Tag Archives: nonrefundable fees

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

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

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

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

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

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

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

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

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

Be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19 N. Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Joseph Corsmeier

about.me/corsmeierethicsblogs

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

Florida Supreme Court adopts Bar Rules defining retainer, flat fee and advance fees and clarifying deposits of fees

 

Hello and welcome to this Ethics Alert which will discuss the recent opinion of the Supreme Court of Florida which adopted Bar Rules which define retainer, flat fee and advance fees and clarifying deposit of fees.  The opinion is In Re: Amendments to Rules Regulating The Florida Bar 4-1.5—Fees and Costs for Legal Services, No. SC14-2112 (September 17, 2015) and the opinion is here: http://www.floridasupremecourt.org/decisions/2015/sc14-2112.pdf  The amendments will become effective on October 1, 2015.

The opinion adopted amendments filed by The Florida Bar adding subdivision (2) to Florida Bar Rule 4-1.5, which defines the terms retainer, flat fee and advance fee.  The amendment also adds language to the Comment under “Terms of payment” stating that nonrefundable flat fees and nonrefundable retainers should not be deposited into the lawyer’s trust account; however, advance fees must be held in trust until earned.  The Comment also states that nonrefundable fees can still be excessive.

The amendment also moves the language in the Comment regarding contingent fees in criminal and domestic relations cases under the header “Prohibited contingent fees.”

Bottom line: these amendments to Rule 4-1.6 resulted from recommendations made by the ABA Ethics Commission 20/20.  As I pointed out in a previous Ethics Alert, the current amendments were drafted after an earlier attempt by The Florida Bar to place definitions in the Comment to Rule 4-1.5 was rejected by the Florida Supreme Court in an opinion stating that any definitions should be in the rule.

Be careful out there.

As always, if you have any questions about this Ethics Alert or need assistance, analysis, and guidance regarding these or any other ethics, risk management, or other issues, please do not hesitate to contact me.

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.

2454 McMullen Booth Road, Suite 431

Clearwater, Florida 33759

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

 

 

 

 

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Filed under Attorney Ethics, Excessive fee, Florida lawyer trust accounts, joe corsmeier, Joseph Corsmeier, Lawyer escrow accounts, Lawyer ethics, Lawyer Ethics and Professionalism, lawyer excessive fee, Lawyer nonrefundable fees, Lawyer trust accounts, Lawyer unreasonable fee

The Florida Bar’s Board of Governors considers revisions to confidentiality, trust account and fee rules and include definitions of retainers, flat fees, and advance fees

Hello and welcome to this Ethics Alert blog which will discuss the recent Notice of the Florida Bar’s Board of Governors of its intent to consider changes to the Rules Regulating The Florida Bar. The Notice is in the February 15, 2014 Florida Bar News and is on the Bar’s website here: http://www.floridabar.org/DIVCOM/JN/jnnews01.nsf/8c9f13012b96736985256aa900624829/d77053b5698a70ef85257c7b004b3384!OpenDocument

The most significant of the proposed revisions would amend Rule 4-1.6 to permit lawyers and law firms to reveal some confidential client information when a lawyer is changing law firms or law firms are merging if the confidential information will not injure the client. The proposed change to Rule 4-1.6 would add subsection (c)(6) to provide for limited disclosure of information “to detect and resolve conflicts of interest between lawyers in different firms arising from the lawyer’s change of employment or from changes in the composition or ownership of a firm, but only if the revealed information would not compromise the attorney-client privilege or otherwise prejudice the client.” Language would also be added subsection (e) to provide that, “A lawyer must make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client.”

Another proposed revision would amend Rule 4-1.5 stating that nonrefundable fees are considered earned on receipt and must not be placed in lawyers’ trust accounts and also providing a definition for retainers, flat fees, and advance fees. The Comment to Rule 4-1.5 would also provide, “A nonrefundable retainer or nonrefundable flat fee is the property of the lawyer and should not be held in trust. If a client gives the lawyer a negotiable instrument that represents both an advance on costs plus either a nonrefundable retainer or a nonrefundable flat fee, the entire amount should be deposited into the lawyer’s trust account, then the portion representing the earned nonrefundable retainer or nonrefundable flat fee should be withdrawn within a reasonable time. An advance fee must be held in trust until it is earned. Nonrefundable fees are, as all fees, subject to the prohibition against excessive fees.”

The proposed revisions would also amend Rule 5-1.1 and create an exception within subdivision (a)(1) related to commingling to permit a lawyer to deposit sufficient funds into the lawyer’s trust account to make up a shortfall in the trust account caused by misappropriation, bank error, bank charge or a bounced check.

The amendments to Rule 4-1.6 resulted from recommendations made by the ABA Ethics Commission 20/20 and, as I pointed out in a previous Ethics Alert, the amendments to Rule 4-1.5 resulted from an earlier attempt by The Florida Bar to amend the Comment to Rule 4-1.5 which was rejected by the Florida Supreme Court in an opinion stating that any definitions should be in the rule, not the comment. According to the Notice, if you would like a copy of the text of any of the proposed amendment, you can e-mail jgreen@flabar.org or call Janellen Green at (850) 561-5751. You should refer to the title or item number and the date of publication (2/15/14).

Bottom line: If approved by the BOG and implemented by the Florida Supreme Court, these rule revisions would clarify issues related to confidentiality when a lawyer leaves a law firm and/or the law firm is purchased, prevent lawyers who place funds into a trust account to reduce shortages from being charged with commingling, clarify the nature of a non-refundable fee, and provide definitions for retainers, flat fees, and advance fees.

Be careful out there!

Disclaimer: this Ethics Alert is not an advertisement and is for informational purposes only. It does not contain any legal advice 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.
2454 McMullen Booth Road, Suite 431
Clearwater, Florida 33759
Office (727) 799-1688
Fax (727) 799-1670
jcorsmeier@jac-law.com
http://www.jac-law.com

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Filed under Attorney Ethics, Attorney/client confidentiality, Attorney/client privilege and confidentiality, Confidentiality and privilege, Departing lawyer and law firm responsibilities, Florida Bar, Florida Lawyer Ethics and Professionalism, joe corsmeier, Joseph Corsmeier, Lawyer escrow accounts, Lawyer ethics, Lawyer Ethics and Professionalism, Lawyer trust accounts

Dodd-Frank unlimited lawyer IOTA funds FDIC deposit insurance provision apparently was not renewed by Congress and expired on 12/31/12 and only trust funds up to $250,000.00 per client ledger will be insured

Hello everyone and welcome to this Ethics Alert blog to advise everyone of the apparent expiration on December 31, 2012 of the Dodd-Frank Deposit FDIC Insurance provision which provided for the unlimited deposit insurance coverage for Interest on Lawyer Trust Accounts (IOLTAs) which are called IOTA trust accounts in Florida.

The federal insurance will now only cover up to $250,000.00 per client ledger within the lawyer’s trust account.  An FAQ post from the FDIC website is here: http://www.fdic.gov/deposit/deposits/unlimited/expiration.html

Bottom line:  If this affects your practice and your IOTA trust account liability, you should plan accordingly.  You can also contact your U.S. Representatives and Senators regarding reinstatement of the deposit insurance coverage.

Be careful out there!

Disclaimer: this e-mail does not contain any legal advice 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.

2454 McMullen Booth Road, Suite 431

Clearwater, Florida 33759

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

 

 

 

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Filed under joe corsmeier, Lawyer trust accounts