While the above aphorism is catchy, it is not the opinion of the New York State Bar Association (NYSBA). For years, NYSBA has asserted nonlawyers have no place in the ownership and management of law firms. Although a simple proposition, this “no nonlawyers” stance may complicate lawyers’ ethical responsibilities in the context of interstate and/or international law firms. Indeed, a recent NYSBA ethics opinion which addresses this issue may have significant implications for New York attorneys whose firms have a presence in multiple states. This article addresses how NYSBA views nonlawyer ownership in the interstate and international context with the goal of providing some guidance to New York law partners and partnerships as to their professional responsibilities.
In December 2021, NYSBA published Ethics Opinion 1234 which examines, inter alia, whether an attorney licensed in New York, whose admission to practice overseas is pending and none of whose clients are currently located in New York, is permitted to sell his firm to an English publicly-traded law firm which has nonlawyer ownership, or to merge with that firm, even though certain attorneys at his New York firm are still located in New York and still serve New York clients. NYSBA Op. 1234 at ¶ 2. The Committee opined that a New York attorney violates the New York Rules of Professional Conduct (NYRPC) if he or she is “a partner, associate or employee of a law firm in New York or in another jurisdiction that has direct or indirect ownership by nonlawyers in accordance with the rules applicable in that jurisdiction, unless the lawyer is licensed in the other jurisdiction and principally practices in such jurisdiction, and the predominant effect of the lawyer’s conduct is not in New York.” Id. at ¶¶ 1, 12-13. To understand this opinion, it is helpful to examine the rules upon which the Committee bases its opinion, specifically Rules 5.4 and 8.5.
