September 1963

SOLICITATION—ADVERSE INFLUENCE AND CONFLICTING INTERESTS—COMPENSATION, COMMISSIONS AND REBATES—It would be a violation of the Canons for a lawyer to enter into an agreement with an insurance company in which the lawyer accepts a legal fee for advising and encouraging his clients and friends to adopt a plan of insurance purportedly designed to save income and death taxes.

Canons 6, 35, 24.


A lawyer is approached by an insurance executive concerning a plan of insurance purportedly designed to save income and death taxes. The lawyer is invited to study the plan, and the insurance company offers to pay a "very liberal legal fee" for the lawyer's cooperation if he decides the plan will be good for his friends and clients. Is it improper for a lawyer to enter into such an arrangement and to accept a legal fee from an insurance company under such circumstances?


Generally, a lawyer may not serve two masters, although he can in some instances with full disclosure and consent (Canon 6). Likewise, a lawyer may accept no secret rebates or commissions, although he can take a commission from others if it is with the full knowledge and consent of the client after full disclosure (Canon 35). However, it would seem that an approach like that in question is calculated (whether or not it succeeds) to cause the lawyer to carry out all arrangements for the insurance without revealing to the client the true circumstance, which action would be in violation of Canon 6 and 35. And such approach would also seem to be calculated to cause the lawyer to seek out clients and recommend this plan, which would constitute solicitation in violation of Canon 24.

It is possible that a client could seek out the lawyer for legal services regarding insurance and that the lawyer could in good faith recommend this plan and that the lawyer at the same time would make such disclosure and obtain consent as is necessary for compliance with Canons 6 and 35. However, it is the opinion of the committee that, if a lawyer accepts and carries out the proposal as submitted by the insurance company, he could not but violate one or all three of the above-mentioned Canons. (9-0.)