May a lawyer or law firm run an advertised insurance and real estate business out of the same offices where they practice law?

Plain-English summary

A firm asked whether it could engage in an extensively advertised insurance and real estate business while practicing law, using its law offices as its insurance and real estate offices, stating that "in no manner will we advertise ourselves as lawyers."

The committee answered that the arrangement violated Canon 27. It noted earlier Oklahoma opinions (Nos. 145 and 147) that had treated a lawyer's abstract or insurance business as not in itself a violation provided the businesses were kept separate, but observed that those opinions had not referred to the ABA opinions, which became controlling once the Oklahoma Supreme Court adopted the ABA Canons in 1939. Drawing on ABA Opinions 57, 225, and 233, the committee reasoned that impropriety arises when a business will readily serve as a means of procuring professional employment, can be used as a cloak for indirect solicitation, or is of a nature that would be the practice of law if handled by a lawyer, and that application of Canon 27 does not depend on whether the lawyer is identified as a lawyer. It concluded that conducting an advertised insurance and real estate business from the law offices would result in indirect solicitation of professional employment. The committee made clear this did not bar a lawyer from selling or advertising his own real estate, or from engaging in business generally, or condemn a lawyer because a business contact happens to produce professional employment; the evil lay in conducting the business as a means of soliciting law work. It overruled any previous Oklahoma opinions in conflict.

Currency note

This opinion was issued in 1953, 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. Canon 27's treatment of advertising and solicitation no longer reflects current law: the United States Supreme Court held in Bates v. State Bar of Arizona, 433 U.S. 350 (1977), that categorical bans on truthful lawyer advertising violate the First Amendment, and lawyer advertising and ancillary businesses are governed by different rules today. Treat this page as historical context, not current guidance.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 the firm avoid the rule by not calling itself a law firm in the ads?

A: No. The committee held that application of Canon 27 does not depend on whether the lawyer is disclosed as a lawyer; the advertised business still operated as indirect solicitation of professional employment.

Q: Did the opinion bar lawyers from any outside business?

A: No. The committee said a lawyer may sell or advertise his own real estate and may engage in business generally, and is not condemned merely because a business contact produces professional employment; the impropriety lay in conducting the business so as to solicit law work.

Q: Did this change earlier Oklahoma guidance?

A: Yes. The committee treated the ABA opinions as controlling after the 1939 adoption of the Canons and overruled any previous Oklahoma opinions in conflict, including the more permissive treatment in earlier opinions on abstract and insurance businesses.

Background and rules framework

The opinion applied Canon 27 of the Canons of Professional Ethics, adopted in Oklahoma, on solicitation of professional employment, as construed by the ABA opinions the committee treated as controlling after the Oklahoma Supreme Court's 1939 adoption of the Canons. The opinion predates the Model Rules and made no Model Rule citation.

Citations and references

Rules of Professional Conduct:

• Canon 27 (ABA Canons of Professional Ethics, adopted by the Oklahoma Bar): the bar on direct and indirect solicitation of professional employment.

Other opinions cited:

• ABA Committee on Professional Ethics Opinion 57, outside business as indirect solicitation
• ABA Opinion 225, lawyer's participation in a collection agency
• ABA Opinion 233, listing a lawyer among lay collectors and adjusters
• Oklahoma Advisory Opinions Nos. 145 and 147 (earlier, more permissive treatment), and ABA Opinions 194, 198, 255, 257, 269, and 272

See also

• Okla. Bar Ethics Op. 164: Newspaper income tax preparation notice
• Okla. Bar Ethics Op. 146: Attorney advertising his casualty adjuster services
• Okla. Bar Ethics Op. 31: Law firm managing a lay adjustment bureau

Source

• Landing page: https://www.okbar.org/ethics/ethics-opinion-no-165/

Original opinion text

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

Adopted January 14, 1953

QUERY

Is it proper for an attorney or a firm of attorneys to engage in the insurance and real estate business, which business will be extensively advertised, and practice law, using their law offices as their insurance and real estate offices?

ANSWER

In Advisory Opinion No. 145 of the Oklahoma Bar Association, the question of a lawyer engaging in the abstract business was passed upon and there said, “… while the Committee cannot say that engaging in the abstract business under the circumstances set forth above, is in violation of any rule or principle of professional ethics, it is a practice of which the Committee does not approve. Particularly is this true where the attorney proposes to have his office in the same quarters utilized by the abstract company.”

Again in Advisory Opinion No. 147 the question of engaging in the insurance business was passed upon, and held, “… the conducting of an insurance business by a practicing attorney violates no rule or principle of legal ethics provided care is exercised to keep the two lines of business separate and apart so that neither business will be used as a means of procuring business for the other.”

Neither of said Opinions make reference to the Opinions of the American Bar Association and since the Canons of Ethics of the American Bar Association were adopted by order of the Supreme Court of Oklahoma on October 10, 1939 the Opinions of the American Bar Association construing said Canons are controlling.

In Opinion 57 of the American Bar Association it was said:

“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. Opinions 31 and 35. The adjustment of claims, the incorporating of companies, and the handling of matters before governmental commissions and boards and in government offices fall within such classifications. It is difficult to conceive how a lawyer could conduct a claim adjustment bureau, a company for the organization of corporations, or a bureau for securing income tax refunds, without practicing law. In performing the services which he would ordinarily render in connection with any of these activities, his professional skill and responsibility as a lawyer would be engaged. 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.” (Emphasis supplied)

Opinion 57 involved an Insurance Adjuster’s Bureau.

A.B.A. Opinion No. 225 held that a practicing lawyer cannot participate in the collection activities or the management of an agency which solicits the collection of claims; that if a lawyer is to participate in such activities he must withdraw from the practice of law, and refrain from holding himself out as a lawyer.

Other A.B.A. Opinions which touch on the question are Numbers 194, 198, 225, 255, 257, 269 and 272.

In the inquiry the firm says, “in no manner will we advertise ourselves as lawyers.”

Engaging in the insurance and real estate business and advertising the same violates Canon 27, even though there is no indication in the ads that the members of the firm are lawyers.

In A.B.A. Opinion 233 the question “Is the listing of a lawyer’s name in a list of laymen and lawyers as collectors, adjusters, abstracters, tax consultants, and the like, ethically proper, even if there is no indication that the listee is a lawyer?” was answered in the negative. It was there said,

“… we cannot close our eyes to the fact that the services generally required are so related to the practice of law as to lead, or be apt to lead, to the necessity for legal services, if in fact legal services are not required at the outset. Solicitation by a lawyer of employment for rendition of such services is solicitation of ‘professional employment’ within the meaning of Canon 27. Application of the Canon is not dependent upon the disclosure or nondisclosure of the fact that the lawyer is a lawyer. Where a lawyer is directly or indirectly involved his conduct must not violate the canons.

We have held that it is ethically improper for a lawyer to participate in the collection activities or management of a collection agency which solicits business. (Opinion 225) Solicitation of such business in the name of a lawyer, even without designating him as such, would be no less improper.”

Generally a lawyer cannot, ethically, engage in the practice of law and at the same time and from the same offices carry on an advertising campaign to sell real estate and solicit insurance business for such activity would result in indirect solicitation of professional employment. This does not mean that a lawyer cannot sell or for that matter advertise his own real estate for sale, nor does it mean that he cannot, ethically, engage in any business, nor is he to be condemned because the business contact may result in professional employment.

The evil is in conducting the business in such manner as to be a means of soliciting, either directly or indirectly, professional employment.

Any previous opinions of the Oklahoma Bar Association in conflict herewith are hereby overruled.