Ohio lawyer receives 1 year stayed suspension for citing to, inter alia, the client’s “potentially illegal actions” in motion to withdraw

Hello everyone and welcome to this Ethics Alert which will discuss the recent Supreme Court of Ohio opinion imposing a one-year stayed suspension on a lawyer who filed a motion to withdraw which revealed attorney/client confidential information without the client’s permission or an exception authorizing the disclosure.  The case is Cleveland Metro. Bar Assn. v. Heben, Slip Opinion No. 2017-Ohio-6965 (July 27, 2017) and the opinion is here:  http://www.supremecourt.ohio.gov/rod/docs/pdf/0/2017/2017-Ohio-6965.pdf

According to the opinion, the lawyer had briefly represented the client in 2008 during the initial stages of her divorce case.  The divorce proceedings were still pending in September 2013 and the client again retained the lawyer for legal assistance. The parties stipulated to the following facts in the Bar matter: (1) the client paid the lawyer a $3,000 retainer on or about September 15, 2013, (2) the lawyer filed a notice of appearance in the divorce case on September 16, 2013, and (3) less than two weeks later, the client terminated the lawyer’s legal services.

After the client terminated his services, the lawyer moved to withdraw as counsel and also submitted a supporting affidavit purporting to state his reasons for seeking withdrawal with the motion. According to the opinion, in the affidavit, the lawyer “recounted communications he had had with (the client) about the scope of his representation and his compensation, accused her of refusing to pay his agreed-upon fees ‘without cause,’ and disclosed legal advice that he had given her. He also described (the client’s) discharge of him as ‘retaliatory’ and alleged that it had ‘occurred because of [his] advice to her concerning her objectionable and potentially illegal actions’ relating to her exhusband, which he characterized as ‘a problem similar to the one [he] experienced in [his] previous representation of her.’”

The judge in the divorce case struck the lawyer’s affidavit from the record and, in his testimony at the disciplinary hearing, the judge stated that he believed that the contents of the affidavit, specifically the disclosure of attorney/client communications, were inappropriate and not necessary to seek withdrawal.

The opinion imposed a one-year suspension which was stayed on the condition that he “commit no further misconduct.”  Two justices dissented and “would suspend respondent for one year with six months stayed”, which was the recommendation of the Disciplinary Board.

Bottom line:  As this case again illustrates, lawyers must never reveal confidential attorney/client confidences in court documents, including a Motion to Withdraw, unless the client authorizes the disclosure or an exception applies which would permit or require the disclosure.

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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Maine Supreme Court holds that competent and expert testimony is required to prove causation in legal malpractice actions

Hello everyone and welcome to this Ethics Alert which will discuss the March 21, 2017 opinion of the Maine Supreme Court which held that expert testimony that is not based on supporting facts in the record was insufficient to prove that a lawyer’s alleged negligence caused the plaintiff’s injury.  In addition, a “corrected affidavit” which contradicts the expert’s clear deposition testimony is insufficient.  The case is Brooks v. Lemieux, 2017 ME 55 (Maine Supreme Judicial Court March 21, 2017) and the opinion is here:  http://www.courts.maine.gov/opinions_orders/supreme/lawcourt/2017/17me55br.pdf.

The former client/malpractice plaintiff in the underlying matter (Brooks) retained the lawyer/malpractice defendant (Lemieux) after he unsuccessfully grieved his termination from Bath Iron Works (BIW) and his failure to attend arbitration.  Brooks was a long-time union employee and, after the union voted not to assist Brooks to arbitrate his grievance, Brooks hired Lemieux.  In February 2007, Brooks filed a complaint against the union and BIW in federal district court for breach of the collective bargaining agreement and discrimination.

After the union and BIW moved for summary judgment, Lemieux failed to timely file opposing statements of material fact, and summary judgment was granted against Brooks. The magistrate granted the motion and noted that Lemieux had failed to cite to record evidence in the statement of facts refuting the opposing statement of facts, resulting in their admission.

Brooks then sued Lemieux for legal malpractice, alleging that the lawyer fell below the standard of care by failing to: (1) timely file responses to statements of material fact supporting summary judgment, (2) follow a local rule governing statements of fact, (3) obtain affidavits from witnesses and (4) conduct adequate discovery.

The trial court granted summary judgment in Lemieux ‘s favor in the malpractice matter, finding that Brooks had failed to prove causation because he failed to identify what evidence Lemieux should have cited, affidavits that he should have obtained, and what discovery he should have conducted.  This resulted in the fact-finder having to speculate as to any causal link between the alleged negligence and the injury, and failed to submit admissible expert testimony on causation.

The trial court refused to consider Brooks’ expert’s corrective affidavit on causation, which contradicted that expert’s earlier deposition testimony.  Relying on a Maine case, the trial court held that the contradictory affidavit could not create a disputed issue of material fact given the expert’s clear and unambiguous answers in the deposition testimony.

Brooks appealed and argued that (1) the trial court applied the incorrect malpractice standard, (2) expert testimony was not required, (3) causation presents a jury question, and (4) plaintiff’s expert’s affidavit established prima facie evidence of causation.

The Maine Supreme Judicial Court Brooks found that Brooks failed to set  forth prima facie evidence of causation to support his claims, and that the trial court properly granted summary judgment in favor of Lemieux.  The opinion rejected the argument that an incorrect standard was applied since Lemieux did not fail to timely plead in the underlying case and cause Brooks’ opportunity before the fact-finder to be lost.  The opinion also found that there was insufficient expert testimony to establish that Brooks would have prevailed but for Lemieux’s alleged negligence since the expert’s deposition testimony and “corrected affidavit” created a clear contradiction, not merely a discrepancy.

According to the opinion, the trial court improperly refused to consider the contradictory affidavit; however, the error was harmless since the affidavit was deficient for summary judgment purposes. The affidavit also provided only conclusory statements that Lemieux breached the standard of care without citing to facts which connect the alleged negligence to the injury; therefore, without competent evidence of negligence, a fact-finder could only speculate about causation (which requires a showing that the plaintiff would have prevailed in the underlying litigation but for the defendant’s alleged negligence); therefore, the expert opinion was insufficient. Pursuant to the above, the opinion affirmed the summary judgment in favor of Lemieux.

Bottom line:  This opinion found that an expert retained by the plaintiff in a legal malpractice matter cannot provide a conclusory opinion that a lawyer failed to meet the standard of care but must cite “to facts which connect the alleged negligence to the injury.”  In addition, the “corrected affidavit” by an expert which contradicts the expert’s clear testimony in a deposition created a clear contradiction, not merely a discrepancy, and was inadequate to prove causation.

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 joe corsmeier, Joseph Corsmeier, lawyer malpractice expert witness, lawyer malpractice sufficiency of evidence expert testimony, Lawyer negligence, legal malpractice negligence, legal malpractice standard of care

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

New Jersey joint ethics opinion finds that fees paid to Avvo for client referrals violate New Jersey Bar rules

Hello everyone and welcome to this Ethics Alert which will discuss the recent New Jersey joint ethics opinion which found that lawyers in New Jersey are prohibited from participating in client referral services provided by AVVO because the services involve improper lawyer referral fees and fee sharing with a non-lawyer.  The joint ethics opinion is here: https://www.dropbox.com/s/5plgfqgi26zuym1/ACPE%20732%20Avvo%2C%20LegalZoom%2C%20Rocket%20Lawyer%206.21.17.pdf?dl=017  and the New Jersey Supreme Court Notice to The Bar of the joint ethics opinion is here: https://www.judiciary.state.nj.us/notices/2017/n170621i.pdf

The joint ethics opinion found that none of the legal service plans interfered with the independent professional judgment of participating lawyers, and Avvo’s procedure of holding fees until the legal services are performed does not violate lawyer trust account rules.

The joint opinion also describes the services offered by three companies’ websites.  Avvo offers two legal services products through its website: “Avvo Advisor” and “Avvo Legal Services”.  Individuals who use “Avvo Advisor” pay a flat fee for a 15-minute phone conversation with a lawyer, while consumers who use “Avvo Legal Services” purchase specific services, such as an uncontested divorce, for a flat fee.  Avvo then deposits the flat fee into the lawyer’s bank account and withdraws a “marketing fee.”

The ethics opinion found the “marketing fee” is an impermissible referral fee, and not a permitted fee for the cost of advertising, as well as an impermissible shared fee between a lawyer and the non-lawyer.  The ethics opinion referred to ethics opinions in Ohio, South Carolina, and Pennsylvania that found marketing fees charged by “Avvo-type companies” were improper referral fees or constituted impermissible fee sharing.

The opinion found that services provided by LegalZoom and Rocket Lawyer appear to comply with the ethics rules if they were registered with the courts’ administrative office, as required by New Jersey’s rules.  LegalZoom’s “Business Advantage Pro” and “Legal Advantage Plus” charge a flat monthly fee for legal advice and consumers can purchase additional services from participating lawyers at a discounted rate.  LegalZoom keeps the monthly subscription fees.  Rocket Lawyer’s legal services plan charges a flat fee for limited legal advice on document-related matters and a free 30-minute lawyer consultation.  Rocket Lawyer keeps the subscription fees and participating lawyers can offer legal services at discounted rates.

Bottom line:  This ethics opinion is the most recent which has reviewed the recent legal services plans of AVVO (and other entities) and found that the fee charges in AVVO’s plan constitute improper referral fees and fee sharing.  Other jurisdictions may weigh in with their own ethics opinions in the future (or the rules may be changed).  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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Filed under Attorney Ethics, AVVO fee sharing and referral fee plans, Avvo legal services, er ethics opinion Avvo lawyer matching services improper fee splitting and referral fees, Florida Lawyer Ethics and Professionalism, joe corsmeier, Joseph Corsmeier, Lawyer ethics, Lawyer Ethics and Professionalism, lawyer fee splitting, Lawyer responsibilities AVVO and Linkedin, LegalZoom, New Jersey joint ethics opinion improper referral fees and fee sharing and