Ezel / Ethics Opinions / NYSBA
NYSBA 2006-02-01

Can a New York lawyer join a business networking organization whose members are required to bring or exchange referrals?

Short answer: No. The committee reaffirms that a lawyer may not participate in an organization that requires the lawyer to refer clients in exchange for other members' referrals, and concludes a lawyer also may not participate where membership fees and the organization's rules require nonlawyer members to refer potential clients to the lawyer, because that amounts to paying for referrals.
Currency note: this opinion is from 2006
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 Not binding precedent.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.

NY State Bar Ethics Opinion 791: Lawyer membership in a referral-based business networking group

Short answer: A lawyer may not participate in a business networking organization that requires members to refer clients in exchange for referrals, or that charges fees and requires nonlawyer members to refer potential clients to the lawyer, because either arrangement violates the bar on paying for referrals.

Disclaimer: This is an advisory ethics opinion. Advisory opinions are not binding; they interpret the New York State Bar Association'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.

View original opinion

Plain-English summary

The committee was asked to reconsider N.Y. State 741 (2001), which held that a lawyer may not belong to a business networking organization that requires the lawyer to refer clients to other members in exchange for their referral of legal business. The inquiring lawyer belonged to a local chapter that, unlike the organization in 741, did not require the lawyer to refer clients to other members, but did require members generally to bring referrals or visitors to meetings, and the lawyer paid an initial registration fee, an annual fee, and an occasional monthly fee.

The committee reaffirms N.Y. State 741: its reasoning is sound whether or not the organization charges the lawyer fees. It then concludes that the inquirer's participation would still violate DR 2-103(B), because the organization requires its nonlawyer members to make referrals to the lawyer. Although the New York Code's professional standards supersede the organization's policies for the lawyer, the committee found no indication that comparable standards would override the nonlawyer members' mandate to bring referrals to other members. In effect, by paying the registration and annual fees, the lawyer is paying for referrals, which DR 2-103(B) prohibits. DR 2-103(B) bars a lawyer from compensating or giving anything of value to a person or organization to recommend or obtain employment by a client, subject to exceptions not applicable here.

In practice

Under the New York Code as it stood at the time, the opinion holds that a lawyer may not belong to a networking organization that conditions membership on exchanging referrals, and may not belong to one whose rules require nonlawyer members to refer clients to the lawyer while the lawyer pays membership fees, because the committee treats that as paying for referrals under DR 2-103(B). The committee identifies the controlling factor as whether the arrangement, directly or through the fee structure, compensates others for steering clients to the lawyer; the absence of a rule compelling the lawyer's own referrals did not save the arrangement.

Common questions

Q: Can a lawyer join a networking group that requires members to swap referrals?

A: No. The committee reaffirms N.Y. State 741 that a lawyer may not participate in an organization requiring the lawyer to refer clients in exchange for other members' referrals, whether or not fees are charged.

Q: What if the group does not require the lawyer to refer, but requires nonlawyer members to refer clients to the lawyer?

A: The committee concludes that arrangement still violates DR 2-103(B), because paying membership fees while the group's rules direct nonlawyer members to refer clients to the lawyer amounts to paying for referrals.

Q: Does it matter that the organization's code says professional standards supersede its policies?

A: The committee found that even if the New York Code supersedes the organization's policies for the lawyer, there was no indication comparable standards would override the nonlawyer members' duty to bring referrals.

Background and rules framework

The opinion applies New York's former Code of Professional Responsibility. DR 2-103(B) prohibits a lawyer from compensating or giving anything of value to a person or organization to recommend or obtain employment by a client (a facet of Model Rule 7.2's restriction on paying for recommendations). The opinion amplifies N.Y. State 741 (2001).

Citations and references

Rules of Professional Conduct:

  • MR 7.2 (advertising; restriction on paying for recommendations); NY DR 2-103(B)

Other opinions cited:

  • N.Y. State 741 (2001): a lawyer may not belong to a networking organization requiring exchange of referrals

See also

Source