Can a lawyer who also owns a title insurance agency advertise that affiliation on the law firm's website, letterhead, and business cards?

Plain-English summary

A lawyer was the sole shareholder of both a law firm and a title insurance agency that acted as an authorized agent of a title insurer. The lawyer wanted to state that affiliation on the firm's website, brochures, business cards, and letterhead, and asked what conflict-of-interest risks arise from an ancillary law-related business.

On the advertising question, the committee concluded the lawyer may indicate the affiliation, assuming the advertising complies with the Rules of Professional Conduct. No rule prohibits a lawyer from engaging in or being affiliated with ancillary law-related businesses, and the committee cited a line of its prior opinions allowing lawyers to own title companies, provide accounting services, act as real estate brokers, and the like. An earlier opinion (1975-03) barring advertising of a title-insurance affiliation was decided under the old disciplinary rules (DR 2-102(E)), which prohibited listing another business on letterhead, signs, and cards. No such prohibition exists under the current rules, and the committee had since allowed lawyers to note designations such as certified mediator, dual law-and-medicine licensure, and a nursing license. So the practice is permissible if the advertising complies with Rule 7.1 (no false or misleading communications) and Rule 7.5 (firm names and designations may not violate Rule 7.1).

On conflicts, the committee declined to enumerate every risk but flagged three points: the lawyer and firm may recommend the title agency or insurer only in accordance with Rules 1.7(b) and 1.8(f); the title agency may recommend the lawyer or firm only in accordance with those same rules; and the lawyer and firm must cease representation if one client's interests become adverse to another's, except as Rules 1.7, 1.8, 1.9, and 1.10 permit.

In practice

Under this opinion, on the facts presented, a lawyer may advertise an affiliated title-insurance business on firm materials so long as the communications are truthful and not misleading under Rules 7.1 and 7.5. The committee tied permissibility to the absence of any current-rule bar (distinguishing the old DR 2-102(E) and Opinion 1975-03) and conditioned operation of the ancillary business on the conflict rules: cross-recommendations only under Rules 1.7(b) and 1.8(f), and cessation of representation where clients become adverse except as Rules 1.7, 1.8, 1.9, and 1.10 allow.

Common questions

Q: Can I list my title insurance agency on my law firm's letterhead and website?

A: Yes, if the listing is truthful and not misleading under Rules 7.1 and 7.5. The committee concludes nothing in the current rules prohibits advertising the affiliation.

Q: Wasn't there an old opinion barring this?

A: Yes, Opinion 1975-03, but the committee explains it was decided under the former disciplinary rule DR 2-102(E), which has no counterpart in the current Rules of Professional Conduct.

Q: What conflict limits apply to running both businesses?

A: The committee says the firm may recommend the title agency, and the title agency may recommend the firm, only in accordance with Rules 1.7(b) and 1.8(f), and the lawyer must cease representation where clients become adverse except as Rules 1.7, 1.8, 1.9, and 1.10 permit.

Background and rules framework

The opinion applies South Carolina's versions of Model Rules 7.1 (communications about a lawyer's services), 7.2 (advertising), and 7.5 (firm names and letterhead), and the conflict rules 1.7 (current-client conflicts, including 1.7(b)), 1.8 (specific conflicts, including 1.8(f)), 1.9 (former clients), and 1.10 (imputation), at SCACR 407. It distinguishes the former Code of Professional Responsibility (DR 2-102(E)) and its earlier Opinion 1975-03.

Citations and references

Rules of Professional Conduct:

• MR 7.1 / SC Rule 7.1 (false or misleading communications)
• MR 7.2 / SC Rule 7.2 (advertising)
• MR 7.5 / SC Rule 7.5 (firm names and designations)
• MR 1.7 / SC Rule 1.7(b); MR 1.8 / SC Rule 1.8(f); MR 1.9 / SC Rule 1.9; MR 1.10 / SC Rule 1.10 (conflicts of interest and imputation)

Other opinions cited:

• SC Ethics Advisory Opinions 1991-21, 1989-17, 1982-15, 1978-14, 1996-28 (ancillary law-related businesses permitted)
• SC Ethics Advisory Opinion 1975-03 (prior bar on advertising a title-insurance affiliation, under the former rules)
• SC Ethics Advisory Opinions 1996-29, 1993-10, 1992-08 (listing other designations or licenses in advertising)

See also

• SC Bar Ethics Op. 04-11: Sharing one office between a law practice and the lawyer's other business
• ABA Formal Op. 507: Office-sharing arrangements

Source

• Landing page: https://www.scbar.org/for-lawyers/quicklinks/legal-resources/ethics-advisory-opinions/ethics-advisory-opinion-05-10/

Original opinion text

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

UPON THE REQUEST OF A MEMBER OF THE SOUTH CAROLINA BAR, THE ETHICS ADVISORY COMMITTEE HAS RENDERED THIS OPINION ON THE ETHICAL PROPRIETY OF THE INQUIRER’S CONTEMPLATED CONDUCT. THIS COMMITTEE HAS NO DISCIPLINARY AUTHORITY. LAWYER DISCIPLINE IS ADMINISTERED SOLELY BY THE SOUTH CAROLINA SUPREME COURT THROUGH ITS COMMISSION ON LAWYER CONDUCT.

Ethics Advisory Opinion 05-10

RULES 1.7(b), 1.8(f), 1.9, 1.10, 7.1, 7.2, AND 7.5

Facts
Lawyer is sole shareholder of both Law Firm and Title Insurance Agency. Title Insurance Agency is authorized agent of Title Insurer. Lawyer would like to state his affiliation with Title Insurance Agency and Title Insurer on Law Firm’s website and in Law Firm’s brochures, business cards, and letterhead.

Questions
1. May Lawyer indicate his affiliation with Title Insurance Agency and Title Insurer on Law Firm’s website and in Law Firm’s brochures, business cards, and letterhead?
2. What conflict-of-interest risks exist for lawyers engaged in ancillary law-related businesses?

Summary of Opinion
Lawyer may indicate his affiliation with Title Insurance Agency and Title Insurer on Law Firm’s website and in Law Firm’s brochures, business cards, and letterhead, assuming the advertisements comply with the Rules of Professional Conduct.
If Lawyer and Law Firm engage in an ancillary law-related business, Lawyer and Law Firm must comply with Rules 1.7 and 1.8.

Opinion
1. May Lawyer indicate his affiliation with a Title Insurance Agency and Title Insurer on Law Firm’s website and in Law Firm’s brochures, business cards, and letterhead?

No ethical rule exists necessarily prohibiting Lawyer or Law Firm from engaging in or being affiliated with ancillary law-related businesses. Furthermore, this Committee has addressed such conduct in numerous settings. See Ethics Advisory Opinion 1991-21 (stating the Rules of Professional Conduct do not require a law firm to establish a separate entity to provide title insurance services); Ethics Advisory Opinion 1989-17 (stating a lawyer may own a title insurance company and be listed as an agent); Ethics Advisory Opinion 1982-15 (stating a lawyer may simultaneously engage in the practice of law and provide accounting services); Ethics Advisory Opinion 1978-14 (stating a lawyer may be simultaneously employed as an attorney and as a real estate broker); see also Ethics Advisory Opinion 1996-28 (stating law firm is ethically permitted to form subsidiary to provide legal services).

Additionally, it is clear advertising by attorneys is permitted by the Rules of Professional Conduct. See Rule 7.2.

Accordingly, the only remaining inquiry is whether Lawyer and Law Firm are prohibited from disclosing the affiliation on Law Firm’s website and in Law Firm’s brochures, business cards, and letterhead.

This Committee has opined on this issue at least once before. In Ethics Advisory Opinion 1975-03, this Committee stated a lawyer may not advertise affiliations with a title insurance company. However, the Committee issued that opinion under the old disciplinary rules, not under the current Rules of Professional Conduct.

The old disciplinary rules prohibited a lawyer from advertising another business on the lawyer’s letterhead, office signs, and business cards. See DR 2-102(E) (“A lawyer who is engaged both in the practice of law and another profession or business shall not so indicate on his letterhead, office sign, or professional card, nor shall he identify himself as a lawyer in any publication in connection with his other profession or business.”).

No such prohibition exists within our current rules. Furthermore, this Committee has addressed similar behavior. See Ethics Advisory Opinion 1996-29 (stating a lawyer who is a certified mediator may indicate the designation on letterhead and business cards); Ethics Advisory Opinion 1993-10 (stating a lawyer may indicate a dual license in law and medicine in a television advertisement); Ethics Advisory Opinion 1992-08 (stating an attorney may indicate the existence of a nursing license in advertisements).

Thus, the practice is permissible, assuming the advertisements comply with Rules 7.1 (“A lawyer shall not make false, misleading, deceptive, or unfair communications about the lawyer or the lawyer’s services.”) and 7.5 (“A lawyer shall not use a firm name, letterhead or other professional designation that violates Rule 7.1.”).

2. What conflict-of-interest risks exist for lawyers engaged in ancillary law-related businesses?
   An attempt to here enumerate every conflict-of-interest risk associated with ancillary law-related businesses would be cumbersome and necessarily flawed, as the Committee is incapable of predicting the vast possibilities existing under every set of facts. That having been said, the Committee invites attention to the following:

A) Lawyer and Law Firm may not recommend the services of Title Insurance Agency or Title Insurer, except in accordance with Rules 1.7(b) and 1.8(f);

B) Title Insurance Agency may not recommend the services of Lawyer or Law Firm, except in accordance with Rules 1.7(b) and 1.8(f); and

C) Lawyer and Law Firm must cease representation if the interests of any one of their clients becomes adverse to another client, except to the extent the representation complies with Rules 1.7, 1.8, 1.9, and 1.10.