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WHILE AN ATTORNEY WHO OPERATES OR IS INTERESTED IN A LAY ADJUSTING
AGENCY MAY NOT PRACTICE LAW GENERALLY, SUCH ATTORNEY MAY SEPARATELY
AND INDEPENDENTLY PRACTICE LAW SUBJECT TO THE RESTRICTIONS THAT:
(1) HE MAY NOT IN HIS LAW PRACTICE PERFORM ANY LEGAL SERVICE FOR
INSURANCE COMPANIES WHICH UTILIZE OR MIGHT UTILIZE THE SERVICE OF
THE ADJUSTING AGENCY, AND (2) HE CANNOT REPRESENT IN HIS LAW PRACTICE
ANY CLAIMANT OR OTHER PERSON WHOSE MATTER GREW OUT OF OR HAS ANY
RELATIONSHIP TO MATTERS HANDLED BY THE LAY ADJUSTING AGENCY.
SUPPLEMENTAL
DISCUSSION:
Previously
this Committee has issued an opinion which states the following
rule:
"An attorney may not ethically engage in the general practice
of law and at the same time own and operate an insurance investigation
and adjustment business in the general area; and the ethical objections
are not removed by incorporating the adjusting business and the
lawyer withdrawing as an officer or director of the corporation."
We are
now asked whether and to what extent an attorney operating or owning
an interest in an adjustment agency may also practice law independently
thereof.
This
Supplemental Opinion assumes that any dual practice of the law and
operation of a lay adjustment agency will conform to the unauthorized
practice of law principles set forth in the statement entered into
by the American Bar Association and the National Association of
Independent Insurance Adjusters referred to in Informal Opinion
No. 427 referred to in the earlier opinion of the Nebraska Committee.
In the
earlier opinion released by our Committee it was pointed out that
the new Code of Professional Responsibility under consideration
made no change in the ethical considerations previously set forth
in our canons. Since that time of our earlier opinion there have
been several additional opinions of the American Bar Association
which added guidance in this area. The matter of dual practice of
law and operation of a mortgage loan corporation was considered
at length in Information Opinion No. 1022 where the opinion states
as follows:
".
. .it is not necessarily improper for an attorney to engage in a
separate business, so long as it is done in a manner not inconsistent
with the lawyer's duties as a member of the bar. In this connection,
it is essential that such separate business not be used as a means
for indirect solicitation on the attorney's behalf."
"It
does not appear from the foregoing that the lawyer is using his
relationship with the building and loan association as a feeder
for business. If, as appears from the statement presented, the attorney
intends to and does establish a separate office from that of the
building and loan association, then such relationship between the
attorney and the association would not be considered objectionable.
However, this committee stresses the necessity for there being a
complete and total separation of the attorney's office and physical
facilities from that of the building and loan association, including
separate and distinct:
Building
and/or offices;
Telephones;
Telephone listings; and
Addresses, etc.
Provided
the foregoing considerations are observed, we would, therefore,
conclude that the arrangements described and proposed would not
be violative of any of the Canons of Professional Ethics."
Thereafter
in Informal Opinion No. 1046 it was held that an attorney may practice
law and also perform legal research for a firm offering a research
service to attorneys provided, however, in such dual operation the
attorney conforms to all of the requirements of the canons of ethics.
The
latest consideration and discussion of the problems involved in
attorneys providing service for lay adjusting agencies and also
independently providing such services as a part of a law practice
is found in Informal Opinion No. 1161 dated February 19, 1971 where
the opinion states:
"This
Committee has been called upon many times to render its opinion
as to the propriety of a lawyer, while in the practice of law, to
engage in other businesses. It has been the opinion of this Committee
that it is not necessarily improper for a practicing attorney to
engage in another business provided such other business is not one
that can readily be used as a means of procuring professional employment.
This danger is evident when the other business engaged in by a practicing
attorney is, for example, that of an accountant, a real estate broker,
insurance agent, business consultant, marriage counselor or affiliation
with a collection agency, for while those businesses may be conducted
by a non-lawyer it would be most difficult if not impossible for
a practicing lawyer engaged in any of those businesses to refrain
from or avoid those acts which when performed by a lawyer constitute
the practice of law and, therefore, the indirect if not direct solicitation
of professional employment. See Informal Opinions 424, 442, 520,
537, 716 and 775."
"A
lawyer may properly undertake to represent an insurance company
or claim adjuster in the investigation or settlement of a claim
even though that activity is frequently engaged in by a non-lawyer.
The burden, however, would be upon the lawyer or law firm accepting
such employment to be most scrupulous and circumspect in conduct
so as not to give the impression of soliciting representation from
other possible claimants. In the opinion of the Committee, the law
firm and its associates did not so act."
The
foregoing Opinion No. 1161 notes that the conclusion reached under
the present Code of Professional Responsibility is the same as the
conclusions under the former canons of professional ethics.
We believe
that the original opinion of the Nebraska Committee in this matter
together with the supplemental citations herein support the rules
set forth in the beginning hereof and delineate the extent to which
an attorney may separately and independently practice law and operate
or be interested in a lay adjusting agency.
72-5
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