Can a lawyer who retires under New York's OCA rules still collect a referral fee on cases handed to successor counsel?
NYSBA Ethics Opinion 1244: Keeping a Referral Fee After Retirement
Short answer: The opinion concludes that a lawyer who retires under the Office of Court Administration rules may receive a referral fee on previously referred cases only if the retired lawyer continues to bear joint responsibility for the matters, with disclosure to and consent from the clients.
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 sole practitioner who handled contingency-fee personal injury cases and, on retiring, referred remaining matters to unaffiliated lawyers under agreements giving the inquirer a third of each successor's legal fee. The inquirer wants to change OCA status from active to "retired" and asks whether that affects the fee arrangements.
The opinion relies on N.Y. State 1201 (2020), which addressed the same situation. It holds Rule 5.4(a) (no fee-sharing with nonlawyers) is inapposite because an OCA-retired lawyer remains a lawyer; only a court can strip a law license, and the OCA rules expressly let a retired lawyer perform legal services without compensation (22 NYCRR § 118.1(g)). The governing rule is Rule 1.5(g), which permits dividing a fee with an unassociated lawyer only if the division is proportional to services or, by a writing to the client, each lawyer assumes joint responsibility, with client consent after disclosure and a total fee that is not excessive.
Applying that, the opinion answers the inquirer's questions. First, the retiring lawyer may not end joint responsibility on retirement if the lawyer wishes to share in the fees; drawing on N.Y. State 961 (2013), it likens joint responsibility to the duties of a supervising lawyer under Rule 5.1, meaning remaining available for consultation, overseeing the matter, and staying exposed to financial and ethical responsibility. Second, successor counsel's own engagement letters do not displace the referring lawyer's joint responsibility, because Rule 1.5(g) would be meaningless if a successor's retainer eliminated the referring lawyer's continuing duty. Third, the effect on the inquirer's malpractice insurance is a question of law outside the committee's jurisdiction.
In practice
Under this opinion, a New York lawyer who moves to OCA-retired status may continue to collect an agreed referral fee on cases now handled by successor counsel only by maintaining joint responsibility for those matters, which the opinion equates with the oversight duties of a supervising lawyer under Rule 5.1. Per the opinion, the clients must have been informed of and consented in writing to the fee division, and successor counsel's separate engagement letter does not relieve the retired lawyer of that continuing responsibility.
Common questions
Q: Does retiring under the OCA rules turn a referral fee into improper fee-sharing with a nonlawyer?
A: Per the opinion, no. An OCA-retired lawyer is still a lawyer, so Rule 5.4(a) does not apply; the fee is governed by Rule 1.5(g) on fee division between unassociated lawyers.
Q: Can the retired lawyer simply stop being jointly responsible and still take the fee?
A: Per the opinion, no. To share in the fee the retired lawyer must keep joint responsibility, which means remaining available, overseeing the matter, and bearing continued responsibility, akin to a supervising lawyer under Rule 5.1.
Q: Does successor counsel's engagement letter end the referring lawyer's joint responsibility?
A: Per the opinion, no. Rule 1.5(g) would be meaningless if the successor's retainer eliminated the referring lawyer's continuing duty and disclosed share.
Background and rules framework
The opinion interprets New York Rule 1.5(g) (division of fees with a lawyer not in the same firm), Rule 5.4(a) (sharing fees with nonlawyers), and Rule 5.1 (responsibilities of supervisory lawyers, used as the analogy for "joint responsibility"), against the OCA registration rules (22 NYCRR Part 118). These correspond to ABA Model Rules 1.5, 5.4, and 5.1.
Citations and references
Rules of Professional Conduct:
- New York Rules of Professional Conduct 1.5(g), 5.1, 5.4(a)
- ABA Model Rules 1.5, 5.1, 5.4 (analogues)
Regulations:
- 22 NYCRR § 118.1(g) (OCA "retired" status; uncompensated legal services permitted)
Other opinions cited:
- N.Y. State 1201 (2020): retired lawyer's referral fee requires continuing joint responsibility
- N.Y. State 961 (2013): joint responsibility likened to supervisory duties
See also
- ABA Formal Op. 487: Fee Split With Prior Counsel
- ABA Formal Op. 474: Referral Fees and Conflicts
- ABA Formal Op. 468: Selling a Law Practice
Source
- Landing page: https://nysba.org/ethics-opinion-1244/