Ezel / Ethics Opinions / NYSBA
NYSBA 2012-08-08

Can a New York lawyer team up with an insurance agency to offer clients a combined legal-and-nonlegal service package?

Short answer: No, not as an exclusive ongoing arrangement. The opinion holds Rule 5.8 bars a systematic cooperative legal/non-legal venture with a provider whose profession is not on the Appellate Divisions' approved list; insurance agencies are not listed, and separate billing does not cure it.
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 Not binding precedent.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 930: A lawyer's cooperative venture with an insurance agency

Short answer: A lawyer may not enter into and maintain an exclusive, ongoing contractual arrangement under which an insurance agency offers its customers both the agency's non-legal services and the lawyer's legal services, even if the two are billed separately and do not share fees.

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 who concentrates in employment and benefits law, including ERISA plans, proposed an exclusive arrangement with an insurance agency. The agency would offer its plan-administrator customers a single lump-sum service to prepare a Summary Plan Description (SPD): the agency would draft the document and the lawyer would review it for ERISA compliance. The plan administrator would pay 87% of the lump sum directly to the lawyer under an engagement letter and the balance to the agency; the lawyer and agency would not share each other's fees, and the agency's promotion would describe the lawyer's abilities.

The opinion concludes that Rule 5.8 prohibits the arrangement as structured because it is an improper multidisciplinary practice, that is, a venture offering both legal and non-legal services to the public. It traces Rule 5.8 to the 2000 MacCrate Report and the Appellate Divisions' 2001 rules (former DR 1-106 and DR 1-107, renumbered as Rules 5.7 and 5.8 in 2009), which took a cautious view of multidisciplinary practice. Rule 5.8(a) lets a lawyer form an ongoing business relationship with a non-lawyer service provider only if three requirements are met, the first being that the provider's profession appears on a list the Appellate Divisions maintain under Section 1205.3 (22 NYCRR 1205.3, 1205.5).

The opinion holds that insurance agencies are not on that list, so the first requirement fails and the arrangement is impermissible. It reads Rule 5.8(a) as mandatory, not permissive: a lawyer may not enter such an arrangement unless every requirement is met, a reading supported by Comment [5], by N.Y. State 888 (2011), N.Y. State 885 (2011), and N.Y. State 765 (2003), and by the history of the rule. The opinion adds that separate billing does not change the result, because the focus is the cooperative arrangement and the systematic offer of services to the public, which it characterizes as a joint venture. It notes the arrangement could also raise issues under Rules 7.1 and 7.3 (advertising and solicitation), Rule 7.2 (payments for referrals, if the lawyer charges other clients a higher SPD-review rate), and Rule 1.7(a)(2) as qualified by Rule 1.7(b) (personal-interest conflict), without resolving those points. It points to the Rule 5.8(c) exception for non-exclusive reciprocal referral arrangements as a possible permissible structure but addresses only the inquiry before it.

In practice

Under this opinion, and under the New York rules as they stood at the time, a lawyer cannot form a systematic, ongoing arrangement to offer the public a combined legal-and-nonlegal package with a non-legal provider unless that provider's profession is on the Appellate Divisions' Section 1205 list; an insurance agency is not. The opinion treats the arrangement's exclusivity and continuing nature, not the billing mechanics, as what brings it within Rule 5.8. It flags, without deciding, that a non-exclusive reciprocal referral relationship under Rule 5.8(c) may be a permissible alternative.

Common questions

Q: Can a New York lawyer partner with an insurance agency to jointly offer SPD preparation and legal review?

A: Not as an exclusive ongoing arrangement. The opinion holds Rule 5.8(a) bars a systematic cooperative legal/non-legal venture with a provider whose profession is not on the Appellate Divisions' Section 1205 list, and insurance agencies are not listed.

Q: Does it matter that the lawyer and agency bill separately and don't share fees?

A: No. The opinion says separate billing does not change the result, because the focus is the cooperative arrangement and the systematic offer of services to the public, which it treats as a joint venture under Rule 5.8(a).

Q: Is there any permissible way to work with the agency?

A: The opinion points to Rule 5.8(c), which excludes "relationships consisting solely of non-exclusive reciprocal referral arrangements," as a possible alternative, but it addresses only the exclusive structure presented.

Q: What other rules did the opinion flag?

A: It noted, without deciding, that the proposed promotion could implicate Rules 7.1 and 7.3 (advertising and solicitation), that Rule 7.2 could be raised if the lawyer charged other clients more for the same review, and that Rule 1.7(a)(2) (qualified by 1.7(b)) requires the lawyer to weigh whether the financial interest complicates the representation.

Background and rules framework

The opinion applies Rule 5.8 (New York's rule on cooperative business arrangements between lawyers and non-legal service providers; former DR 1-107), especially 5.8(a) and its Section 1205 list requirement and the 5.8(c) reciprocal-referral exclusion. It situates Rule 5.8 alongside Rule 5.7 (Model Rule 5.7) on non-legal services. It also references Rule 1.7 (Model Rule 1.7) on personal-interest conflicts and Rules 7.1, 7.2, and 7.3 (Model Rules 7.1, 7.2, 7.3) on advertising, payment for referrals, and solicitation.

Citations and references

Rules of Professional Conduct:

  • NY 5.8(a), 5.8(c) (cooperative arrangements with non-legal providers; Section 1205 list; reciprocal-referral exclusion)
  • MR 5.7 / NY 5.7 (non-legal services)
  • MR 1.7 / NY 1.7(a)(2), 1.7(b) (personal-interest conflict)
  • MR 7.1, 7.2, 7.3 / NY 7.1, 7.2, 7.3 (advertising, payment for referrals, solicitation)

Statutes and rules:

  • ERISA, 29 U.S.C. 1002 et seq. (Summary Plan Description requirement)
  • 22 NYCRR 1205.3, 1205.5 (Appellate Divisions' list of eligible non-legal professions)

Other opinions cited:

  • N.Y. State 888 (2011) and N.Y. State 885 (2011): Rule 5.8(a) limits the non-legal professions a lawyer may contract with
  • N.Y. State 765 (2003): forerunner DR 1-107(A) limited the professions to the Appellate Divisions' list
  • N.Y. County 733 (2004): no cooperative arrangement with a financial advisor (not a Designated Professional)

See also

Source