Ezel / Ethics Opinions / NYSBA
NYSBA 2024-08-28

Can a lawyer accept real estate clients referred by an associate at the firm who is also a licensed real estate broker?

Short answer: Yes, conditionally. The opinion concludes a lawyer may accept clients referred by an associate who is also a real estate broker, provided the lawyer does not share legal fees or real estate commissions with the broker/associate, neither acts as both lawyer and broker in the same deal, and the lawyer obtains the client's informed written consent.
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 Not binding precedent.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 1273: Referrals From a Broker Who Is Also an Associate

Short answer: The opinion concludes that a lawyer may accept real estate clients referred by an associate in the firm who is also a licensed real estate broker, provided the lawyer does not share legal fees or real estate commissions with the broker/associate and obtains the client's informed written consent. Neither the lawyer nor the broker/associate may act as both lawyer and broker in the same transaction, which is a per se nonconsentable conflict.

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 has an associate who is also a real estate broker. The broker/associate wants to refer her real estate clients to the inquirer for legal representation. The inquirer would not pay a referral fee, would not receive any part of the broker's commission, would not let the broker/associate work on the legal matters, would disclose the employment affiliation, and expects the referrals to be only a small part of his practice revenue.

The opinion first reaffirms that in New York a lawyer may not act as both lawyer and broker in the same transaction, with or without client consent, because the broker's financial interest in closing interferes with independent legal advice; that conflict is per se nonconsentable (citing N.Y. State 1043 (2015) and N.Y. State 1237 (2022)). So neither the inquirer nor the broker/associate may serve in both roles on a referred matter.

The opinion then explains that referrals from a broker are not barred in all situations. Drawing on N.Y. State 1208 (2020), it explains that the disabling concern arises from the lawyer's own financial interest in the broker's commission, and that where the lawyer has no such interest the per se nonconsentable conflict is not triggered. The remaining question is the lawyer's personal-interest conflict under Rule 1.7(a)(2), which turns on whether the likely brokerage-referral revenue is significant enough to affect the lawyer's independent judgment. The opinion concludes that on these facts (no shared fees or commissions, informed consent, modest referral volume) the conflict is consentable, so the lawyer may proceed with the client's informed written consent under Rule 1.7(b), defined in Rule 1.0(j) and elaborated in Comment [18].

In practice

Under this opinion, a lawyer may accept real estate clients referred by a broker who is also a firm associate if the lawyer shares no legal fees or real estate commissions with the broker/associate, does not let the broker act as lawyer (or the lawyer act as broker) in the same deal, and obtains the client's informed written consent. Per the opinion, whether the personal-interest conflict is consentable turns on whether the referral revenue is significant enough to affect the lawyer's independent professional judgment.

Common questions

Q: Can a lawyer take real estate clients referred by a broker who works at the firm?

A: Per the opinion, yes, if the lawyer shares no legal fees or real estate commissions with the broker/associate and obtains the client's informed written consent under Rule 1.7(b).

Q: Can the same person be both broker and lawyer on the referred deal?

A: Per the opinion, no. A lawyer may not act as both lawyer and broker in the same transaction, with or without consent; that conflict is per se nonconsentable.

Q: What makes the referral conflict consentable here?

A: Per the opinion, the lawyer has no interest in the broker's commission and the referrals are a small part of the practice, so the personal-interest conflict under Rule 1.7(a)(2) does not unreasonably impair the lawyer's judgment and may be waived with informed written consent.

Background and rules framework

The opinion interprets New York Rule 1.7(a)(2) and (b) (personal-interest conflicts and consentability) and Rule 1.0(j) (informed consent). These correspond to ABA Model Rules 1.7 and 1.0. The opinion reaffirms the New York line of authority that a lawyer may not act as both lawyer and broker in the same transaction.

Citations and references

Rules of Professional Conduct:

  • New York Rules of Professional Conduct 1.0(j), 1.7(a) & (b)
  • ABA Model Rules 1.7, 1.0 (analogues)

Other opinions cited:

  • N.Y. State 1043 (2015): a lawyer may not act as lawyer and broker in the same transaction
  • N.Y. State 1237 (2022): such dual-role conflicts are per se non-waivable
  • N.Y. State 1208 (2020): referrals from a broker/paralegal permitted where the lawyer has no interest in the commission

See also

Source