Category Archives: Bar rules fee agreements

Proposed Florida Bar Advisory Opinion finds that lawyers may share fees with lawyers in firms owned with non-lawyers

Hello everyone and welcome to this Ethics Alert which will discuss Proposed Florida Bar Advisory Ethics Opinion 17-1 (June 23, 2017) which states that Florida Bar members may divide fees with out of state lawyers who are members of law firms which have non-lawyer ownership as permitted in the jurisdiction where the law firm is located.

The proposed ethics opinion is here:  https://www.floridabar.org/news/tfb-news/?durl=%2Fdivcom%2Fjn%2Fjnnews01.nsf%2F8c9f13012b96736985256aa900624829%2Fda5da7932958bb6a852581560062520c.  The proposed opinion is not final.  See below for details and opportunity to comment.

One of the issues that Florida lawyers who wish to co-counsel with out of state lawyers face is whether the lawyer can share fees with other lawyers who are members of law firm with non-lawyer owners as permitted in that jurisdiction.  Non-lawyer ownership of law firms is currently permitted in Washington, D.C. and the State of Washington in the U.S., the Canadian provinces Ontario, British Columbia and Quebec, the countries of England, Wales, Scotland, Germany, the Netherlands, Brussels, and New Zealand.

The Professional Ethics Committee was asked by the Florida Bar’s Board of Governors to opine on whether Florida lawyers are permitted divide fees with out-of-state lawyers who are members of law firms in which there is nonlawyer ownership because nonlawyer ownership is allowed in the jurisdiction where the other law firm is located.  The proposed opinion found that such fee sharing “in accordance with Florida rules, law, and ethics opinions does not violate the prohibition against fee sharing set forth in Rule 4-5.4.” (emphasis supplied)

According to the proposed ethics opinion,

“Florida Bar members frequently work with lawyers outside their firms in representing clients. Florida Bar members also co-counsel cases with lawyers who are admitted solely in jurisdictions outside of Florida. Lawyers admitted solely in jurisdictions outside Florida are authorized to provide legal services in Florida under limited circumstances. Co-counselling with out-of-state lawyers thus raises potential concerns regarding assisting in the unlicensed practice of law and improper division of legal fees. Florida Bar members may divide fees with lawyers from other jurisdictions only where the out-of-state lawyers are providing legal services to the same client that the out-of-state lawyers are authorized by other law to provide and only in compliance with Florida Bar rules. See, Rules 4-1.5(g), 4-5.4(a), 4-5.5, and Florida Ethics Opinions 90-8, 88-10, and 62-3.

“Florida Bar members are prohibited from partnering or sharing legal fees with nonlawyers. See, Rule 4-5.4. Most U.S. jurisdictions share a similar prohibition. The only United States jurisdictions that currently permit nonlawyer ownership of law firms are Washington, D.C. and Washington state. Nonlawyer ownership of law firms is permitted in Canadian provinces Ontario, British Columbia and Quebec, England, Wales, Scotland, Germany, the Netherlands, Brussels, and New Zealand.

“Requirements and limitations on nonlawyer ownership vary in jurisdictions that allow it.

“This opinion addresses Florida Bar members in co-counseling and dividing fees with out-of-state lawyers with whom the Florida Bar members are permitted to divide fees as noted above, and in which the out-of-state lawyers practice in law firms with nonlawyer ownership as permitted by the other jurisdiction.

“The committee is of the opinion that sharing fees with an out-of-state lawyer in accordance with Florida rules, law, and ethics opinions does not violate the prohibition against fee sharing set forth in Rule 4-5.4. A Florida Bar member should not be subject to discipline merely because a nonlawyer ultimately may receive some part of the out-of-state lawyer’s fee solely by virtue of being an owner of the out-of-state law firm. The Florida Bar member has no control over the organization and ownership of the out-of-state firm. The out-of-state law firm may be organized in accordance with the rules of its own jurisdiction. The fact that the nonlawyer ownership would not be permitted in Florida should not impact what the out-of-state lawyer is permitted to do under the rules of that jurisdiction. To opine otherwise unnecessarily places Florida Bar members at risk and deprives clients of counsel of their own choosing from other jurisdictions.

“Other jurisdictions that have addressed the issue have reached similar conclusions. See, ABA Formal Opinion 464 (2013); New York City Bar Formal Ethics Opinion 2015-8 (2015); and Philadelphia Bar Association Ethics Opinion 2010-7 (2010).

“ABA Formal Opinion 464 also cautions lawyers that they:

. . .must continue to comply with the requirement of Model Rule 5.4(c) to maintain professional independence. Even if the other law firm may be governed by different rules regarding relationships with nonlawyers, a lawyer must not permit a nonlawyer in the other firm to interfere with the lawyer’s own independent professional judgment. As noted above, the actual risk of improper influence is minimal. But the prohibition against improper nonlawyer influence continues regardless of the fee arrangement.

“The committee agrees with and adopts the reasoning of the ABA Standing Committee on Ethics and Professional Responsibility in formal opinion 464 above.

“Finally, the committee notes that this opinion does not address a Florida Bar member becoming a partner, shareholder, associate, or other formal arrangement in a law firm that is permitted to have nonlawyer ownership in its home jurisdiction and does so in compliance with the rules of its home jurisdiction. Neither does this opinion address the issue of a Florida Bar member who also is admitted to practice in another jurisdiction where nonlawyer ownership is permitted joining a law firm with nonlawyer owners under the rules of the other jurisdiction.”

___________________

1Alternative Law Business Structures ABA Issue Paper (April 5, 2011) available at:http://www.americanbar.org/content/dam/aba/administrative/ethics_2020/abs_issues_paper.authcheckdam.pdf.

Bottom line:  This ethics opinion finds that sharing fees with lawyers who are members of law firms which have non-lawyer ownership does violate not the prohibition against fee sharing set forth in Florida Bar Rule 4-5.4; however, the opinion is not final.

According to the Bar’s Notice:

“Pursuant to Rule 4(c) and (d) of The Florida Bar Procedures for Ruling on Questions of Ethics, comments from Florida Bar members are solicited on the proposed opinion. The committee will consider any comments received at a meeting to be held in conjunction with The Florida Bar’s Fall Meeting at 9:30 a.m. on Friday, October 13, 2017, at the Tampa Airport Marriott. Comments must contain the proposed advisory opinion number and clearly state the issues for the committee to consider. A written argument may be included explaining why the Florida Bar member believes the committee’s opinion is either correct or incorrect and may contain citations to relevant authorities. Comments should be submitted to Elizabeth Clark Tarbert, Ethics Counsel, The Florida Bar, 651 E. Jefferson Street, Tallahassee 32399-2300, and must be postmarked no later than 30 days from the date of this publication.”

Be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19, N., Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

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Bar Ethics Committee will decide whether to modify or withdraw Ethics Op. 87-4 which allows lawyers to offer 2 contracts to PI clients

Hello everyone and welcome to this Ethics Alert blog which will discuss the recent Notice in the April 30, 2013 issue of The Florida Bar News advising that the Bar’s Professional Ethics Committee (PEC) will consider whether to modify or withdraw current Florida Bar Ethics Opinion 87-4, which states that lawyers may offer personal injury clients a choice between two contingent fee contracts with differing percentage fees depending on whether the client or the lawyer will assume responsibility for submitting the client’s medical bills for payment as long as neither percentage exceeds the maximum allowed under the contingency fee requirements of the Rules Regulating The Florida Bar.  The Florida Bar’s Notice is at http://www.floridabar.org/DIVCOM/JN/jnnews01.nsf/8c9f13012b96736985256aa900624829/39825807a56dd34185257b5500458f47!OpenDocument and Ethics Opinion 87-4 is at: http://www.floridabar.org/tfb/tfbetopin.nsf/SearchView/ETHICS,+OPINION+87-4?opendocument

The PEC will consider whether to withdraw or modify Ethics Opinion 87-4 at its meeting at 2 pm on June 28, 2013 at the Boca Raton Resort & Club in conjunction with The Florida Bar Annual Convention.  The review of the Ethics Opinion for potential withdrawal or modification is in conjunction with the recent Notice that the Bar Board of Governors intends to take final action on proposed changes to the Florida Bar rules at its May 31, 2013 meeting in Sarasota.

The proposed Bar rule changes include proposed new Rule 4-1.5(f)(4)(E), which would prohibit a lawyer from charging any additional fee to the client for providing “ordinary lien resolution” and, if all fees for the personal injury matter plus lien resolution exceed the contingent fee schedule, “extraordinary services for subrogation and lien resolution” may be referred to another only with the client’s informed consent.  Further, any additional fees by the other lawyer must comply with all provisions of the fee rule and that the lawyer providing the extraordinary subrogation and lien resolution services may not divide fees with the lawyer handling the personal injury or wrongful death claim.  The Comment to the Rule “explains what lien resolution services are required as part of the original fee contract and what extraordinary services entail.”

Comments regarding the proposed modification or withdrawal can be directed to Elizabeth Tarbert, Bar Ethics Counsel in Tallahassee or by e-mail to the Bar Ethics Department at eto@flabar.org.

Bottom line:  This proposed Bar rule would impose (for the first time) a duty on Florida lawyers to provide “ordinary lien resolution” services in all personal injury and wrongful death matters.  If the proposed rule is implemented, one of the questions will be what is “ordinary lien resolution” and what constitutes “extraordinary services for subrogation and lien resolution”  As I have previously explained, if there are disputes regarding distribution of PI/wrongful death settlement funds, including disputes by third party lien holders, the lawyer can consider an interpleader action and placing the funds in the registry of the court.

Be careful out there!

Disclaimer: this e-mail does not contain any legal advice and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

2454 McMullen Booth Road, Suite 431

Clearwater, Florida 33759

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

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Filed under Attorney Ethics, Bar rules fee agreements, Contingency fee agreements, Florida Lawyer Ethics and Professionalism, joe corsmeier, Joseph Corsmeier, Lawyer ethics, Lawyer Ethics and Professionalism, Lawyer ethics opinions, Lawyer fee agreements, Lawyer improper fees, Lien resolution

Recent Notice of Proposed Florida Bar Board of Governors Actions contains important potential changes to the Florida Bar Rules

Hello everyone and welcome to this Cinco de Mayo Ethics Alert which will discuss the recent Notice of Proposed Board Actions which has some important proposed amendments to the Florida Bar Rules.  The Notice is on page 4 of the 4/30/13 Florida Bar News and also: http://www.floridabar.org/DIVCOM/JN/jnnews01.nsf/8c9f13012b96736985256aa900624829/b30ead230120050a85257b550045a451!OpenDocument

            Pursuant to its Standing Policies, the Board of Governors of The Florida Bar recently published a notice of intent to take final action on proposed changes to the Florida Bar rules at its May 31, 2013 meeting in Sarasota. The proposed changes are governed by Rule 1-12.1, Rules Regulating The Florida Bar and most amendments to the Rules Regulating The Florida Bar must be filed with the Supreme Court of Florida after the board takes final action, with further notice and opportunity to be heard, before they are officially approved and become effective.

            The proposed changes include a revision to Rule 3-5.2 which would provide a mechanism for owners of trust account funds to assert ownership over the funds, a revision to Rule 3-5.3 which would make lawyers eligible for diversion for a different type of misconduct as long as the subsequent conduct more than one year after the diversion and shortens the time between diversions from 7 to 5 years, and a revision to Rule 4-1.5(f)(4) which would, inter alia, require a lawyer in a personal injury or wrongful death case charging a contingent fee to provide ordinary lien resolution as part of the lawyer’s representation of the client under the fee contract.

            The following are summaries of the above revisions in the Board Notice:

            RULE 3-5.2 EMERGENCY SUSPENSION AND INTERIM PROBATION OR INTERIM PLACEMENT ON THE INACTIVE LIST FOR INCAPACITY NOT RELATED TO MISCONDUCT
Within subdivision (c) and new subdivisions (d) and (e), and renumbered subdivisions (h) and (k), proposed rule amendments provide a mechanism for owners of funds in a lawyer’s frozen trust account, to assert claims of ownership on these funds as part of the Bar’s referee procedures in suspension and emergency suspension cases through a referee or receiver. Remaining rule provisions are renumbered and additional non-substantive changes are made to conform to the Supreme Court style guide.

           RULE 3-5.3 DIVERSION OF DISCIPLINARY CASES TO PRACTICE AND PROFESSIONALISM ENHANCEMENT PROGRAMS

            Within subdivision (c) and the comment, the proposed change allows bar members who have received a diversion to be eligible for a diversion for a different type of conduct, for which a diversion program exists, as long as the subsequent conduct occurred one year or more after the first diversion. Within subdivision (c) the proposed amendment also shortens the period between diversions for the same type of conduct from 7 years to 5 years.

            RULE 4-1.5 FEES AND COSTS FOR LEGAL SERVICES

            Within Rule 4-1.5(f)(4), adds new subdivision (E) that the lawyer in a personal injury or wrongful death case charging a contingent fee must provide ordinary lien resolution as part of the lawyer’s representation of the client under the fee contract, that the lawyer may not charge any additional fee to the client for providing such services if all fees for the personal injury matter plus lien resolution exceed the contingent fee schedule, that extraordinary services for subrogation and lien resolution may be referred to another only with the client’s informed consent, that additional fees by the other lawyer must comply with all provisions of the fee rule, and that the lawyer providing the extraordinary subrogation and lien resolution services may not divide fees with the lawyer handling the personal injury or wrongful death claim. Within comment, explains what lien resolution services are required as part of the original fee contract and what extraordinary services entail.

            Bottom line:  The proposed Bar rule changes would clarify the right to trust funds when a lawyer is suspended on an emergency basis, broaden the eligibility of lawyers to receive a diversion, and clarify a lawyer’s duty to resolve liens in personal injury and wrongful death matters.  The proposed rule changes will be considered for final action by the Board of Governors at its May 31, 2013 meeting in Sarasota.  If approved, the rule changes will most likely be included in the next annual Bar rule revision petition filed by The Florida Bar in the fall.  If you want a full copy of the text of any of the proposed amendments, you can email the Bar Ethics Department at eto@flabar.org.

            Be careful out there!

Disclaimer: this e-mail does not contain any legal advice and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

2454 McMullen Booth Road, Suite 431

Clearwater, Florida 33759

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

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Filed under Attorney Ethics, Bar rules fee agreements, Florida Lawyer Ethics and Professionalism, joe corsmeier, Joseph Corsmeier, Lawyer discipline, Lawyer ethics

Massachusetts Supreme Judicial Court amends Massachusetts Bar Rules to require most fee arrangements to be in writing effective January 1, 2013

Hello everyone and welcome to this Ethics Alert blog which will discuss the recent Order issued by the Massachusetts Supreme Judicial Court which will amend the Massachusetts Bar Rules to require most fee arrangements to be in writing effective January 1, 2013.  The Order is  online at: http://www.mass.gov/obcbbo/SJCRPC10-24-12.pdf.

The Supreme Judicial Court Order amends Massachusetts Bar Rule 1.5(b) and will require that the scope of the representation and basis or rate of the fee and expenses be communicated to the client in writing in most circumstances.  This amendment is a major change from the current version of the Bar Rule, which states that only contingent fee agreements must be in writing and other types of fee arrangements should “preferably” be communicated in writing.  The section as amended provides:

(b)(1) Except as provided in paragraph (b )(2), the scope of the representation and the basis or rate of the fee and expenses for which the client will be responsible shall be communicated to the client in writing before or within a reasonable time after commencing the representation, except when the lawyer will charge a regularly represented client on the same basis or rate. Any changes in the basis or rate of the fee or expenses shall also be communicated in writing to the client.

A new comment to the Massachusetts Bar Rule explains what is required and states that “a simple memorandum or copy of the lawyer’s customary fee schedule is sufficient if the scope of the representation and the basis or rate of the fee is set forth.”  The comment also notes that the lawyer ordinarily should send the written fee statement to the client before any substantial services are rendered.  Section (b)(2) of the revised rule creates exemptions to the requirement of a written statement for a single-session legal consultation and for a situation in which the lawyer reasonably expects the total fee to the client will be under $500. This section additionally states that, where an indigent representation fee is imposed by a court, a writing is not required because no fee agreement has been entered into between a lawyer and a client.

Whether the writing is a fee agreement executed by both parties or is a letter or memorandum from the attorney to the client, it must set forth the scope of the representation and the basis or rate of both the fee and expenses.  In addition to describing the services to be provided, the agreement should also specify, the limitations on the services, if any, such as the exclusion of an appeal from the representation or if other  types of potential relief will not be pursued.  The writing must also state whether the fee is a flat/set fee or a retainer against hourly charges and, if it is an hourly retainer, it must disclose the hourly rate.  The writing must also disclose how expenses will be billed.

Bottom line:  As of 1/1/13, Massachusetts lawyers will be required to put most fee agreements/arrangements in writing.  The rationale underlying this requirement that fee and expense arrangements be in writing is to avoid disputes between the lawyer and client; however, the lack of a writing can also form the basis of a charge that the lawyer violated the Bar Rules.  Which state will be next?

Be careful out there!

Disclaimer: this e-mail does not contain any legal advice and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

2454 McMullen Booth Road, Suite 431

Clearwater, Florida 33759

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Leave a comment

Filed under Attorney Ethics, Bar rules fee agreements, joe corsmeier, Lawyer ethics, Lawyer Ethics and Professionalism, Lawyer fee agreements, Lawyer written fee agreements