Can a New York lawyer work from a New York office as an employee of a foreign firm that has non-lawyer owners or managers?
NY State Bar Ethics Opinion 911: Employment With a Foreign Firm Owned by Non-Lawyers
Short answer: A New York lawyer may not practice law principally in New York as an employee of an out-of-state or foreign entity that has non-lawyer owners or managers.
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
New York-admitted lawyers asked whether they could enter a business relationship with a United Kingdom entity formed as an Alternative Business Structure under the UK's Legal Services Act, which permits non-lawyer owners and supervisors. Under the proposal, the UK entity would have non-lawyer owners and managers, raise private equity, and employ the New York lawyers in a New York office representing New York clients; the lawyers would hold stock options or vested shares, would not share confidences with the UK non-lawyer managers, and the entity would follow UK rules (paragraph 1).
The committee held the arrangement would clearly violate Rule 5.4(a), which forbids a lawyer from sharing fees with a non-lawyer, and Rule 5.4(d), which forbids practicing law for profit in an entity that has a non-lawyer owner or member (paragraph 2).
The committee then addressed the choice-of-law angle. Drawing on N.Y. State 889 (2011), it explained that Rule 5.4 does not necessarily apply to New York-admitted lawyers who principally practice in another jurisdiction where they are also licensed: under Rule 8.5(b), a lawyer admitted in a second jurisdiction is generally governed by the rules of the place of principal practice, so a New York and D.C. lawyer who principally practices in D.C. could rely on D.C.'s more liberal rules even for occasional New York litigation (paragraph 3). Here, by contrast, the lawyers would practice from a New York office for New York clients, so the predominant effect of their conduct would be in New York, and New York's Rule 5.4 governs even if they are also licensed in the UK (paragraph 4).
In practice
The opinion holds that, under the New York rules, a New York lawyer cannot practice principally in New York as an employee of a foreign or out-of-state firm owned or managed by non-lawyers, because Rule 5.4(a) and (d) prohibit fee sharing with and for-profit practice in such an entity. The committee frames the controlling question as one of predominant effect under Rule 8.5(b): when the lawyer's New York office serves New York clients, New York's rules apply regardless of the entity's home-jurisdiction rules or the lawyer's foreign license.
Common questions
Q: Can I work from a New York office as an employee of a UK firm with non-lawyer owners?
A: No. The committee held that Rule 5.4(a) and (d) bar a New York lawyer from sharing fees with, or practicing for profit in, an entity that has non-lawyer owners or managers, so the arrangement is prohibited (paragraphs 2, 5).
Q: Does it help that the UK entity is a lawful Alternative Business Structure in the UK?
A: No. Because the lawyers would practice from a New York office for New York clients, the predominant effect of their conduct is in New York, so under Rule 8.5(b) New York's Rule 5.4 governs even though the structure is permitted under UK law (paragraph 4).
Q: Could a New York lawyer ever rely on another jurisdiction's more permissive ownership rules?
A: The committee said yes in a different posture: under Rule 8.5(b), a lawyer also admitted elsewhere who principally practices in that other jurisdiction may be governed by its rules, as with a New York and D.C. lawyer principally practicing in D.C. (paragraph 3, citing N.Y. State 889).
Background and rules framework
The opinion applies New York Rule 5.4(a) (no fee sharing with non-lawyers) and Rule 5.4(d) (no practicing law for profit in an entity with a non-lawyer owner or member), corresponding to ABA Model Rule 5.4, and Rule 8.5(b) (choice of law; the jurisdiction where the lawyer's conduct has its predominant effect), corresponding to Model Rule 8.5. The analysis turns on locating the predominant effect of the New York lawyers' practice.
Citations and references
Rules of Professional Conduct:
- MR 5.4 / NY Rule 5.4(a), (d): fee sharing with non-lawyers; for-profit practice with non-lawyer owners
- MR 8.5 / NY Rule 8.5(b): choice of law and predominant effect
Other opinions cited:
- N.Y. State 889 (2011): a dually admitted lawyer principally practicing elsewhere may be governed by that jurisdiction's rules
See also
- NY State Bar Ethics Op. 906: Sharing of Legal Fees With a Non-Profit Organization
- NY State Bar Ethics Op. 930: Arrangement Between a Law Firm and a Non-Legal Service Provider
- No additional sibling opinions yet indexed.
Source
- Landing page: https://nysba.org/ethics-opinion-911/