In a New York (out-of) state of mind…

It has been a minute or two since I’ve stumbled upon an ethics opinion that provides a quick and easy example of how to take an issue, makes it overly complex and in so doing highlight several ongoing problem areas in the regulation of the profession, but ultimately still get to the correct result as to the “yes” or “no” answer to the question addressed.

But along comes New York State Bar Association Committee on Professional Ethics Opinion No. 1160. This one seems to me to be just such an opinion so let’s chat about it briefly.

Op. 1160 exists to answer the following question:

May a lawyer admitted in New York affiliate and share legal fees with another lawyer, who, while a resident of this State, is not admitted here, with the affiliation intended solely for the purpose of obtaining clients referred by the non-admitted lawyer?

Now, because the question included the desire to share legal fees with the rainmaking lawyer who was living in but not licensed in New York, the opinion could have chosen to cut to the chase based on a relatively straightforward application of New York’s Rule 1.5(g) which largely tracks ABA Model Rule 1.5(e).

New York’s 1.5(g) only lets lawyers not in the same law firm (and to be clear the inquirer’s desire to affiliate did not apparently involve actually forming a law firm together) share legal fees if, among other bells and whistles regarding consent and the existence of a writing, the amount of the division of the fee is either proportional to the service performed or (if it is going to be disproportionate in that respect) if both lawyers assume joint responsibility for the work.

Given that the inquiry transparently admitted that the rainmaker would not be doing anything beyond landing the client and passing the client on to the New York lawyer for handling, it seems pretty clear that Rule 1.5(g) could only be satisfied if the lawyers would be assuming joint responsibility. Given the lack of a New York license for the rainmaker, that would seem an impossible state of affairs because while landing a client might not cross the line into the unauthorized practice of law in New York, agreeing to have joint responsibility for legal work performed in New York for a New York client would be harder to argue involves staying on the right side of the line. Thus, it feels like the NYSBA committee could have wrapped this one up with a bow in a 1 or 2 pages tops.

In fairness, they almost managed to do something like that when they attempted to explain the difference between this situation and an earlier opinion they issued in 2011:

We examined Rule 1.5(g) in N.Y. State 864 (2011), in which the inquirer wished to accept a referral from an out-of-state lawyer in a personal injury matter. The injury occurred in New York and the referring lawyer proposed that, in the particular matter at issue, the in-state lawyer would “handle” the matter and pay the referring lawyer a portion of any recovery. We endorsed the proposal subject to compliance with Rule 1.5(g)…. Although we have declined to delineate the precise contours of “joint responsibility” under this Rule …, we have made clear that the mere cultivation of client relationships does not qualify as “services performed” by the referring lawyer… Thus, the inquirer’s contemplated action would violate Rule 7.2(a) unless it could be said that the inquirer is ethically permitted to be affiliated with the out-of-state lawyer in the circumstances presented.

Where the committee goes awry is that last sentence which is pretty viciously circular.

It seems like it should have said: Thus, the inquirer’s contemplated action would violate Rule 7.2(a) unless it could be said that the out-of-state lawyer was willing to undertake “joint responsibility” for the matter and if doing so would not constitute the unauthorized practice of law.

They did not write it that way, however. And, as a result, the rest of the pieces of the opinion exist all of which for rhetorical purposes treat the rainmaker, despite being a lawyer licensed in at least one jurisdiction, as a “non lawyer.” And much of which bears the hallmarks of heavy-handedness that often arise in ethics opinions construing restrictions on (1) the ability of lawyers to offer compensation to those who refer them work, (2) the ability of lawyers to ask for work from clients; and (3) the ability of lawyers to practice law remotely.

You can read the full opinion here.

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