The New York State Bar’s Committee on Professional Ethics (“Committee”) recently issued an opinion regarding fee-splitting. Attorneys
In response to an inquiry, the Committee advised that a lawyer who is barred in New York may need to avoid affiliating and splitting fees with attorneys who reside in New York, but are only admitted to practice in other states. The main consideration is whether the conduct among the attorneys involves “the solicitation of clients, sharing of fees, and any other services…, [that] would as a matter of law constitute the unauthorized practice of law.”
The Committee considered a hypothetical in which a New York attorney affiliates on his letterhead with an attorney barred in another state for the primary purpose of having the out-of-state attorney generate business for the New York attorney. The out-of-state attorney would attend initial client meetings and obtain a percentage of the fee, but he would not participate in the legal work. The Committee concluded that the arrangement is likely a violation of New York’s Rule of Professional Conduct 5.5(b), which prohibits out-of-jurisdiction practice, and its Rule of Professional Conduct 7.3, which covers solicitation and referral of clients. Moreover, the proposal runs counter to established case law and prior ethics opinions.
After reviewing various case authority and other ethics opinions concerning the unauthorized practice of law and fee splitting, the Committee ultimately concluded that the answer to inquiry is a conclusion of law. The Committee advised the inquirer to consider the precedent and the import of the prior case law to his proposal.
Read the full opinion here.
