Can a lawyer act as a surety company's bonding agent, and who has authority to discipline a lawyer for unethical conduct?

Plain-English summary

The committee answered four questions. On the first, whether a lawyer could serve as an "executing agent and attorney in fact" for a fidelity and surety company writing financial-responsibility and court-appearance bonds, it said no. The basic problem was whether the lawyer could engage in a business so closely related to the practice of law that pursuing it would amount to improper solicitation. The committee said it is not improper for a lawyer to be in business generally, but where the nature of the business readily lends itself to obtaining professional employment, he should refrain; because people required to execute bond are invariably in immediate need of legal services, the bond-agency business is so related to practice that an actively practicing lawyer cannot undertake it. On the second question, the committee said there is nothing illegal in a lawyer personally executing a bond, but he should not do personally what he cannot do as an agent.

On the third and fourth questions, about disciplinary authority, the committee said answers to questions of ethical conduct should be obtained through advisory opinions under the governing rule (RCA 3.530), but that any judge of any court has jurisdiction to dispose of unethical conduct before him through contempt proceedings, subject to statutory and constitutional limits and rights of review. It held that a minor-court judge may not pass judgment on a Bar member's ethics and a city judge has no authority to suspend an attorney, because disciplinary actions involving reprimand, suspension, or disbarment rest solely and exclusively in the Court of Appeals, citing In re Wehrman.

Currency note

This opinion was issued in 1967 under the former Canons of Professional Ethics (in effect in Kentucky from 1946 to 1971) and predates both the 1990 adoption of the Rules of Professional Conduct (SCR 3.130) and the substantial 2009 revisions to those rules. Kentucky's lawyer-discipline structure has since changed; jurisdiction over discipline now rests with the Supreme Court of Kentucky rather than the former Court of Appeals. Subsequent rule amendments and later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against the current rules before relying on any specific point mentioned here.

Common questions

Q: Can a lawyer act as a surety company's bond-executing agent?

A: Under this opinion, no. The committee held the bond-agency business is so closely related to the practice of law, because bond principals immediately need legal services, that an actively practicing lawyer cannot undertake it without improper solicitation.

Q: Can a lawyer personally act as surety on a bond?

A: Yes. The committee said there is nothing illegal in personally executing a bond, but a lawyer should not do personally what he cannot do as an agent.

Q: Can a city or minor-court judge discipline or suspend a lawyer?

A: No. The committee held disciplinary actions (reprimand, suspension, disbarment) rest solely with the Court of Appeals (citing In re Wehrman), though any judge may address misconduct before him through contempt.

Background and rules framework

The opinion addressed solicitation through a law-related business (the surety-bond agency) and the structure of lawyer discipline, referencing the rule then governing advisory opinions and discipline (RCA 3.530). The modern analogs for the solicitation question are Model Rule 5.7 (responsibilities regarding law-related services) and Model Rule 7.3 (solicitation of clients), with Kentucky's counterparts at SCR 3.130(5.7) and SCR 3.130(7.3); lawyer discipline is now governed by SCR 3.130 et seq. under the Supreme Court of Kentucky.

Citations and references

Rules of Professional Conduct:

• Canons of Professional Ethics (solicitation through a law-related business); modern analogs Model Rules 5.7 and 7.3

Court rules:

• RCA 3.530 (advisory opinions and discipline, as then in effect; cited in the opinion as formerly RCA 3.590)

Cases:

• In re Wehrman, 327 S.W.2d 743 (Ky. 1959), disciplinary authority rests with the Court of Appeals

See also

• KBA Ethics Op. E-92: Interstate Law Partnerships
• KBA Ethics Op. E-39: Paying a Lender for Closing Help

Source

• Landing page: https://kybar.org/For-Members/Rules-Ethics-Information/Ethics-Opinions
• Original PDF: https://kybar.org/Portals/0/Admin/Ethics%20Opinions/KBA_E-032.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

KENTUCKY BAR ASSOCIATION
Ethics Opinion KBA E-32
Issued: May 1967

Question 1:

May an attorney represent, as an “executing agent and attorney in fact”, a
fidelity and surety company which is engaged in the business of executing
financial responsibility bonds and court appearance bonds?

Answer 1:

No.

Question 2:

May an attorney “personally” act as surety on a bond?

Answer 2:

Yes.

Question 3:

Does a judge of a minor court have the right to pass judgment on the ethical
conduct of a member of the Bar?

Answer 3:

No.

Question 4:

Does a city judge have authority to suspend an attorney in the city police
court?

Answer 4:

No.

References:

RCA 3.530

OPINION
Question 1
Basically the question is whether an attorney can engage in a business so closely
related to the practice of law that advertising for, and the pursuance of this type of business
could amount to the unethical practice of solicitation of law business. It is not at all
improper for an attorney to engage in business, but when the nature of the business is such
that it readily lends itself to a means of obtaining professional employment, the attorney
should refrain from engaging in it. Individuals required to execute bond invariably are in
immediate need of legal services. The business of “executing agent and attorney in fact” is
so related to the practice of law that an attorney actively engaged in the practice cannot
undertake it.

Question 2
There is nothing illegal in an attorney’s executing a bond, but he should not do
personally that which he can not do as an agent.
Question 3
Answers to questions of ethical conduct should be obtained through Advisory
Opinions as provided by RCA 3.590 (now RCA 3.530). However, any judge of any court
has jurisdiction to dispose of any unethical conduct or practice before him through
contempt proceedings and may peremptorily exercise this authority, subject to statutory
and constitutional limitations and such rights of review as may be provided by law.
Question 4
Disciplinary actions relating to a reprimand, suspension, or disbarment rest solely
and exclusively in the Court of Appeals. See In re Wehrman, 327 S.W.2d 743 (1959).

Note to Reader
This ethics opinion has been formally adopted by the Board of Governors of the
Kentucky Bar Association under the provisions of Kentucky Supreme Court Rule 3.530
(or its predecessor rule). The Rule provides that formal opinions are advisory only.