United States: Recent N.Y. Ethics Opinions: March/April 2017

Last Updated: April 27 2017
Article by Tyler Maulsby


NYSBA Ethics Op. 1108 (Nov. 2016):
Referral to Third Party Financing Companies

Opinion 1108 addressed whether a lawyer may refer clients to a third-party financing company, so that the company could help the clients pay the lawyer's fees. The potential financing arrangements would not be contingent on the outcome of the matters. The lawyer would pay the financing company either a one-time "registration fee" or a monthly "subscription fee." Additionally, while the financing company would not pay the lawyer's fees directly, the lawyer's proposed arrangement with the financing company would allow him to receive a notification when the company disbursed funds to the client. The Opinion concluded that such an arrangement may be permissible subject to several caveats. First, under Rule 1.8(f), a lawyer "shall not accept compensation for representing a client, or anything of value related to the lawyer's representation of the client, from one other than the client" unless (i) the client gives informed consent; (ii) the arrangement with the third party does not interfere with the lawyer's professional independent judgment; and (iii) the lawyer adequately protects the client's confidential information. Opinion 1108 reasoned that the lawyer was subject to Rule 1.8(f) because he was receiving "something of value" from the financing company when he received information that funds were disbursed to the client, which were ostensibly borrowed to pay the lawyer's fees. The Opinion noted that it was possible the client could believe that the lawyer was exercising "professional judgment in recommending a funding source appropriate for that particular client, or [that] the client might believe that lawyer has evaluated the loan terms." If the lawyer believes that is reasonably likely, the Opinion reasoned, the lawyer should consider limiting the scope of his representation in accordance with Rule 1.2(c) to make clear that the lawyer is not advising the client about the potential financing options. The Opinion also concluded that in accordance with Rule 1.4(b), which requires the lawyer to reasonably explain a matter to the client, the lawyer should disclose to the client that he will have access to information regarding the status of the loan given that the client "might believe that dealings with the third-party financing company will be kept confidential." Finally, the Opinion concluded that the registration or subscription fees paid by the lawyer to the financing company likely do not constitute improper "financial assistance" to a client under Rule 1.8(e). The Opinion reasoned that "[i]f these fees compensate the financing company for the risk of lending to the attorney's potential clients, the lawyer's payment of the fees would appear to be financial assistance to the clients... . On the other hand, if the purpose of the fees is to pay for the "portal" by which the lawyer can track the financing status of potential clients, that is something in which the client has no particular interest, and the financing company's fees would not be financial assistance to clients."

The full opinion is available at: http://www.nysba.org/CustomTemplates/Content.aspx?id=69519

NYSBA Ethics Op. 1109 (Nov. 2016):
Use of Pre-Paid Debit Cards to Transmit Funds to Clients

Opinion 1109 addressed whether a lawyer could transmit settlement funds to a client by way of a pre-paid debit card as opposed to a check. The Opinion responded to an inquiry from a lawyer who sought to offer clients, many of whom did not have a regular banking or checking accounts, an alternative to receiving a check where the client would then be required to pay a fee to a check-cashing service before receiving the settlement funds. The Opinion concluded that the use of a pre-paid debit card for this purpose did not violate the Rules provided that the lawyer obtained the client's informed consent. The Opinion reasoned that Rule 1.15(c)(4)'s requirement that a lawyer promptly pay funds owed to the client "as requested by the client" means that the lawyer must "seek the client's consent before using a pre-paid debit card to do so, as the inquirer intends to do." Additionally, the Opinion reasoned, "Rules 1.4(a)(1)(i) & 1.4 (a)(2), and Rule 1.4(b) — each concerned with communicating with the client about matters material to the representation ... obligate the lawyer to explain to the client, in the words of Rule 1.0(j), 'the material risks of the proposed course of action and reasonably available alternatives.'" Finally, the Opinion noted that Rule 1.15(e) requires that all "special account withdrawals shall be made only to a named payee and not to cash. Such withdrawals shall be made by check or, with the prior written approval of the party, by bank transfer." As a result, the Opinion reasoned, the lawyer must ensure that the pre-paid debit card issuer will accept payment from the lawyer by check or bank transfer and, if the latter, that the client approves the wire transfer in writing.

The full opinion is available at: http://www.nysba.org/CustomTemplates/Content.aspx?id=69522

NYSBA Ethics Op. 1110 (Nov. 2016):
Webinars and the Attorney Advertising Rules

Opinion 1110 addressed the attorney advertising rules in the context of a lawyer who sought to participate in and promote a series of webinars and live seminars. As a threshold question, the Opinion reasoned, if the "primary purpose" of the lawyer's programs was the retention of new clients then it constituted an advertisement under Rule 1.0(a) and must therefore comply with the Rule 7.1, which governs attorney advertising. Additionally, if the seminar constituted advertising, certain methods of promotion may also constitute solicitation under Rule 7.3. The Opinion articulated a three-part test to make this determination: "(1) the intent of the communication, i.e., whether it is primarily educational or whether instead a substantial or significant purpose is to secure the retention of the lawyer or law firm publishing the newsletter; (2) the content of the communication; and (3) the targeted audience of the communication." The Opinion reasoned, "[a]ssuming that the seminar and the communications used to publicize the seminar do not go beyond education to discuss the lawyer's skills or reputation, or give other reasons to hire the inquirer, we believe they would not constitute advertising, and, therefore, would not involve solicitation." If, however, the seminars went beyond educational purposes, the lawyer would be required to comply with the advertising rules. For instance, if the lawyer "included a pitch for his own services, it would constitute solicitation that is in-person or using real-time or interactive computer-accessed media" and would therefore generally be prohibited under Rule 7.3(a). Additionally, if the seminar invitations contain a "hiring pitch" or other advertising then the invitations must also comply with Rule 7.3 governing solicitations. Finally, the Opinion concluded that while the lawyer may charge for the seminars, he should make clear that he is not providing individualized legal advice in order to avoid the possibility that "the attendees may believe that their payments entitle them to receive legal advice."

The full opinion is available at: http://www.nysba.org/CustomTemplates/Content.aspx?id=69536

Originally published by the New York Legal Ethics Reporter


This alert provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Tyler Maulsby
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions