New York State Bar Association Ethics Opinions
Free plain-English summaries of legal ethics opinions issued by the New York State Bar Association, with full citations and source links on every page.
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May a New York lawyer hold a financial interest in, divide fees with, or manage an Arizona-licensed alternative business structure (ABS) with nonlawyer owners?
The Committee concludes a New York lawyer may hold a passive financial interest in an out-of-state ABS that lawfully practices in its home jurisdiction. The lawyer may divide fees with the ABS under n…
May a New York attorney's nonlegal entity (here, one providing tax filings) share a percentage of revenue with a nonlawyer technology developer, and pay referral fees to other attorneys who refer clients to the entity?
Per the opinion, yes if the entity avoids being treated as a law firm under Rule 5.7. The attorney owners must give the Rule 5.7(a)(4) written disclaimer and otherwise avoid any reasonable client beli…
May a New York attorney's irrevocable testamentary trust own his shares of a law-firm professional corporation after his death, when both the trustee and the sole beneficiary are New York-licensed lawyers and the trust prohibits any benefit to nonlawyers?
The Committee concludes no. A trust is a nonlawyer and is not an entity authorized to practice law, so its permanent ownership of P.C. shares would violate Rule 5.4(a), (b), and (d). Rule 5.4(d)(1)'s …
Can New York lawyers pay a referral fee to a partner who is licensed only in a foreign country, and must they supervise that partner's New York-related conduct?
The committee concluded that lawyers associated in the same firm may divide fees with a foreign-licensed partner under Rule 1.5(g), but the New York-admitted lawyers must supervise that partner under …
Can a lawyer accept real estate clients referred by an associate at the firm who is also a licensed real estate broker?
Yes, conditionally. The opinion concludes a lawyer may accept clients referred by an associate who is also a real estate broker, provided the lawyer does not share legal fees or real estate commission…
Can a lawyer use an online bidding platform that takes a percentage of the legal fee and vets the participating attorneys?
No. The opinion concludes that paying a non-lawyer-owned online bidding service a percentage of the legal fee violates Rule 5.4(a)'s bar on fee sharing; because the service vets and rates the lawyers'…
Can a New York lawyer enter a collaboration agreement with an independent paralegal who refers clients to the lawyer and prepares forms, and how may the lawyer pay the paralegal?
Yes, subject to several rules. The opinion concludes a lawyer may enter a non-exclusive arrangement with an independent paralegal who refers clients and completes forms, but may not split legal fees w…
Can a New York lawyer partner with a U.K. solicitor who also belongs to a U.K. firm with nonlawyer owners, and may the two firms co-brand and share fees?
Yes, with conditions: Rule 7.5(d) allows the cross-border partnership, the solicitor's separate U.K. ABS membership alone does not violate Rule 5.4, but co-branding cannot mislead the public and fee d…
Can a lawyer who retires under New York's OCA rules still collect a referral fee on cases handed to successor counsel?
Yes, but only if the retired lawyer keeps joint responsibility for the referred matter; an OCA-retired lawyer is still a lawyer, so Rule 5.4(a) does not bar the fee, but Rule 1.5(g) requires continuin…
Can a New York lawyer be sold to, merge into, or work for a foreign law firm that has nonlawyer owners?
Generally no. The opinion concludes a New York lawyer may not practice in a firm (in New York or elsewhere) with direct or indirect nonlawyer ownership unless the lawyer principally practices in the o…
Can lawyers co-own a divorce mediation business with a nonlawyer, accept referrals from it, and enter a reciprocal referral agreement with it?
Lawyers may co-own a mediation business with a nonlawyer only if it provides solely nonlegal services and employs no lawyers to give legal advice; they may accept referrals and enter a non-exclusive r…
Can a law firm pay a former lawyer their agreed share of fees on cases they worked on after that lawyer leaves to take public office?
Yes, subject to any governing law. The opinion concludes that paying a departed lawyer a fee share for work performed at the firm is a permitted separation-agreement payment under Rule 1.5(h), not a r…
Can a lawyer pay to join an online matching service that picks 'the best traffic lawyer' for a client and vouches for that lawyer's track record?
No. The opinion concludes that a service that vouches for a lawyer's credentials and recommends the lawyer as the 'best' or 'right' choice is making a prohibited recommendation, so the lawyer's paymen…
Can a lawyer pay a referral fee to a lawyer who has since taken 'retired' registration status with the Office of Court Administration?
Yes, if the referring lawyer assumed joint responsibility for the matter. The opinion concludes that an OCA-retired lawyer is still a member of the bar, so Rule 5.4(a) does not bar the split, and the …
Can a New York lawyer add nonlawyer family members as minority members of the PLLC through which the lawyer practices, so they can get retirement and health benefits?
No. The opinion concludes that Rule 5.4(d) bars a lawyer from practicing in a for-profit entity in which a nonlawyer holds any ownership interest or membership, so a PLLC providing legal services may …
Can a retiring lawyer who hands over clients' wills to another attorney collect a referral fee when those wills turn into estate work?
Only if the retiring lawyer assumes joint responsibility for the new representation under Rule 1.5(g), which requires keeping active attorney registration; a lawyer in 'retired' status or who has resi…
If a lawyer runs both a law firm and an IP consulting company, which ethics rules apply, and can the lawyer share ownership or fees with non-lawyers and a foreign lawyer?
The opinion concludes that where the consulting services are not distinct from the legal services, the Rules govern the whole operation: the lawyer may share fees with a qualifying foreign lawyer but …
Can a lawyer who runs or works with an R&D tax-credit business pay or receive referral fees from lawyers and from the business?
The opinion concludes a lawyer's own tax-credit firm may not pay lawyer referral fees unless Rule 1.5(g) or 7.2 allows it; a lawyer employed by a non-lawyer-owned tax-credit firm may take a referral f…
Can a New York lawyer affiliate and share fees with a New York resident who is admitted only in another state but in New York federal courts, purely to bring in New York clients?
The opinion concludes the arrangement is improper if the other lawyer's soliciting clients, sharing fees, and other activities would, as a matter of law, be the unauthorized practice of law; a federal…
After a solo lawyer dies and the firm is dissolved, can the lawyer who took over the cases pay part of the fees to the deceased lawyer's estate?
Only in narrow circumstances. Because an estate is a nonlawyer, fees may go to it only under a Rule 5.4(a) exception, chiefly to compensate for legal services the deceased actually rendered before dea…
Can a New York lawyer pay Avvo Legal Services' marketing fee to participate in the program?
No. Avvo's marketing fee is an improper payment for a recommendation under Rule 7.2(a). By advertising its ratings as identifying 'the right' lawyer, touting participants as 'highly qualified,' and ba…
Can a lawyer pay a for-profit online service a flat fee for leads to potential clients?
Yes. A lawyer may pay a for-profit lead service for client leads if the service picks lawyers by transparent, mechanical methods, does not analyze the client's problem or recommend any lawyer, and its…
When a lawyer takes over a deceased lawyer's cases, may the lawyer pay the deceased lawyer's estate a share of the fee, and how may fees be split if the case is referred to a third attorney?
The lawyer may pay the estate only the portion of the fee that fairly represents legal services the deceased lawyer actually performed; paying for a bare referral, where the deceased did no work, is a…
When a law firm receives a settlement check covering the client's money, a referral fee, a staff bonus, and the firm's own fees, which payments must come out of the attorney trust account, and how fast?
Money in which a client or third person has an ownership interest must be paid from the trust (Special) account; money owed to someone who has only a claim against the lawyer may be paid from either t…
Can a company's in-house counsel hand over the attorney-fee portion of an insurance arbitration award to the company employer without it being improper fee sharing?
Yes. Because New York no-fault insurance law entitles the prevailing claimant, not the attorney, to the fee award, the in-house lawyer may sign the fee portion over to the company without violating th…
Can a lawyer let a non-lawyer civil rights client keep some or all of the statutory attorney fees a court awarded to the client?
Yes. The opinion concludes that because statutory civil rights fees are awarded to the prevailing party (the client), not to the lawyer, letting the client keep some or all of them is not the kind of …
Can an in-house lawyer at a nonlawyer-owned company provide legal services to the public through the company, and does ghost-writing the pleadings cure the problem?
No. The opinion concludes a lawyer may not provide legal services to individuals through a for-profit company in which a nonlawyer has an ownership or controlling interest, because it aids the company…
Can lawyers employed by a debt management company provide legal services to the company's customers?
No. If the company's services to customers are legal services, the opinion concludes the employed lawyers may be aiding a nonlawyer's unauthorized practice, sharing fees with a nonlawyer, ceding their…
Can a lawyer team up with a nonlawyer claims recovery firm that signs up clients, hires the lawyer to bring their antitrust claims, takes a one-third contingent commission, and pays the lawyer out of that commission?
Not on a systematic, continuing basis, because a claims recovery firm is not on the Appellate Division list of approved nonlegal professionals under Rule 5.8. Even a non-exclusive reciprocal referral …
Can new lawyers raise start-up money for their law firm through online crowdfunding, and which crowdfunding models are allowed?
Some models, not others. Donation and reward crowdfunding are permissible, but equity and royalty models are barred because giving a funder an ownership interest or a share of revenue violates Rule 5.…
Can a New York lawyer who practices principally abroad join a foreign firm with non-lawyer owners, like a UK Alternative Business Structure, without violating New York's rules?
Yes, subject to conditions. A New York lawyer based abroad may do work that does not require local licensing and may practice in a foreign entity with non-lawyer owners or supervisors, provided the fo…
Can a New York lawyer with a primarily New York practice join a DC firm that has a nonlawyer partner, or practice in a New York subsidiary of that firm?
No. A New York lawyer who principally practices in New York may not join a DC firm with a nonlawyer partner, and may not practice in a wholly owned New York subsidiary of that firm, because the predom…
Can a law firm sell advertising space to other professionals in its educational newsletter, and is the whole newsletter treated as lawyer advertising?
Yes. A firm may sell ad space in its newsletter to third parties, including other firms, as long as the rates carry no implied referral or fee-splitting arrangement. The entire newsletter counts as ad…
Can a New York lawyer accept payment of fees from a third party whose interests may be adverse to the client, when the client also still owes the lawyer money from earlier work?
Yes. Under Rule 1.8(f) the lawyer may accept a third party's payment if the client gives informed consent, the lawyer's independent judgment is not compromised, and confidences are protected. A client…
Can a lawyer partner with or be employed by a nonlawyer's 'Disability Office' to handle Social Security, Medicaid, and guardianship matters, and split fees with the nonlawyer?
No. The lawyer may not be employed by or partner with the nonlawyer entity to provide legal services, nor share legal fees with the nonlawyer (Rules 5.4(a), (b), (d)). The lawyer may pay the businessp…
Can a New York law firm enter an exclusive deal with a marketing company that does forensic mortgage analysis, pay it for referred clients, and tie its fee to the firm's legal fee?
No. The opinion concludes the arrangement is an impermissible cooperative business arrangement under Rule 5.8 because the company is not a listed profession, and the firm may not pay the company for r…
When a retiring lawyer sells a law practice, can the purchase price be structured as a percentage of fees the buyer earns after the sale?
Yes, within limits. Rule 1.17 lets a retiring lawyer take a share of post-sale fees as payment for goodwill if the amount and term fairly reflect the goodwill's value, but the lawyer may not be paid a…
If a firm markets practice-succession planning to solo lawyers, is that advertising, and does a lawyer's agreement to take over a colleague's matters trigger the fee-sharing rule?
No on both. Communications only to other lawyers are not advertisements or solicitations, and a referral or take-over agreement does not make two lawyers 'associated' for fee-sharing unless their firm…
Can a New York lawyer take client referrals from a non-lawyer firm and be paid an undisclosed cut of the flat fee the client pays that firm?
No. A lawyer may not accept referrals where the legal fee, in an amount never disclosed to the client, is taken from the fee the client pays a non-lawyer firm; that violates the duty to communicate fe…
Can a New York law firm pay an of-counsel lawyer's compensation to a Subchapter S corporation that a non-lawyer spouse partly owns?
Not as compensation for legal services, because a professional service corporation organized to practice law cannot have non-lawyer shareholders. The firm may pay that corporation as a third party at …
Can a New York lawyer take foreclosure-case referrals from a non-lawyer company that telephoned the clients and collects a fee covering the lawyer's services?
No. The opinion finds the arrangement flawed on several grounds: the company's telephone solicitation is imputed to the lawyer, the client's single payment to the company effectively shares a legal fe…
Can a New York law firm pay a non-lawyer marketing employee a bonus based on how many clients they bring in?
Yes, a firm may pay a non-lawyer marketing employee a bonus tied to the number of clients obtained through advertising, as long as the bonus is not calculated from the fees those clients pay. The firm…
Can a New York lawyer work from a New York office as an employee of a foreign firm that has non-lawyer owners or managers?
No. A New York lawyer may not practice law principally in New York as an employee of an out-of-state (or foreign) entity that has non-lawyer owners or managers, because Rule 5.4 bars sharing fees with…
Can a New York lawyer share legal fees with a non-profit organization that is not a law firm?
No. New York rejected the ABA Model Rule 5.4(a)(4) exception for sharing court-awarded fees with public-interest groups, so under Rule 5.4 a lawyer may not share legal fees with a non-profit organizat…
Can a lawyer admitted in New York and based in DC share New York litigation fees with a non-lawyer partner in a DC firm?
Yes, ordinarily. New York Rule 5.4 bars fee-sharing and non-lawyer partnerships, but under the Rule 8.5 choice-of-law analysis, a lawyer who principally practices in a jurisdiction that allows such a …
Can a New York law firm pay a non-lawyer marketer a bonus based on the new business they bring in?
A firm may employ a non-lawyer marketer who does only the advertising and solicitation a lawyer could do, and may pay a profit-sharing bonus tied to overall firm profits or a percentage of base salary…
Can a lawyer cut a contingent fee to share it with a non-attorney tax-reduction firm that refers clients, or be retained by that firm to serve its customers?
No. A lawyer may not reduce a contingent fee so the difference flows to a non-attorney tax-reduction firm that refers clients, because that is impermissible fee-splitting (or a cooperative business ar…
Can a lawyer take a case on a contingent fee when the client has already retained a non-testifying expert who is paid a percentage of the recovery?
Yes. There is no ethical barrier to a lawyer agreeing to a contingent fee where the client has separately retained a non-testifying expert who is also paid a percentage of the recovery, because the la…
Can a New York lawyer share a personal injury fee with an out-of-state lawyer who is not admitted in New York?
Yes, if the split meets Rule 1.5(g): proportional to each lawyer's work or a written assumption of joint responsibility, the client's written consent after disclosure of the division, and a total fee …
Can a law firm pay a nonlawyer business developer a percentage of grants its clients are awarded?
It depends on whether the grant writing is legal services. If it is, Rule 5.4(a) bars paying the nonlawyer a percentage of grants and Rules 7.1, 7.2, and 7.3 limit the marketing. If it is distinct non…
Can a lawyer who is also a real estate broker share her brokerage commission with lawyers who refer buyers or sellers to her?
Yes, but only if the referring lawyer is not representing the buyer or seller in that transaction, or, if the referring lawyer is, the lawyer remits or credits the referral fee to the client and obtai…
Can a lawyer email other lawyers asking them to refer cases, such as injuries from a particular drug, without it being a regulated solicitation?
Yes. Emails seeking referrals from other lawyers are not 'advertisements' or 'solicitations' under Rules 7.1 and 7.3, but they must still comply with Rule 7.4 (specialization claims) and Rule 8.4(c) (…
Can a law firm cooperate with a client's outside billing auditor and pay the auditor a percentage of the firm's billings directly from the firm's account?
Yes, with the client's informed consent. The committee concludes that cooperating with a client-hired auditor and paying it a percentage of billings from the firm's account is an allocation of costs b…
Can a divorce lawyer settle with the client for less than a court-awarded fee and promise to repay the client anything the opposing party later pays toward that award?
Yes. The committee concludes settling with one's own client for less than a Domestic Relations Law section 237 fee award, and reimbursing the client for amounts later collected from the adverse party,…
Can a New York firm split fees with a foreign law firm that refers it a New York matter and stays involved as a consultant?
Yes, with conditions. The committee concludes a New York firm may share a percentage of its fees with a foreign law firm on referred matters where the foreign firm's lawyers are bona fide lawyers with…
Can a New York lawyer form a partnership with an attorney admitted only in another state who would work exclusively from a New York office on New York matters?
Not where the out-of-state attorney's New York work would be unauthorized practice. The committee concludes such a partnership violates DR 3-101(A); and if the out-of-state attorney instead limited he…
Can a physician who is also a New York lawyer advertise free exams to screen medical malpractice claims for referral to lawyers, without disclosing the law license or the fee split?
No. The committee concludes that screening claims for referral is the practice of law, so the advertising must disclose the lawyer status; the referral-for-a-share-of-the-fee arrangement is barred unl…
If a lawyer is disqualified from a matter by a conflict of interest, can the lawyer still collect a referral fee for sending it to another firm?
The opinion concluded that a lawyer disqualified on non-consentable conflict grounds may not receive a referral fee, because the lawyer cannot assume the joint responsibility that fee division require…
Can a law firm pay a non-lawyer employee a percentage of the fees from matters the employee referred, now that the rule allows profit-sharing compensation?
The opinion concluded that the 1999 amendment letting a firm compensate non-lawyer employees on a profit-sharing basis does not allow paying an employee a percentage of fees attributable to matters th…
Can a lawyer take personal injury referrals from an accounting firm and let the firm collect its own contingent fee from the same client's recovery?
The opinion concluded the arrangement is prohibited: capping the legal fee so the accounting firm can take a separate contingent fee for unsought services gives the firm something of value for referra…
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Legal ethics opinions from the New York State Bar Association interpret the rules of professional conduct for working lawyers, in response to inquiries from members and committees. They are not binding like court discipline decisions, but courts and discipline boards treat formal opinions as substantial guidance on how the rules apply. Every opinion above has a plain-English question and short answer, plus a link to the original source on the bar's site.