When a New York lawyer sells a nonlegal product like shelf corporations to non-clients, do the lawyer advertising and solicitation rules apply to that business?
NY State Bar Ethics Opinion 832: Selling shelf corporations as a nonlegal service
Short answer: Whether the advertising and solicitation rules apply to a lawyer's sale of shelf corporations turns on whether the lawyer gives legal advice and whether the lawyer's status as a lawyer is visible to buyers; where it is visible, the Rules apply absent the Rule 5.7(a)(4) disclaimer.
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.
Plain-English summary
A sole practitioner wanted to sell "shelf corporations" (dormant, aged corporations sold to investors who want to skip the incorporation process) as a nonlegal service to people he regarded as non-clients, and asked whether the Rules on advertising and solicitation apply. The committee analyzes the question under Rule 5.7, which governs nonlegal services provided by lawyers, and works through three scenarios.
In Scenario One, the lawyer provides legal advice about the shelf corporations (their legality, validity, advantages, or tax consequences). The committee concludes that when a lawyer gives such advice it constitutes the provision of legal services, so the Rules (including the advertising and solicitation rules) apply to both the advice and the sale, and the Rule 5.7(a)(4) disclaimer would not be effective.
In Scenario Two, the lawyer provides no legal advice at all, never answering the kinds of questions that call for legal advice, and is not identified as a lawyer. The committee concludes the Rules generally would not apply to those sales, although some Rules still would, notably Rule 8.4(c)'s prohibition on dishonesty, fraud, deceit, or misrepresentation.
In Scenario Three, the lawyer gives no legal advice but the lawyer's status as a lawyer is visible (a law office name or letterhead, advertising the sales on the lawyer's website, or "Esq." or "J.D." after the name). The committee concludes there is then a substantial risk the buyer will be misled into believing an attorney-client relationship exists, so the Rules apply unless the lawyer gives the buyer the written Rule 5.7(a)(4) disclaimer stating that no legal services are being rendered and that the protections of an attorney-client relationship do not exist. The committee emphasizes (quoting N.Y. State 755) that the writing only reverses the presumption against the lawyer and is not "an automatic safe harbor," and that even with the disclaimer the Rules apply if the lawyer actually provides legal advice.
In practice
The opinion holds that, under Rule 5.7 as it stood at the time, the dividing line is whether the lawyer renders legal services and whether the lawyer's status is visible to the buyer. Where the lawyer actually gives legal advice, the Rules apply and the Rule 5.7(a)(4) disclaimer is ineffective. Where the lawyer gives no legal advice and is not held out as a lawyer, the Rules generally do not apply, though Rule 8.4(c) still does. Where the lawyer gives no legal advice but is visibly a lawyer, the opinion treats the buyer as presumptively believing an attorney-client relationship exists and applies the Rules unless the written 5.7(a)(4) disclaimer is given, with the caveat that the disclaimer is not conclusive.
Common questions
Q: If a New York lawyer sells a nonlegal product to non-clients, do the lawyer advertising rules apply?
A: The opinion concludes it depends. If no legal advice is given and the seller is not held out as a lawyer, the Rules generally do not apply; but Rule 8.4(c) always applies, and if the lawyer's status is visible the Rules apply absent the Rule 5.7(a)(4) disclaimer.
Q: Does giving any legal advice about the product change the analysis?
A: Yes. The opinion concludes that when a lawyer gives advice such as the legality, validity, or tax consequences of the product, that is the provision of legal services, the Rules apply to both the advice and the sale, and the 5.7(a)(4) disclaimer is not effective.
Q: Does the written Rule 5.7(a)(4) disclaimer fully protect the lawyer?
A: No. The opinion explains, quoting N.Y. State 755, that the writing only reverses the presumption and is not "an automatic safe harbor"; it is ineffective if the lawyer in fact provides legal services.
Background and rules framework
The opinion interprets New York Rule 5.7 (responsibilities regarding nonlegal services, the analogue of ABA Model Rule 5.7), including Rule 5.7(a)(1) and (a)(2) (when nonlegal services are or are not "distinct" from legal services) and Rule 5.7(a)(4) (the presumption that the recipient believes the services are part of a client-lawyer relationship unless the lawyer gives a written disclaimer). It also applies Rule 8.4(c) (dishonesty, fraud, deceit, or misrepresentation) and cites Comments 1 and 3 to Rule 5.7.
Citations and references
Rules of Professional Conduct:
- MR 5.7 (responsibilities regarding nonlegal services)
- NY RPC 5.7(a)(1), (a)(2), (a)(4); Comments 1 and 3 to Rule 5.7
- NY RPC 8.4(c) (dishonesty, fraud, deceit, misrepresentation)
Other opinions cited:
- N.Y. State 755 (2002): a written disclaimer reverses the presumption but is not an automatic safe harbor
- N.Y. State 557 (1984): services performed by a lawyer holding himself out as a lawyer constitute the practice of law
See also
- NY State Bar Op. 845: Lawyer-real estate broker sharing a brokerage commission
- NY State Bar Op. 1223: Renting office space to other lawyers as a nonlegal business
- NY State Bar Op. 1252: Referral fees for nonlegal services
- NY State Bar Op. 1264: Listing of degrees by an attorney working in a nonlegal capacity
Source
- Landing page: https://nysba.org/ethics-opinion-832/