Ezel / Ethics Opinions / NYSBA
NYSBA 2021-05-25

Can a lawyer run a business renting office space and equipment to other lawyers, and is that nonlegal business subject to the ethics rules?

Short answer: Yes. The opinion concludes that renting office space to other lawyers is a permitted nonlegal business; under Rule 5.7(a)(3) it is subject to the ethics rules only if a renter could reasonably believe the rental creates a client-lawyer relationship, which is unlikely here, so no disclaimer is required.
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 Not binding precedent.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 1223: Renting Office Space to Other Lawyers as a Nonlegal Business

Short answer: The opinion concludes that renting law-office space and amenities to other lawyers for lawful purposes is a permitted nonlegal business; under Rule 5.7(a)(3) the rental business is subject to the ethics rules only if a renter could reasonably believe the rental is the subject of a client-lawyer relationship, which is unlikely on these facts, so no Rule 5.7(a)(4) disclaimer is required.

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 plans to form a PLLC or PC to operate an office-suite business on the first floor of his home, with a reception desk, ten or more independent stand-alone workstations, secure filing for each user, and shared conference rooms, rented to other lawyers (who are not the inquirer's clients) to run their own practices. He asks whether a New York lawyer may rent space and equipment to other lawyers as a nonlegal business.

The committee declines to decide the related legal questions (whether a PLLC may run a nonlegal business under LLC Law § 1203(a), and what Judiciary Law § 470 requires), noting those are matters of law. It also declines to adopt the "virtual law office" label, contrasting its own definition in N.Y. State 1025 (online presence) with N.Y. City 2019-2 (shared as-needed facilities), and describes the proposal simply as renting office space.

On the ethics question, renting office space, even space lawyers will use to practice, is a nonlegal business governed by Rule 5.7. The issue is whether the nonlegal services are "not distinct" from legal services and thus subject to the Rules. Under Rule 5.7(a)(3), a nonlegal business serving non-clients is subject to the Rules only if the recipient could reasonably believe the services are the subject of a client-lawyer relationship; Rule 5.7(a)(4) presumes such a belief absent a written disclaimer, but per N.Y. State 1222 (2021) that presumption arises only after the facts under (a)(3) show the belief could reasonably exist. Here, lawyers renting office space are unlikely to reasonably believe the rental creates a client-lawyer relationship, so no disclaimer is necessary. The committee cross-references office-sharing confidentiality duties (N.Y. State 1102 (2016)) and the "firm" definition in Comment [2] to Rule 1.0. It then surveys Judiciary Law § 470 at length: a non-resident New York lawyer who practices New York law must keep a New York office meeting § 470's minimum requirements (Schoenefeld v. State, 25 N.Y.3d 22 (2015); Schoenefeld v. Schneiderman, 821 F.3d 273 (2d Cir. 2016)), while a resident lawyer may keep a non-permanent office without implicating § 470, and confirms N.Y. State 1025 that a lawyer may use a virtual-office address for the Rule 7.1(h) advertising address as long as all applicable laws are met. What § 470 requires remains a question of law it does not decide.

In practice

Under this opinion, a New York lawyer may operate a business renting office space and amenities to other lawyers; that is a permitted nonlegal activity governed by Rule 5.7. Per the opinion, the rental business becomes subject to the ethics rules only where a renter could reasonably believe the rental creates a client-lawyer relationship (Rule 5.7(a)(3)), which is unlikely for ordinary office rental, so the Rule 5.7(a)(4) written disclaimer is not required here. The opinion confirms a lawyer may use a virtual-office street address for the Rule 7.1(h) advertising address, while treating compliance with Judiciary Law § 470 as a question of law it does not decide.

Common questions

Q: Can a lawyer run a business renting office space to other lawyers?

A: Per the opinion, yes; renting office space and amenities for lawful purposes, even to lawyers who will practice there, is a permitted nonlegal business governed by Rule 5.7.

Q: Is that rental business subject to the ethics rules?

A: Per the opinion, only if a renter could reasonably believe the rental is the subject of a client-lawyer relationship (Rule 5.7(a)(3)); that is unlikely for ordinary office rental, so no Rule 5.7(a)(4) disclaimer is needed on these facts.

Q: Can a lawyer use a shared or virtual office address in advertising?

A: Per the opinion, yes; confirming N.Y. State 1025, a lawyer may use a virtual-office address as the principal office address under Rule 7.1(h) as long as all applicable laws and rules are met.

Q: Does this resolve the Judiciary Law § 470 office requirement?

A: No. Per the opinion, whether a given space qualifies as an office for the transaction of law business under § 470, which a non-resident New York lawyer must maintain, is a question of law the committee does not decide.

Background and rules framework

The opinion interprets New York Rule 5.7(a)(3) and (4) (responsibilities for nonlegal services) and Rule 7.1(h) (principal-office address in advertising), and discusses Judiciary Law § 470 (physical-office requirement for non-resident lawyers) as a question of law it does not decide. These correspond to ABA Model Rule 5.7 and the ABA Model Rule 7.1/7.2 advertising provisions.

Citations and references

Rules of Professional Conduct:

  • New York Rules of Professional Conduct 5.7(a)(3)-(4), 7.1(h)
  • ABA Model Rule 5.7 (analogue)

Statutes:

  • New York Judiciary Law § 470 (physical-office requirement; noted, not interpreted); LLC Law § 1203(a) (PLLC purpose; noted, not interpreted)

Cases:

  • Schoenefeld v. State, 25 N.Y.3d 22 (2015): § 470 requires a physical New York office
  • Schoenefeld v. Schneiderman, 821 F.3d 273 (2d Cir. 2016): § 470 does not violate the Privileges and Immunities Clause
  • In re Gordon, 48 N.Y.2d 266 (1979): striking § 470's residency requirement

Other opinions cited:

  • N.Y. State 1222 (2021): timing of the Rule 5.7(a)(4) presumption; N.Y. State 1025 (2014): virtual-office address under Rule 7.1(h)
  • N.Y. State 1102 (2016): confidentiality in office-sharing; N.Y. City 2019-2: virtual law offices

See also

Source