Ezel / Ethics Opinions / NYSBA
NYSBA March 27, 2012

Can a New York law firm pay a non-lawyer marketing employee a bonus based on how many clients they bring in?

Short answer: Yes, a firm may pay a non-lawyer marketing employee a bonus tied to the number of clients obtained through advertising, as long as the bonus is not calculated from the fees those clients pay. The firm may not pay for the referral or recommendation of a specific client.

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This page answers the general question as of 2012. Ezel answers yours: whether it's allowed on your facts, under the current New York Rules of Professional Conduct, with citations.

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 Not binding precedent.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 on this page) is the authoritative source for any reliance.

Plain-English summary

A law firm asked whether it may pay a bonus to a non-lawyer marketing employee based either on the number of clients brought in (without regard to fees or recovery) or on the number of clients over a minimum threshold (paragraph 1).

The committee started with what a non-lawyer marketer may do: a firm may use a non-lawyer to engage in the advertising and solicitation the firm itself could lawfully do, but no more. So the marketer may prepare print or web materials and may solicit existing and former clients, but may not engage in in-person solicitation that a lawyer could not (Rule 7.3(a)(1)), unless the person solicited is a close friend, relative, or former or existing client (paragraphs 2, 3, citing N.Y. State 887).

On compensation, Rule 7.2(a) bars a lawyer from giving anything of value to obtain employment by a client or as a reward for a recommendation resulting in employment. So the firm could not pay a bonus tied to the referral or recommendation of specific clients, and the committee pointed to N.Y. State 902, where a lawyer could not pay a marketing firm per introduction to doctors or extra when a doctor sent collection cases (paragraph 4).

Rule 5.4(a) bars sharing legal fees with a non-lawyer, but Rule 5.4(a)(3) permits compensating a non-lawyer employee under a profit-sharing plan based on the total profitability of the firm or a department, not on the fee from a single case (Comment [1B]) (paragraph 5). Reading these together with N.Y. State 887, the committee concluded the marketer may be paid a bonus based solely on the number of clients obtained from advertising, but that bonus may not be calculated with respect to the fees those clients pay (paragraph 6).

In practice

The opinion holds that, under the New York rules as they stood, a firm may tie a non-lawyer marketer's bonus to client volume produced by advertising, but not to the fees or recoveries those clients generate, and not to the referral or recommendation of any specific client. The committee grounds the line in Rule 5.4(a)'s fee-sharing bar (with the profit-sharing exception in 5.4(a)(3)) and Rule 7.2(a)'s bar on paying for client-getting recommendations, and it cautions that the marketer may not do any solicitation a lawyer could not do.

Common questions

Q: Can I pay my non-lawyer marketer a bonus for each new client they bring in?

A: Yes, if the bonus is based on the number of clients obtained through advertising and is not calculated from the fees those clients pay. The committee approved a count-based bonus but barred one keyed to client fees (paragraphs 6, 7).

Q: Can the bonus be a cut of the fees the new clients generate?

A: No. That would be impermissible fee sharing with a non-lawyer under Rule 5.4(a); the permitted profit-sharing exception must rest on overall firm or department profitability, not the fee from particular cases (paragraphs 5, 6).

Q: Can I pay the marketer for referring or recommending specific clients?

A: No. Rule 7.2(a) bars giving anything of value to obtain employment by a client or to reward a recommendation that results in employment, so a bonus tied to specific referrals is prohibited (paragraphs 4, 7).

Q: Can the non-lawyer marketer solicit prospects in person?

A: Only to the extent a lawyer could. Rule 7.3(a)(1) bars in-person, telephone, and real-time solicitation unless the person is a close friend, relative, or former or existing client; the firm cannot authorize the non-lawyer to do otherwise (paragraph 3).

Background and rules framework

The opinion applies New York Rule 5.4(a) and its profit-sharing exception 5.4(a)(3) (sharing fees with non-lawyers), Rule 7.2(a) (paying for recommendations), and Rule 7.3(a)(1) (solicitation). These correspond to ABA Model Rules 5.4, 7.2, and 7.3. The analysis distinguishes permissible volume-based and profit-sharing compensation from impermissible fee splitting and per-referral payments.

Citations and references

Rules of Professional Conduct:

  • MR 5.4 / NY Rule 5.4(a), (a)(3): fee sharing with non-lawyers and the profit-sharing exception
  • MR 7.2 / NY Rule 7.2(a): bar on paying to obtain or reward client recommendations
  • MR 7.3 / NY Rule 7.3(a)(1): bar on in-person and real-time solicitation

Other opinions cited:

  • N.Y. State 887 (2011): scope of non-lawyer marketing and permissible profit-sharing bonuses
  • N.Y. State 902 (2012): lawyer may not pay a marketing firm per introduction or per retained case

See also

Source

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