FLORIDA BAR ETHICS OPINION
June 15, 1977
Advisory ethics opinions are not binding.
A lawyer may, with client consent after full disclosure, participate in an arrangement with a title
company whereby the title company prepares a title commitment to which the lawyer adds an
endorsement and the title company remits a substantial percentage of the title insurance fee to the
38, Canons of Professional Ethics
EC 2-21; DR 5-107(A)(2)
Drinker, Legal Ethics, p. 97; Real Estate Settlement Procedures Act of 1974, 41
Fed. Reg. 109
Vice Chairman Lehan stated the opinion of the committee:
This inquiry concerns the circumstances outlined in Opinion 74-50, i.e., an
arrangement between a lawyer and a title insurance company under which:
1. The lawyer would ask the title company for a commitment;
2. The title company then prepares and signs by its authorized in-house
agent a title commitment in usual form and sends same to the attorney,
accompanied, however, by a photocopy of the title company’s search;
3. The lawyer then spends whatever time he wishes “looking at the search;”
4. The attorney adds a stamped or typed endorsement to the commitment
stating that the title appears to be the way the title company says it is, then signs
his name; and
5. Finally, the title company “remits a substantial percentage of the title
insurance fee” to the lawyer.
Opinion 74-50 finds that arrangement unethical for the reasons stated therein.
The present inquiry is:
(a) whether the arrangement above is permissible if the attorney makes full
disclosure to the client of the amount received from the title company and obtains
the client’s consent; and
(b) to what extent, if any, the attorney must credit against any fee charged
the client the money the title company has remitted to him.
For purposes of this inquiry, we assume that the premiums charged by any competing
title companies between which the attorney might choose in placing title insurance and the
amounts of the premium each title company would remit to the attorney are competitive. Also,
the underlying facts, as we construe them for the purpose of this opinion, involve the attorney
bearing responsibility to the title company for the status of title in the event a title defect causes
loss. See Opinion 75-27.
The Committee is of the opinion that the inquiry should be answered in the affirmative as
to (a). As to (b), the Committee is of the opinion that if any part of the fee the attorney charges
the client is for time spent looking at the search and endorsing the commitment, the amount the
attorney receives from the title company should be credited against that part of the fee. Of
course, if the client’s consent to the attorney’s keeping the money he receives from the title
company is conditioned upon the attorney’s crediting that amount against the fee charged the
client, the attorney should credit the amount received from the title company. Otherwise, it is not
necessary to credit against the fee to the client the amount the title company remits to the lawyer.
DR 5-107(A) provides:
(A) Except with the consent of his client after full disclosure, a lawyer shall
(2) Accept from one other than his client any thing of value related to his
representation of or his employment by his client.
EC 2-21 provides that “a lawyer should not accept compensation or anything of value
incident to his employment or services from one other than his client without the knowledge and
consent of his client after full disclosure.” EC 2-21 is similar to former Canon 38 providing that a
lawyer “should accept no compensation, commissions, rebates or other advantages from others
without the knowledge and consent of his client after full disclosure.” That Canon was construed
as permitting, with client consent after full disclosure, “customary allowances” from title
companies which “obviously in no way interfere with the lawyer’s loyalty to his client.” Drinker,
Legal Ethics (1953), p.97.
We reach the same conclusion as to the propriety of this practice under the Code of
Professional Responsibility. We do not believe that the attorney’s accepting the fee from the title
company under the circumstances stated above necessarily impairs his ability to properly
represent his client.
We add the caveat that, of course, a lawyer may not receive payment from a third party if
that would constitute a violation of law. See the Real Estate Settlement Procedures Act of 1974
and regulations thereunder, including those relating to prohibitions as to referral fees. 41 Fed.
Reg. 109. The Committee expresses no legal opinion whatsoever as to the effect of RESPA
under the facts of this Inquiry or under the facts of Opinion 74-50.