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Ethics Advisory Opinion 05-10

April 13, 2005

South Carolina Bar Ethics Advisory Opinion 05-10

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

Date

June 17, 2005

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.

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