Can New York lawyers pay a referral fee to a partner who is licensed only in a foreign country, and must they supervise that partner's New York-related conduct?
NYSBA Ethics Opinion 1284: Sharing Fees With a Foreign-Licensed Partner
Short answer: The committee concluded that New York lawyers who associate with a lawyer admitted only in a foreign jurisdiction in the same firm may divide a fee with that lawyer, because Rule 1.5(g) permits lawyers associated in the same firm to share fees; but the New York-admitted lawyers must exercise supervision under Rule 5.1 over the non-New York partner to the extent that partner's conduct implicates the New York Rules.
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
Two lawyers admitted in both New York and a foreign country planned to form a New York PLLC to provide legal services in New York and a separate foreign-country entity to provide services in the foreign country. They intended to make a third lawyer, admitted only in the foreign country, a partner in the foreign entity but not a member or employee of the New York PLLC. The New York PLLC proposed to pay that third lawyer a 30 percent referral fee for New York cases he referred to the PLLC. The inquirers asked whether they could pay that referral fee and whether they had to supervise the foreign-licensed lawyer.
The committee identified that Rule 5.4(b)'s apparent bar on partnership with a lawyer not admitted in New York is tempered by Rule 7.5(d), which recognizes partnerships among lawyers licensed in different jurisdictions, including jurisdictions outside the United States. On that basis the committee treated the lawyers as permitted to associate as a firm, so that a division of fees among them is governed by Rule 1.5(g), which allows lawyers associated in the same firm to share fees without the more restrictive conditions that apply to fee divisions between lawyers in different firms.
The committee also addressed supervision. Because Attorneys 1 and 2 are admitted in New York, they are subject to New York's disciplinary authority under Rule 8.5(a), and the committee concluded they must supervise the foreign-licensed partner under Rule 5.1 to the extent that partner's conduct implicates the New York Rules of Professional Conduct.
In practice
Under this opinion, a fee paid to a same-firm foreign-licensed partner is treated as an internal division under Rule 1.5(g) rather than a referral fee subject to the conditions for fee sharing between unrelated lawyers. Per the opinion, the New York-admitted lawyers carry supervisory responsibility under Rule 5.1 for the foreign-licensed partner's conduct where that conduct implicates the New York Rules.
Common questions
Q: Can the New York firm pay the foreign-licensed lawyer for referring New York cases?
A: Per the opinion, yes, where the foreign-licensed lawyer is associated in the same firm, because Rule 1.5(g) permits lawyers in the same firm to share fees.
Q: Is a partnership between New York lawyers and a foreign-licensed lawyer permitted at all?
A: Per the opinion, yes. The committee concluded that Rule 7.5(d) recognizes partnerships among lawyers licensed in different jurisdictions, including non-U.S. jurisdictions, tempering Rule 5.4(b).
Q: Do the New York lawyers have to supervise the foreign-licensed partner?
A: Per the opinion, yes, to the extent the partner's conduct implicates the New York Rules; the New York-admitted lawyers must exercise supervision under Rule 5.1.
Background and rules framework
The opinion interprets New York Rule 1.5(g) (division of fees, including among lawyers in the same firm), Rule 5.1 (responsibilities of partners and supervisory lawyers), Rule 5.4(b) (partnership with a nonlawyer), Rule 5.5(a) (unauthorized practice), Rule 7.5(d) (firm names and multijurisdictional partnerships), and Rule 8.5(a) (disciplinary authority). These correspond to ABA Model Rules 1.5, 5.1, 5.4, 7.5, and 8.5. The committee relied on its prior opinions N.Y. State 1072 (2015), 658 (1993), and 542 (1982).
Citations and references
Rules of Professional Conduct:
- New York Rules of Professional Conduct 1.0(a), 1.0(h), 1.5(g), 5.1, 5.3, 5.4(b), 5.5(a), 7.1, 7.2(a), 7.5(d), 8.5(a)
Other opinions cited:
- N.Y. State Opinions 1072 (2015), 658 (1993), 542 (1982)
See also
- LACBA Ethics Op. 473: Disclosure of Additional Attorneys and Fee-Splitting
- LACBA Ethics Op. 511: Sharing Fees as Partner or Employee of Two Law Firms
- LACBA Ethics Op. 467: Client Consent to a Referral Fee