Can a New York lawyer share a personal injury fee with an out-of-state lawyer who is not admitted in New York?

Plain-English summary

A New York personal injury lawyer was asked by an out-of-state lawyer to "handle" a case arising from a New York accident, with the out-of-state lawyer staying involved and being paid from the recovery. The opinion holds that the New York lawyer may share the fee, because a lawyer admitted and in good standing in another U.S. jurisdiction qualifies as a "lawyer" within Rule 1.5(g), not as a "nonlawyer" barred from fee sharing under Rule 5.4.

The committee reaches this by reading the term "lawyer" in context. In some rules (such as Rule 5.1(a)'s supervisory duty) "lawyer" means a New York-admitted lawyer; in others it is broader. Following N.Y. State 806 (2007), which construed the predecessor of Rule 1.5(g), the committee makes explicit what 806 implied: lawyers from other U.S. jurisdictions are "lawyers" for Rule 1.5(g), so a New York lawyer may divide a fee with them when the division complies with that rule's three conditions (proportional services or written joint responsibility, client consent confirmed in writing after disclosure of each lawyer's share, and a total fee that is not excessive).

On the inquirer's two follow-up questions, the committee answers narrowly. Rule 1.5(c) and Rule 1.5(g) require the disclosures and the client's written agreement, but neither requires that the out-of-state lawyer's name or the basis for the fee division be placed in the retainer agreement itself, or in retainer and closing statements filed with the Office of Court Administration. Whether court rules outside the Rules of Professional Conduct (for example, 22 NYCRR Part 1215 or the Appellate Division filing rules) impose such requirements is a question of law beyond the committee's jurisdiction.

In practice

Under the New York rule as it stood at the time of the opinion, a fee split between a New York lawyer and an out-of-state U.S. lawyer who is not admitted in New York is permitted on the same terms as any other interfirm split: it must be proportional to the work each performs or backed by a written assumption of joint responsibility, the client must consent in writing after disclosure of the division and each lawyer's share, and the total fee must not be excessive. The opinion assumes the out-of-state lawyer will not engage in unauthorized practice in New York; if that assumption fails, the New York lawyer could violate Rule 5.5(b) (aiding unauthorized practice).

The opinion holds only that the Rules of Professional Conduct do not require the out-of-state lawyer's name or the fee-division basis to appear in the retainer agreement or in OCA filings; it expressly declines to interpret the separate court rules that may impose such filing requirements.

Common questions

Q: Can a New York lawyer split a contingent fee with a lawyer admitted only in another state?

A: Yes. The opinion concludes that a lawyer admitted in another U.S. jurisdiction is a "lawyer" within Rule 1.5(g), so the New York lawyer may divide the fee if Rule 1.5(g)'s conditions are met.

Q: Does the out-of-state lawyer's name have to go in the client's retainer agreement?

A: Not under the Rules of Professional Conduct. The opinion holds that Rule 1.5(g) requires written client consent disclosing each lawyer's share, but neither Rule 1.5(c) nor Rule 1.5(g) requires that information to appear in the retainer agreement itself.

Q: What if the out-of-state lawyer's work amounts to practicing law in New York?

A: The opinion assumes the out-of-state lawyer will not engage in the unauthorized practice of law in New York. If that assumption is wrong, the New York lawyer could violate Rule 5.5(b) by aiding unauthorized practice.

Background and rules framework

The opinion interprets Rule 1.5(g) (the New York analogue of Model Rule 1.5(e)), which permits a division of a fee between lawyers not in the same firm only if the division is proportional to services or accompanied by a written assumption of joint responsibility, the client consents in writing after disclosure, and the total fee is not excessive. It distinguishes Rule 5.4 (no fee sharing with nonlawyers) by reading "lawyer" to include out-of-state U.S. lawyers, drawing on N.Y. State 806 (2007) and Rule 7.5(d)'s recognition of partnerships among lawyers licensed in different jurisdictions.

Citations and references

Rules of Professional Conduct:

• New York Rule 1.5(g) (division of fees between lawyers not in the same firm); Model Rule 1.5(e)
• New York Rule 5.4(b) (partnership with a nonlawyer); Model Rule 5.4
• New York Rule 5.5(b) (aiding unauthorized practice); Model Rule 5.5
• New York Rule 7.5(d) (firms with lawyers licensed in different jurisdictions); Model Rule 7.5

Other opinions cited:

• N.Y. State 806 (2007): sharing fees with a foreign firm whose lawyers have comparable training
• N.Y. State 762 (2003): "lawyer" in the supervisory rule means a New York-admitted lawyer
• N.Y. State 801 (2006): partnering with an out-of-state lawyer whose services are unauthorized practice
• N.Y. State 542 (1982): a lawyer admitted in any U.S. jurisdiction is not a "nonlawyer"

See also

• NY State Bar Op. 870: Non-exclusive referral agreement
• NY State Bar Op. 885: Business relationship with a non-attorney
• NY State Bar Op. 875: Non-testifying expert paid a percentage of recovery

Source

• Landing page: https://nysba.org/ethics-opinion-864/