LEO: Business Activities — Title Company, LE Op. 1138
Business Activities — Title Company: Financial Arrangement in Behalf of Attorneys/Shareholders of Title Company — Nonlawyers: Attorney Engaged in Business with a Nonlawyer.
August 18, 1988
You inquire as to the propriety of receiving consulting fees from a title company in which you are a stockholder, the amount of which is tied to the number of policies you obtain for your clients through the title insurance company. You have indicated there are eleven stockholders of the title company of which ten are attorneys and the other is an insurance agent from whose office the title policies are written. You further advised that one possible approach would be to allow each stockholder to receive an equal dividend from a percentage of the profits equal to the percentage contributed by non-owner attorneys, and then distribute the remaining profits as consulting fees based on a percentage of premiums contributed by each owner attorney.
The Committee opines that the proposed arrangement as outlined above does not violate the Code of Professional Responsibility. The Committee would direct your attention to prior LE Op. 939 and LE Op. 886 concerning the disclosure to clients and consent required in such an arrangement.
The Committee also directs your attention to DR:3-103 which states that a lawyer shall not form a partnership with a non-lawyer if any of the activities of the partnership consist of the practice of law. For the purposes of this opinion the Committee will assume that the title insurance company will not engage in any activities which could be construed to constitute the “practice of law.”
Committee Opinion August 18, 1988
LEO: Business Activities - Title Company:, LE Op. 1138 (1988)