Can lawyers run a financial planning company from their law office and take its customers as legal clients?

Plain-English summary

The committee was asked whether the members of a law firm may run a financial planning corporation from the same office where they practice law and accept the corporation's customers as legal clients. It traced the evolution of its dual-practice rules: before Bates v. State Bar of Arizona, 433 U.S. 350 (1977), former DR 2-102(E) (since deleted) barred lawyers from identifying their dual capacity, and N.Y. State 206 (1971) distinguished between second occupations that permitted advertising and professions that did not. After Bates liberalized lawyer advertising, that distinction became irrelevant, and in N.Y. State 493 (1978) the committee allowed a lawyer to run a real estate brokerage from the same office, overruling five prior contrary opinions while cautioning that a lawyer may not solicit employment in violation of any statute or court rule.

Applying those principles, the committee held that the members of a law firm may form and operate a financial planning corporation from the same office, subject to two conditions: the corporation must not be used to solicit law business in violation of any statute or court rule, and it must not offer any product (such as securities, real estate, or insurance) for which it would receive a commission or other compensation. It added that conflicts of interest must be avoided, and that a lawyer may never act as both legal counsel and broker in the same transaction (N.Y. State 516 (1980)).

The committee concluded that, absent any violation of the solicitation statutes or rules, the firm may accept as legal clients persons first introduced through its financial planning activities, citing Matter of Koffler, 51 N.Y.2d 140 (1980), and Judiciary Law section 479. The question was answered in the affirmative.

Currency note

This opinion was issued in 1981, before New York replaced the Code of Professional Responsibility with the Rules of Professional Conduct in 2009 (responsibilities regarding law-related services now appear at Rule 5.7 and solicitation at Rule 7.3). 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 Treat this page as historical context, not current guidance.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, deadline, or requirement mentioned here.

Common questions

Q: Can lawyers operate a side financial planning business from their law office?

A: Yes. The committee held members of a law firm may run a financial planning corporation from the same office, subject to conditions on solicitation and commission products.

Q: Can the firm take the financial planning company's customers as legal clients?

A: Yes, provided there is no violation of the statutes or rules against solicitation; the introduction may not come from unlawful solicitation.

Q: What can the financial planning corporation not do?

A: It may not be used to solicit law business in violation of any statute or court rule, and it may not offer commission-based products such as securities, real estate, or insurance.

Background and rules framework

The opinion applied DR 2-103(A) and DR 2-104(A) (the bars on unlawful solicitation and on accepting employment from unsolicited advice in violation of law) to a law firm operating an ancillary financial planning business. The closest current Model Rule analogues are Rule 5.7 (responsibilities regarding law-related services) and Rule 7.3 (solicitation of clients).

Citations and references

Rules of Professional Conduct:

• MR 5.7 (responsibilities regarding law-related services)
• MR 7.3 (solicitation of clients)
• NY DR 2-103(A), DR 2-104(A)

Statutes:

• N.Y. Judiciary Law section 479 (solicitation)

Cases:

• Bates v. State Bar of Arizona, 433 U.S. 350 (1977), lawyer advertising
• Matter of Koffler, 51 N.Y.2d 140 (1980), direct-mail advertising

Other opinions cited:

• N.Y. State 206 (1971): dual-practice guidelines
• N.Y. State 493 (1978): real estate brokerage from the same office
• N.Y. State 516 (1980): a lawyer may not act as counsel and broker in the same transaction

See also

• NY State Bar Op. 549: Referrals with a lawyer-owned collection agency
• NY State Bar Op. 556: Dual practice advertising and title insurance
• NY State Bar Op. 542: British law firm opening a New York office

Source

• Landing page: https://nysba.org/opinion-536/