Source: Florida Contemplates Fee Sharing with Out of State NonLawyers | Legal Ethics in Motion
Florida Contemplates Fee Sharing with Out of State NonLawyers
A proposed advisory opinion by The Florida Bar’s Professional Ethics Committee addresses fee-splitting with out-of-state lawyers when the out-of-state lawyer practices in a law firm with nonlawyer ownership. In the opinion, the committee states that a Florida Bar member should not be subject to discipline simply because a nonlawyer owner of an out-of-state law firm could receive a portion of the legal fees.
Partnerships with out-of-state lawyers are hardly new, but tensions between Florida’s Rules of Professional Conduct, and the organization and ownership of out-of-state-firms led the Florida Bar to clarify the matter.
Under Florida Rule of Professional Conduct 4-5.4, lawyers are prohibited from partnering or sharing legal fees with a nonlawyer. However, some U.S. jurisdictions—Washington, D.C. and Washington state—permit nonlawyer ownership of law firms.
The Florida Bar proposed advisory opinion follows in the footsteps of ABA Formal Opinion 464, and several other jurisdictions, in deciding that nonlawyer ownership of law firms in jurisdictions where permissible should not cause collaborating Florida lawyers to violate the prohibition against fee sharing set forth in Rule 4-5.4.
The underlying policy of Rule 4-5.4 concerns the improper influence of a nonlawyer may on a lawyer’s professional judgment. However in the scenario analyzed in the proposed opinion, Florida Bar committee believes that a lawyer’s professional independence is not at risk simply because a nonlawyer owner receives a portion of an out-of-state lawyer’s fees.
Ultimately, the proposed opinion encourages attorneys to work with out-of-state lawyers despite differences in ownership structure, and allows clients to maintain flexibility in choosing counsel from other jurisdictions.
To read the proposed opinion please click here.
Welcome to our community of professional responsibility teachers! This web site provides teaching resources, ranging from syllabi and powerpoints to real time updates and videos. The web site accompanies our casebook Professional Responsibility: A Contemporary Approach (3d ed. 2017). The Casebook uses the problem method and offers learning outcomes, multiple choice assessment questions, role plays and simulations, and an interactive online version that includes short audio lectures. Please feel free to share your ideas and resources with our community of adopters.
You may review the Table of Contents here.
We look forward to getting to know you and working with you and our fellow adopters.
The Authors (Bruce A. Green, Peter A. Joy, Sung Hui Kim, Renee Newman Knake, Ellen Murphy, Russell G. Pearce & Laurel S. Terry)
The ABA Journal has a nice summary of the recent Seventh Circuit decision affirming the lower court’s dismissal of the malpractice lawsuit against Mayer Brown, which represented General Motors, for the erroneous release of a 1.6 billion dollar security interest against General Motors. The plaintiffs were the lenders whose security interests were released.
The Court held that Mayer Brown didn’t owe a duty to third parties who aren’t clients and that Mayer Brown’s representation of JPMorgan Chase Bank in different matter did not create a duty of care in the loan/security interest matter. According to the Court, Plaintiff had offered 3 theories as to why Mayer Brown owed a duty of care to plaintiffs: (a) JP Morgan was a client of Mayer Brown in unrelated matters and thus not a third‐party non‐client; (b) even if JP Morgan was a third‐party non‐client, Mayer Brown assumed a duty to JP Morgan by drafting the closing documents; and (c) the primary purpose of the General Motors‐Mayer Brown relationship was to influence JPMorgan.
Among other things, the Court stated: ““Consider the consequences of the rule plaintiffs advocate, that a law firm owes a duty of care to a party adverse to its client because the adverse party is a client in unrelated matters and has waived the conflict of interest.” The Court’s opinion is here.
The first African-American state attorney in Florida history, Aramis Ayala, made national news this spring when she announced that she would never seek the death penalty in any of her cases. As a result, Florida Governor Rick Scott transferred two dozen cases to another prosecutor in the state from another county, one known to be a death penalty proponent. Ayala’s claims that these cases should be returned to her jurisdiction were heard by the Florida Supreme Court on Wednesday, June 28.
The following article from the Miami Herald (June 29. 2017) provide a good overview of the Supreme Court hearing. This is a great case for highlighting the competing roles and professional responsibilities of the prosecutor. Keep a lookout for the Florida Supreme Court’s forthcoming decision in a case that has many legal experts filing briefs already on all sides of the issue.
The American College of Trust and Estate Counsel (ACTEC) has released the third edition of its book with sample engagement letters: Engagement Letters A Guide for Practitioners (3rd ed. 2017). It is also available as a free pdf. These samples can be useful when teaching Chapter 2, Section III on Creating the Lawyer-Client Relationship. (Hat Tip to the Elder Law Prof Blog for this news item.)
P.S. For those who don’t know, ACTEC has also issued commentaries on the Model Rules.
Source: OTHERWISE: Avvo, Rocket Lawyer, Legal Zoom Blocked by New Jersey Supreme Court Ethics Committees
Opinion 732 – AVVO, Legal Zoom, Rocket Lawyer
NJ Supreme Court Committees: Advisory Committee on Professional Ethics, Attorney Advertising, Unauthorized Practice of Law
Responding to an inquiry by the New Jersey State Bar Association, the New Jersey Law Journal reports today that a binding joint Opinion of three New Jersey Supreme Court Committees has found that AVVO Legal Services fee plan violates the Court’s Rules of Professional Conduct. The business model runs afoul of RPC 5.4 (a) bar on division of fees with non-lawyers and constitutes an impermissible referral fee in violation of RPC 7.2 (c).
New Jersey lawyers are barred from participating in AVVO Legal Services.
The Opinion is binding subject to discretionary review by the Supreme Court itself.
Legal Zoom and Rocket Lawyer were found to be permissible legal services plans, but lawyers may not participate until the plan is properly registered with the Supreme Court.
AVVO asserted a First Amendment defense but the Committees responded:
AVVO asserted that its marketing scheme is commercial speech that must be tested against the intermediate scrutiny standard applied to First Amendment commercial speech. The Committees are not restricting Avvo’s marketing; the focus of this Joint Opinion is on the for-profit lawyer referral program and sharing of a legal fee with a nonlawyer. The First Amendment does not protect lawyers who seek to participate in prohibited attorney referral programs or engage in impermissible fee sharing.
NOTICE TO THE BARLAWYER PARTICIPATION IN THE AVVO LEGAL SERVICE PROGRAM AND IN LEGAL ZOOM AND ROCKET LAWYER LEGAL SERVICE PLANS
On June 21, 2017, the Advisory Committee on Professional Ethics, Committee on Attorney Advertising, and Committee on the Unauthorized Practice of Law issued a Joint Opinion (ACPE Opinion 732, CAA Opinion 44, UPL Opinion 54) stating that the legal service program operated by Avvo through its website is an impermissible lawyer referral service, in violation of Rules of Professional Conduct 7.2(c) and 7.3(d), and comprises improper fee sharing with a nonlawyer in violation of Rule of Professional Conduct 5.4(a). New Jersey lawyers may not participate in the Avvo legal service program. The Joint Opinion further states that LegalZoom and Rocket Lawyer appear to be offering legal service plans that have not been registered pursuant to Rule of Professional Conduct 7.3(e)(4)(vii). New Jersey lawyers may not participate in the LegalZoom or Rocket Lawyer legal service plans because they are not registered with the New Jersey Supreme Court (Administrative Office of the Courts).
Glenn A. Grant, J.A.D.,
Acting Administrative Director of the Courts