Attorney Referrals & Title Agencies: Rules You Should Understand

At Liberty Land Abstract, we frequently work with attorneys, lenders, and real estate professionals who rely on us to provide clear, compliant title services. But one topic that often raises questions—and sometimes confusion—is whether an attorney can refer their own client to a title abstract company in which the attorney has an ownership interest.

This is not just a business question; it’s also an ethical one. Let’s break it down in plain language.

The Core Issue: Dual Roles and Conflicts of Interest

When an attorney both represents a client in a real estate transaction and has an ownership stake in a title abstract company that brokers insurance, there’s a potential conflict of interest.

Why? Because the attorney is wearing two hats:

• As the client’s lawyer, they owe a duty of undivided loyalty.
• As an owner of the title company, they have a financial interest in steering business to that agency.

This dual role raises the risk that the attorney’s judgment could be influenced—or that clients might question whether their best interests are being put first.

What the Rules Say

Under the New York Rules of Professional Conduct:

• Rule 1.7(a)(2) says an attorney has a conflict when their personal financial interest could limit their independent judgment.
• Rule 1.8(a) governs business transactions with clients and requires full disclosure, client consent, and fairness.
• Rule 1.10(a) (as amended effective January 1, 2025) adds an important clarification: if the conflict stems from a lawyer’s personal financial interest, it won’t automatically be imputed to the entire firm unless there’s a “significant risk” that other lawyers’ professional judgment will also be compromised.

Ministerial vs. Negotiated Roles

So, can attorneys ever represent clients while also owning a title agency? The answer is: only in very limited circumstances.

If the attorney’s role with the title agency is purely ministerial—for example, processing paperwork without negotiating exceptions to title—then the conflict may be manageable.

But if the attorney acts as agent for the underwriter or negotiates issues tied to title insurance coverage, that creates what ethics committees have consistently called a non-consentable conflict of interest. In plain English: disclosure and client consent don’t fix it.

Disclosure Is Key

Even when an attorney’s role is limited, disclosure remains critical. Best practices include:

• Informing the client in writing that the attorney (or their firm) has a financial interest in the title agency.
• Making it clear that the client is free to choose any title company.
• Explaining the fee structure and how the attorney benefits financially from the referral.

Only with this transparency can clients make an informed choice.

What This Means for Attorneys and Clients

For attorneys: Owning a stake in a title agency can be permissible, but you must strictly separate your roles, limit your title-related functions to ministerial tasks, and disclose your interest fully.

For clients: If your attorney refers you to a title agency they partially own, ask questions. Make sure you understand your options and the potential conflicts.

For lenders and partners: Working with a compliant title agency helps ensure smoother, legally sound closings.

Final Takeaway

At Liberty Land Abstract, we know the line between legal representation and title services can get blurry. But the rules are designed to protect clients’ best interests and preserve attorneys’ independence.

The bottom line:

Attorneys can refer clients to a title agency they own, but only if their role is limited to ministerial tasks and they fully disclose the financial interest.

Starting in 2025, these conflicts won’t automatically extend to the entire firm—but careful judgment and compliance remain essential.

If you’re an attorney, lender, or client navigating this issue, our team is here to help clarify the rules and provide transparent, professional title services.

At Liberty Land Abstract, you can rest assured that this will never be a concern, as no attorney holds any ownership interest in our agency. This structure not only ensures compliance with ethical guidelines but also provides peace of mind that our recommendations and services are driven solely by professionalism and integrity.

For further reference, please see New York State Bar Association Opinion 1282 (8/18/2025).