Could a Vermont lawyer sell title insurance as an agent, including to a legal client, and keep the commission?
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This page answers the general question as of 1979. Ask about yours and see what the current Vermont Rules of Professional Conduct say for your facts, with citations.
Plain-English summary
The committee treated selling title insurance as a business distinct from practicing law. Under DR 2-102(E), the lawyer could not identify the separate business on legal letterhead, an office sign, or a professional card, or identify as a lawyer in a publication connected with that business.
Selling a policy to someone who was not a legal client presented no ethical problem on the facts considered. Selling to a legal client was also not inherently improper, but DR 5-107(A) required full disclosure of the relationship with the title insurer and the commission, followed by the client's consent. The committee noted that the rule did not require a written record, although proof of disclosure and consent could be difficult without one.
The opinion treated the lawyer as representing both the insurer and the purchaser while serving as sales agent. A later dispute between the client and insurer would therefore almost certainly disqualify the lawyer from representing either side.
The lawyer did not have to apply the commission as a direct credit to the client's bill. The committee nevertheless concluded that the commission paid for part of the work in the real-estate transaction and had to be considered when determining the client's legal fee under the Code's prohibition on excessive fees.
Currency note
This opinion was issued in 1979 under Vermont's former Code of Professional Responsibility, before the Vermont Supreme Court promulgated the Vermont Rules of Professional Conduct in 1999. 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 Treat this page as historical context, not current guidance.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.
Common questions
Q: Was a lawyer barred from acting as a title-insurance agent?
A: No. The committee said the agency relationship was not objectionable by itself.
Q: What disclosure was required when the insurance purchaser was also the lawyer's client?
A: The lawyer had to disclose the relationship with the title-insurance company and the commission, then obtain the client's consent under DR 5-107(A).
Q: Could the lawyer represent a client in a later dispute with the title insurer?
A: The opinion said the lawyer would almost certainly be disqualified from representing either the client or the insurer in that dispute.
Q: Did the commission have to be credited dollar for dollar against the legal bill?
A: No. The committee found no direct-credit requirement, but required the lawyer to consider the commission when determining the legal fee.
Background and rules framework
The opinion applied DR 2-102(E) to the separation of the legal practice from the title-insurance business and DR 5-107(A) to compensation or other value connected with a client's representation. It also invoked the Code's excessive-fee prohibition when assessing the effect of the commission on the legal bill.
Citations and references
Vermont Code of Professional Responsibility:
- DR 2-102(E)
- DR 5-107(A)
Other opinions cited:
- ABA Informal Opinion 883 (October 2, 1965)
- ABA Opinion 304 (1962)
See also
- NY State Bar Op. 753: Lawyer-owned mortgage and title company
- NY State Bar Op. 1117: Lawyer and broker in one deal
Source
- Landing page: VBA Title Insurance opinions
- Original PDF: Vermont Advisory Opinion 79-16
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