Can an insurance-defense firm give Christmas gifts or host entertainment for the claims adjusters and representatives of its insurance-company clients?

Plain-English summary

The inquiry came from a law firm handling a large volume of insurance-defense work. It asked whether presenting Christmas gift certificates to claims adjusters and representatives of its insurance-company clients, and hosting an annual football party for them (renting a bus, furnishing tickets, and supplying drinks and meals), would be unethical.

The Committee said it could not answer the questions categorically. Canon 24 condemns solicitation of professional employment by direct or indirect means, and whether gifts and entertainment for clients and their employees amount to solicitation of future employment or merely an expression of personal friendship depends on all the facts and circumstances. The Committee identified the relevant factors as the value or cost of the gifts or entertainment, the personal relationships between the lawyers and the individuals involved, the insurance company's rules on its employees accepting gifts and entertainment, and the lawyer's intent.

The Committee observed that a close personal friendship between a lawyer and a client or a client's representative is not uncommon, and in such a case it is not unethical to take a friend to a football game or to dinner or to give a modest Christmas gift. It said that indiscriminate, widespread distribution of costly gifts or ostentatious party-hosting not warranted by personal relations would tend to create the impression that the lawyer is seeking professional employment. Within reasonable limits, each lawyer or firm decides where to draw the line; but where reasonable limits appear exceeded, the Bar's Grievance Committees should investigate and act after considering all the facts. The ruling was 9-0.

Currency note

This opinion was issued in 1966, under the former Texas Canons of Ethics, which the Texas Disciplinary Rules of Professional Conduct replaced effective January 1, 1990. It also predates Bates v. State Bar of Arizona, 433 U.S. 350 (1977), which loosened categorical advertising restrictions, though prohibitions on misleading or solicitous communications were not eliminated. 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 Treat this page as historical context, not current guidance.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 insurance-defense firm give holiday gifts to its clients' claims adjusters?

A: The Committee declined to give a categorical answer. Whether such gifts are improper solicitation under Canon 24 or an expression of personal friendship depends on all the facts and circumstances.

Q: What factors did the Committee say control the analysis?

A: The value or cost of the gifts or entertainment, the personal relationships involved, the insurer's rules on its employees accepting gifts, and the lawyer's intent.

Q: Is a modest gift to a personal friend who happens to be a client representative improper?

A: No. The Committee said that where a close personal friendship exists, it is not unethical to take the friend to a game or dinner or give a modest Christmas gift; the concern is indiscriminate, costly, or ostentatious giving not warranted by personal relations.

Background and rules framework

The opinion interprets former Texas Canon 24, which condemned solicitation of professional employment by direct or indirect means. The modern analogs are ABA Model Rule 7.3 (solicitation of clients) and Model Rule 7.2 (advertising).

Citations and references

Rules of Professional Conduct:

• MR 7.3 (solicitation of clients), as the modern analog
• MR 7.2 (advertising), as the modern analog
• Texas Canon 24 (former canon)

See also

• TX Ethics Op. 322: Holiday Greetings to the Public Through Advertising
• TX Ethics Op. 334: Validating Clients' Parking Tickets
• TX Ethics Op. 320: Use of an Attorney's Name and Picture in Airline Advertising

Source

• Landing page: https://www.legalethicstexas.com/resources/opinions/opinion-316/
• Original PDF: https://tcle-web.s3.amazonaws.com/public/documents/Opinion_316.pdf

Original opinion text

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

QUESTION PRESENTED

Would it be unethical for a law firm, which handles a large volume of defense work for various insurance companies, to present Christmas gift certificates to claims adjusters and representatives of its insurance company clients?
Would it be unethical for such a law firm to give an annual football party for a large group of such claims adjusters and representatives, the firm renting a bus, furnishing football tickets, taking such guests to the game in another city, and supplying drinks and meals for them?

23 Baylor L. Rev. 840 (1972)

We cannot answer these questions categorically. Canon 24 condemns solicitation of professional employment, by either direct or indirect means. Whether gifts to and entertainment of clients and their employees constitute solicitation of future employment or merely an expression of personal friendship depends on all the facts and circumstances, including such factors as the value or cost of the gifts or entertainment, the personal relationships between the lawyers and the individuals involved, the insurance company rules regarding acceptance by its employees of gifts and entertainment, and the lawyer's intent. It is not uncommon for a close personal friendship to exist between a lawyer and his client or his client's representative. Certainly, in such a case, it is not unethical for the lawyer to take his friend to a football game or to dinner or to give him a modest Christmas gift. Good taste, if not ethical considerations, would cause most lawyers to limit such favors to a few close friends and to avoid such wholesale giving and lavish entertainment as might create a suspicion of soliciting employment. However generous and innocent his intentions, a lawyer's indiscriminate and widespread distribution of costly gifts or ostentatious party-hosting, when not warranted by personal relations, would tend to create the unwholesome impression among his brethren of the Bar, if not among his clients and prospective clients, that he is thereby seeking professional employment. Within reasonable limits, it is for each lawyer or law firm to decide where to draw the line; but when reasonable limits appear to be exceeded, the Bar, through its Grievance Committees, should investigate and take appropriate action after considering all the facts and circumstances. (9-0.)

SOLICITATION - GIFTS AND ENTERTAINMENT FOR CLAIMS ADJUSTERS
Whether or not it is unethical for a law firm to provide gifts and entertainment for claims adjusters and representatives of its regular insurance-company clients depends upon whether solicitation of future employment is indicated by all the facts and circumstances.

Canon 24.

Tex. Comm. On Professional Ethics, Op. 316 (1966)