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Ethics Opinion 11: Law Practice in Combination with Insurance Sales, 01/11/60; Addendum Issued 1993

PLEASE NOTE: This opinion was issued before the January 1, 2008 effective date of the revised Colorado Rules of Professional Conduct. The revised Rules may affect the analysis and conclusions contained in the opinion, and the opinion is under review by the Ethics Committee in light of the revised Rules. Lawyers should not rely on this opinion and should consult the revised Rules in connection with the issues addressed by the opinion. 

The following Formal Opinion was written by
the Ethics Committee of the Colorado Bar Association

[Formal Ethics Opinions are issued for advisory purposes only and are not in any way binding on the Colorado Supreme Court, the Presiding Disciplinary Judge, the Attorney Regulation Committee, or the Office of Attorney Regulation Counsel and do not provide protection against disciplinary actions.]

11 LAW PRACTICE IN COMBINATION WITH INSURANCE SALES
Adopted January 11, 1960.
Addendum issued July 24, 1993.

 

Syllabus

A person admitted to the Bar of this state may not disclose, nor permit others to disclose, the fact that he is a lawyer, if the manner of such disclosure would be in violation of Canon 27, if done by a practicing lawyer, and if such person is engaged in a business or occupation which, if performed by a lawyer, would constitute, at least in part, the practice of law.

A lawyer engaged in the occupation of selling life insurance may not give legal advice to his customers or clients.

A lawyer associated with an insurance corporation may not give legal advice on behalf of the corporation to its customers or clients.

Facts

John Doe is a life insurance agent or salesman associated with the X Life Insurance Co. He is also a lawyer licensed to practice in the State of Colorado, but his livelihood is derived through the sale of life insurance. He uses various means to advertise and promote his insurance business, among which are the following:

  1. The mailing and distribution of desk calendars upon which appears:

     

    John Doe, LL.B.
    Tax-Planned Insurance
  2. The mailing and distribution of a folder prepared by X Insurance Co. containing Mr. Doe's picture and the following biographical data:

      Mr. Doe received his LL.B. from ________ Law School in ________. He is a member of the ________ and ________ Bars. He has appeared frequently as a lecturer and has written various law review articles.

  3. The use of stationery and envelopes upon which appears Mr. Doe's name, followed by "LL.B."
  4. Participation in newspaper advertisements of the X Insurance Co. in which appears Mr. Doe's name, followed by "LL.B."
  5. The mailing of letters to potential buyers of life insurance, a sample of which is the following:

      Dear _________,

      Recent changes made in the tax laws now give the opportunity to doctors alone to obtain a tax-free retirement income, in some cases as high as $18,000.00 a year.

      Just mail the enclosed card to receive complete information. No obligation, of course.

      Sincerely,
      John Doe, LL.B.

  6. The mailing of a monthly four-page circular, prepared by the X Insurance Co., digesting recent cases in the field of tax, wills and estates, and trust law, and containing suggestions and addresses, and signed by "John Doe, LL.B."

Opinion

The Committee is of the opinion that Mr. Doe is in violation of the Canons of Professional Ethics.

A difficult aspect of this case is the fact that Mr. Doe is not practicing law in the sense of earning his living therefrom. He is an insurance salesman who is using his legal education, degree and license as an aid to, and in promotion of, his insurance business. If he were a practicing lawyer, or if he prepared any legal instruments for a fee in connection with his insurance business, his advertising and promotional activities enumerated above would constitute a clear violation of Canon 27. Assuming that this is not the case, we must resolve the more perplexing problem of how far a lawyer not engaged in active practice may go in using his legal degree and license to promote another business.

The Committee is of the opinion that a person admitted to the Bar of this state may not disclose, nor permit others to disclose, the fact that he is a lawyer, if the manner of such disclosure would be in violation of Canon 27, if done by a practicing lawyer, and if such person is engaged in a business or occupation which, if performed by a lawyer, would constitute, at least in part, the practice of law.

This conclusion by the Committee would preclude Mr. Doe from using the initials "LL.B." after his name in each of the six instances set out in the facts above.

We believe that the facts show that Mr. Doe's activities would in some measure constitute the practice of law. While the selling of life insurance is not the practice of law per se, Mr. Doe purports to offer a so-called "estate planning" service and to give advice as to the federal tax laws and other laws affecting the ownership, transfer, and devolution of property. This advice, if given by a lawyer, would be the practice of law.

We are not unmindful of the fact that the Canons of Professional Ethics are generally regarded as applying to the legal profession as such and are meant to provide a standard of conduct among lawyers which will merit the respect and confidence of the profession, the courts and the public. We, nevertheless, feel that a person licensed to practice law, but engaged in another occupation, subjects himself to the Canons of Professional Ethics when he holds himself out as a lawyer in connection with such other occupation.

It may be argued that, in any event, the prohibition against advertising contained in Canon 27 does not apply to Mr. Doe since the Canon refers to professional employment, meaning employment as a lawyer, and Mr. Doe is not seeking such employment. Nevertheless, the only purpose which the disclosure that Mr. Doe is an attorney would serve would be to convey the impression to potential buyers of insurance that Mr. Doe is educated and qualified to advise with regard to legal and tax problems which might arise in the planning of an estate. Certainly the fact that Mr. Doe is a lawyer has nothing to do with his business as an insurance salesman, if in fact he does nothing other than sell insurance. If, on the other hand, he uses his legal knowledge as an aid in selling insurance, and at the same time holds himself out to the public as a lawyer, he subjects himself to the provisions of the canons. We hold that the activities of Mr. Doe constitute the soliciting of professional employment within the meaning of Canon 27.

But we are not confined to Canon 27 as a basis for this opinion. If Mr. Doe is giving legal advice to customers or clients in connection with his association with the X Life Insurance Co., he is in violation of Canon 35, which provides that the professional services of a lawyer should not be controlled or exploited by any lay agency. A corporation may not practice law. Neither may an attorney practice law through or on behalf of a corporation which intervenes between him and his client. If the employees of a corporation are engaged in the activity of giving legal advice to third parties on behalf of the corporation, such constitutes the corporate practice of law and is prohibited.

If the X Life Insurance Co. is practicing law, Mr. Doe is also in violation of Canon 47, which prohibits a lawyer from permitting his professional services, or his name, to be used in aid of, or to make possible, the unauthorized practice of law by any lay agency, personal or corporate.

1993 Addendum

To the extent that Opinion 11 addresses advertising and promotional activities, such opinion is modified by Colorado Rules of Professional Conduct 7.1 through 7.5.