LEO: Title Agency: Issuing Title Policies  LE Op. 1152


Title Agency: Issuing Title Policies to Real Estate Clients.


November 16, 1988


You wish to know whether it is proper for 13 attorneys practicing before

the bar, in a locality where only 21 attorneys engage in the practice of

law, to form and own equal shares of stock in a corporation which will act

as an agent for a title insurance company. You advised that equal

dividends will be distributed among the attorneys, the agency will be

located in its own office, separate from the office of any attorney, and

an office manager and secretary will be hired to run the day-to-day

business affairs. You state further that there are already two existing

title insurance agencies in the locality which are owned in whole or in

part by attorneys and which will indeed be in competition with the

proposed new agency.


Disciplinary Rule 5-101(A) [ DR:5-101] is the controlling rule relative

to your inquiry. The rule provides as follows:


A lawyer shall not accept employment if the exercise of his professional

judgment on behalf of his client may be affected by his own financial,

business, property, or personal interest, except with the consent of his

client after full and adequate disclosure under the circumstances.


The Committee has previously opined that it is not improper for an

attorney to place his real estate clients' title insurance needs through a

title agency in which the attorney has an ownership interest, as long as

full disclosure is made to the client. The Committee would direct your

attention to LE Op. 886 and LE Op. 939, which in the Committee's view

are dispositive of your inquiry.


Committee Opinion November 16, 1988