N.Y. Lawyers Can Accept Referral Fees In Retirement

Oct. 9, 2019, 6:28 PM

Retired New York lawyers can ask for and accept referral fees for work they’ve turned over to another lawyer for safekeeping that evolves into additional work, the state bar’s ethics committee advised.

The attorney has to assume joint responsibility for that work, which requires maintaining the attorney’s registration, the New York State Bar Association’s Committee on Professional Ethics said in the Oct. 3 opinion.

The opinion is a straightforward application of the division of fee rule, Stephen Gillers, an ethics professor with New York University School of Law, said in an email.

A trusts and estates lawyer about to retire turned over several wills to a “custodial attorney” and asked the committee if it was alright to ask for referral fees from the other attorney if those wills generated additional work down the line.

Referral fees are restricted under state ethics rules, the opinion noted, but one exception that could apply to this situation is when each lawyer assumes joint responsibility for the representation.

A comment to this rule says that “Joint responsibility for the representation entails financial and ethical responsibility for the representation as if the lawyers were associated in a partnership,” the committee said.

The client who later hires the second lawyer must agree to the fee division and the first lawyer must assume joint responsibility for the second’s work in writing. That agreement is given to the client, Gillers said.

The committee concluded that the only way for a retired lawyer to assume responsibility would be to maintain attorney registration because of the prohibition on attorneys sharing legal fees with non-attorneys, and “because in order to agree to joint responsibility for a representation, a lawyer must be able to provide legal services to the client.”

Disbarred or suspended attorneys, for example, can’t agree to it, the opinion noted.

The opinion is N.Y.S. Bar Ass’n Comm. on Prof’l Ethics, Op. 1172, 10/3/19.

To contact the reporter on this story: Melissa Heelan Stanzione in Washington at mstanzione@bloomberglaw.com

To contact the editors responsible for this story: Jessie Kokrda Kamens at jkamens@bloomberglaw.com; Rebekah Mintzer at rmintzer@bloomberglaw.com

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