The Florida Bar

Ethics Opinion

Opinion 73-1

April 20, 1973
Advisory ethics opinions are not binding.
There is no ethical objection to members of a law firm having a substantial interest in a title
insurance company so long as any client referred to the company is informed of that interest and
the company is not used to feed legal business to the firm.
[Note: Lawyers who refer clients to a business in which the lawyer owns an interest must
comply with Rule 4-1.8(a), regarding business transactions with clients.]

EC 2-21
59-38, 63-12, 64-45, 70-16, 72-26; ABA Informal C731, 883

Vice Chairman Zehmer stated the opinion of the committee:
The inquiring attorney’s firm intends to organize, in conjunction with other
parties, a corporation for profit to act as title insurance agents for the purpose of
issuing title insurance to real estate vendees and mortgagees. The members of the
inquirer’s law firm will own the majority of the stock. Although the title insurance
business will be conducted in cities where the law firm maintains offices, the title
company will conduct its business from a location substantially distant from the
location of the law office. The inquirer further states that members of his firm
would be directors of the title company, but would take no part in its day to day
operations. His firm would probably issue title opinions to the title company upon
which various title policies would be written.
The inquirer also states that employees of the title company would be
instructed not to refer legal matters to the inquirer’s firm and the inquirer’s firm
would refer business to the title company only upon solicitation by a client or
third party with full disclosure that members of the law firm have a financial
interest in the title company. The title company would not engage in the abstract
The inquirer asks whether there is any ethical objection to the members of his
firm having a substantial interest in the title company so long as his firm does not
use the title company as a “feeder” for the law practice and the members of the
law firm do not mingle title company business either physically or functionally
with their law practice.
It appears that the inquirer and the members of his law firm are cognizant of the ethical
considerations involved and are taking every precaution to avoid them. They are meeting the
requirements of EC 2-21, Code of Professional Responsibility, by disclosing to clients that
members of the law firm have a financial interest in the title company. They are taking specific
action to avoid the “feeder” problem. In short, the Committee finds no ethical impropriety under

these circumstances. See this Committee’s opinions 59-38, 63-12 [since withdrawn], 64-45
[since withdrawn], 70-16 [since withdrawn], and 72-26. See also ABA Informal Opinions C731
and 883.