The Florida Bar

December 8, 1964

It would be improper for an attorney to prepare proposed estate analyses for insurance agents. Even if the proposed arrangement were otherwise proper, it would be improper to make the fee for professional services rendered contingent in whole or in part upon the sale of insurance.

Canons: 6, 12, 13, 27, 35
Opinion: 64-33

Chairman Smith stated the opinion of the committee:

A member of The Florida Bar requests our opinion on the following facts and questions.

The general agent for a life insurance company has agents working under his supervision. These agents approach prospective insurance clients and propose an estate analysis. The analysis includes: (1) mathematical computation of estate taxes as if the insurance client had died yesterday, (2) an analysis of critical areas in estate planning and (3) proposed solutions for critical areas. If insurance is needed to solve estate problems the agent sells the insurance. If insurance is not needed the insurance client refers the agent to three other persons of equivalent financial standing.

The general agent wishes to employ the lawyer to prepare the proposed analyses and to supply information concerning estate analysis which is needed by the agents for their respective insurance clients. The analyses would be limited to explaining the various instruments which should be prepared in a particular case and to stating the provisions which such instruments would contain. The lawyer's only contact would be with the insurance agents, and his name would not appear on the analysis.

In some manner which is not stated, the analysis initially prepared would first be presented to attorneys and accountants employed by the prospective client, and the analysis might be changed after conferences with those individuals. After those conferences and changes, if any, the analysis would be presented to the agent's prospective client with a written explanation, and an oral explanation would be given by the agent.

The lawyer would be paid for his service by the general agent who, in turn, would pass on all or part of the cost to his agents as he sees fit.

Our opinion is sought as to the following questions:

1. Is the above arrangement in any way unethical? If so, in what way? Does it in any way violate Canon 35 dealing with intermediaries?
2. In setting the fee in such a situation is it unethical to set the fee either in whole or in part on a contingent basis depending on the sale of insurance?

3. What steps must the lawyer take, if any, to prevent the agents from disclosing that the analysis is prepared by him?

4. If the insurance client does not have an attorney does the lawyer have any responsibility to prevent the agent from recommending his services?

5. Although it is contemplated that the agent will gather all information, would it be unethical for the lawyer to participate in gathering information from the insurance client, which would involve disclosure of the lawyer's name?

6. Would it be unethical for the lawyer to participate in conferences with the insurance client's attorney and accountant?

Questions of similar nature have previously been propounded to our Committee. In our Opinion 64-33 we covered, particularly in the second situation discussed there, a problem quite similar to the one now posed.

In connection with the specific questions which are presented, the Committee unanimously agrees as follows:

1. It would be ethically improper to engage in the work outlined in the factual situation above. Violations of Canons 6 and 35 are involved for the reasons presented in connection with the second factual situation outlined in Opinion 64-33. The Committee does not consider material that the lawyer's name will not appear on the proposed analyses.

2. Even if the proposed arrangement was otherwise proper, it would be ethically improper to make the fee for professional services rendered contingent in whole or part upon the sale of insurance. The effect of such arrangement is to attempt rendition of a service to a prospective insurance client through an intermediary when the lawyer would be paid by the intermediary only if the client purchased insurance from the intermediary. Canons 6 and 35 are involved.

3. We can conceive of no effective steps which could be taken to prevent the agents from disclosing who prepared the analyses if the agents desired to do so.

4. Although it is not always improper to accept employment upon reference by a layman, we believe it would be wise to decline to represent the prospective insurance client even if he is referred by the insurance agent without the lawyer's knowledge or consent. Otherwise, the whole arrangement could be subject to criticism as a device for channelling legal employment.

5. We also believe it would be unwise to participate in gathering information from the prospective client by direct contact with the client. We understand the lawyer would be employed by the general agent to render advice on the basis of information he furnishes. Direct contact with the prospective insurance client would offer the same possibility for criticism mentioned immediately above.

6. Assuming that he was to render the services contemplated, a majority of the Committee believes it would not be improper for the lawyer to confer with attorneys or accountants representing the prospective insurance client provided the meeting, in effect, amounts to negotiations “at arm's length.”

[Revised: 08-24-2011]