Can a New York law firm form a partnership with a foreign law firm organized as a stock company?

Plain-English summary

A New York law firm asked whether it could ethically form a partnership with a Swedish firm of attorneys organized as a stock company under Swedish law. The committee answered yes, conditioned on the New York lawyers' own inquiry, addressing only the ethics issues and assuming the arrangement otherwise complied with Swedish and New York substantive law.

The committee worked through DR 3-103(A), which barred a lawyer from forming a partnership with a nonlawyer if any of the partnership's activities consisted of the practice of law. It read that bar together with DR 2-102(D), which contemplates partnerships between lawyers of different jurisdictions and requires the letterhead to denote each lawyer's jurisdiction of admission. The committee had previously held that "lawyers licensed in other jurisdictions" can include lawyers licensed outside the United States (N.Y. State 542 (1982)).

The committee applied the standard from N.Y. State 646 (1993): whether a foreign lawyer falls within the DR 3-103 nonlawyer proscription turns on whether the foreign lawyer's training and applicable ethical standards are comparable to those of an American lawyer. The inquiry into the foreign system's educational and ethical requirements protects the New York lawyer's ability to uphold New York's professional standards. Examining the Swedish system, the committee noted that all members of the Swedish corporation were members of the Swedish Bar, that Swedish "advocates" complete several years of legal study, pass a certifying examination, and practice for at least five years, and that the Swedish Bar Association exercises admission and disciplinary functions. On that basis the proposed reorganization did not appear to violate DR 3-103(A).

The committee added that its conclusion was bolstered by the revised Court of Appeals rules on foreign legal consultants (Rule 521.4, effective December 8, 1993), which let a licensed foreign legal consultant affiliate in a firm with New York bar members and subjected such consultants to the same ethical and disciplinary rules. It directed the New York participants to make a more thorough inquiry into the applicable Swedish rules to satisfy themselves that the arrangement would not interfere with their ethical obligations, in particular the protection of client confidences. The question was answered in the affirmative, subject to that independent inquiry; if the inquiry revealed substantial differences making it impossible to uphold New York's ethical obligations, the answer would be in the negative.

Currency note

This opinion was issued in 1993, under New York's former Code of Professional Responsibility, which New York replaced with the Rules of Professional Conduct in 2009. The provisions on partnership with nonlawyers and on multijurisdictional practice have since been revised. 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 a New York firm partner with a foreign law firm?

A: Under this opinion, yes, provided the foreign lawyers' training and ethical standards are comparable to a New York lawyer's, so the partnership does not run afoul of the bar on partnering with nonlawyers.

Q: Does it matter that the foreign firm is a stock company rather than a partnership?

A: The committee found that form was not itself a bar; DR 2-102(C) does not prohibit forming a partnership with a professional corporation, and the analysis turned on the comparability of the Swedish lawyers' qualifications.

Q: What must the New York lawyers do before going ahead?

A: The committee directed them to make a thorough independent inquiry into the applicable Swedish rules to confirm the arrangement will not interfere with their ethical obligations, in particular the protection of client confidences.

Background and rules framework

The opinion interpreted DR 3-103(A) (no partnership with a nonlawyer involving the practice of law), DR 2-102(C) and (D) (holding out partnerships; multi-jurisdiction letterhead), and EC 3-8 of New York's former Code. The closest Model Rule analogues are Rule 5.4 (professional independence; restrictions on partnership and fee-sharing with nonlawyers) and Rule 5.5 (multijurisdictional practice). New York replaced the Code with the Rules of Professional Conduct in 2009; the provisions cited here are historical.

Citations and references

Rules of Professional Conduct:

• MR 5.4 (professional independence of a lawyer)
• MR 5.5 (multijurisdictional practice of law)
• NY DR 3-103(A); DR 2-102(C), (D); EC 3-8

Other opinions cited:

• N.Y. State 542 (1982): partnership with a British solicitor permissible given comparable standards
• N.Y. State 646 (1993): comparability of foreign training and ethical standards as the test
• N.Y. State 509 (1979): DR 2-102(C) never prohibited partnership with a professional corporation
• N.Y. City 81-72: "lawyer" status of a foreign lawyer turns on comparable requirements

See also

• NY State Bar Op. 762: Supervising foreign-licensed lawyers
• NY State Bar Op. 1290: Multijurisdictional-practice partnership with a non-U.S. lawyer
• NY State Bar Op. 1246: Partnership with a foreign lawyer and ABS
• NY State Bar Op. 889: Sharing legal fees and forming a partnership with a non-lawyer

Source

• Landing page: https://nysba.org/opinion-658/