May a lawyer who is also a title insurance company agent solicit and write title insurance on property purchased by the lawyer's client or on which the lawyer rendered a title opinion?

Plain-English summary

Title insurance companies had retained attorneys as policy soliciting and issuing agents, paid normal commissions on the policies they sold. The committee was asked whether attorneys who are also title insurance agents may solicit and write title insurance covering property purchased by their clients, or covering property on which they have rendered a title opinion for a mortgage company that is the attorney's client in the transaction.

The committee stated that an attorney may engage in another business while practicing law, but must conduct the second business in accordance with the ethical standards governing the practice of law, citing its Opinions No. 274 and No. 276. This meant, among other things, that the attorney may not advertise the other business and that solicitation must comport with the Code of Professional Responsibility, particularly Disciplinary Rules 2-101, 2-103, and 2-104. Subject to those conditions, the committee found it was not improper for an attorney to serve as a soliciting or policy-issuing agent for an insurance company while practicing law.

The committee then drew the line: an attorney may not act as agent for a title insurance company in placing title insurance covering the title to property purchased by the attorney's client, because such an intertwined transaction presents serious conflict-of-interest questions under DR 5-101(A) and DR 5-104(A). It concluded that attorneys should not benefit directly or indirectly, as a policy-issuing or writing agent, from their client's purchase of title insurance covering property in which the attorney or firm examined the title or handled the legal matters incident to the transaction, because the interests of the title insurer and of the purchaser are of a nature that may reasonably be expected to give rise to disputes, leaving the attorney as agent and representative of both parties in an unseemly posture inconsistent with the Code.

In practice

This opinion has been withdrawn and replaced by Legal Ethics Opinion No. 290; the current Oklahoma position is stated there. As issued, the opinion held that a lawyer may serve as a title-insurance soliciting or issuing agent while practicing, subject to the Code's advertising and solicitation limits, but may not write title insurance on property the lawyer's client is purchasing, nor benefit from a client's title-insurance purchase covering property for which the lawyer or firm examined title or handled the transaction. Per the opinion, the analysis turns on the conflict between the title insurer's interests and the purchaser's interests, which may reasonably give rise to disputes.

Currency note

This opinion was adopted September 21, 1974, and its official header states it was withdrawn and replaced by Legal Ethics Opinion No. 290; consult Opinion No. 290 for the operative Oklahoma position. The opinion was also issued under the Code of Professional Responsibility, before Oklahoma adopted the Oklahoma Rules of Professional Conduct (1988) and the later Ethics 2000 revisions. 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 an Oklahoma lawyer be a title insurance company's agent while practicing law?

A: As issued, the opinion concluded a lawyer may serve as a soliciting or policy-issuing agent while practicing law, provided the second business is conducted under the Code's standards (no advertising, and solicitation complying with DR 2-101, 2-103, and 2-104).

Q: Could the lawyer-agent write the title policy on a property the lawyer's client was buying?

A: No. The committee held an attorney may not act as agent placing title insurance covering property purchased by the attorney's client, citing the conflict-of-interest concerns of DR 5-101(A) and DR 5-104(A).

Q: Is this opinion still in effect?

A: No. Its official header states it was withdrawn and replaced by Legal Ethics Opinion No. 290.

Background and rules framework

The opinion applied the principle that a lawyer engaging in a second business must conduct it under the standards governing the practice of law (Opinions No. 274 and 276), with the advertising and solicitation limits of DR 2-101, 2-103, and 2-104, and the conflict-of-interest rules DR 5-101(A) (declining employment where the lawyer's own financial, business, property, or personal interests may affect professional judgment) and DR 5-104(A) (business transactions with a client where they have differing interests). It predates the Model Rules and made no Model Rule citation.

Citations and references

Rules of Professional Conduct:

• DR 5-101(A) and DR 5-104(A) (Code of Professional Responsibility): conflicts arising from the lawyer's own interests and from business dealings with a client.
• DR 2-101, DR 2-103, and DR 2-104 (Code of Professional Responsibility): advertising and solicitation limits applied to the lawyer's second business.

Other opinions cited:

• OBA Legal Ethics Opinions No. 274 (1973) and No. 276 (1974).

Subsequent history:

• Withdrawn and replaced by OBA Legal Ethics Opinion No. 290.

See also

• Okla. Bar Ethics Op. 274: Lawyer-accountant dual practice (overrules Op. 208)
• Okla. Bar Ethics Op. 276: Lawyer-CPA certificates, listings, and tax returns
• Okla. Bar Ethics Op. 232: A lawyer's interest in an abstract company

Source

• Landing page: https://www.okbar.org/ethics/ethics-opinion-no-281/

Original opinion text

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

Adopted September 21, 1974 [Withdrawn and replaced by Legal Ethics Opinion No. 290]

Title insurance companies have sought and obtained the services of attorneys as policy soliciting and issuing agents. Such agents are paid the normal commissions upon policies of title insurance solicited and sold by them.

The Committee has been asked its opinion upon the propriety of attorneys, who are also title insurance company agents, soliciting and writing title insurance policies covering properties purchased by their clients or covering property upon which they have rendered a title opinion for a mortgage company, which in such transactions, is the attorney’s client.

An attorney may engage in another business at the same time he is engaged in the practice of law. The attorney, however, must conduct the second business in accordance with the ethical standards which govern the practice of law. Oklahoma Bar Association Legal Ethics Opinion No. 274, 44 Okla. Bar Ass’n J. 2157, adopted June 23, 1973, and Oklahoma Bar Association Legal Ethics Opinion No. 276, 45 Okla. Bar Ass’n J. 560, adopted February 22, 1974. This means that, among other things, no advertising may be engaged in by the attorney with respect to his other business and that the solicitation of business must in all matters, comport with the requirements of the Code of Professional Responsibility, particularly Disciplinary Rules 2_101, 2_103, and 2_104. Subject to these conditions and requirements, it is not improper for an attorney to serve as a soliciting and/or policy issuing agent for an insurance company while the attorney is engaged in the practice of law.

An attorney may not act as an agent for a title insurance company in the placement of title insurance covering the title to property purchased by the attorney’s client. Such an intertwined transaction presents serious questions of a conflict of interest between the various interests being represented by the attorney. Disciplinary Rule 5_101(A) and Disciplinary Rule 5_104(A).

The Committee is of the opinion that attorneys should not benefit directly or indirectly, as a policy issuing or writing agent, from their client’s purchase of title insurance covering property in which the attorney or his firm has examined the title for such a client or has handled the legal matters incident to the transaction for such a client. The interest of the title insurance company and of the purchaser of title insurance are of a nature which may reasonably be expected to give rise to disputes. In such an event the attorney is in the position of having been the agent and representative of both parties of such transactions. This unseemly posture is not in accordance with the requirements of the Code of Professional Responsibility and the relationship which an attorney at law must maintain with respect to his client.