Can a lawyer employed by a life insurance company to prepare estate plans also draft the customer's will?

Plain-English summary

The committee addressed a lawyer employed full time by a life insurance company to prepare estate plans for its customers, some of whom, having no other counsel, then asked the lawyer to prepare and supervise the execution of a will implementing the plan. It first set aside a set of legal questions it said were beyond its jurisdiction: whether the arrangement violated Judiciary Law sections 479 and 495 (which forbid solicitation of legal business and the practice of law by business corporations) and the related ethical questions under DR 2-103 and DR 3-101(A) (solicitation and aiding unauthorized practice). Because resolving those ethical questions would depend on unresolved legal issues, the committee found them not ripe.

The committee then identified one ethical issue that disposed of the inquiry without reaching the others: the dual representation would create a basic conflict of interest violating DR 5-105(A). A lawyer whose full-time employment with the insurer involves preparing estate plans for prospective insurance buyers (plans presumably designed, where appropriate, to promote the insurer's interests) represents conflicting interests whenever he also counsels the customer on disposing of the estate or drafts the will, at least where the plan or will uses life insurance. Under DR 5-105(A) and Definition 1, those interests are likely to affect the lawyer's judgment or loyalty adversely, and DR 5-107(B) bears on the difficulty of exercising independent judgment for an employer-directed plan (citing N.Y. State 350).

The committee concluded this was not a situation where it is obvious the lawyer can adequately represent each interest, so consent under DR 5-105(C) could not cure it. Rather, it was one of those situations of delicate conflicting relationships and inescapable divided loyalties where, regardless of disclosure and consent and without any showing of harm, the likelihood of improper conduct or motivation may itself give rise to professional misconduct (citing Matter of Kelly and Greene v. Greene). The question was answered in the negative.

Currency note

This opinion was issued in 1980, before New York replaced the Code of Professional Responsibility with the Rules of Professional Conduct in 2009 (the conflict standard now appears at Rule 1.7, and the bar on an employer or payer directing the lawyer's judgment at Rules 1.8(f) and 5.4(c)). 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.

Common questions

Q: Can an insurer's estate-planning lawyer also draft the customer's will?

A: No. The committee held that the lawyer's full-time employment by the insurer creates an inherent conflict with drafting the customer's will, at least where the plan or will uses life insurance.

Q: Can the customer consent to the lawyer drafting the will anyway?

A: No. The committee found this was not a situation where adequate representation of each interest is obvious, so consent under DR 5-105(C) could not cure the conflict.

Q: Did the committee decide the solicitation and unauthorized-practice questions?

A: No. It found those questions turned on unresolved legal issues under Judiciary Law sections 479 and 495 that were beyond its jurisdiction, and decided the inquiry on the conflict ground alone.

Background and rules framework

The opinion rested on DR 5-105(A) and (C) (declining or limiting representation of differing interests), Definition 1's broad reading of "differing interest," and DR 5-107(B) (independence from an employer's direction), while declining to resolve the solicitation and unauthorized-practice questions under DR 2-103 and DR 3-101(A). The closest current Model Rule analogues are Rule 1.7 (concurrent conflicts of interest) and Rule 5.4 (professional independence of the lawyer).

Citations and references

Rules of Professional Conduct:

• MR 1.7 (concurrent conflicts)
• MR 5.4 (professional independence)
• NY DR 2-103, DR 3-101(A), DR 5-105(A), DR 5-105(C), DR 5-107(B), Definition 1

Statutes:

• N.Y. Judiciary Law secs. 479, 495

Cases:

• Matter of Kelly, 23 N.Y.2d 368 (1968), conflicts that bar representation regardless of consent
• Greene v. Greene, 47 N.Y.2d 447 (1979), divided loyalties
• People v. People's Trust Co., 180 App. Div. 494 (2d Dept. 1917), corporate practice of law

Other opinions cited:

• N.Y. State 350 (1974): independent judgment in insurer-directed work

See also

• NY State Bar Op. 519: Insurer staff counsel when coverage is disclaimed
• NY State Bar Op. 521: Holding a deceased client's will
• NY State Bar Op. 517: Conflicting representation in two matrimonial matters

Source

• Landing page: https://nysba.org/opinion-516/