Ezel / Ethics Opinions / NYSBA
NYSBA 2012-01-31

Can a New York lawyer share legal fees with a non-profit organization that is not a law firm?

Short answer: No. New York rejected the ABA Model Rule 5.4(a)(4) exception for sharing court-awarded fees with public-interest groups, so under Rule 5.4 a lawyer may not share legal fees with a non-profit organization that is not a law firm.
Currency note: this opinion is from 2012
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 Not binding precedent.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 906: Sharing Legal Fees With a Non-Profit That Is Not a Law Firm

Short answer: A lawyer may not share legal fees with a non-profit organization that is not a law firm; New York rejected the ABA Model Rule 5.4(a)(4) exception that would have allowed sharing court-awarded fees with public-interest groups.

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

A lawyer employed by a non-profit organization that is not a law firm asked whether the lawyer could share legal fees with that organization. The inquiry noted that ABA Model Rule 5.4(a)(4) specifically permits this kind of fee sharing, but that New York did not adopt that standard (paragraph 1).

The committee traced the history. When the NYSBA submitted the proposed Rules to the Appellate Division presiding justices in 2008, its Reporters' Notes explained that proposed Rule 5.4(a)(4) would have let a lawyer share court-awarded fees with a non-profit public-interest organization that procured the lawyer's employment, a change from the prior DR 3-102 meant to support public-interest litigation, though the Notes recognized that Judiciary Law section 491 appeared to bar such sharing absent a statutory amendment (paragraph 2). The Administrative Board of the Courts rejected the proposed Rule 5.4(a)(4) when it adopted the new Rules, enacting only Rule 5.4(a)(1) through (3), whose exceptions concern deceased lawyers and retirement plans, not public-interest fee sharing (paragraphs 3, 4).

The committee concluded that because the Model Rule exception was explicitly rejected and is not in effect in New York, Rule 5.4 prohibits a lawyer from sharing legal fees with a non-profit that is not a law firm. The committee expressly did not address the situation where the employing non-profit is itself a "law firm," nor the question of law whether a First Amendment right might override the restriction (paragraphs 5, 6).

In practice

The opinion holds that, under New York Rule 5.4, a lawyer may not share legal fees with a non-profit organization that is not a law firm. The committee made the controlling point that New York's Administrative Board rejected the ABA Model Rule 5.4(a)(4) public-interest exception and adopted only the deceased-lawyer and retirement-plan exceptions, so the basic bar on dividing fees with a non-lawyer applies. The committee declined to opine on two adjacent questions: whether the result differs when the employing non-profit is itself a law firm, and whether a First Amendment right might trump the restriction, the latter being a question of law outside its charter.

Common questions

Q: Can a lawyer at a non-profit share legal fees with that non-profit?

A: No, where the non-profit is not a law firm. The committee held Rule 5.4 prohibits it, because New York rejected the ABA Model Rule 5.4(a)(4) exception and enacted only Rule 5.4(a)(1) through (3) (paragraphs 4, 6).

Q: Doesn't the ABA Model Rule allow sharing court-awarded fees with public-interest groups?

A: The Model Rule does, but New York does not. The committee explained the NYSBA proposed adopting Model Rule 5.4(a)(4), and the Administrative Board explicitly rejected it when adopting the New York Rules (paragraphs 2, 3).

Q: Does the opinion address a non-profit that is itself a law firm?

A: No. The committee expressly did not address the situation where the employing non-profit is itself a "law firm," nor whether any First Amendment right would override the restriction, calling the latter a question of law (paragraph 5).

Background and rules framework

The opinion interprets New York Rule 5.4 (professional independence; the bar on sharing legal fees with a non-lawyer), corresponding to ABA Model Rule 5.4. The analysis is essentially one of adoption history: New York's Rule 5.4(a) mirrors the prior DR 3-102 and includes only the exceptions for deceased lawyers and retirement plans, having declined to adopt the Model Rule's public-interest fee-sharing exception. The committee also noted Judiciary Law section 491 as a separate statutory bar.

Citations and references

Rules of Professional Conduct:

  • MR 5.4 / NY Rule 5.4: professional independence; prohibition on sharing legal fees with a non-lawyer (NY adopts only the (a)(1)-(3) exceptions)

Statutes:

  • N.Y. Judiciary Law section 491: appears to prohibit fee sharing with non-lawyer organizations

Cases:

  • Rodriguez v. City of New York, 721 F. Supp. 2d 148 (E.D.N.Y. 2010), fee-splitting concerns recede where awarded fees go to a fund controlled by lawyers and used solely for legal work

See also

Source