Category Archives: fee sharing

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

 

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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

ABA issues Formal Opinion 487 providing guidance regarding fee divisions in contingency cases when a lawyer is replaced

Hello everyone and welcome to this Ethics Alert, which will discuss the recent American Bar Association Formal Opinion 487, which provides guidance regarding the requirements of fee divisions in contingency fee matters when the initial lawyer is replaced by a successor lawyer.  ABA Formal Opinion 487 is here:  https://www.americanbar.org/content/dam/aba/images/news/2019/06/FormalOpinion487.pdf

ABA Formal Opinion 487 clarifies that a lawyer, who is a successor counsel in a contingency-fee matter, must notify the client, in writing, that a portion of any fees recovered may be paid to the original counsel. The opinion addresses a common misunderstanding about which model rules apply to successor relationships in contingency fee agreements, and the duties of successor counsel.

The initial lawyer in a contingency fee matter will often assert a lien on the proceeds when the lawyer is terminated or is required to withdraw; however, if the client employs successor counsel, the client may not understand there is a continuing obligation to pay the original lawyer for the value that lawyer contributed or was entitled to under the original contract.

The opinion states that lawyers may erroneously believe that ABA Model Rule 1.5(e) (or its state equivalent) (division of a fee between lawyers who are not in the same firm) governs this situation; however, Rule 1.5(e) only applies when there is division of fees between lawyers from different firms who are simultaneously representing a client or maintaining responsibility for the matter, not when there is successive representation. Rule 1.5(e) specifically requires that lawyers who are simultaneously representing a client and dividing a fee in a matter either divide the fee in proportion to the services delivered or assume joint responsibility for the representation.

When a lawyer no longer represents the client and there is a successor lawyer, there is no joint responsibility since the initial lawyer has no further responsibility after the withdrawal or termination and, according to the opinion, Model Rule 1.5(b) and (c) would apply to the successor lawyer in the fee relationship with the client.

Comment 2 to 1.5 states that, “an understanding as to fees …must be established”; however, the rule provides no specific time frame in which that understanding must occur. The opinion notes that under 1.5(a), client consent must be obtained before the fee is divided, which can occur up to the time of the conclusion of the matter and prior to disbursement of any money.

The opinion states that the duty to disclose the original lawyer’s potential claim and entitlement to some portion of the recovery does not constitute an “unreasonable burden” on successor counsel since, although a client may discharge a lawyer at any time for any reason, the client may be unaware of obligations to pay both the successor lawyer and the initial lawyer.  The opinion states that the successor counsel must address and clarify any confusion and inform the client, in writing, that the original attorney may have a claim against the contingency fee.

In many jurisdictions (including Florida), the initial lawyer may or would be entitled to, at a minimum,  the quantum meruit value of the lawyer’s services and the exact recovery and division of fees may not be known until the end of the case; however, the successor lawyer still has a duty to inform the client about a potential fee split.

The opinion also observes that, in many instances, the fees paid to both attorneys will not affect the client’s recovery, since a client cannot be required to pay more than one contingency fee when switching attorneys; however, if the client’s original counsel was terminated for cause, the initial lawyer may not have any claim to fees on the recovery.

Finally, according to the opinion, if the successor lawyer is required to negotiate fees with the initial lawyer on the client’s behalf, the successor lawyer must advise the client and obtain a waiver to avoid issues with Rule 1.7 conflict of interest regarding the disbursement of the funds.  Also, if a dispute arises regarding the disbursement of the funds, the successor lawyer has the obligation under Rule 1.15(e) to retain the funds in the trust account pending resolution of the dispute (and, in many jurisdictions, including Florida, the lawyer may be required to place the disputed funds in the court registry if the dispute cannot be resolved).

Bottom line:  This ABA opinion provides clear guidance on the Model Bar rule requirements when there is division of fees after the initial lawyer withdraws or is terminated and the client hires a successor counsel in contingency matters; however, lawyers must be aware that ABA opinions provide guidance regarding the ABA Model Rules only and each lawyer must research his or her own jurisdiction’s Bar Rules before taking any action.

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

 

 

 

 

 

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Filed under ABA Formal Opinion 487- lawyer division of fees in contingency cases when lawyer is replaced, ABA Model Rules, Attorney Ethics, fee sharing, joe corsmeier, Joseph Corsmeier, Lawyer division of fees contingency matters, Lawyer ethics, Lawyer Ethics and Professionalism, lawyer fee splitting, Uncategorized

Florida Bar’s Board of Governors finds that AVVO Advisor is a for-profit lawyer referral service and must comply with Bar Rules

Hello everyone and welcome to this Ethics Alert which will discuss the recent decision by the Florida Bar’s Board of Governors to approve a BOG committee’s conclusion that AVVO Advisor is a for-profit lawyer referral service and must comply with the Florida Bar Rules related to those referral services.

According to a recent Bar Board of Governors informational release and the January 1, 2018 issue of the Florida Bar News, the BOG Review Committee on Professional Ethics responded to a lawyer inquiry regarding the status of AVVO Advisor and unanimously recommended that the lawyer be advised that Avvo Advisor, which is described as “a private for-profit company’s online system for connecting potential clients to lawyers for 15-minute consultations for $39”, is a lawyer referral service under Florida’s rules.  The Board of Governors voted unanimously at its December 8, 2018 meeting to approve the committee’s recommendation and opinion. The January 1, 2018 Florida Bar News article is here: https://www.floridabar.org/news/tfb-news/?durl=%2Fdivcom%2Fjn%2Fjnnews01.nsf%2F8c9f13012b96736985256aa900624829%2F3a1cd1f9be52b1f1852581fe004ede22.

As a for-profit lawyer referral service, AVVO Advisor will now be required to comply with Florida Bar Rule 4-7.22 or Florida lawyers will not be permitted to participate in the service.  Florida Bar Rule 4-7.22 requires that the services receive no payment that constitutes a division of fees, it must furnish or require lawyers to have professional liability insurance, it must affirmatively state in advertisements that the system is a lawyer referral service, and comply with the other requirements in the rule.   According to the BOG release, there are twenty-eight lawyer referral services which are current in their quarterly reports to The Florida Bar.

Florida Bar President-elect Designate John Stewart is quoted as stating: “This is a difficult question for this board, it’s going to set a lot of precedent for issues we are going to have to deal with that are related…The decision could affect a large number of our constituents. There are at least, anecdotally, a fair number of our constituents who participate in this program.”

The Florida Bar will provide a 90-day grace period on discipline under Rule 4-7.22 for lawyers who may be currently associated with Avvo Advisor. This would allow Avvo Advisor to file its first quarterly report and comply with Rule 4-7.22 or for the Florida lawyers to exercise other options if Avvo Advisor chooses not to follow Rule 4-7.22, Rules Regulating The Florida Bar.

The January 1, 2018 Florida Bar News, which went online on December 26, provides more information for Bar members about participating in Avvo Advisor.  The webpage “What you need to know about the Bar and AVVO Advisor” is here: https://www.floridabar.org/news/tfb-news/?durl=%2Fdivcom%2Fjn%2Fjnnews01.nsf%2F8c9f13012b96736985256aa900624829%2Fb5f5fefbce7ee680852581fe004f7f92.

Bottom line:  This decision by the BOG addresses only the Avvo Advisor service and it triggers the requirement that AVVO Advisor comply with Florida Bar Rule 4-7.22.  Those requirements include, inter alia, that there is no division of fees, that AVVO either have, or ensure that lawyers have, professional liability insurance, and that AVVO affirmatively state in any advertisements that it is a lawyer referral service.  If a lawyer is currently participating in this service, or is considering participating, he or she should act accordingly.

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

 

 

 

 

 

 

 

 

 

 

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Filed under Attorney Ethics, AVVO Advisor- BOG opinion re lawyer referral service, AVVO fee sharing and referral fee plans, Avvo legal services, fee sharing, Florida Bar, Florida Bar lawyer referral rule revisions, joe corsmeier, Joseph Corsmeier, Lawyer ethics, Lawyer Ethics and Professionalism, Lawyer referral fees, Lawyer Referral Services, Lawyer responsibilities AVVO and Linkedin

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

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Filed under Attorney discipline, Attorney Ethics, deceit, dishonesty, fee sharing, fraud, joe corsmeier, Joseph Corsmeier, Lawyer advertising and solicitation, Lawyer criminal conduct, Lawyer criminal conduct - kickbacks on referrals, Lawyer criminal kickbacks, Lawyer ethics, Lawyer Ethics and Professionalism, lawyer illegal personal injury solicitation and provider kickbacks, lawyer improper solicitation through agents, Lawyer referral fees, Uncategorized