Hello everyone and welcome to this Ethics Alert which will discuss the Florida Bar Board of Governor’s (BOG) recent withdrawal of proposed Advisory Opinion 23-1 which would have allowed Florida lawyers to passively invest in out of state alternative lawyer business structures that permit non-lawyer ownership.
As background, the Florida Bar Rules prohibit alternative business structures with non-lawyer ownership; however, other jurisdictions, such as Washington D.C. and Arizona law permit them. In March 2022, Florida Bar ethics staff declined to issue an opinion based on a lack of Florida precedent. The individuals who requested the opinion asked that the BOG Professional Ethics Committee (PEC) review the denial.
Proposed Advisory Opinion 23-1 was drafted and stated that, even if a lawyer is admitted in a jurisdiction that does not authorize non-lawyer ownership of law firms, a lawyer may passively invest in an ABS in another jurisdiction so long as the relevant jurisdiction permits those entities. In the proposed advisory opinion, the PEC found the Florida attorney’s participation as a passive investor in an ABS permissible so long as it met certain criteria.
The proposed opinion also stated the ABS cannot have any presence in Florida nor can it provide Florida legal services, the ABS must comply with all requirements of the jurisdiction that permits it, the Florida investor cannot have a managerial role or be involved in the daily operations of the ABS, and the Florida attorney may not have access to any confidential information regarding the ABS.
At its meeting at the Bar’s Annual Convention on June 23, 2023, the Florida Bar’s Professional Ethics Committee voted unanimously to support Proposed Advisory Opinion 23-1 which would have permitted a Florida attorney to be a passive investor in an alternative business structure (ABS) in another state that allows non-lawyer ownership of law firms.
At its December 2023 meeting, the BOG voted to withdraw the proposed Florida Bar Advisory Opinion 23-1.
Bottom line: According to reports, the withdrawal of the proposed opinion came after a BOG discussion regarding whether this would be a potential “camel’s nose” under the tent and lead to non-lawyer ownership of Florida law firms, which has been strongly opposed by many Florida lawyers..
Be careful out there.
Disclaimer: this communication is not an advertisement, does not contain any legal advice, does not create an attorney/client relationship, and the comments herein should not be relied upon as legal advice 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
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