Ezel / Ethics Opinions / NYSBA
NYSBA 2019-05-13

Can a lawyer buy a firm wholly owned by another lawyer who keeps practicing elsewhere, and keep using that lawyer's name on the firm?

Short answer: Yes. The opinion concludes a lawyer with a pre-existing, bona fide affiliation may purchase the firm under Rule 1.17, that the seller is 'retired' once he stops practicing in the firm's geographic area even if he practices elsewhere, and that the buyer may keep the seller's name so long as the name is not misleading.
Currency note: this opinion is from 2019
Subsequent statutory amendments, court decisions, or later opinions or rule amendments may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
Disclaimer: Advisory only. Not binding precedent.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official ethics opinion. The original opinion (linked at the bottom of this page) is the authoritative source for any reliance.

NYSBA Ethics Opinion 1168: Buying a Wholly Owned Firm and Keeping Its Name

Short answer: The opinion concludes that a lawyer affiliated with a firm wholly owned by another lawyer may purchase that firm consistent with Rule 1.17, that the seller counts as "retired" for the sale once he ceases practicing in the firm's geographic area even though he opens a distant practice, and that the buyer may continue using the seller's name in the firm provided the name is not misleading.

Disclaimer: This is an advisory ethics opinion. Advisory opinions are not binding; they interpret the New York State Bar Association's view of New York'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 is a New York lawyer affiliated with a firm wholly owned by another lawyer (the "Owner"), operating as the [Owner] Group, P.L.L.C., with offices in the New York City metropolitan area. The Owner plans to leave, stop practicing at that firm, and start a new practice in a distant part of the state. The inquirer wants to buy the practice and keep using the Owner's name. The inquirer asked whether the purchase is permissible even though the seller continues practicing law, and whether the buyer may keep using the seller's firm name.

On the sale, the committee explains that Rule 1.17 (successor to 1996's DR 2-111) lets a lawyer retiring from private practice sell a practice including good will, and defines "retirement" to include ceasing private practice in the geographic area (the county, city, and contiguous counties or cities) where the sold practice operated. Because the Owner will cease practicing in the metropolitan area and intends to practice only in distant, non-contiguous counties, the Owner is "retiring" within Rule 1.17, so the inquirer may buy the practice if the rule's other requirements are met.

On the name, the committee addresses a tension between Rule 1.17 and Rule 7.5(b). Rule 1.17 lets any lawyer buy a practice and its good will (the firm name being central to good will), while Rule 7.5(b) broadly bars trade names and firm names containing names other than lawyers in the firm, with limited exceptions, to protect the public from deception about identity, responsibility, or status. The committee declines to resolve in the abstract whether Rule 1.17's inclusion of good will tempers Rule 7.5(b), because here the pre-existing, presumably bona fide relationship between the Owner and the inquirer (a continuation of the practice) resolves it: a lawyer with such an affiliation may acquire the firm and use its name if Rule 1.17's other requirements (including notice to clients and protection of confidences) are honored. Its sole caveat is that "Group" implies more than one lawyer, so continued use assumes other lawyers are in the practice. The committee then revisits prior opinions: it overrules N.Y. State 148 (1970) (which barred a former associate from continuing a firm name with a deceased partner's name) given changed nomenclature, and modifies N.Y. State 850 (2011) to recognize that, for Rule 1.17 and 7.5(b) purposes, a partner may "retire" from a firm without entirely retiring from the practice of law; the court-rule definition of "retired" in 22 NYCRR 118.1(g) serves a different purpose.

Common questions

Q: Can a lawyer buy a firm whose owner keeps practicing law?

A: Per the opinion, yes, if the owner is "retiring" in the Rule 1.17 sense, which means ceasing private practice in the firm's geographic area (its county, city, and contiguous areas). Practicing in a distant, non-contiguous county does not defeat the sale.

Q: Can the buyer keep using the seller's name on the firm?

A: Per the opinion, yes, where the buyer has a pre-existing, bona fide affiliation with the firm reflecting a continuation of the practice, provided Rule 1.17's other requirements are met and the name is not misleading.

Q: Does "retired" mean the seller has to stop practicing law entirely?

A: Per the opinion, no. The committee modifies N.Y. State 850 to hold that "retired" for Rule 1.17 and 7.5(b) means ceasing practice in the relevant geographic area, not retiring from the practice of law altogether; the court-registration definition in 22 NYCRR 118.1(g) serves a different purpose.

Q: Does the word "Group" in the firm name raise a problem?

A: Per the opinion, the committee's only caveat is that "Group" implies more than one lawyer; continued use is acceptable assuming other lawyers are in fact engaged in the practice.

Background and rules framework

The opinion centers on New York Rule 1.17(a) (sale of a law practice, including good will, and its definition of "retirement" by geographic cessation) in tension with Rule 7.5(b) (the bar on trade names and on firm names containing non-member names, with limited exceptions), informed by Rule 7.5(c), Rule 1.5(h) (separation or retirement payments), and Rule 8.4(c) (no misrepresentation). These correspond to ABA Model Rules 1.17, 7.5, and 8.4. The opinion expressly overrules N.Y. State 148 (1970) and modifies N.Y. State 850 (2011). New York later amended Rule 7.5 effective June 24, 2020 to permit non-misleading trade names; that change relaxes, rather than reverses, the name conclusion here. Verify the current text of Rule 7.5 before relying on the specific rule numbering.

Citations and references

Rules of Professional Conduct:

  • New York Rules of Professional Conduct 1.17(a) (and Comment [1]); 7.5(b); 7.5(c); 1.5(h); 8.4(c)
  • ABA Model Rules 1.17, 7.5, 8.4 (analogues)

Statutes and rules:

  • 22 NYCRR section 118.1(g) (court-registration definition of "retired," distinguished)

Other opinions cited:

  • N.Y. State 148 (1970) (overruled); 850 (2011) (modified); 622 (1991); 961 (2013); 869 (2011); 740 (2001); 920 (2012); 669 (1994): firm names, good will, and the trade-name bar
  • N.Y. City 725 (1948): bona fide successor firm, looking to continuity of lawyers, clientele, and practice

See also

Source