Can a New York lawyer or firm pay a pro bono organization to receive pro bono case referrals?
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This page answers the general question as of 2009. Ezel answers yours: whether it's allowed on your facts, under the current New York Rules of Professional Conduct, with citations.
Plain-English summary
The Committee addressed a practice it found increasingly common: pro bono organizations soliciting or requiring payments from lawyers and firms in exchange for referrals of pro bono assignments. Finding no prior ethics authority on the question, it analyzed the practice under the New York Rules of Professional Conduct, which took effect in 2009. The opinion concludes that Rule 7.2 ("Payments for Referral," former DR 2-103) permits these payments within limits: although Rule 7.2(a) generally bars compensating a person or organization to recommend or obtain employment, Rule 7.2(a)(2) lets a lawyer "pay the usual and reasonable fees or dues charged by a qualified legal assistance organization," and Rule 7.2(b) defines which organizations qualify.
The opinion explains "usual and reasonable" as a fact-specific inquiry. A fee is "usual" when charged in the ordinary course on an equivalent basis for all referrals (a uniform flat fee, for example), and not when imposed ad hoc for "special" cases or to cover a sudden budget shortfall. "Reasonable" is assessed case by case, with the marketplace and the organization's actual cost of providing services (intake, overhead, supervising-attorney time) as relevant factors. The lawyer must also confirm the organization fits one of the four categories of "qualified legal assistance organization" in Rule 7.2(b)(1)-(4), such as legal aid offices or bona fide member-serving organizations, the latter subject to conditions guarding against profit-driven referral mills.
Other rules cabin the practice. Regardless of Rule 7.2, the opinion states a lawyer accepting referrals must comply with Rule 1.1 (competence) and Rule 5.4(c) (independent professional judgment and protection of client confidences). The opinion's stated bottom line is that the client's interest in independent, competent representation cannot be subordinated to the organization's financial interest. It also notes that general donations to non-qualified organizations are permissible so long as there is no tacit agreement that the donation is in exchange for case referrals.
In practice
Under this opinion, as it interpreted the New York Rules as they stood in 2009, a firm may pay a pro bono organization for referrals if two conditions hold: the fee is "usual and reasonable," and the organization is a "qualified legal assistance organization" under Rule 7.2(b). Per the opinion, both the paying lawyer and the responsible lawyer at the organization must also meet Rule 1.1 competence and Rule 5.4(c) independent-judgment and confidentiality duties.
The opinion distinguishes referral payments from unconditional donations: a general donation to a non-qualified organization does not violate the Rules so long as it is not tied, even tacitly, to receiving case referrals. Because the Rules have been amended since 2009, verify the current text of Rule 7.2 before relying on the specific conditions described here.
Common questions
Q: Can a New York law firm pay to receive pro bono referrals?
A: Yes. The opinion concludes Rule 7.2(a)(2) permits paying the "usual and reasonable fees or dues" of a qualified legal assistance organization in exchange for pro bono referrals.
Q: What makes a referral fee "usual and reasonable"?
A: Per the opinion, a fee is "usual" when charged in the ordinary course on an equivalent basis for all referrals (such as a uniform flat fee) and not imposed ad hoc; "reasonable" is fact-specific, judged against the marketplace and the organization's cost of providing services.
Q: Which organizations may charge such fees?
A: Only a "qualified legal assistance organization" as defined in Rule 7.2(b)(1)-(4), for example a legal aid or public defender office, or a bona fide member-serving organization meeting the Rule's conditions.
Q: Does paying for referrals relieve the lawyer of other duties?
A: No. The opinion states the lawyer must still provide competent representation under Rule 1.1 and exercise independent professional judgment and protect client confidences under Rule 5.4(c); the client's interests cannot be subordinated to the organization's finances.
Q: Are unconditional donations to pro bono groups affected?
A: The opinion states general donations to non-qualified organizations are permissible so long as there is no tacit agreement that the donation is in exchange for case referrals.
Background and rules framework
The opinion interprets New York Rule of Professional Conduct 7.2 (Payments for Referral; former DR 2-103), corresponding to Model Rule 7.2, along with Rule 7.2(b) and Rule 1.0(p) (definition of "qualified legal assistance organization"), Rule 1.1 (competence; former DR 6-101), Rule 1.5 (fees; former DR 2-106), Rule 5.4(c) (independent professional judgment; former DR 5-107(b)), and Rule 6.1 (pro bono). It also draws on Comment 2 to Rule 7.2 prepared by NYSBA's COSAC.
Citations and references
Rules of Professional Conduct:
- New York Rule 7.2 (former DR 2-103) / Model Rule 7.2 (payments for referral)
- New York Rule 1.1 (former DR 6-101) / Model Rule 1.1 (competence)
- New York Rule 5.4(c) (former DR 5-107(b)) / Model Rule 5.4 (independent professional judgment)
- New York Rule 1.5 (former DR 2-106); Rule 6.1; Rule 1.0(p) (definitions)
See also
Source
- Landing page: https://www.nycbar.org/reports/formal-opinion-2009-04-payments-for-pro-bono-referrals/
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