Can a lawyer join a barter exchange and accept 'trade dollars' for legal services?
NY State Bar Ethics Opinion 665: Lawyer participation in a barter exchange
Short answer: The opinion concluded that a lawyer may join a commercial barter exchange and accept "trade dollars" for legal services, provided the exchange does not interfere with the lawyer's professional judgment, does not steer clients to particular lawyers, advertises only in compliance with the Code, does not solicit clients in person through its agents or brokers, and the lawyer's fee to the client remains reasonable.
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
A lawyer wanted to join a barter exchange, an association whose members trade goods and services for "trade dollars" cleared by an exchange manager. The lawyer would sell legal services for trade dollars usable to buy any member's services, not only legal ones. The manager publishes member directories, advertises members' offerings, and uses independent brokers to broker transactions; it charges a flat fee plus a cash percentage on purchases and sales. The committee answered the question yes, on stated assumptions, and analyzed three issues: whether the exchange is a lawyer referral service, whether it complies with advertising and solicitation rules, and whether its payment system improperly splits legal fees.
On referral, the committee held a barter exchange is not inherently a lawyer referral service under DR 2-103, so long as it does not recommend or select a particular lawyer for a member and does not cap the number of participating lawyers in an area in a way that makes choosing legal services tantamount to choosing a particular lawyer. Because the trade dollars the manager earns from a lawyer can be spent on any service, the manager has no special incentive to push that lawyer's services.
On advertising, the committee saw no reason a directory of providers who accept trade dollars differs from any other advertising medium, provided it is not false, deceptive, or misleading (DR 2-101(A), (B)). The one troubling possibility was the brokering function: if a broker or the sponsor engages in in-person solicitation (including by telephone) of legal services, participation would violate DR 2-103(C), and such solicitation by the sponsor would be especially problematic given its pecuniary interest. If the brokering uses only written advertising the lawyer controls, it poses no problem.
On fee splitting, the committee acknowledged the manager's cash percentage on sales raised serious questions under DR 3-102's bar on sharing legal fees with nonlawyers. But it analogized the arrangement to approved credit-card plans and to the lawyer-placement agency in ABA Formal Op. 88-356 (1988), reasoning that a percentage-based charge is not improper fee sharing where the lawyer's independent judgment is preserved, the total fee to the client is reasonable (DR 2-106(A)), and the exchange does not engage in improper solicitation. Subject to those qualifications, the committee answered the question in the affirmative.
Currency note
This opinion was issued in 1994, under New York's former Code of Professional Responsibility, which New York replaced with the Rules of Professional Conduct in 2009. The advertising and solicitation rules in particular have been substantially revised since. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.
Common questions
Q: Can a lawyer accept 'trade dollars' instead of cash for legal work?
A: Under this opinion, yes, subject to conditions. The committee allowed participation in a barter exchange where the lawyer's fee remains reasonable, professional judgment is uncontrolled, and the exchange's advertising and solicitation comply with the Code.
Q: Does joining a barter exchange make it a lawyer referral service?
A: The opinion concluded not inherently. It is not a referral service so long as the exchange does not recommend or select a particular lawyer and does not limit the number of participating lawyers in a way that forces members to a particular lawyer.
Q: Is the exchange's percentage fee improper fee splitting with a nonlawyer?
A: The committee held it is not, analogizing to approved credit-card plans and ABA Formal Op. 88-356, provided the lawyer's independent judgment is preserved, the total fee is reasonable, and the exchange does not solicit clients improperly.
Q: What conduct by the exchange would make participation improper?
A: In-person solicitation of legal services by the exchange's sponsor or brokers (including by telephone) would violate DR 2-103(C), as would advertising the lawyer could not use directly or paying the exchange for a seemingly unsolicited favorable review.
Background and rules framework
The opinion interpreted New York's former Code: DR 2-101 (advertising that is not false or misleading), DR 2-103 (referral services and solicitation), DR 2-106(A) (reasonable fees), DR 3-102 (sharing legal fees with nonlawyers), DR 3-101(B) (unauthorized practice across jurisdictions), and DR 5-103(B) (litigation expenses). The closest Model Rule analogues are Rule 7.2 (lawyer referral and payment for recommendations), Rule 7.1 (communications about a lawyer's services), Rule 7.3 (solicitation), Rule 5.4 (fee sharing with nonlawyers), and Rule 1.5 (fees). New York replaced the Code with the Rules of Professional Conduct in 2009; the provisions cited here are historical.
Citations and references
Rules of Professional Conduct:
- MR 7.2 (referrals and payment for recommendations)
- MR 7.1 (communications about a lawyer's services)
- MR 7.3 (solicitation of clients)
- MR 5.4 (professional independence; fee sharing)
- MR 1.5 (fees)
- NY DR 2-101; DR 2-103; DR 2-106(A); DR 3-102; DR 3-101(B); DR 5-103(B)
Cases:
- Matter of Greene, 54 N.Y.2d 118 (1981), and Matter of Alessi, 60 N.Y.2d 229 (1983): limits on third-party solicitation by those with intertwined interests
Other opinions cited:
- ABA Formal Op. 88-356 (1988): percentage-based placement-agency fee is not improper fee sharing
- N.Y. State 565 (1984): percentage payment to a marketing firm doing in-person solicitation disapproved
- N.Y. City 273 (1933): barter exchange with a percentage fee not unethical fee splitting
See also
- NY State Bar Op. 666: Referring a client to a lender for living expenses
- NY State Bar Op. 1162: Referral fees and a lawyer-run tax-credit business
- NY State Bar Op. 1043: Referral fee from a real-estate broker's commission
Source
- Landing page: https://nysba.org/opinion-665/