Category Archives: Florida Bar

Proposed Florida Bar rule initiated by Florida lawyer would make court finding of frivolousness “conclusive determination” of rule violation

Hello everyone and welcome to this Ethics Alert which will discuss the Petition initiated by a Florida lawyer to amend the Bar rules and provide that a court determination that an action violates F.S. §57.105, Florida appellate Rule 9.410, or Rule 11, Federal Rules of Civil Procedure “constitutes a conclusive determination of guilt of misconduct by the lawyer(s) who prosecuted such frivolous claim or defense for violation of Rule 4-3.1.”  The Florida Bar published a Notice in the Florida Bar News that the petition will be filed on November 6, 2017 and members may comment on the Petition after it is filed.  The Bar Notice is here: 10-1-17 Bar News Notice of Filing Petition to Amend Rule.

The proposed rule revision would amend Florida Bar Rule 3-4.3 (misconduct or minor misconduct), by adding a section on frivolous actions which would provide if any Florida or federal appellate court has determined that a court action violated F.S. §57.105, Florida appellate Rule 9.410, or Rule 11 of the Federal Rules of Civil Procedure, that “constitutes a conclusive determination of guilt of misconduct by the lawyer(s) who prosecuted such frivolous claim or defense for violation of Rule 4-3.1.”  Upon being notified of the finding, The Florida Bar would open a file, which would be sent to the grievance committee for review.

The proposed rule also provides that, unless there are aggravating circumstances, the referee or grievance committee considering the complaint can resolve the matter with an admonishment or referral of the lawyer to the Bar’s diversion program (lawyers would be eligible for diversion once every five years under the proposed rule).

The proposed rule would also require a lawyer who has had an appellate ruling that the a lawyer has violated the rules or state law on frivolous actions to notify the Bar within 10 days with copies to opposing counsel. Bar counsel would then docket the case “and The Florida Bar shall prosecute the misconduct in accordance with the rules considering the conclusive determination of a violation of Rule 4-3.1.”

The proposal would also amend the comment to Rule 4-3.1 to refer to the amendment to Rule 3-4.3. The comment to Rule 3-4.3 also provides that, “A lawyer shall not use any funds held in his trust account for payment of any personal obligation imposed upon the lawyer or the lawyer’s law firm as to sanctions pursuant to Section 57.105, Fla. Stats., Rule 9.410 of the Florida Rules of Appellate Procedure, Rule 11 of the Federal Rules of Civil Procedure, or any other similar statute or rule.”

The Florida Bar Rules allow members to directly propose amendments to Bar rules if the there is a petition filed with the Supreme Court signed by 50 Bar members.  This petition was signed by 55 Bar members.  The Board of Governors’ Disciplinary Procedure Committee (DPC) will review the proposed petition and rule amendments and will have a special meeting to discuss it.  A report by the DPC on the petition is expected at the Dec. 8, 2017 BOG meeting.

Bottom line:  This is rare member initiated petition to amend the Florida Bar Rules.  The amendment certainly appears to be well intended; however, since an order finding that a claim or defense is frivolous does not involve a criminal conviction, I am very concerned that the proposed rule that would make an order finding a frivolous filing by an appellate court on a civil matter “a conclusive determination of guilt of misconduct by the lawyer(s) who prosecuted such frivolous claim or defense for violation of Rule 4-3.1.”  I believe (and continue to believe) that a lawyer should be able to challenge such a court order since, among other things, the action and parties are different and the evidentiary requirements underlying such an order are not necessarily the same as those required for the Bar to prove a violation of the Bar rules.  In addition, the courts have inherent authority to sanction lawyers for frivolous filings as well as under the relevant statutes and court rules.

According to the Bar’s October 1, 2017 Notice in the Florida Bar News:

“Members who desire to comment on this proposed amendment may do so within 30 days of the filing of the above-referenced petition. Comments must be filed directly with the clerk of the Supreme Court of Florida, and a copy must be served on the executive director of The Florida Bar and Thomas O. Wells, Esq. Rule 1-12.1 and Rule 3-7.15 of the Rules Regulating The Florida Bar govern these proceedings.”

Stay tuned…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.

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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Potential Florida Bar ethics advisory opinion 17-2 will address lawyer referral fees and private client matching services

Hello everyone and welcome to this Ethics Alert which will discuss recent decision by the Florida Bar’s Board of Governors (BOG) to consider a potential ethics advisory opinion to address the ethics issues surrounding lawyer referral fees and private client matching services.  The advisory opinion has not been drafted; however, the draft opinion will be identified as Proposed Advisory Opinion 17-2.

The Bar review began after a lawyer sent an ethics inquiry to The Florida Bar asking whether lawyers could participate with a private lawyer referral service which planned to charge a different set fee depending upon the type of case referred.  The lawyer referred to the system “as a ‘pay-per-lead’ structure.”

The lawyer’s inquiry was referred to the BOG and, at its July 21, 2017 meeting in Miami, the BOG unanimously approved the recommendation of the Board Review Committee on Professional Ethics (BRCPE) that it be directed to prepare an advisory opinion on the inquiry, specifically whether lawyer referral services can charge a fee per referral and impose different fees for different types of cases.  The BRCPE has authority to decline drafting an opinion and the BOG could also decide not to issue the opinion if it is drafted.

If an ethics advisory opinion is drafted, it will address the ethics issues created when online entities (such as AVVO) rolled out programs which attempt to match potential clients with lawyers and which make different payments depending on the type of case.  The opinion would also address the Bar rules related to advertising and referral services.  Lawyers and others will be able to comment on the issues before any opinion is drafted and/or approved.

The Florida Bar Rules have long prohibited lawyers from sharing fees with private referral services.  The Bar’s Standing Committee on Advertising (SCA) also rejected “pay-per-lead” plans on previous appeals and the BOG rejected an appeal from a referral service that proposed a payment of $300.00 to participating lawyers for each referred and accepted case in 2012.

Other jurisdictions have published ethics opinions addressing these issues or are in the process of reviewing them.  As I reported in a recent Ethics Alert blog, New York Ethics Opinion 1132 (published August 8, 2017) found that New York lawyers are prohibited from participating in AVVO’s client referral services.  The opinion found that lawyers who participate in AVVO’s client referral services (and any similar services) would violate the New York Bar rules since they involve AVVO’s improper “vouching” for (recommendation of) the lawyer, improper lawyer referral fees, and improper fee sharing with a non-lawyer.

As background, The Florida Bar filed a petition with proposed Bar rule amendments with the Florida Supreme Court in 2015 addressing, inter alia, referral services that offer both legal and medical or other non-legal services. Those proposed rules would have allowed lawyers to participate in those services, as long as clients were informed about potential conflicts, there was no quid pro quo requiring the lawyer to send a referred client for medical or other services offered by the referral agency, and the lawyer’s independent judgment was not affected.

The Florida Supreme Court published an opinion on September 24, 2015 which declined to implement the rule revisions and instructed the Bar to draft rules that “preclude Florida lawyers from accepting referrals from any lawyer referral service that is not owned or operated by a member of the Bar.”    That opinion is here: 9/24/15 SC Opinion

The Florida Bar then filed revised rule amendments designating private entities which match lawyers with potential clients as “qualified providers” and requiring those entities to comply with the Bar rules, including a required review of the advertisements. Participating lawyers would not have been required to carry malpractice insurance.

The Florida Supreme Court heard oral argument in April 2017 and then published an order dismissing the petition on May 3, 2017. That order is here: 5/3/17 SC Order.  The order stated: “In this case, the Bar proposes amendments to rule 4-7.22 that do not comply with the Court’s direction concerning lawyer referral services that are not owned or operated by a member of the Bar and that seek to expand the scope of the rule to include “matching services” and other similar services not currently regulated by the Bar.

The May 3, 2017 Order also stated that the dismissal was without prejudice “to allow the members of this Court to engage in informed discussions with the Bar and those who are in favor or against the proposed regulation of matching and other similar services. The Court lacks sufficient background information on such services and their regulation at this time.”  A meeting was held at the June 2017 Bar Annual Convention in Boca Raton to discuss the issues and was attended by Justices, Bar officials, and representatives of private referral services.

The Bar’s Notice of the proposed ethics advisory opinion was published in the August 15, 2017 issue of the Florida Bar News.  The Bar’s Notice is here: 8/15/17 Notice of Proposed advisory opinion 17-2.

According to the Notice:  “The Board Review Committee on Professional Ethics will consider adopting a proposed advisory opinion at the direction of The Florida Bar Board of Governors based on an inquiry by a member of The Florida Bar, at a meeting to be held on Thursday, December 7, 2017, from 1-3 p.m. at the Ritz-Carlton on Amelia Island.” and “comments from Florida Bar members are solicited on the issues presented. Comments must contain Proposed Advisory Opinion number 17-2, must clearly state the issues for the committee to consider, may offer suggestions for additional fee arrangements to be addressed by the proposed advisory opinion, and may include a proposed conclusion. 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.”

Bottom line:  If the ethics opinion is drafted and approved, Florida will join the growing list of jurisdictions addressing “marketing fees” taken from fees paid by private online entities to lawyers participating in client generation services.  This ethics opinion (like all ethics opinions) would be advisory and for guidance only.

Stay tuned 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.

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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Miami-Dade Circuit Judge’s Facebook “friendship” with Florida lawyer and former judge leads to motion to disqualify and appeal

Hello everyone and welcome to this Ethics Alert which will discuss the recent denial of a Motion to Disqualify a Miami-Dade County Circuit Judge who was “friends” with opposing counsel on Facebook as well as the pending appeal.  The case is Law Offices of Herssein and Herssein, P.A. d/b/a Herssein Law Group and Reuven T. Herssein v. United Services Automobile Association, Case No.: _______________, Lower Tribunal No.: 2015-015825-CA-43 (Florida Third District Court of Appeal) and the Motion for Writ of Prohibition is here:  http://www.almcms.com/contrib/content/uploads/sites/292/2017/07/FILED-HLG-Petition-for-Writ-of-Prohibition-3D17-1421-1.pdf 

According to the Petition, Miami-Dade Circuit Judge Beatrice Butchko is a “friend” of attorney Israel Reyes on Facebook.  Reyes is also a former Miami-Dade judge who served with Judge Butchko and now has a private law firm in Coral Gables.  Reyes represents a USAA employee in the case who retained separate counsel after Herssein apparently accused the employee of witness tampering.  Herssein told the court that he planned to add the employee as a defendant and Reyes entered an appearance on behalf of the employee/non-party.

The Motion to Disqualify filed by the Herssein law firm on behalf of USAA alleged that the Facebook friendship between the judge and Reyes would cause Reyes to be able to influence the judge, and that she could not be impartial.  The judge denied the motion, stating that it was legally insufficient.  The law firm then filed the Petition for Writ of Prohibition with the Third District Court of Appeal.

The Florida Supreme Court’s Judicial Advisory Committee (JEAC) issued an opinion on this issue in 2009.  The JEAC opinion states that judges should not send or accept social media friend requests from lawyers who may appear before them.  The advisory opinion excludes campaign sites created by a committee.  The opinion is JEAC Op. No. 2009-20 (11/17/09) and is here:  http://www.jud6.org/legalcommunity/legalpractice/opinions/jeacopinions/2009/2009-20.htmlt  The opinion states:

“The Committee believes that listing lawyers who may appear before the judge as “friends” on a judge’s social networking page reasonably conveys to others the impression that these lawyer “friends” are in a special position to influence the judge.  This is not to say, of course, that simply because a lawyer is listed as a “friend” on a social networking site or because a lawyer is a friend of the judge, as the term friend is used in its traditional sense, means that this lawyer is, in fact, in a special position to influence the judge.  The issue, however, is not whether the lawyer actually is in a position to influence the judge, but instead whether the proposed conduct, the identification of the lawyer as a “friend” on the social networking site, conveys the impression that the lawyer is in a position to influence the judge.  The Committee concludes that such identification in a public forum of a lawyer who may appear before the judge does convey this impression and therefore is not permitted.”

The JEAC applied the same analysis in a 2012 opinion related to professional networking websites, such as LinkedIn, and stated that there is no “meaningful distinction” between Facebook, and LinkedIn.  The opinion is JEAC Op. No. 2012-12 (5/9/12) and is here:  http://www.jud6.org/legalcommunity/legalpractice/opinions/jeacopinions/2012/2012-12.html.  The opinions states:

The Committee continues to believe that the process of selecting persons to be connections on LinkedIn, and the communication by the judge of the list of the judge’s connections to others who the judge has approved, violates Canon 2B.  The Committee does not believe that there is meaningful distinction in this regard between Facebook, and LinkedIn, a site used for professional networking, because the selection and communication process is the same on both sites.

The Fourth District Court of Appeal relied on the 2009 opinion in a 2012 decision disqualifying a judge in a criminal case for being Facebook friends with the prosecutor. The court found the social media connection could “create in a reasonably prudent person a well-founded fear of not receiving a fair and impartial trial.”

USAA argued that the 2012 Fourth DCA decision should not apply since it involved a criminal defendant who might have a reasonable fear of prejudice; however, the law firm is more sophisticated and should not have such a fear only because two judges who both previously sat as judges in Miami-Dade County are “friends” on Facebook.

Other states have also provided guidance on judicial social media use and Florida’s opinion is one of the most restrictive.  California, Kentucky and New York have opined that judges may accept Facebook friend requests from lawyers who may appear before them under certain conditions.  California permits judges to be friends with lawyers on Facebook if those pages are used only for professional activities, such as communications with members of a law school alumni group and other factors include how many friends the judge has, whether he or she declines some attorneys’ friend requests but accepts others and how often the attorney appears before the judge.

Bottom line:  As this case illustrates, judges (and lawyers who may appear before them) would be well advised not to be “friends” or otherwise connect on social media and professional networking sites or, if they are already connected and a case is assigned, to immediately remove the connection and disclose it to all parties and provide an option to recuse if the party believes that it would potentially be prejudiced.

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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Florida lawyer accused of “planning” Allied Veterans scam is reinstated nunc pro tunc after criminal charges were reversed

Hello everyone and welcome to this Ethics Alert which will discuss the recent Order of the Florida Supreme Court reinstating the license of a lawyer who had been charged with felony crimes for allegedly planning Allied Veterans scam and whose conviction was reversed.  The case is The Florida Bar v. Kelly Bernard Mathis, Case No.: SC13-2031 (Supreme Court of Florida, July 17, 2017) and the SC Order is here:  https://efactssc-public.flcourts.org/casedocuments/2013/2031/2013-2031_disposition_138842.pdf

As some of you may recall, an alleged financial scam involving an entity called Allied Veterans, based in St. Augustine, was in the media extensively a number of years ago.  The alleged scam involved gambling and “internet cafes”.  The lawyer had advised Allied Veterans that the internet cafes were legal and, after a law enforcement investigation, he was charged with planning the scam and with multiple felonies.  In 2013, Attorney General Pam Bondi said that the lawyer was the “mastermind” behind the alleged $300 million racketeering and money laundering scheme with internet cafes where people were actually illegally gambling.

Although 57 people were arrested, the lawyer was the only defendant who went to trial.  He argued that he was giving legal advice to a client and many lawyers were concerned about what that might mean for the potential criminal liability of attorneys who advise clients on a future course of conduct.  The former presidents of the nonprofit pleaded no contest and the former Fraternal Order of Police president and vice president pleaded guilty and faced no prison time.

The criminal prosecutors argued that, although Allied Veterans claimed that it was a nonprofit organization created to help veterans, it had only given about two percent of its profits to charitable causes.  The prosecutors also argued that the lawyer’s law firm had billed the nonprofit about $6 million for his legal services, although his lawyers stated the amount was most likely less than that and that he only billed for actual work his firm had performed.

During the trial, prosecutors presented testimony from witnesses who said that they had purchased hundreds of hours of internet time but never used it because they actually came to gamble. The lawyers wanted to argue in the lawyer’s defense that the lawyer had properly advised Allied Veterans that it was his opinion that offering a sweepstakes game that was legal under Florida law, which permits sweepstakes if they are used to bring a customer into a business that sells a legal product, such as McDonald’s sweepstakes.  The judge rejected their request to make that argument.

After his conviction on 103 criminal counts, the lawyer was sentenced to six years in prison.  He appealed and the Florida Fifth District Court of Appeals reversed the conviction, finding that the trial judge improperly prohibited his lawyers from arguing that the internet cafes were legal and not gambling.  The Attorney General’s office decided not to pursue charges against the lawyer after the conviction was reversed.

In disciplinary matter, The Florida Bar did not oppose the lawyer’s reinstatement and Fourth Judicial Circuit Chief Judge Mark Mahon issued a report in March 2017 recommending that the Florida Supreme Court immediately reinstate the lawyer.  In its July 17, 2017 Order, the Florida Supreme Court reinstated the lawyer nunc pro tunc to the date of his felony suspension in 2013.

Bottom line:  This lawyer was charged with multiple felonies and chose to go to trial instead of accepting a plea bargain which would not have resulted in prison time; however, the conviction would most likely have resulted in his disbarment.  After his trial in 2013, the lawyer was convicted and sentenced to 6 years in prison.  He was also automatically suspended because of the felony conviction.  Pursuant to the Florida Supreme Court’s July 17, 2017 Order, the lawyer was reinstated to practice nunc pro tunc to November 28, 2013, the date of his felony suspension.  The lawyer was ultimately suspended and unable to practice for over 3 ½ years for a conviction that was later reversed.

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 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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