Can a lawyer start an insurance-adjusting business and mail cards to insurance companies announcing the service?

Plain-English summary

A lawyer and former court reporter proposed to take up adjustment work for insurance companies under a business name, sending cards to the chief adjusters of insurance companies to advise them of the service. He represented that being a lawyer was not a qualification for the work, that he would represent no clients and file no cases, and that the service would consist of getting statements from witnesses and keeping in touch with the chief adjusters. He asked whether being a lawyer would prevent him from sending the cards.

The Board distinguished two situations. If the inquirer intended to engage in the adjusting of insurance claims, the proposed plan would be the solicitation of professional employment by a member of the bar in contravention of Rule 29, because, per ABA Opinion 57, the adjustment of insurance claims by a lawyer is professional employment engaging his professional skill and responsibility. The Board added, citing its Advisory Opinion No. 89, that it made no difference that the solicitation letter did not indicate the writer was authorized to practice law.

If instead the inquirer intended merely to investigate the facts of insurance claims and report on them to chief adjusters, without settling them, a narrower question arose. Drawing again on ABA Opinion 57, the Board explained that it is not necessarily improper for a lawyer to engage in a business, but impropriety arises when the business is of such a nature, or is conducted in such a manner, as to be inconsistent with the lawyer's duties: when it can serve as a means of procuring professional employment, can be used as a cloak for indirect solicitation, or, if handled by a lawyer, would be regarded as the practice of law. The Board stressed that the lawyer must keep any such business entirely separate from his practice, and, quoting its Advisory Opinion No. 67, observed that a member who assumes such a relationship will be under suspicion of improper conduct, restating that a lawyer should avoid not only impropriety but the appearance of impropriety.

Currency note

This opinion was issued in 1936, decades before Oklahoma replaced its original Rules of Professional Conduct (patterned on the ABA Canons of Professional Ethics) with the Oklahoma Rules of Professional Conduct (adopted 1988) and the later Ethics 2000 revisions. The flat ban on solicitation has since been narrowed by constitutional decisions on lawyer advertising and solicitation beginning with Bates v. State Bar of Arizona (1977). Subsequent rule amendments and 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: Could a lawyer mail cards announcing an insurance-adjusting service?

A: No, where the lawyer means to adjust claims. The opinion held that adjusting insurance claims is professional employment, so soliciting it by card violated Rule 29.

Q: Did it matter that the cards did not mention he was a lawyer?

A: No. Citing Advisory Opinion No. 89, the Board said it made no difference that the solicitation letter did not indicate the writer was authorized to practice law.

Q: What about a business limited to investigating facts, not settling claims?

A: The opinion treated that as a narrower question but still cautioned that such a business is improper where it can procure professional employment, serve as a cloak for indirect solicitation, or amount to the practice of law, and it must be kept entirely separate from the law practice.

Background and rules framework

The opinion applied Rule 29 of the canon-era Oklahoma Rules of Professional Conduct, which prohibits solicitation of professional employment, and drew on ABA Committee on Professional Ethics and Grievances Opinion 57 (insurance-claim adjustment as professional employment; lawyers engaging in outside business). It predates the Model Rules and made no Model Rule citation.

Citations and references

Rules of Professional Conduct:

• Rule 29 (1929 Oklahoma Rules of Professional Conduct): prohibits solicitation of professional employment.

Other opinions cited:

• ABA Committee on Professional Ethics and Grievances Op. 57: the adjustment of insurance claims by a lawyer is professional employment; a lawyer's outside business must not become a means of solicitation or the practice of law.
• Oklahoma Advisory Opinion No. 89: it makes no difference that the solicitation letter does not indicate the writer is authorized to practice law.
• Oklahoma Advisory Opinion No. 67: a member who combines a lay business with law practice is under suspicion of improper conduct.

See also

• Okla. Bar Ethics Op. 118: Insurance-adjustment department on a law firm letterhead
• Okla. Bar Ethics Op. 98: A card in an insurance trade magazine
• Okla. Bar Ethics Op. 89: Mailing form letters to solicit tax-refund work

Source

• Landing page: https://www.okbar.org/ethics/ethics-opinion-no-119/

Original opinion text

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

Adopted September 24, 1936

The Board is in receipt of the following:

"I would like to take up adjustment work for Insurance Companies, establishing my own business, known as ………….. Oklahoma Insurance Service, and would like to send cards to the different Insurance Companies advising them of my service. There are many men over the country in this line of work who are not lawyers, therefore, being a lawyer is not the qualification of an Adjuster. I would represent no clients, file no cases. My services would be for the Chief Adjusters of these Insurance Companies and the cards would be sent to the Chief Adjusters. My service would be getting statements from witnesses and keeping touch with the Chief Adjusters at their home office. It would not require the services of a lawyer at all to do the line of work I have in mind but would require a good shorthand writer and a good typist, and I am both, as I was Court Reporter here in the courts for several years.

Now then, to let these Chief Adjusters know I wanted to work I would have to send them a card, advising them I am in this line of business. I want to be fair about it, and would the fact that I am a lawyer, would this splendid qualification prevent me from sending these cards?"

In response:

If the inquirer intends to engage in the adjusting of insurance claims, the proposed plan would constitute the solicitation of professional employment by a member of the bar in contravention of Rule 29 of the Rules of Professional Conduct.

As said in Opinion No. 57 of the A. B. A. Committee on Professional Ethics and Grievances:

"The adjustment of insurance claims by a lawyer is professional employment. In performing such a service his professional skill and responsibility are engaged."

An analogous situation was passed upon by the Board in Advisory Opinion No. 89 (1 Adv. Op. p. 157), wherein the conclusion was reached that:

"It makes no difference that the member of the bar, upon his letter of solicitation, does not indicate that he is authorized to practice law."

If the inquirer intends to engage merely in the business of investigating the facts concerning insurance claims and reporting thereon to chief adjusters, without engaging in the settlement thereof, a narrower question is presented. As stated in A. B. A. Committee on Professional Ethics and Grievances Opinion No. 57:

"It is not necessarily improper for an attorney to engage in a business; but impropriety arises when the business is of such a nature or is conducted in such a manner as to be inconsistent with the lawyer's duties as a member of the Bar. Such an inconsistency arises when the business is one that will readily lend itself as a means for procuring professional employment for him, is such that it can be used as a cloak for indirect solicitation on his behalf, or is of a nature that, if handled by a lawyer, would be regarded as the practice of law. To avoid such inconsistencies it is always desirable and usually necessary that the lawyer keep any business in which he is engaged entirely separate and apart from his practice of the law and he must, in any event, conduct it with due observance of the standards of conduct required of him as a lawyer.

Some businesses in which laymen engage are so closely associated with the practice of law that their solicitation of business may readily become a means of indirect solicitation of business for any lawyer that is associated with them."

"The fact that a layman can lawfully render certain service does not necessarily mean that it would not be professional service when rendered by a lawyer. On the contrary, lawyers are frequently called upon to render such service for the very reason that it can be better rendered by a lawyer."

"If such a business and his law practice should be conducted from the same office, the public could not be expected to distinguish between his dual capacities and know when he is acting in the capacity of a lawyer and when in that of a layman."

In Advisory Opinion No. 67 (1 Adv.Op. p. 127), in respect to an analogous situation the Board took occasion to say:

"But in the last hypothesis, a member of the bar who assumes such relationship will undoubtedly be under the suspicion of improper conduct. Paraphrasing the language in Advisory Opinion No. 36 (Vol. 26 State Bar Reports, page 214), if he is engaged in the lay business of collecting accounts for compensation as a collection agency, his conduct is disapproved of as having a tendency to lower the dignity of the profession in that he combines his lay business with his law practice in such a way as to obtain business as a collecting agent because he is a lawyer, or to obtain business as a lawyer because he is engaged in the lay business of collecting accounts. In the opinion it was said:

'This sort of combination of lay business with the practice of law has been condemned by the Committee on Professional Ethics of the New York County Lawyers Association in answer to question 114, wherein it held that, though a lawyer is not prohibited by any accepted standard from engaging in a lay business while practicing law, he must conduct such lay business with due observance of the standards of conduct required of him as a lawyer; and that in conducting such lay business, he must not use it as a means of obtaining law business, he must not use the fact that he is a member of the bar as a means to obtain lay business.'

In this connection the Board restates what it has had repeated occasion to state, 'a member of the bar should not only avoid all impropriety, but should likewise avoid the appearance of impropriety'."