Can a lawyer take on a client who was first advised and worked up by a nonlawyer claims-investigation firm?

Plain-English summary

Company X, an investigation firm, evaluated and investigated personal-injury, FELA, workers' compensation, and accident claims, assisted customers in preparing settlement letters to insurers (without directly negotiating), and opined on claim values based on its claims-adjusting experience. When a claim could not be settled, Company X told customers to seek a lawyer, provided a list of attorneys if asked, and continued providing investigative and consulting services alongside the chosen lawyer. The inquiry asked whether an attorney who participates aids the unauthorized practice of law, and whether Company X's activities are unauthorized practice.

The opinion concluded that attorneys who participate in Company X's arrangement may facilitate its unauthorized practice of law in violation of Rule 5.5(b), because Company X gathers the information, evaluates the claim, and advises customers on settlement before the lawyer's legal advice ever occurs. It analogized to prior opinions in estate and financial planning (Opinions 91-10, 90-20, 474, 261) where attorneys who reviewed documents prepared by banks, financial planners, or insurance agencies aided those entities' unauthorized practice, and to the ISBA's Real Estate Taxation Practices policy.

The opinion concluded, however, that if the attorney merely accepts representation of a client after referral by Company X and then pursues negotiation and performs such other legal services as the attorney deems necessary, the attorney would not be aiding the unauthorized practice of law. On the second question, it concluded that, regardless of whether Company X is registered as a public insurance adjuster (215 ILCS 5/512.51 et seq., which itself bars adjusters from giving legal advice or engaging in unauthorized practice), Company X could be engaged in the unauthorized practice of law by explaining the strengths and weaknesses of claims and drafting settlement letters on the client's behalf.

Currency note

This opinion was issued in 1993, before Illinois adopted the 2010 Illinois Rules of Professional Conduct. The ISBA Board of Governors affirmed the opinion in May 2010 as generally consistent with the 2010 Rules (referring to Rule 5.5(a)), while noting the specific standards referenced may differ from the 2010 Rules. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule or requirement mentioned here.

Common questions

Q: Can a lawyer represent a client who was first worked up by a nonlawyer claims firm?

A: The opinion concluded a lawyer may accept such a client without aiding unauthorized practice, so long as the lawyer then proceeds independently rather than jointly continuing the nonlawyer's settlement work.

Q: When would the lawyer cross the line into aiding unauthorized practice?

A: The opinion concluded that actively participating with the nonlawyer firm in continued settlement actions, where the firm evaluates and advises on the claim, could facilitate the firm's unauthorized practice in violation of Rule 5.5(b).

Q: Was the claims firm itself practicing law?

A: The opinion concluded Company X could be engaged in the unauthorized practice of law by explaining the strengths and weaknesses of claims and drafting settlement letters, regardless of any public-adjuster registration.

Background and rules framework

The opinion interpreted Rule 5.5(b) (a lawyer shall not assist a nonlawyer in the unauthorized practice of law), read against the public-insurance-adjuster statute (215 ILCS 5/512.51 et seq.), which bars adjusters from providing legal advice (Model Rule 5.5).

Citations and references

Rules of Professional Conduct:

• Model Rule 5.5 (unauthorized practice; assisting nonlawyers) / Illinois Rule 5.5(b)

Statutes:

• 215 ILCS 5/512.51 et seq. (public insurance adjusters; bar on legal advice and unauthorized practice)

Other opinions cited:

• ISBA Opinions Nos. 261, 474, 90-19, 90-20, 91-10; ISBA Real Estate Taxation Practices policy (1992)

See also

• ISBA Ethics Op. 94-08: Paying a Nonlawyer for Client Referrals
• ISBA Ethics Op. 94-01: Drafting Documents but Delegating Advice
• ISBA Ethics Op. 95-07: Nonlawyer Providing Assistance or Advice

Source

• Landing page: https://www.isba.org/ethics/opinions/9220