on the quality of title and the sufficiency of title insurance policies. The lawyer asked whether owning a title company was proper. The Committee concluded that ethics rules do not prohibit a lawyer from engaging in a non-law business, and the bar does not regulate non-law businesses, but the lawyer's ethical obligations may be affected by that participation.

The Committee concluded that if a lawyer's client needs the services of a title company, the lawyer may not have the lawyer's own company provide those services unless the lawyer complies with MRPC 1.8(a), the rule on business transactions with a client: fair and reasonable terms, full written disclosure, an opportunity to seek independent counsel, and written consent. It separately concluded that under MRPC 1.7(b) it is not conceivable a lawyer could reasonably believe the representation would not be adversely affected when asked to pass on the sufficiency of title or quality of services provided by the lawyer's own title company, so the lawyer may not offer legal advice on the sufficiency of that company's policy or services. The Committee cited CI-868 and North Carolina Opinions 302 and 690 as consistent authority, and noted a title company may not itself deliver legal services to customers, even through in-house lawyers, even if a licensed lawyer owns it.

The Committee added that beyond MRPC 1.7(b) and 1.8(a), the lawyer must not appear to let the connection to the title business interfere with the lawyer's judgment on a title policy's sufficiency (MRPC 8.4(a) and (c), see 5.4(c)), and may not let the title company or its employees communicate about the lawyer's services in violation of MRPC 7.1 or solicit legal business on the lawyer's behalf in violation of MRPC 7.2(c). A lawyer with two occupations, one of which is the practice of law, must keep the operations separate.

Currency note

This opinion has been refined by State Bar of Michigan Ethics Opinion RI-392, published December 12, 2025; consult RI-392 for the current analysis. This opinion was issued in 1989 and interprets the Michigan Rules of Professional Conduct as they then stood, and MRPC 1.7, 1.8, 7.1, and 7.2 have since been amended. 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 Michigan lawyer own a title insurance company?

A: The opinion concluded it is not improper for a lawyer to hold an ownership interest in a title company, provided the title business and the law practice are maintained separately.

Q: Can the lawyer represent a client who is using the lawyer's own title company?

A: The opinion concluded the lawyer may not have the lawyer's own company provide the client's title services unless the lawyer complies with MRPC 1.8(a), and may not give the client legal advice on the sufficiency of the company's policy or the quality of its services.

Q: Why couldn't the lawyer just review the title policy with consent?

A: The opinion concluded that under MRPC 1.7(b)(1) a lawyer could not reasonably believe the representation would not be adversely affected when passing on the sufficiency of title insurance issued by the lawyer's own company, so that particular advice was off limits even though the lawyer might represent the client on other matters.

Background and rules framework

The opinion interpreted MRPC 1.8(a) / Model Rule 1.8(a) (business transactions with a client require fair terms, written disclosure, opportunity for independent counsel, and written consent), MRPC 1.7(b) / Model Rule 1.7 (a lawyer may not represent a client where the representation may be materially limited by the lawyer's own interests unless the lawyer reasonably believes it will not be adversely affected and the client consents), and MRPC 8.4(a) and (c), 5.4(c), 7.1, and 7.2(c). The Committee read these together to permit ownership but bar the lawyer from advising a client on the lawyer's own title product.

Citations and references

Rules of Professional Conduct:

• MR 1.7 / MRPC 1.7(b) (material limitation by lawyer's own interests)
• MR 1.8 / MRPC 1.8(a) (business transactions with a client)
• MR 5.4 / MRPC 5.4(c) (professional independence)
• MR 8.4 / MRPC 8.4(a), (c) (misconduct; conduct involving misrepresentation)
• MRPC 7.1, 7.2(c) (communications about services; improper solicitation)

Statutes:

• MCL 450.681; MCL 500.7304 (limits on title company delivery of legal services)

Other opinions cited:

• CI-868: lawyer may not act as counsel for a personal representative where the lawyer's real estate firm sold estate assets
• North Carolina Opinions 302 and 690: lawyer may not certify title and represent the buyer for title insurance, or execute binders for the firm's own client

See also

• ABA Formal Op. 00-418: Taking Equity in a Client
• Mich Ethics Op. RI-106: Former-Client Confidences

Source

• Landing page: https://www.michbar.org/opinions/ethics/numbered_opinions?OpinionID=875&Type=6

Original opinion text

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

This opinion has been refined by Ethics Opinion RI-392 published December 12, 2025. Please see RI-392 for further clarification.

RI-5

July 12, 1989

SYLLABUS

It is not improper for a lawyer to hold an ownership interest in a title company, if the businesses are maintained separately.

It is improper for a lawyer having an ownership interest in a title company to agree to represent a client who is obtaining services from the title company, or to review the sufficiency of the title insurance policy issued by the company.

References: MRPC 1.7(b), 1.8(a), 5.4(c), 8.4(a) and (c).

TEXT

A lawyer has been offered an opportunity to become an owner or partner in a corporation set up for the sole purpose of issuing title insurance. In the lawyer's private law practice, the lawyer provides advice on the quality of the title and the sufficiency of the title insurance policy from the perspective of a client purchaser or lender. The lawyer asks whether it is proper for a lawyer to have an ownership interest in a title insurance company.

Ethics rules do not prohibit a lawyer from engaging in a career or business other than the practice of law, and the bar does not regulate nonlaw businesses. A lawyer's ethical obligations may be affected by the lawyer's participation in a nonlaw business, however, and ethical perspectives should be safeguarded.

MRPC 1.8(a) states:

"A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security or other pecuniary interest adverse to the client unless:

"(1) the transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing to the client in a manner that can be reasonably understood by the client;

"(2) the client is given a reasonable opportunity to seek the advice of independent counsel in the transaction; and

"(3) the client consents in writing thereto."

If a lawyer's client needs the services of a title insurance company, the lawyer may not recommend or allow the lawyer's own company to undertake to provide the needed services unless the lawyer complies with MRPC 1.8(a).

MRPC 1.7(b) states:

"A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer's . . . own interests, unless:

"(1) the lawyer reasonably believes the representation will not be adversely affected; and

"(2) the client consents after consultation . . . ."

In CI-868 we stated a lawyer may not act as counsel for a personal representative of an estate where that lawyer's real estate firm sold assets of the decedent. Some jurisdictions have held that a lawyer may not certify title to a property and represent a buyer in an effort to obtain title insurance. North Carolina Op. 302. Nor may a lawyer execute title binders and policies issued by the title agency to the law firm's client. North Carolina Op. 690.

If a customer of a title insurance company needs legal services, it is not conceivable that a lawyer could "reasonably believe the representation will not be adversely affected" when the lawyer is asked to pass on the sufficiency of title or quality of services provided by the lawyer's own title company. MRPC 1.7(b)(1). Although the lawyer may be able to represent the client on other matters, the lawyer may not offer legal advice on the propriety of the services of the lawyer's own title company. We also note that the title company is prohibited from directly delivering legal services to customers, even through licensed in-house staff lawyers, and even though the title company is owned by a properly licensed lawyer. MCL 450.681, MCL 500.7304.

In addition to the protections afforded the client in MRPC 1.7(b) and 1.8(a), the lawyer must not give the appearance of allowing a connection to a title insurance business to interfere with the lawyer's judgment on the sufficiency of a title insurance policy or the quality of the title transferred. MRPC 8.4(a) and (c). See MRPC 5.4(c).

A lawyer may not allow the title insurance company or its employees to communicate about the lawyer's services in violation of MRPC 7.1, and may not allow the title company to improperly solicit legal business on the lawyer's behalf. MRPC 7.2(c). A lawyer having two businesses or occupations, one of which involves the practice of law or delivery of legal services, must keep the operations of the businesses separate.