If a firm markets practice-succession planning to solo lawyers, is that advertising, and does a lawyer's agreement to take over a colleague's matters trigger the fee-sharing rule?
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This page answers the general question as of 2013. Ezel answers yours: whether it's allowed on your facts, under the current New York Rules of Professional Conduct, with citations.
Plain-English summary
A firm proposed to sell solo practitioners a contingency and succession "Plan" under which a "Planning Attorney" contracts with an "Assisting Attorney" to step in if the planner becomes unable to practice, and to target marketing at lawyers likely to want such planning. The firm asked three things: whether the marketing is regulated as advertising or solicitation; whether executing or triggering a Plan makes the two lawyers "associated" for fee-sharing; and whether efforts to "cultivate" a client count as "services" under the proportional fee-division rule.
On the first, Rule 1.0(a) defines "advertisement" to exclude "communications to ... other lawyers," and because the marketing goes solely to other lawyers, it is not an advertisement; and since Rule 7.3(b) defines a "solicitation" as a type of advertisement, a communication that is not an advertisement cannot be a solicitation.
On the second, Rule 1.5(g) bars dividing a legal fee with a lawyer "not associated in the same law firm." Drawing on N.Y. State 715 (1999) and N.Y. City 2007-2, the committee notes "associated" is undefined, with the touchstones being the nature of the relationship and access to client confidential information. Neither a referral nor an agreement to refer creates association on its own. Two lawyers would more likely be "associated" if they hold out to the public as a firm or share client files generally; a Plan that triggers a comprehensive merger of the two firms would create association. The more work the assisting lawyer takes on, the higher the likelihood of association.
On the third, the committee concludes that efforts to "cultivate" a client relationship are not "services performed by" a lawyer for purposes of a proportional fee split under Rule 1.5(g)(1); the rule contemplates a division based on services performed for the client's benefit (citing Palmer v. Breyfogle, 535 P.2d 955 (Kan. 1975), that mere referral is not a legal service).
In practice
The opinion holds that, under the New York rules as they stood in 2013, marketing succession-planning services only to other lawyers is outside the advertising and solicitation rules, and a referral or take-over agreement does not by itself create a fee-sharing "association" under Rule 1.5(g). The committee identifies the controlling factors for association as holding out as a firm, general sharing of client files, and the volume of work transitioned, culminating in a true firm merger. It also holds that client-cultivation effort is not a "service" that supports a proportional fee division.
Common questions
Q: Is marketing succession-planning services to other lawyers an advertisement?
A: No. Per paragraph 6, Rule 1.0(a) excludes communications to other lawyers from the definition of "advertisement," and a non-advertisement cannot be a solicitation under Rule 7.3(b).
Q: Does agreeing to take over a colleague's practice make us one firm for fee-sharing?
A: Not by itself. Per paragraphs 7 and 8, a referral or agreement to refer does not create "association" under Rule 1.5(g) unless the lawyers hold out as a firm, share files generally, or their firms truly merge.
Q: Can a lawyer claim a proportional fee share for bringing in or cultivating the client?
A: No. Paragraph 9 concludes that cultivating a client relationship is not a "service" under Rule 1.5(g)(1); the proportional division must rest on services performed for the client's benefit.
Background and rules framework
The opinion interprets the Rule 1.0(a) definition of "advertisement" and the Rule 1.0(h) definition of "firm," the solicitation rule Rule 7.3(b) (Model Rule 7.3), and the fee-division rule Rule 1.5(g) (Model Rule 1.5(e)). The "association" analysis tracks the relationship and confidential-information touchstones the committee has used for conflict imputation.
Citations and references
Rules of Professional Conduct:
- NY Rule 1.0(a) (definition of "advertisement"); NY Rule 1.0(h) (definition of "firm")
- MR 1.5 / NY Rule 1.5(g)(1) (division of fees; proportional to services)
- MR 7.3 / NY Rule 7.3(b) (definition of "solicitation")
Cases:
- Palmer v. Breyfogle, 535 P.2d 955 (Kan. 1975), that mere referral is not a legal service for fee-division purposes.
Other opinions cited:
- N.Y. State 715 (1999); N.Y. City 2007-2: the meaning of "associated" and its touchstones.
See also
- NY State Bar Op. 961: Selling a law practice for a share of future fees
- NY State Bar Op. 1035: Original wills when taking over a retiring lawyer's practice
- NY State Bar Op. 1244: Referral fees paid to retired lawyers
Source
- Landing page: https://nysba.org/ethics-opinion-954/
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