May a Nebraska lawyer work full time as an insurance agent while also providing legal services to insurance customers and others?

Plain-English summary

An insurance-company in-house lawyer wanted to become a full-time captive agent while continuing to provide limited legal services to insurance customers and members of the public.

Selling insurance is not itself practicing law. The opinion permits the dual occupations only if the insurance activity is conducted consistently with the Rules and does not become a direct or indirect feeder for legal work.

The lawyer may not advertise lawyer status while soliciting insurance business because that representation could attract legal matters indirectly. After a person becomes an insurance customer, the lawyer may disclose the law degree and provide legal advice only under the conflict and consent safeguards described.

When selling insurance to a legal client, the lawyer's professional judgment must remain independent, the transaction must be fair and reasonable, the lawyer's financial interest and possible adverse consequences must be disclosed in writing, the client must have an opportunity to seek independent counsel, and the client must consent in writing.

For insurance customers who receive legal advice, the lawyer must make the dual role clear and obtain written informed consent acknowledging the lawyer's interests. For legal clients who are not insurance customers, the lawyer must avoid conflicts involving the insurance-company employer.

In practice

Under this opinion, the insurance and law practices must remain functionally distinct until a properly disclosed and consented legal relationship forms. The lawyer's insurance role cannot be used to generate legal business.

Common questions

Q: May a Nebraska lawyer work full time as an insurance agent?

A: Yes, while also practicing law if all applicable Rules are satisfied.

Q: May the agent advertise that the agent is a lawyer?

A: Not to solicit insurance business, because the opinion treats that as indirect solicitation of legal work.

Q: May the lawyer give legal advice to an insurance customer?

A: Yes, only after explaining the dual role and obtaining written informed consent under the stated safeguards.

Q: What must be disclosed when the lawyer sells insurance to a legal client?

A: The lawyer's financial interest, transaction terms, possible conflict, adverse consequences, and the opportunity for independent legal advice.

Q: Must conflicts involving the insurance employer be checked?

A: Yes. The lawyer may not represent outside clients with conflicting interests involving the carrier employer.

Background and rules framework

Rules 1.7 and 1.8 govern conflicts and business transactions with clients. Rules 7.1 and 7.2 govern advertising and indirect solicitation. Rules 1.2, 1.4, and 5.7 inform client authority, communication, and law-related services.

Citations and references

Nebraska Rules of Professional Conduct:

• Neb. R. Prof. C. §§ 3-501.2, 3-501.4, 3-501.7, 3-501.8, 3-505.7, 3-507.1, and 3-507.2

Other opinions cited:

• Nebraska Ethics Advisory Opinion 68-3
• ABA Informal Opinion 775
• District of Columbia Ethics Opinion 306

See also

• New York State Op. 619: Lawyer as financial planner and insurance agent
• VSB LEO 1754: Lawyer-insurance agent commission
• Ohio Ethics Op. 2001-004: Lawyer-insurance agent selling annuities

Source

• Landing page: Nebraska lawyer ethics opinions archive
• Original PDF: Nebraska Ethics Advisory Opinion 11-02

Original opinion text

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

Best-effort transcription from a scanned PDF. Minor errors may remain; the linked PDF is authoritative.

Nebraska Ethics Advisory Opinion for Lawyers
No. 11-02

A LAWYER WHO IS A FULL-TIME INSURANCE AGENT MAY ALSO PRACTICE LAW PROVIDED THAT THE LAWYER COMPLIES WITH THE RULES OF PROFESSIONAL CONDUCT, THAT THE LAWYER DOES NOT ACTIVELY SOLICIT LEGAL BUSINESS FROM HIS INSURANCE CLIENTS, THAT THE LAWYER DOES NOT ADVERTISE THAT HE IS A LAWYER, AND THAT THE LAWYER DOES NOT GIVE LEGAL ADVICE TO HIS LIFE INSURANCE CUSTOMERS WITHOUT WRITTEN INFORMED CONSENT FROM THE CLIENTS. FACTUAL SITUATION A lawyer who serves as in-house counsel for an insurance company would like to become a full-time captive insurance agent. While working for the insurance company, the lawyer wishes to provide legal advice to insurance customers and public persons who are

not his insurance customers. The lawyer would like to advertise the fact that he has a law degree but would not represent that he is an insurance lawyer or actively seek to take

cases from his insurance customers.

DISCUSSION
While the Model Rules of Professional Conduct do not specifically address permissible business practices in which active bar members may participate, there are several rules that are applicable to attorneys who wish to pursue other business opportunities while continuing to practice law. While a lawyer must take care to abide by all of the Rules of Professional Conduct, Rules 1.2, 1.4, 1.7, 1.8, 5.7, 7.1, and 7.2 are

informative when determining which outside business practices may or may not be

permissible.

The Advisory Committee has previously addressed several issues relating to the sale of insurance by lawyers. In Opinion No. 68-3, the Committee came to the conclusion that a lawyer could sell insurance other than life insurance as long as the lawyer avoided any suggestion that the insurance company served as indirect solicitation

for his law business. In the same Opinion, the Committee referenced a ruling in Informal

2824

Opinion No. 775 which remains useful. Informal Opinion 775 held that a lawyer may engage in an independent business “(1) if the separate business is clearly not necessarily the practice of law when conducted by a lawyer, (2) if it can be conducted in accordance with and so as not to violate the Canon, (3) if it is not used or engaged in such a manner as to directly or indirectly advertise or solicit legal matters for the lawyer as a lawyer, (4) if it will not ‘inevitably serve’ as a feeder to his law practice...”

Under the instant set of facts, the sale of insurance would not be the practice of law when conducted by a lawyer, if the lawyer conducted himself in accordance with the current Rules of Professional Conduct, and the insurance sales did nor serve as a feeder to the lawyer’s law practice.

In order to insure that the lawyer’s sale of insurance does not serve as a feeder to his law practice, the Committee would deem improper any attempt to advertise the fact that he is a lawyer when soliciting business in his capacity as an insurance agent. Such a representation would constitute the indirect solicitation for his law practice which was deemed improper in Opinion 68-3 and other previous informal opinions. Once a prospective insurance customer becomes a client, however, the lawyer may disclose the fact that he has a law degree and may provide legal advice in some situations.

The questions presented in this matter differ from those previously answered in Nebraska in that the lawyer wishes to work primarily as an insurance agent while simultaneously providing legal services in limited situations. In addressing the issues, it is our opinion that Ethics Opinion 306 from the District of Columbia correctly states the duties of an insurance agent who is also a practicing lawyer. That Opinion states:

A lawyer who is also an insurance broker may sell insurance products to the general public provided the lawyer complies with the ethics rules. When selling

2825

insurance to nonclients, the lawyer must ensure that the prospective purchaser understands that the lawyer is acting exclusively as an insurance broker and not as a lawyer in the transaction, and she must ensure that a lawyer-client relationship is not inadvertently created. When selling insurance products to clients, the lawyer must ensure that the transaction will not adversely affect the lawyer’s professional judgment on behalf of the client; the terms of the transaction are fair, reasonable, and fully disclosed in writing to the client; the client is advised and given the opportunity to seek independent counsel regarding the transaction; the client is advised of the lawyer’s interest in the transaction and of possible conflict of interest and attendant adverse consequences; and the client consents in writing to

the transaction.

It should be noted that the District of Columbia currently allows multi- disciplinary practices while such practices have not been formally approved in Nebraska. While authority to change acceptable practice in Nebraska ultimately rests with the Nebraska Supreme Court, this committee feels that Opinion 306 of the District of

Columbia is informative and applicable to the facts at hand.

In selling insurance to customers with whom the lawyer ultimately develops a lawyer-client relationship, the lawyer must take measures to ensure that the client understands the lawyer’s dual role as insurance salesman and counselor. These measures include written notice of the lawyer’s interest in any insurance transactions, In representing persons who are not insurance customers, the lawyer must ensure that he

does not represent any clients with actual, implied, or apparent conflict with his insurance

carrier employer.

CONCLUSION
In accordance with the previous Opinions of this Advisory Committee and Ethics Opinion 306 from the District of Columbia, we find under the facts and circumstances of this case that a lawyer may be employed as a full-time insurance agent and provide legal

advice to insurance customers and others so long as the lawyer does not violate the

2826

applicable Rules of Professional Conduct and gets informed consent in writing from the client which acknowledges the lawyer’s interests in all transactions between the two

parties,

2827