Category Archives: Fee sharing with non-lawyer owned firms

Arizona becomes first U.S. state to authorize non-lawyer ownership of law firms and fee sharing

Hello everyone and welcome to this Ethics Alert, which will discuss the Arizona Supreme Court’s recent implementation of rule revisions which will permit non-lawyers to own law firms and share fees with lawyers, and also makes other significant rule revisions.  The link to the Court’s August 27, 2020 press release explaining the rule revisions is here:  http://www.azcourts.gov/Portals/201/Press%20Releases/2020Releases/082720RulesAgenda.pdf

When the rule revisions become effective on January 1, 2021, Arizona will become the first U.S. state to implement revisions to its Bar rules permitting non-lawyer ownership of law firms and permitting non-lawyers to share fees with lawyers.

According to the press release, the rule revisions are intended to promote innovation and make legal services more affordable and still protecting the public.

“The court’s goal is to improve access to justice and to encourage innovation in the delivery of legal services. The work of the task force adopted by the court will make it possible for more people to access affordable legal services and for more individuals and families to get legal advice and help.”  “These new rules will promote business innovation in providing legal services at affordable prices.”

The press release states that, after the revised rules become effective, the court will adopt a new licensure process to allow non-lawyers, called “legal paraprofessionals,” to provide limited legal services to the public, including representing clients in court proceedings.  The revisions also eliminate rule 5.4, which prohibits non-lawyers from having an ownership interest in a law firm; however, these “alternative business structures” will be required to obtain licenses.

The Arizona Supreme Court also made revisions to the Bar rules regulating lawyer advertising “most of which align with recent changes made to the American Bar Association’s Model Rules.”

The press release states that more information about the revisions is on the Court’s Access to Legal Services webpage at https://www.azcourts.gov/accesstolegalservices/

Bottom line:  The Arizona Supreme Court’s decision to revise the Bar rules continues the growing trend toward permitting non-lawyers and non-traditional entities to become involved in legal practice and the legal process.

As I previously blogged here: https://jcorsmeier.wordpress.com/2020/08/18/utah-supreme-court-authorizes-pilot-program-which-inter-alia-permits-non-lawyers-to-own-law-firms-and-share-fees-with-lawyers/, the Utah Supreme Court also recently approved a two-year “regulatory sandbox” pilot program permitting non-lawyers to experiment with different methods of delivering legal services outside of the existing regulatory framework.  Washington, D.C. and other states are also considering potential revisions related to the restrictions on non-lawyer involvement in the practice of law.

Stay safe and healthy and 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.

2999 Alt. 19, Suite A

Palm Harbor, Florida

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

 

Joseph Corsmeier

about.me/corsmeierethicsblogs

5 Comments

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Utah Supreme Court authorizes pilot program which, inter alia, permits non-lawyers to own law firms and share fees with lawyers

Hello everyone and welcome to this Ethics Alert, which will discuss recent Utah Supreme Court approval of a pilot program which would permit non-lawyers to own law firms, share fees with lawyers, and makes other significant revisions.  The link to the Utah Supreme Court’s Standing Order No. 15 approving the pilot program is here:  http://www.utcourts.gov/utc/rules-approved/wp-content/uploads/sites/4/2020/08/FINAL-Utah-Supreme-Court-Standing-Order-No.-15.pdf and the Utah Bar Rule revisions related to the pilot program are here: http://www.utcourts.gov/utc/rules-approved/2020/08/13/supreme-court-regulatory-reform-effective-august-14-2020/.  The Standing Order and Rule revisions were effective August 14, 2020 and will sunset in two years unless there is a further order of the Court.

The details of the “pilot legal regulatory sandbox” are set forth in the Supreme Court’s Standing Order 15 and in the revisions to the Utah Rules of Professional Conduct.  The program creates a “regulatory sandbox” for non-traditional legal providers and services, including entities with non-lawyer investment or ownership and also creates an Office of Legal Services Innovation, which will assess the sandbox applicants and make recommendations to the Court and also supervise the applicants who are authorized by the Court to offer legal services.

According to the Utah Supreme Court’s August 13, 2020 press release:

“These changes allow individuals and entities to explore creative ways to safely allow lawyers and non-lawyers to practice law and to reduce constraints on how lawyers market and promote their services. In order to assess whether the changes are working as intended, the Supreme Court has authorized the core portions of these changes for a two-year period. At the conclusion of that time, the Supreme Court will carefully evaluate whether the program should continue. The evaluation will be based on a review of data collected from those entities and individuals participating in the program. The Supreme Court’s willingness to experiment with innovation is an important step, especially now, because the need for more affordable legal help has reached crisis levels as a result of the COVID-19 pandemic and its economic fallout.”

According to the press release, after the 90 day period which was allotted for input, the Supreme Court made a number of changes to the initial proposals. These changes “included: (1) increasing transparency into the application and approval process, (2) adding clearer channels for complaints regarding the new legal services, (3) severely restricting any roles for disbarred or suspended lawyers and those with certain felony convictions, (4) more explicitly articulating the program’s access-to-justice goals, (5) and more clearly delineating that the program will sunset in two years absent further order of the Supreme Court.”

The Utah Supreme Court’s press release is here: https://www.utcourts.gov/utc/news/2020/08/13/to-tackle-the-unmet-legal-needs-crisis-utah-supreme-court-unanimously-endorses-a-pilot-program-to-assess-changes-to-the-governance-of-the-practice-of-law/

Bottom line:  If the Utah Supreme Court’s pilot program is made permanent, it will radically change the practice of law in Utah and may also become the wave of the future in other states and jurisdictions.

Stay safe and healthy and 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.

2999 Alt. 19, Suite A

Palm Harbor, Florida

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

 

Joseph Corsmeier

about.me/corsmeierethicsblogs

4 Comments

Filed under 2019 Utah pilot program permitting non-traditional legal services, including non-lawyer firm ownership, 2020 Utah Supreme Court Order approving sandbox and non- lawyer practice and ownership, Attorney Ethics, fee sharing, Fee sharing with non-lawyer owned firms, joe corsmeier, Joseph Corsmeier, Lawyer ethics, lawyer fee splitting, Non-lawyer ownership, Non-lawyer ownership of law firms, non-lawyer ownership of law firms and fee splitting, Non-lawyer practice, Non-lawyer practice of law, Non-lawyer practicing law, Uncategorized, Utah Supreme Court regulatory sandbox

Arizona legal advocates program beginning in September 2020 will train non-lawyers to provide limited legal advice

Hello everyone and welcome to this Ethics Alert which will discuss the Arizona licensed legal advocates program beginning in September 2020 which will provide training for non-lawyers to provide limited  legal advice.  A recent news release on the program by the University of Arizona James E. Rogers College of Law is here:  https://law.arizona.edu/news/2020/02/new-licensed-legal-advocates-pilot-program

The Rogers College of Law initiated a two-year pilot project that will license a small group of non-lawyers to give limited legal advice on civil matters related to domestic violence.  The individuals will be known as licensed legal advocates and will be trained to provide legal advice on protective orders, divorce, child custody, consumer protection and housing.

Three to four lay legal advocates from Southern Arizona’s Emerge! Center Against Domestic Abuse are expected to start an eight-week training program at the law school in September 2020.  The individuals must have a bachelor’s degree and at least 2,000 hours of experience as a lay legal advocate.  The Arizona lay legal advocates will be permitted to provide general information about legal forms and court procedures in issues stemming from domestic violence, but are prohibited from providing legal advice.

The training will have an online curriculum and in-person classes.  The Arizona Supreme Court’s Administrative Office of the Courts is working with the Innovation for Justice Program to include a licensing examination for the course. If the pilot is made permanent, the licensed legal advocates will be required to take continuing legal education courses after completing the training.  Individuals who are required to appear in court in a matter will represent themselves; however, the licensed legal advocate will be permitted to sit at that individual’s table.

The pilot project runs until the end of 2021 and includes a research study which will review procedural fairness, whether a licensed legal advocate was able to provide the required level of legal services, and case outcomes.

The 2020-2021 pilot project results from a 2019 Arizona Supreme Court task force report on legal services delivery which recommended, inter alia, the elimination Arizona Rule of Professional Conduct 5.4 (based on Rule 5.4 of the ABA Model Rules of Professional Conduct) which restricts lawyer partnerships with nonlawyers in law firms.  An American Bar Association Task Force Report in October 2019 also recommended elimination of the Model Rule

The October 2019 American Bar Association Task Force on the Delivery of Legal Services Report is here:   https://www.americanbar.org/content/dam/aba/administrative/legal_education_and_admissions_to_the_bar/council_reports_and_resolutions/november2019/arizona-supreme-court-task-force-on-delivery-of-legal-services-final-report-2019-october.pdf

The Arizona Supreme Court is expected to vote on the recommendation to eliminate Arizona Bar Rule of Professional Conduct 5.4 in August 2020.

The Arizona Supreme Court authorized a pilot project creating a legal document preparer program to assist people in domestic violence matters.  As I previously reported, the Utah Supreme Court voted in August 2019 to pursue a regulatory reform working group’s recommendations, which included either eliminating or relaxing Utah’s Rule 5.4 and the Ethics Alert blog on that vote and working group report is here:  https://jcorsmeier.wordpress.com/2019/09/03/utah-supreme-court-approves-pilot-program-to-permit-non-traditional-legal-services-including-non-lawyer-firm-ownership/

The Utah working group report and the Arizona Supreme Court task force report are both referenced in the report accompanying proposed American Bar Association Resolution 115, which is scheduled to be considered and potentially approved by the ABA House of Delegates on Feb. 17, 2020 at the ABA Midyear Meeting in Austin, Texas. The resolution requests that the ABA to encourage jurisdictions to consider regulatory innovation and examine existing regulations, including those related to the unauthorized practice of law.

Bottom line:  This Arizona non-lawyer “legal advocate” pilot program permitting non-lawyers to give limited legal advice is a continuation of the trend toward expanding the non-lawyer practice of law and also authorizing non-lawyers to own legal service entities.  As always, I will be following it and I will keep you advised

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.

2999 Alt. 19, Suite A

Palm Harbor, Florida 34683

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

 

Joseph Corsmeier

about.me/corsmeierethicsblogs

 

Leave a comment

Filed under 2018 Utah rules permitting non-lawyer legal practice, 2019 California non-lawyer practice and ownership proposals, 2019 Utah pilot program permitting non-traditional legal services, including non-lawyer firm ownership, ABA Resolution 105 non lawyer ownership of law firms, fee sharing, Fee sharing with non-lawyer owned firms, joe corsmeier, Joseph Corsmeier, Non lawyer compensation, Non-lawyer limited practice of law, Non-lawyer ownership, Non-lawyer ownership of law firms, non-lawyer ownership of law firms and fee splitting, Non-lawyer practice of law, Non-lawyer practicing law, Uncategorized

Washington D.C. Bar considers relaxing Bar Rules related to non-lawyer law firm ownership and fee splitting

Hello everyone and welcome to this Ethics Alert which will discuss a Washington D.C. Bar committee press release announcing a review regarding the potential relaxing of that jurisdiction’s non-lawyer law firm ownership rules, including potential fee sharing/splitting.  The January 23, 2020 D.C. Bar press release announcing the review is here: https://www.dcbar.org/about-the-bar/news/DC-Bar-Global-Legal-Practice-Committee-Seeks-Public-Comment-on-Rule-of-Professional-Conduct-5-4.cfm

Washington D.C. is the only U.S. jurisdiction that allows lawyers to partner with nonlawyers and those partnerships are subject to certain restrictions; however, a D.C. Bar committee has announced that it will be exploring less restrictive rules.  According to the D.C Bar press release, the D.C. Bar’s Global Legal Practice Committee will be taking public comments on its current system and potential changes until March 9, 2020.

The press release identifies “alternative business structures” and “multidisciplinary practice” as areas of interest. United Kingdom rules permit alternative business structures which authorize legal service providers to apply for licenses allowing outside ownership or non-lawyer investment.  Multidisciplinary practice refers to a type of Alternative Business Structures (ABS) firm that provides both legal and non-legal services.

The current Washington D.C. Bar rule permitting non-lawyer ownership is a modification of the American Bar Association’s Model Rule 5.4(b) and was implemented in 1991.  The rule permits lawyers to practice law in a with non-lawyer partners/owners if the non-lawyers provide professional services within the firm, the law firm solely offers only legal services, and non-lawyers follow the rules of professional conduct.

The press release states that the committee would like to receive responses from Washington D.C. law firms that have non-lawyer partners to determine if the current rules have made it easier to retain professionals including medical doctors or nurse practitioners, mental health experts, economists, lobbyists, accountants and law firm managers. The press release also states that it would like to know if there is any client demand for more types of professional services, and whether firms have lost business because of their inability to deliver these services.

The press release also requests comments regarding how law firms could benefit from sharing fees with non-lawyers, and whether this outside investment would allow greater innovation through technology use or increased financial stability.  The committee is also considering how a rule change would impact firms that currently work with third-party litigation funders, or are interested in doing this and will be examining what type of regulatory structure would work best for non-lawyers working within law firms.

California, Utah and Arizona also have Bar task forces which are examining similar potential revisions and the Chicago Bar Association has announced the creation of a task force.  The ABA’s House of Delegates will also consider a resolution that would encourage jurisdictions across the U.S. to experiment with new regulatory models at its February midyear meeting in Austin, Texas.

Bottom line:   As I indicated, Washington D.C. is the only U.S. jurisdiction that currently allows lawyers to partner with nonlawyers and those partnerships are subject to certain restrictions; however, D.C. is considering relaxing its rules and other jurisdictions are considering new rules related to non-lawyer ownership of law firms.

I will keep you advised…and 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.

2999 Alt. 19, Suite A

Palm Harbor, Florida 34683

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Joseph Corsmeier

about.me/corsmeierethicsblogs

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Filed under fee sharing, Fee sharing with non-lawyer owned firms, joe corsmeier, Joseph Corsmeier, Lawyer ethics, Lawyer Ethics and Professionalism, Lawyer sharing fees with non-lawyers, Non-lawyer ownership, Non-lawyer ownership of law firms, non-lawyer ownership of law firms and fee splitting, Uncategorized, Washington D.C.- rules related to non-lawyer ownership of law firms

California Bar examines proposal that non-lawyers be permitted to provide legal advice and have a financial interest in law firms

Hello everyone and welcome to this Ethics Alert, which will discuss the recent proposals of a State Bar of California task force which would, inter alia, permit legal technicians to offer legal advice and also permit non-lawyers to have a financial interest in law firms.  The proposals were approved by the State Bar Board of Trustees on July 11, 2019.

The proposals were developed by the California Bar’s Task Force on Access Through Innovation of Legal Services.  The task force’s proposals would make sweeping changes by modifying the restrictions on the unauthorized practice of law and ethics rules that prohibit fee sharing with nonlawyers and would also permit legal technicians to provide legal advice and practice law.  The California Bar press release announcing the proposals is here: http://www.calbar.ca.gov/About-Us/News-Events/News-Releases/board-approves-public-comment-on-tech-task-forces-regulatory-reform-options-under-consideration.  The California Bar agenda item with the proposals is here:  http://board.calbar.ca.gov/docs/agendaItem/Public/agendaitem1000024450.pdf

The proposals would permit non-lawyers to provide certain specified legal advice and services, with the appropriate regulation, and permit entities that provide legal or law-related services to be made up of lawyers, nonlawyers or a combination of the two. The regulations would differ depending upon the type of entity, and also permit lawyers to be part of a law firm in which a nonlawyer holds a financial interest.

The task force proposed two alternatives.  The first would include provisions permitting non-lawyers to provide services that assist the lawyers or law firm in providing legal services, and state that the nonlawyers have no power to direct or control the professional judgment of the lawyers. The other would permit lawyers to share fees with non-lawyers as long as the client provides written consent.

The proposals also would also permit state-approved businesses to use legal technology to deliver legal services.  Regulatory standards governing the provider and the technology would be established and client communications with such entities would be covered by attorney-client privilege/confidentiality.

According to the California Bar press release:  “The State Bar Board of Trustees on July 11 authorized a 60-day public comment period for a sweeping set of regulatory reform options for improving access to legal services, developed by the Task Force on Access Through Innovation of Legal Services (ATILS).”

“Beginning next week, the State Bar will seek written comment from consumers, legal service providers, technology experts, and lawyers as vital input for evaluating the options. The Task Force also plans to hold a public hearing to receive oral testimony. The hearing, to take place on August 10, 2019, at the State Bar’s San Francisco office, is timed to coincide with this year’s annual meeting of the American Bar Association.”

Bottom line:  These California Bar proposals have a long way to go before being potentially implemented; however, if they are eventually implemented, California will be another one of the few states which would permit legal technicians to offer legal advice and the only jurisdiction (other than the District of Columbia) to permit nonlawyers to hold a financial interest in law firms.  Stay tuned…

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

Joseph Corsmeier

about.me/corsmeierethicsblogs

1 Comment

Filed under 2019 California non-lawyer practice and ownership proposals, Fee sharing with non-lawyer owned firms, joe corsmeier, Joseph Corsmeier, Lawyer ethics, Lawyer Ethics and Professionalism, lawyer fee splitting, Non lawyer compensation, Non-lawyer limited practice of law, Non-lawyer ownership, Non-lawyer practice of law, Non-lawyer practicing law, Uncategorized

Four south Florida lawyers arrested for involvement for illegal personal injury solicitation and provider kickbacks

Hello everyone and welcome to this Ethics Alert which will discuss the recent arrests of four south Florida lawyers who are  alleged to have improperly and illegally obtained personal injury victims as clients and referred them to health care facilities which then paid them cash for the referrals.

According to media articles and criminal charging documents, four south Florida lawyers have been charged with crimes  ranging from money laundering to organized fraud and patient brokering.  The lawyers are Steven Slootsky, whose record Bar address is in Boca Raton, and Adam Hurtig, Mark Spatz, and Vincent Pravato, whose record Bar addresses are in Fort Lauderdale.  The lawyers were arrested on or about September 6, 2017.

The lawyers are alleged to have improperly and illegally obtained personal injury victims as clients and referred them to health care facilities which paid cash to the lawyers for the referrals.  According to arrest records, the lawyers allegedly paid runners from towing companies and body shops to improperly solicit victims of motor vehicle accidents.  Those individuals were allegedly then referred to clinics for medical treatment and the clinics would illegally pay for the referrals.

The arrest report states that the lawyers “were actively involved in illegal patient brokering and the unlawful solicitation of motor-vehicle accident victims throughout South Florida…after the patient was brokered to the health care facility, the facility was then able to begin treatment and bill the auto insurance companies for claims covered by the PIP benefits, which resulted in fraud on the insurance companies.”

It is illegal under federal law for a doctor, clinic, or other health care provider to pay for patient referrals and for a “patient broker” to receive kickbacks for sending patients to a health care provider.  It is also a violation of the Florida Bar Rules for an agent of a lawyer to improperly solicit a client, for a lawyer to pay non-lawyers and clinics for referrals, and for the lawyer to receive payment or a fee based upon an improper solicitation.  Of course, it is certainly a violation of the Florida Bar Rules to commit a crime.

Bottom line: I have heard anecdotally that these activities have been occurring in south Florida for many years (and potentially throughout our entire state, particularly in urban areas).  These lawyers are certainly presumed innocent unless and until they are proven guilty; however, if the allegations are shown to be true, this is an extremely unfortunate blight on the legal profession.  On the other hand, this could potentially discourage others from doing (or continuing to do) this in the future.

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

Joseph Corsmeier

about.me/corsmeierethicsblogs

1 Comment

Filed under Attorney Ethics, dishonesty, Fee sharing with non-lawyer owned firms, Florida Lawyer Ethics and Professionalism, Florida lawyer ethics nonlawyer compensation, fraud, joe corsmeier, Joseph Corsmeier, Lawyer criminal conduct, Lawyer criminal conduct - kickbacks on referrals, Lawyer criminal kickbacks, Lawyer discipline, Lawyer ethics, Lawyer Ethics and Professionalism, lawyer fee splitting, lawyer illegal personal injury solicitation and provider kickbacks, Lawyer improper solicitation through non-lawyers

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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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 nonlawyer 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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Filed under Attorney Ethics, Ethics Opinion sharing fees with non-lawyer owned law firms Rule 4-5.4, Fee sharing with non-lawyer owned firms, Florida Bar, Florida Bar ethics opinion sharing fees with non-lawyer owned law firms, joe corsmeier, Joseph Corsmeier, Lawyer ethics, Lawyer Ethics and Professionalism, Lawyer ethics opinions, lawyer fee splitting, Lawyer referral fees, Lawyer sharing fees with non-lawyers, Non-lawyer ownership of law firms