If I can't take a prospective client because of a conflict with an existing client, can I refer them to another lawyer?

Plain-English summary

The opinion addresses a lawyer who must decline a prospective client because representing that person would create a conflict of interest with an existing client (in a matter the lawyer's firm is not handling for the existing client). The question is whether the lawyer may nonetheless refer the prospective client to another competent lawyer. The committee concludes the lawyer is ethically permitted to do so, while identifying several limits.

The committee grounds the duty of loyalty in Rules 1.7, 1.10, and 1.1(c)(2): Rule 1.7(a)(1) bars taking on a representation involving "differing interests" absent an effective waiver, Rule 1.10 imputes that to the firm, and the lawyer satisfies those duties by declining the prospective client. The committee relies on N.Y. State Op. 1018 (2014) and District of Columbia authority for the conclusion that a good-faith recommendation of competent counsel is permitted; it distinguishes Op. 1018, which concerned referral after withdrawal under Rule 1.16(e), noting that here the lawyer is rejecting a prospective representation, so Rule 1.16 does not apply, but agreeing with Op. 1018's reliance on Rule 1.1(c)(2).

The committee stresses that the purpose of such a referral is to give members of the public useful information for choosing counsel, so the referral must be made in good faith. A lawyer must not exploit the referral to sabotage a client's adversary by steering the person to a lawyer the referring lawyer believes is incompetent or dishonest, and must not make material misrepresentations about the lawyers being recommended (Rule 8.4(c)). The opinion also flags the duty to maintain confidentiality (Rule 1.6), the limits on communicating with unrepresented adverse parties (Rule 4.3), and the rules governing reciprocal referral agreements and fee sharing (Rules 7.2 and 1.5(g)). Finally, the committee emphasizes that there is no ethical obligation to refer a non-client to another lawyer; a lawyer who is unwilling to abide by these limits should simply decline the request for a referral.

In practice

Under this opinion, conduct in which a conflicted-out lawyer refers a prospective client to other competent counsel is permitted, as the rules stood at the time, provided the lawyer acts in good faith and observes the related duties. The opinion holds that the lawyer satisfies the loyalty rules (1.7, 1.10, 1.1(c)(2)) by declining the representation, that any referral must be made in good faith and without material misrepresentation about the recommended lawyers (Rule 8.4(c)), that confidentiality and the limits on contact with unrepresented adverse parties apply, and that reciprocal-referral and fee-sharing arrangements remain governed by Rules 7.2 and 1.5(g). The opinion holds there is no duty to refer at all.

Common questions

Q: I have to turn down a prospective client because of a conflict. Can I still point them to another lawyer?

A: Yes. The opinion concludes a lawyer who declines a prospective client because of a conflict may refer that person to another competent lawyer or list of lawyers, subject to several ethical limits.

Q: Am I required to refer them somewhere?

A: No. The opinion states there is no ethical obligation to refer a non-client to another lawyer, even if the lawyer believes the person needs representation; a lawyer unwilling to abide by the limits should decline the referral request.

Q: Can I steer the person away from my client's adversary's interests?

A: No. The opinion says the referral must be made in good faith. A lawyer must not use the referral to sabotage a client's adversary by recommending a lawyer believed to be incompetent or dishonest, and must not misrepresent the recommended lawyers (Rule 8.4(c)).

Q: Do fee-sharing rules apply if I get something for the referral?

A: The opinion flags the rules on reciprocal referral agreements and fee sharing (Rules 7.2 and 1.5(g)) as among the limits a referring lawyer must observe.

Background and rules framework

The opinion interprets New York Rule of Professional Conduct 1.7 (concurrent conflicts; Model Rule 1.7), Rule 1.10 (imputation; Model Rule 1.10), and Rule 1.1(c)(2) (not prejudicing the client; Model Rule 1.1), together with Rule 1.18 (duties to prospective clients; Model Rule 1.18), Rule 1.6 (confidentiality), Rule 4.3 (unrepresented persons), Rule 8.4(c) (misrepresentation), and the referral and fee-sharing provisions of Rules 7.2 and 1.5(g). It relies on N.Y. State Op. 1018 (2014) and District of Columbia authority.

Citations and references

Rules of Professional Conduct:

• Model Rule 1.7 / NY RPC 1.7 (concurrent conflicts of interest)
• Model Rule 1.10 / NY RPC 1.10 (imputation of conflicts)
• Model Rule 1.1 / NY RPC 1.1(c)(2) (not prejudicing the client)
• Model Rule 1.18 / NY RPC 1.18 (duties to prospective clients)
• Model Rule 7.2 / NY RPC 7.2, 1.5(g) (referrals and fee sharing); Rule 8.4(c) (misrepresentation)

Other opinions cited:

• N.Y. State Bar Ethics Op. 1018 (2014): referring a former client to competent counsel after withdrawal

See also

• NYC Bar Ethics Op. 2017-1: Payment of fees to a legal referral service
• ABA Formal Op. 474: Referral fees and conflicts of interest
• NYC Bar Ethics Op. 2019-4: Representing multiple individuals in an investigation

Source

• Landing page: https://www.nycbar.org/reports/formal-opinion-2016-1-referring-a-prospective-client-to-other-counsel-when-the-referring-lawyer-has-a-conflict-of-interest/
• Original PDF: https://www.nycbar.org/wp-content/uploads/2023/05/20073139-2016-1_Referral_to_Competent_Counsel_Opinion_7_7_16_.pdf