Ezel / Ethics Opinions / SBAND

May a North Dakota lawyer use out-of-state lawyers as estate-planning consultants and receive their referrals to a separate investment business?

Short answer The committee permitted the proposed consultation if the North Dakota lawyer retained responsibility, the consultants worked outside the state, and they did not advise clients directly. Referrals to the lawyer's separate business did not trigger Rule 1.5, but Rule 5.7 still applied to its services.
Bar
SBAND
Issued
March 9, 2005
Source
View Original PDF

Apply this to your situation

This page answers the general question as of 2005. Ask about yours and see what the current North Dakota Rules of Professional Conduct say for your facts, with citations.

Currency note: this opinion is from 2005
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.
How much weight this carries: Under North Dakota Rule for Lawyer Discipline 1.2(B), a lawyer who acts in good faith and in reasonable reliance on a written opinion of the association's ethics committee is not subject to sanction for the conduct the opinion addresses. Source.
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 as a PDF) is the authoritative source for any reliance.
View original ethics opinion (PDF)

Plain-English summary

A North Dakota estate-planning lawyer proposed paying two lawyers licensed elsewhere for consultation, document review, and some drafting on federal tax and estate-planning questions. The local lawyer would review their work for North Dakota law, take responsibility for it, and remain the only lawyer in contact with the client. The same lawyer operated a separate business providing tax, investment, and insurance services; the out-of-state lawyers might refer investment clients to it without a referral fee or an expectation of referrals in exchange for the consulting payments.

The committee found that the first proposal did not divide a legal fee: the local lawyer would pay the consultants on an hourly or project basis even if the client did not pay. It permitted the arrangement if the local lawyer retained responsibility for their work, the consultants did not actually work in North Dakota, and they did not communicate with or advise the client directly. If the arrangement later became a fee split, the committee pointed to Rule 1.5(e).

The committee said the second proposal did not trigger Rule 1.5 because the lawyer would receive no legal fee from the separate business and the referrals were not an exchange for the consulting payments. It treated the business as potentially subject to Rule 5.7 for law-related services. The opinion said the lawyer should make the law practice distinct from the separate business or take reasonable measures so referred customers understood that the business was not providing legal services and did not create a lawyer-client relationship.

In practice

Under the opinion's proposed arrangement, consultation with lawyers licensed elsewhere was permitted only with the three limits the committee stated: local responsibility, no work in North Dakota by the consultants, and no direct client advice by them. The separate-business referrals did not create a fee division on the stated facts, while Rule 5.7 governed how the lawyer presented that business's services.

Common questions

Q: Could the North Dakota lawyer pay out-of-state lawyers to review or draft estate-planning work?

A: The committee said yes under the proposed arrangement if the local lawyer retained responsibility, the consultants worked outside North Dakota, and they did not advise the client directly.

Q: Was paying those consultants a division of the client's legal fee?

A: The committee said the proposed hourly or project payments were not a fee split because the local lawyer owed them regardless of whether the client paid. It pointed to Rule 1.5(e) if the arrangement changed into a fee division.

Q: Could the out-of-state lawyers refer investment customers to the lawyer's separate business?

A: The committee said those referrals did not trigger Rule 1.5 on the stated facts, which included no referral payment and no promised exchange for consulting fees. It applied Rule 5.7 to the separate business's law-related services.

Background and rules framework

The opinion discusses North Dakota Rule 5.5(e) and the state statute on unauthorized practice in assessing where the consultants worked and whether they advised clients directly. It applies Rule 1.5(e) only if the first arrangement becomes a fee split, and Rule 5.7 to the lawyer's separate law-related business.

Citations and references

Rules of Professional Conduct:

  • North Dakota Rule 1.5(e), fee division between lawyers.
  • North Dakota Rule 5.5(e), unauthorized practice.
  • North Dakota Rule 5.7, law-related services.

Statutes:

  • N.D.C.C. § 27-11-01, practice of law in North Dakota.

Other opinions cited:

  • SBAND Ethics Committee Opinion 00-09, unauthorized practice analysis.
  • SBAND Ethics Committee Opinions 98-07 and 01-03, law-related businesses.

See also

Source

Original opinion text

Full opinion text unavailable from the official source; see the linked source above for the complete text.

What do the rules say today, for your facts?

This opinion is from 2005. Ezel checks the current North Dakota Rules of Professional Conduct against your situation and cites the rules it relies on.

Opens in Ezel Pro.

  • Checks the law as it stands today, not only this page
  • Cites every source it relies on, so you can verify it
  • Chat, drafting and research in one workspace