Can a lawyer help a company market and prepare living trust plans sold to the public by nonlawyer salespeople?

Plain-English summary

Opinion E-92-2 (1992) addressed several arrangements in which lawyers participate in the marketing of living trust plans sold by companies using nonlawyer salespeople, including a scheme where an out-of-state company has a Wisconsin lawyer opine that documents conform to Wisconsin law without the lawyer meeting the purchasers, and a scheme where nonlawyer salespeople prepare documents from materials supplied by a lawyer who never meets purchasers or sees the documents. The committee largely rested on its earlier Formal Opinion E-90-7, which it quoted.

The committee identified two principal hazards. First, on conflicts of interest, it reiterated from E-90-7 that nonwaivable conflicts are created if the lawyer has some type of contractual association with a seller of an estate-planning product while providing related legal services to client buyers, citing SCR 20:1.7 and 20:2.1. Second, on unauthorized practice, the committee noted it lacks authority to decide what constitutes UPL, but warned that if a Wisconsin court or the Attorney General finds the nonlawyer activity to be UPL, lawyers participating with such organizations could be disciplined for assisting unauthorized practice under SCR 20:5.4 and 20:5.5, and that lawyers risk a SCR 20:5.5 violation where the seller states or implies the documents were prepared with a lawyer's assistance.

The committee added that, assuming no UPL or conflict problem, a lawyer who did not make clear to purchasers who the client was could be held to have an attorney-client relationship with the purchaser (citing Westinghouse Electric Corp. v. Kerr-McGee Corp.), which would trigger all client duties, including competence, communication, confidentiality, conflict of interest, the duty of independent professional judgment, and the prohibition on misrepresentation (SCR 20:1.1, 20:1.4, 20:1.6, 20:1.7, 20:2.1, and 20:8.4(c)). If instead the lawyer makes clear that the client is only the seller, the lawyer must refrain from giving the purchasers any legal advice or assistance under SCR 20:4.3.

Currency note

This opinion was issued in 1992, before Wisconsin's July 1, 2007 adoption of the revised Rules of Professional Conduct (the state's Ethics 2000 update). The conflict, UPL, and supervision rules it relies on have been revised since. 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 a lawyer have a contract with a living-trust seller to provide legal services to its customers?

A: The committee concluded, following E-90-7, that such a contractual association with the seller creates nonwaivable conflicts of interest under SCR 20:1.7 and 20:2.1 when the lawyer also provides legal services to the buyers.

Q: Could the lawyer be disciplined for the salespeople's conduct?

A: Potentially. The committee concluded that if a Wisconsin court or the Attorney General finds the nonlawyer activity to be the unauthorized practice of law, participating lawyers could be disciplined for assisting UPL under SCR 20:5.4 and 20:5.5.

Q: What happens if the lawyer does not make clear who the client is?

A: The committee concluded the lawyer could be held to have an attorney-client relationship with the purchaser, triggering all client duties; if the lawyer's only client is the seller, the lawyer must refrain from giving purchasers legal advice under SCR 20:4.3.

Background and rules framework

The opinion applies SCR 20:1.7 / Model Rule 1.7 and SCR 20:2.1 / Model Rule 2.1 (conflicts and independent judgment), SCR 20:5.4 and 20:5.5 / Model Rules 5.4 and 5.5 (professional independence and assisting unauthorized practice), and SCR 20:4.3 / Model Rule 4.3 (dealing with an unrepresented person), along with the general client duties in SCR 20:1.1, 20:1.4, 20:1.6, and 20:8.4(c). It builds on the committee's prior Opinion E-90-7.

Citations and references

Rules of Professional Conduct:

• Wis. SCR 20:1.7, 20:2.1 / Model Rules 1.7, 2.1 (conflicts; independent judgment)
• Wis. SCR 20:5.4, 20:5.5 / Model Rules 5.4, 5.5 (professional independence; unauthorized practice)
• Wis. SCR 20:4.3 / Model Rule 4.3 (dealing with an unrepresented person)
• Wis. SCR 20:1.1, 20:1.4, 20:1.6, 20:8.4(c) / Model Rules 1.1, 1.4, 1.6, 8.4(c) (client duties; misrepresentation)

Cases:

• Westinghouse Electric Corp. v. Kerr-McGee Corp., 580 F.2d 1311 (7th Cir. 1978) (when an attorney-client relationship is implied)

Other opinions cited:

• Wis. Formal Op. E-90-7 (lawyer participation with estate-planning product sellers)
• Wis. Formal Op. E-89-8; Wisconsin OAG 39-86 (1986)

See also

• WI Ethics Op. EF-18-02: In-House Counsel Aiding Unauthorized Practice
• WI Ethics Op. E-93-6: Retaining a Financial Planner for Estate Planning
• WI Ethics Op. E-94-6: Financial Planners in Estate Planning Practice

Source

• Landing page: https://www.wisbar.org/formembers/ethics/pages/formal-opinions.aspx
• Original PDF: https://www.wisbar.org/formembers/ethics/Ethics%20Opinions/E-92-2.pdf