What could lender-side counsel say to an unrepresented Vermont borrower at closing?
Apply this to your situation
This page answers the general question as of 1995. Ask about yours and see what the current Vermont Rules of Professional Conduct say for your facts, with citations.
Plain-English summary
A title insurer hired a lawyer to handle closing work for a bank while borrowers could choose to close without their own lawyer. The lawyer was paid a portion of the title-insurance premium, although the insurer performed the title search and policy work.
The committee said the lawyer’s indirect payment and retention through the insurer did not change the lawyer’s lender-side role. At a closing with an unrepresented borrower, the lawyer had to avoid suggesting the borrower was also a client. Discussing the lender’s requirements was distinct from giving the borrower legal advice; a borrower’s legal question called for referral to separate counsel.
The committee also said payment should be a reasonable fee for the lawyer’s closing services rather than a title-insurance commission. It did not reject a percentage-of-premium calculation by itself if the resulting fee reasonably reflected the actual work.
Currency note
This opinion was issued in 1995 under Vermont's former Code of Professional Responsibility. The Vermont Supreme Court's rules history says the Rules of Professional Conduct replaced the Code and applied to lawyer conduct after September 1, 1999; the court later made comprehensive amendments in 2009. 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 Treat this page as historical context, not current guidance.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: Did payment through a title insurer change the lawyer’s role?
A: No. The opinion treated the lawyer as providing legal services for the bank’s interests at closing.
Q: Could lender counsel answer an unrepresented borrower’s legal question?
A: The opinion, citing its earlier work, said the lawyer should direct the borrower to another attorney for legal advice.
Q: Was a premium-based fee automatically prohibited?
A: No. The committee focused on whether it was a reasonable legal fee for actual closing work rather than an insurance commission.
Background and rules framework
The opinion cited former Code DR 7-104(A)(2) for dealings with an unrepresented borrower, DR 3-102 on fee splitting, and DR 2-106 on reasonable fees. It reaffirmed Vermont Opinions 90-8, 94-8, and 95-3.
Citations and references
Vermont Code of Professional Responsibility:
- DR 7-104(A)(2), DR 3-102, DR 2-106
Other opinions cited:
- Vermont Opinions 90-8, 94-8, and 95-3
See also
Source
- Landing page: VBA conflict of interest opinions
- Original PDF: Vermont Advisory Opinion 95-09
- Rules history: Vermont Rules of Professional Conduct, “These rules apply to lawyer conduct after September 1, 1999.”
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