20030019 | Office of Legal Ethics Counsel & Advisory Committee of the Supreme Court of Missouri

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Informal Opinion Number: 20030019

Rules: 4–1.8; 4–1.7; 4–5.7

Client-Lawyer Relationship

Conflict of Interest: Prohibited Transactions

Subject: Business Transaction with Client (see also Conflict of Interest - Prohibited Transactions); Conflict of Interest - Prohibited Transactions (see also Business Transaction with Client); Law Related Services

Summary: referral by lawyer to investment/life insurance business owned by lawyer

Reference Note: Rule 4 dash–5.7, Responsibilities Regarding Law-Related Services, was adopted effective July 1, 2007. Rule 4 dash–5.7 would also govern this Question and should be consulted, in addition to Rule 4 dash–1.8 cited in the opinion.

QUESTION: Attorney wants to establish a separate investment advisory and/or life insurance business. There would be a referral relationship between Attorney and the new business. May attorney do this? If so, what information must be disclosed to clients when referred to the side business?

ANSWER: Attorney is permitted to establish the side business. All communications should clearly state that it is a completely separate business from the law firm. All referrals will need to make full disclosure regarding Attorney’s interest in the side business and that the client has the option of going to any other similar business for that type of service. Attorney must follow the steps outlined in Rule 4 dash–1.8(a), which requires written disclosure and consent, among other things.

Informal Opinions are ethics advisory opinions issued by the Office of Legal Ethics Counsel to members of the Bar about Rule 4 (Rules of Professional Conduct), Rule 5 (Complaints and Proceedings Thereon), and Rule 6 (Fees to Practice Law) pursuant to Missouri Supreme Court Rule 5.30(c). Written summaries of select Informal Opinions are published for informational purposes as determined by the Advisory Committee of the Supreme Court of Missouri pursuant to Rule 5.30(c). Informal opinion summaries are advisory in nature and are not binding. These opinions are published as an educational service and do not constitute legal advice.

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