NUMBER 313 1933

Question. A practicing attorney, X, receives from Y, a friend who is an insurance agent, a proposition that X put Y in touch with such clients of X as the latter considers would be benefited by a given plan of insurance, if Y should profit by contacts so effected he would compensate X for such service as X rendered. Y suggests that X make application for a sub-agent’s license with the company he represents, thereby enabling X to underwrite a case jointly with Y. Any client of X to whom Y may be introduced is to be fully informed of the relations between X and Y.

Would it be professionally improper for X to enter into such a relation with Y?

Answer. An attorney at law is not precluded from engaging in other profitable occupations, and the Committee does not condemn the course of lawyers in some districts who engage in real estate and insurance business in addition to practicing law. A practicing attorney who engages in business, however, must conduct himself therein in accordance with the standards of the legal profession (see Opinions 114 and 179). Moreover, a lawyer must not exploit for his own benefit or for the benefit of third parties the relationship between himself as attorney and his client (see Opinion 250).

In the opinion of the Committee, therefore, the proposed arrangement is professionally improper as affording opportunity for and tending to encourage such exploitation, unless it contemplates that the attorney, before taking any other steps in the matter, shall disclose to his client the attorney’s interest and obtain the client’s consent to the communication of his name to the agent and to the attorney’s participation in the commission. Even within these limitations, the attorney’s interest in the commission makes the consummation of any insurance a transaction between attorney and client, demanding the highest degree of good faith in respect to any advice or act of the attorney which contributes to such consummation.


In so answering, the Committee expresses no opinion upon the construction or application of Section 65 of the Insurance Law of the State of New York.