NYCLA Professional Ethics Committee Submits Comments to OCA re: Proposal to Amend Rule 1.16 of the Rules of Professional Conduct

February 20, 2026

David Nocenti, Esq.
Office of Court Administration (“OCA”)
25 Beaver Street, 10th Floor New York, NY 10004
Email: rulecomments@nycourts.gov

VIA EMAIL

RE: Response to Request for Public Comment on a proposal to amend Rule 1.16 of the Rules of Professional Conduct

Dear Mr. Nocenti:

On behalf of the New York County Lawyers Association (“NYCLA”) Professional Ethics Committee (“the Committee”), we write to provide comments with respect to the Request for Public Comment on a proposal submitted by the New York State Bar Association (“NYSBA”) to amend Rule 1.16 of the New York Rules of Professional Conduct (“NYRPC”) (“the Proposal”) and titled “Request for Public Comment on a proposal to amend Rules 1.16 of the Rules of Professional Conduct relating to imposing a duty of inquiry when accepting, declining or terminating an engagement.” See NYSBA, Request for Public Comment on a proposal to amend Rules 1.16 of the Rules of Professional Conduct, RequestForPublicComment-RulesOfProfessionalConduct-RiskAssessments-123025.pdf (2025).

While we acknowledge NYSBA’s diligent efforts to address institutional concerns regarding money laundering, the Committee believes that the Proposal lacks the empirical record required to justify a fundamental transformation of the attorney-client relationship and triggers important constitutional concerns. Instead, the Committee supports the adoption by the Appellate Division of the New York State Supreme Court of the August 2023 ABA Model Rule 1.16 amendments, which provide a balanced, tested framework that fulfills the “gatekeeper” mandate without destabilizing the small-firm bar. See ABA., Resolution 100: Rule 1.16 Amendment 1, 6, https://www.americanbar.org/content/dam/aba/directories/policy/annual-2023/100-annual[1]2023.pdf (2023) (hereinafter “the ABA Proposal”).

The Proposal significantly exceeds the ABA Proposal by transforming the ABA’s risk-based inquiry duty—limited to determining whether a lawyer may accept or continue a representation—into a mandatory, ongoing obligation that requires attorneys to “inquire into and assess” ethical risks “at the outset and throughout the engagement,” while adding explicit, enumerated grounds for mandatory termination (e.g., harassment, frivolous claims, or assisting crime/fraud, even after client discussion) and broadening permissive withdrawal criteria. NYSBA, supra, at 3-4.

 

1. The Proposal’s premise is contradicted by the public record involving criminal conduct in the legal profession

A fundamental principle of judicial and regulatory rulemaking is that major shifts in professional obligations must be supported by a robust factual record. The Proposal, however, presents a “solution” in search of a documented “problem” specific to the New York Bar.

First, the Proposal does not include or refer to data demonstrating that New York attorneys are unwittingly facilitating financial crimes at a rate that justifies the “continuous risk assessment” mandate it imposes. In fact, empirical evidence indicates that attorney convictions based on financial crimes remain relatively sparse. Between 2015 and 2019, New York attorneys’ convictions for state and federal financial crimes totaled just 119. Michael C. Miller & Morgan Lucas, Attorney Convictions in New York, 263 N.Y.L.J. 1, 2-3 (Jan. 9, 2020). Note that only 4 attorneys were convicted for federal money laundering over this period. Id. at 3.

Second, unlike the ABA’s multi-year study involving the Standing Committee on Ethics and Professional Responsibility, which resulted in the carefully balanced Report to the House of Delegates (Report 100), the Proposal does not include any studies to justify why New York should depart from the “reasonably should know” standard (NYRPC 1.16(b)(1)) or why these concerns have not already been addressed.

Third, empirical data confirm that the New York Bar already maintains a high degree of ethical standards. For instance, data from the Steptoe Survey of New York Attorney Convictions reveals a 27% decrease in criminal convictions of New York-licensed attorneys over the last decade. Miller & Lucas, supra, at 2. Between 2009 and 2014, convictions averaged 41 per year; between 2015 and 2019, that number dropped to 30 per year. Id.

In addition, despite the Proposal’s focus on money laundering, convictions for this specific offense are exceedingly rare. According to the Steptoe Survey, explicit money laundering convictions represented less than 3% of all NY attorney criminal cases between 2015 and 2019. See id. at 2-3 (showing just 4 federal money laundering convictions out of 148 total convictions of NY attorneys for all state and federal crimes). Furthermore, attorney convictions represent a minuscule fraction of the bar. In 2017, the New York State Office of Public Information reported 318,186 licensed attorneys; against only 31 convictions, attorneys convicted of criminal conduct represent just 0.01% of the New York Bar. Id. at 3.

Fourth, as to objective measures of client losses, reports issued by the Lawyers’ Fund for Client Protection of the State of New York (“the Fund”) demonstrate that the existing regulatory framework—supported by the current version of NYRPC 1.16—is in fact remarkably effective.

In 2024, just 28 lawyers were responsible for dishonest conduct resulting in client losses, out of 360,171 lawyers registered to practice in New York. The Lawyers’ Fund for Client 3 Protection of the State of New York, Annual Report for the Board of Trustees for Calendar Year 2024 1, 19 (2024). Moreover, 16 of the lawyers responsible for client losses were repeat offenders already known to the Fund. Id. Accordingly, lawyers responsible for client losses represent less than 0.01 % of the bar. Attorney misconduct resulting in client losses is clearly a de minimis concern.

Furthermore, the Fund’s data consistently shows that Real Property Escrow and Estates/Trusts remain the primary categories of loss. Id. at 2 (“The largest reported losses ($10.8 million) involved alleged losses in real estate transactions.”) These are internal thefts of existing funds, not the external “unwitting facilitation” of new crimes that the Proposal’s “continuous risk assessment” aims to stop.

 

2. By moving much further than the ABA’s position, the Proposal raises significant constitutional concerns

The Proposal’s shift toward a “gatekeeper” model, codified through the nebulous term “engagement,” threatens several constitutional safeguards.

First, by imposing an aggressive, mandatory due diligence standard, the rule may force attorneys to decline to represent clients with high-risk but legitimate matters, in order to avoid the threat of disciplinary quasi “strict liability.” In the criminal context, this requirement implicates the Sixth Amendment right to counsel and the broader Fourteenth Amendment due process right to choice of counsel (United States v. Gonzalez-Lopez, 548 U.S. 140 (2006); New York v. Burgos, 38 N.Y.3d 56, 63-64 (2022)), because an obligatory risk assessment could lead to a mandatory withdrawal, signaling potential guilt to the government and other attorneys. As noted in United States v. Stein, 541 F.3d 130 (2d Cir. 2008), government interference in the relationship between a client and their counsel of choice can implicate Sixth Amendment and Fourteenth Amendment due process rights.

Second, there is no doubt that, when a rule requires a private attorney to conduct “continuous monitoring,” the lawyer effectively becomes an agent of the state’s investigative apparatus. See Dana Remus, The Lawyer’s Role as Gatekeeper, 82 FORDHAM L. REV. 2665, 2679-80 (2014) (discussing how modifying reporting requirements may change attorney-client relationships); see also id. at 148 (finding that a law firm’s actions constituted state action as a matter of law where the firm was required by the government to adopt a constricted fee policy)

Third, the Proposal fails to define “engagement” as distinct from “representation.” A law or rule is unconstitutionally vague if it fails to provide “fair warning” of what is prohibited. Grayned v. City of Rockford, 408 U.S. 104, 108 (1972). Practitioners will not be able to discern when the “risk assessment” requirement will be triggered during non-client interactions. Whereas “representation” had developed practical meaning over the course of its usage in the vernacular of legal practice, attorneys will now struggle to redefine the scope of their relationships with non-clients and prospective clients. Without further clarification, this vague language cannot be said to provide attorneys with fair warning of their responsibilities.

Moreover, under New York’s substantive due process analysis, an administrative regulation will not be upheld unless it “has a rational basis and is not unreasonable, arbitrary, or 4 capricious.” New York State Ass’n of Cntys. v. Axelrod, 78 N.Y.2d. 158, 166 (1991). Without empirical data to show that New York’s small firms are a primary conduit for illicit finance, imposing costly and otherwise unnecessary compliance requirements on “Main Street” lawyers lacks a rational nexus to the state’s interest in public protection. Absent this evidence, the Proposal remains unreasonable and arbitrary.

 

3. The Proposal threatens to destabilize the economic viability of New York’s solo and small-firm practitioners, a majority of the State’s bar, by imposing a regressive ‘unfunded mandate’ of complex, documented risk assessments that creates a discriminatory and insurmountable administrative barrier for attorneys representing underserved and immigrant communities.

The Proposal presents a disproportionate threat to the viability of solo and small-firm practitioners while raising significant concerns regarding disparate impact and equal protection. By mandating a sophisticated “risk assessment” and a heightened “Reasonably Should Know” standard of inquiry, the Proposal imposes an administrative and economic burden that scales poorly for smaller practices, effectively creating a tiered system of justice and professional standing.

First, for solo and small-firm practitioners, the Proposal constitutes a significant “unfunded mandate” that threatens their economic survival. Unlike large firms with dedicated compliance departments and access to high-cost Anti-Money Laundering (AML) and “Know Your Customer” (KYC) software, small firms must absorb the time and financial costs of “geopolitical risk assessments” personally. Legal research indicates that the challenges of meeting compliance regulations and adapting to regulatory changes pose a concern for 37% of solo practitioners and small firms. Jatin Amin, Top challenges for small law firms and solo practitioners in 2025, LexisNexis Future of Law (Jan. 10, 2025). Clearly, requiring lawyers to unilaterally engage in comprehensive risk assessments is likely to disproportionately burden smaller firms.

Second, according to data on solo practice sustainability, the median solo practitioner already spends only 55% of their day on billable work, with the remainder consumed by administration. A Guide to Setting Your Own Salary as a Solo Law Firm Owner: The 2025 Data[1]Driven Approach, LEANLAW (Sept. 25, 2025), https://www.leanlaw.co/blog/a-guide-to-setting[1]your-own-salary-as-a-solo-law-firm-owner-the-2025-data-driven-approach/. The addition of a mandatory, documented risk assessment for every “engagement” will significantly threaten the viability of these margins.

Third, the Proposal directly conflicts with the NYSBA’s own Report on Attorney Professionalism (2025), which emphasizes that the representation of unpopular clients is a fundamental cornerstone of the rule of law. See Robert I. Kantowitz & Andrew L. Oringer, How an Attorney’s Professional Activities Affect Consideration of the Attorney for Judicial and Political Positions: A Framework for Citizens in NYSBA, REPORT AND RECOMMENDATIONS OF THE NEW YORK STATE BAR ASSOCIATION COMMITTEE ON ATTORNEY PROFESSIONALISM 1 (Jan. 2025). To avoid the disciplinary risk associated with a “failed” risk assessment, small-firm lawyers will inevitably engage in “defensive lawyering”—declining to represent clients from high-risk backgrounds or those involved in complex international transactions. Unpopular clients 5 will struggle to find adequate representation among small firms, damaging this fundamental cornerstone of the New York legal system.

Furthermore, for the criminal defense bar and 18-B panel attorneys, the Proposal is, at best, redundant with pre-existing requirements and interferes with attorneys’ Constitutionally required duties at worst. As the Supreme Court held in Rompilla v. Beard,

“It is the duty of the lawyer to conduct a prompt investigation of the circumstances of the case and to explore all avenues leading to facts relevant to the merits of the case and the penalty in the event of conviction. The investigation should always include efforts to secure information in the possession of the prosecution and law enforcement authorities. The duty to investigate exists regardless of the accused’s admissions or statements to the lawyer of facts constituting guilt or the accused’s stated desire to plead guilty.” 545 U.S. 374, 387 (quoting 1 ABA Standards for Criminal Justice 4-4.1 (2d ed. 1982 Supp.).)

Accordingly, lawyers already have a duty to engage in a prompt investigation of their prospective clients’ cases and circumstances. The Proposal’s requirements are thereby rendered superfluous with pre-existing duties accorded to attorneys under Rompilla.

 Insofar as the Proposal deviates from this standard by requiring attorneys to disengage with prospective clients during the course of their preliminary “risk assessment” investigation, this clearly inhibits an attorney’s duty to “explore all avenues” and investigate “regardless of the accused’s admissions or statements to the lawyer of facts constituting guilt.” Id. Under the Proposal, should a preliminary risk assessment uncover troubling information, the investigating attorney would be incentivized – if not required – to cease all engagement with the prospective or current client immediately. The attorney would therefore be prevented from pursuing their preliminary investigation to its conclusion, failing to capture the full picture.

 

4. The Proposal will have the unintended consequence of heightening the threshold for attorneys to withdraw from representations by subjecting their subjective professional judgment to objective second-guessing by disciplinary tribunals.

Under the current version of NYRPC 1.16(c), “permissive withdrawal” is generally within the attorney’s discretion if one of the thirteen specified conditions is met. See, e.g., NYRPC 1.16(c)(2) (permitting withdrawal where “the client persists in a course of action involving the lawyer’s services that the lawyer reasonably believes is criminal or fraudulent.”)

By preventing attorneys from abandoning “difficult” clients without an objective justification that would satisfy a “reasonable lawyer,” the Proposal will heighten the effective threshold for attorneys seeking to disengage from a representation. Furthermore, adding “informed consent” to subsection (c)(10)—which currently allows withdrawal if the client 6 “knowingly and freely assents”—imposes a much higher evidentiary burden on the attorney to prove the client fully understood the legal consequences of the attorney’s departure.

The Proposal represents a dangerous shift from the historically permissive nature of attorney withdrawal to an adversarial ‘reasonableness’ test. By requiring that a withdrawal be justified by the ‘reasonable lawyer’ standard, the Proposal invites disciplinary committees and courts to second-guess attorneys’ decisions to cease representation. Moreover, the Proposal requires committees and courts to probe into the highly nuanced, often privileged, and subjective breakdown of the attorney-client relationship, as well as the confidential details of clients and subject matters, without regard for their privacy. This objective standard transforms a discretionary professional decision into a potential disciplinary trap, where an attorney’s honest assessment of an untenable representation is subject to a ‘hindsight’ review by those not privy to the specific constraints of the engagement, while threatening the core tenets of confidentiality and attorney-client privileges. The ramifications of undermining the attorney-client relationship may result in a knock-on effect, whereby clients will become less willing to share information with their attorneys. See Fred C. Zacharias, Understanding Recent Trends in Federal Regulation of Lawyers, U. OF SAN DIEGO PUB. L. AND LEGAL THEORY RES. PAPER SERIES 1, 18-19 (Sept. 2004) (discussing how monitoring, reporting, and withdrawal requirements under the federal Sarbanes-Oxley Act “create[d] new incentives for clients not to share information with their lawyers.”)

The burden on attorneys is further exacerbated by the proposed addition of an “informed consent” requirement to NYRPC 1.16(c)(10). The current rule allows for withdrawal where a client ‘knowingly and freely assents’ to the termination. The proposed requirement to obtain ‘informed consent’—as defined under Rule 1.0(j)—imposes a significantly higher and impractical hurdle because it requires the lawyer to communicate ‘adequate information and explanation about the material risks’ of the withdrawal itself. In a contentious or broken relationship, obtaining such a high level of verified consent is often a practical impossibility.

Collectively, the proposed changes to NYRPC 1.16(c) do not protect clients or provide attorneys with more discretion to terminate a relationship. Instead, the Proposal introduces speculative variables such as ex post facto judicial scrutiny and objective reasonability into the already fraught calculus of whether they should cease representing a client.

 

5. The ABA Proposal provides a far more sophisticated and defensible framework for the New York Bar.

First, as detailed in ABA Formal Opinion 513 (2024), the ABA Model Rule adopts a “risk-based approach” incorporating reasonableness and proportionality. It explicitly rejects “dragnet-style operations” in favor of an inquiry commensurate with the actual risk profile of the client and matter.

Second, the ABA Proposal retains the term “representation,” which is consistent with the Restatement (Third) of the Law Governing Lawyers § 14. This ensures that the duty to inquire is tied to the actual attorney-client relationship, avoiding the unconstitutional vagueness of the NYSBA’s “engagement” terminology.

Third, the ABA Proposal provides five specific, non-exclusive factors to guide inquiry depth: (i) the client’s identity (including beneficial ownership); (ii) the lawyer’s familiarity with the client; (iii) the nature of the services; (iv) the jurisdictions involved; and (v) fund-flow identities. This allows solo practitioners to scale their diligence efficiently without the significant compliance software costs typically required for the NYSBA’s proposed “continuous monitoring.” See, e.g., NIMONIK PRICING, https://nimonik.com/software/pricing/ (last visited Feb. 7, 2026) (noting that typical software, content, and consulting costs for law firms range from $20,000 to $1,000,000).

Fourth, adopting the language of the ABA’s Proposal prevents New York from becoming an isolated jurisdiction. Uniformity allows New York attorneys to rely on a growing body of national ethics opinions and multi-state case law, facilitating practice across jurisdictions in an increasingly globalized legal market. Adopting standardized regulations – such as those proposed by the ABA – ensure that New York remains practically osmotic.

Fifth, the ABA House of Delegates explicitly noted that Resolution 100 was designed to preserve state-based judicial regulation. See ABA Standing Committee on Professional Regulation, Report to the House of Delegates: Revised Resolution 5 (Aug. 2023) (“The ABA has long supported state-based judicial regulation of lawyers and the practice of law and opposed federal legislative or executive branch efforts to regulate the practice of law at the federal level.”) By adopting the ABA standard, New York satisfies international AML expectations (such as those from the FATF) while warding off more intrusive federal oversight like the proposed ENABLERS Act, which would treat lawyers as banks and mandate Suspicious Activity Reports.

Finally, the Committee notes that adopting the ABA’s Resolution 100 language is the most effective way to preserve the New York judiciary’s historical role as the sole regulator of the bar, as opposed to the NYSBA’s more aggressive Proposal. The ABA standard satisfies international expectations while providing a shield against federal legislation, such as the ENABLERS Act, which would treat lawyers as financial institutions. Adopting the Proposal, by contrast, invites a ‘strict liability’ regime that mirrors federal banking regulations, effectively surrendering professional independence without any documented proof of necessity.

In fact, a framework prohibiting attorneys from engaging in illegal conduct already exists in the New York Rules of Professional Conduct. Pursuant to Rule 8.4, lawyers and law firms are prohibited from illegal or unconscionable conduct, as well as fraud, deceit, and “any other conduct that adversely reflects on the lawyer’s fitness as a lawyer.” N.Y. RULES OF PRO. CONDUCT, r. 8.4 (N.Y. State Unified Ct. Sys.). This rule already covers the gamut of illicit conduct at the center of the Proposal, rendering any further restrictions redundant and unnecessarily inhibitive to the solo practitioner and small-firm bar.

For all these reasons, the Committee requests that the Appellate Division of the New York State Supreme Court rejects the Proposal and instead adopts the ABA Proposal. Thank you for considering our comments. If you believe that it would be beneficial, we would be happy to discuss these comments with you further.