NCSB Journal Spring 2026

make an independent recommendation of a title insurance company to his client, unbiased by any personal interest. In addi tion, a lawyer opining on title to property should be independent from the title insurance agency issuing the title insur ance in reliance upon that opinion. This is consistent with the emphasis that the North Carolina legislature has placed on the professional and financial independ ence of the closing lawyer from the title insurance agency. See, e.g. N.C.G.S. § 58-26-1(a) (title insurance company may not issue insurance as to North Carolina real property unless the company has obtained the opinion of a North Carolina licensed attorney who is not an employee or agent of the company) and N.C.G.S. § 58-27-5(a) (lawyer who performs legal services incident to a real estate sale may not receive any payment, directly or indi rectly, in connection with the issuance of title insurance for any real property which is a part of such sale). Id. The Ethics Committee agrees with these prior opinions and concludes again that it is a non-waivable conflict of interest for Attorney B to serve as closing attorney while also rec ommending Title Company—in which Attorney B has a financial interest—to Client Smith and preparing a title opinion for obtaining title insurance through Title Company. Inquiry #3: Client Smith retained Attorney A for a real property closing transaction. May Attorney A recommend Title Company to Client Smith and prepare a title opinion for obtaining title insurance through Title Company while Attorney B remains a part ner at Law Firm X and retains a financial interest in Title Company? A conflict of interest pursuant to Rules 1.7 and 1.9 experienced by one attorney at a law firm is imputed to the other members of the law firm. Rule 1.10(a). Generally, however, a conflict of interest based upon a personal interest of the prohibited lawyer is not imput ed to the other members of a law firm so long as “the prohibition does not present a signifi cant risk of materially limiting the representa tion of the client by the remaining lawyers in Opinion #3: No.

the firm.” Id . The comment to Rule 1.10 provides the following example of such a sce nario: [I]f an opposing party in a case were owned by a lawyer in the law firm, and others in the firm would be materially limited in pursuing the matter because of loyalty to that lawyer, the personal dis qualification of the lawyer would be imputed to all others in the firm. Rule 1.10, cmt. [3]. Title insurance, while not required in all real property transactions, is frequently a required and critical component that must be obtained to carry out the goals of the repre sentation (to wit: to successfully complete the closing in the client’s best interests). Here, Attorney B has a personal interest conflict that prohibits him from representing Client Smith in the underlying transaction based upon Attorney B’s financial interest in Title Company. Although personal interest con flicts are generally not imputed to the rest of the firm, the combination of Attorney B’s financial interest in Title Company, Attorney B’s relationship with Law Firm X, and the important (if not required) role of title insur ance in completing the representation “pre sent[s] a significant risk of materially limiting the representation of the client by the remain ing lawyers in the firm” such that the personal interest conflict is imputed to the other mem bers of Law Firm X, including Attorney A. Similar to the example from the comment to Rule 1.10, other members of Law Firm X may be materially limited by their loyalty to Attorney B when exercising their independ ence during closing in selecting a title insur ance company and negotiating the terms of title insurance. Accordingly, Attorney B’s conflict of interest in the underlying matter pursuant to Rule 1.7 ( see Opinion #2) is imputed to the other members of Law Firm X, including Attorney A, and Attorney A may not refer Client Smith to Title Company. Additionally, this conflict cannot bewaived. See Opinion #2. Notably, this opinion and the described imputation of a personal interest conflict under these circumstances is limited to the issue of title insurance due to the important and often necessary role title insurance plays in carrying out the goals of the representa tion. This opinion does not address a lawyer’s ability to refer a client to other ancillary serv ices—in which a lawyer may have a financial interest—that are related to the legal services

provided but the absence of which does not impact the lawyer’s ability to carry out the goals of the representation. A lawyer may continue to make referrals to such services provided the referral is permissible under the Rules; this opinion does not overrule any prior ethics opinion addressing those differ ent circumstances. Inquiry #4: Does the answer to Inquiry #3 change if Attorney A is an associate with Law Firm X rather than a partner? Opinion #4: No. Attorney A’s subordinate status to Attorney B in this scenario creates a greater material limitation on Attorney A’s represen tation of Client Smith given Attorney A’s personal and professional interest in main taining a positive, productive, and personally beneficial relationship with a law firm part ner. See Opinion #3. Proposed 2026 Formal Ethics Opinion 2 Release of Claims and Non Disparagement Clause in Fee Agreement or as a Condition of Fee Dispute Resolution January 22, 2026 Proposed opinion rules that when a lawyer is required by the rules to refund an unearned fee, the lawyer may not condition the resolution of a fee dispute on the client’s agreement to release claims related to the representation and/or refrain from publishing negative comments about the lawyer or the law firm and may not include the same or similar language in a fee agreement. Inquiry #1: Lawyer represented Clients in a civil mat ter. At the end of the representation, Clients filed a petition for resolution of a disputed fee with the State Bar’s Fee Dispute Resolution Program. In the petition, Clients allege that Lawyer did not perform legal services dili gently or competently and did not earn the fee they paid. Lawyer is participating as a respondent in the mandatory fee dispute res olution process. Lawyer denies that she did not perform legal services diligently or com petently, and denies that she did not earn the fee paid. Lawyer indicates that she is nonethe less willing to resolve the fee dispute by refunding a portion of the fee—to buy her

SPRING 2026

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