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?
NY State Bar Ethics Opinion 1096: Letting a civil rights client keep statutory fees
Short answer: A lawyer may allow a civil rights client to keep some or all of the statutory attorney fees a court awards to the client, even though the client is not a lawyer, because such fees are awarded to the prevailing party rather than to the lawyer, so the arrangement is not the fee sharing with a non-lawyer that Rule 5.4(a) bars.
Disclaimer: This is an advisory ethics opinion. Advisory opinions are not binding; they interpret the New York State Bar Association's rules of professional conduct and are persuasive authority. This summary is for research purposes only and is not legal advice. Verify current rules before acting on any specific guidance.
About this page: The plain-English summary and Q&A below were written by Ezel based on the official opinion. We do not reproduce the opinion text on this page; follow the linked source for the official text, which controls.
Plain-English summary
The inquirer, admitted in Florida and admitted pro hac vice in a New York court, represented a non-lawyer plaintiff who prevailed in a civil rights suit. The court ordered the defendant to pay statutory civil rights attorney fees to the client. Believing the damages award was too low, the lawyer wanted to let the client keep some of the court-awarded fees to make up the difference (¶ 1).
The committee first resolved choice of law: under Rule 8.5(b)(1), conduct in connection with a proceeding before a court where the lawyer is admitted (including pro hac vice) is governed by the rules of the jurisdiction where the court sits, so the New York Rules applied (¶¶ 3-4). It then turned to Rule 5.4(a), which prohibits sharing legal fees with a non-lawyer (¶ 5). The committee reasoned that the reach of the rule is not unlimited and that a lawyer declining to take statutory fees the court awarded directly to a non-lawyer client is not the kind of fee sharing the rule targets, which is sharing with a non-lawyer who is a stranger to the attorney-client relationship (¶ 6).
The dispositive point was that statutory fee awards generally go to the prevailing "party," not the lawyer, as in federal civil rights cases (¶ 7, citing Evans v. Jeff D.) and New York fee-shifting statutes. Because the fee is awarded to the client, the client would be "sharing" with the lawyer, not the other way around, so the anti-fee-sharing prohibition does not bar letting the client keep the award (¶ 7). The committee acknowledged that retainer agreements typically assign the statutory fee award to the lawyer, but held the award is still made first to the client, and a lawyer may ethically waive that assignment in whole or part, which is equivalent to a fee discount and does not implicate Rule 5.4's concern with protecting the lawyer's independent judgment (¶ 8). It distinguished N.Y. State 906 (2012), where the lawyer wanted to share fees with a non-lawyer not-for-profit employer that was not the client (¶ 9).
In practice
Under the New York rules as they stood at the time of the opinion, the committee held that the direction of the transaction is what matters. Because statutory fees vest in the prevailing party, allowing the client to retain them is the client declining to pass the award through to the lawyer, not the lawyer paying a non-lawyer. The opinion frames a lawyer's waiver of an assigned fee as the functional equivalent of a discount, which is plainly permissible and does not threaten the professional-independence value behind Rule 5.4. The result is confined to fees the court awards to the client; it does not authorize sharing fees with a non-lawyer who stands outside the attorney-client relationship, as N.Y. State 906 still prohibits.
Common questions
Q: Whose rules apply when a lawyer is admitted pro hac vice in New York?
A: New York's. The opinion concludes that under Rule 8.5(b)(1), conduct connected to a proceeding before a court where the lawyer is admitted, including pro hac vice, is governed by the rules of the jurisdiction where the court sits (¶ 4).
Q: Isn't letting a non-lawyer client keep attorney fees a form of prohibited fee sharing?
A: No. The opinion concludes that because statutory fees are awarded to the prevailing party, not the lawyer, letting the client keep them is not the fee sharing with a non-lawyer that Rule 5.4(a) prohibits (¶¶ 6-7).
Q: What if the retainer assigned the fee award to the lawyer?
A: The lawyer may still waive it. The opinion concludes the award is made first to the client, and waiving the assignment in whole or part is equivalent to a fee discount, which Rule 5.4 does not bar (¶ 8).
Background and rules framework
The opinion interprets New York Rule of Professional Conduct 5.4(a) (no sharing legal fees with a non-lawyer) and Rule 8.5(b)(1) (choice of law for court proceedings), corresponding to ABA Model Rules 5.4 and 8.5. Comment [1] to Rule 5.4 supplies the rule's purpose, protecting the lawyer's professional independence of judgment, which the committee uses to define the prohibition's reach. The fee-award analysis draws on federal and New York fee-shifting statutes that award fees to the "prevailing party."
Citations and references
Rules of Professional Conduct:
- MR 5.4 / NY RPC 5.4(a) (no fee sharing with a non-lawyer)
- MR 8.5 / NY RPC 8.5(b)(1) (choice of law for court proceedings)
Cases:
- Evans v. Jeff D., 475 U.S. 717 (1986), on statutory civil rights fees awarded to the prevailing party
Statutes:
- N.Y. Gen. Bus. Law § 349(h); N.Y. State Finance Law §§ 187-194 (fees to a "prevailing plaintiff")
Other opinions cited:
- N.Y. State 906 (2012): a lawyer may not share statutory fees with a non-lawyer not-for-profit employer that is not the client
See also
- NY State Bar Op. 1108: Referring clients to third-party fee financing
- NY State Bar Op. 1121: In-house counsel remitting a fee award
Source
- Landing page: https://nysba.org/ethics-opinion-1096/