Florida Bar News - August 02. 2023 - by Jim Ash

The Board of Governors has approved publishing proposed Advisory Opinion 23-1, which would allow a Florida lawyer to be a passive investor in an alternative business structure (ABS) in another state that allows non-lawyer ownership of law firms.

At a July 28 meeting in Sarasota, the board voted without objection to allow the proposed opinion to be published for comment.

“Staff initially declined to offer an opinion because there was a lack of precedent in the matter,” said board member Brian Burgoon, chair of the Board Review Committee on Professional Ethics. “We haven’t published it for comment yet, because we wanted the board to have an opportunity to look at it.”

When  Bar staff declined to issue an opinion last year, the inquirers requested that the Professional Ethics Committee review the denial.

Last October, the PEC voted 26-9 to direct committee staff to work on a draft opinion using ABA Formal Ethics Opinion 499 for guidance. The committee was scheduled to hear the draft at the Bar’s Winter Meeting in January, but a lawyer for the inquirers requested more time to gather additional information to support the position.

At the Annual Florida Bar Convention in June, counsel for the inquirers suggested edits for the Professional Ethics Committee to consider. The Professional Ethics Committee and the Board of Governors incorporated some of those edits and a few typographical corrections into the final version approved for publication at the board’s meeting on July 28.

Meeting the day before, the Board Review Committee on Professional Ethics voted 6-0 to recommend that the board approve publishing the proposed opinion.

As approved, the proposed advisory opinion states that  a Florida lawyer may passively invest in an ABS in another jurisdiction, so long as: the ABS satisfies certain requirements. Specifically, the proposed opinion says 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 provide legal services through the ABS, the Florida lawyer cannot be involved in the daily operations of the ABS, and the Florida lawyer may not have access to any confidential information regarding the ABS.

The staff’s draft opinion also cautions that “it does not address the propriety of investing Florida lawyer’s firm receiving referrals from the alternative business structure as those referrals may implicate concerns regarding solicitation, impermissible ‘feeder’ arrangements, and payments in exchange for referrals,” according to a staff analysis.

Tim Chinaris, a lawyer who represents lawyers in disciplinary and other matters, thanked the BRC for considering the “very interesting” issue.

“I haven’t seen this in the last 20 or 30 years, so you’re breaking new ground,” he said. “We’ll see what happens if it gets published.”

https://www.floridabar.org/the-florida-bar-news/ethics-opinion-to-allow-florida-lawyer[…]-firms-that-include-nonlawyers-to-be-published-for-comment/

Florida Bar News - July 14, 2023 - by Patrick R. Fargason

The ABA’s Standing Committee on Ethics and Professional Responsibility released a formal opinion July 12 that provides guidance on how attorneys can share offices and staff resources with an unaffiliated attorney.

In Formal Opinion 507, the ABA opined that office sharing is permissible under the ABA’s Model Rules of Professional Conduct so long as attorneys comply with the “ethical duties concerning the confidentiality of information, conflicts of interest, supervision of nonlawyers and communications about their services.”

The opinion also points out that lawyers who share offices but do not practice together as a law firm must take appropriate steps to clearly communicate the nature of their relationship to the public and to their clients and cites the model rule regarding advertising as prohibiting any “false or misleading communication about the lawyer or the lawyer’s services.” For instance, the lawyers “may not imply or hold themselves out as practicing together in one firm when they are not a firm.”

The Florida Bar has released several ethics opinions over the years that are similar to the new guidance from the ABA. Florida Bar Ethics Opinion 88-15 advises that a lawyer may operate multiple businesses from the same suite of offices provided they adhere to certain ethical requirements.

Specifically, Opinion 88-15 requires that the lawyer protect the confidentiality of all information relating to the representation of clients, take steps to avoid misleading the public regarding the business activities in their offices, and prohibits the lawyer from engaging in in-person solicitation of legal employment.

Furthermore, Opinions 93-6 and 93-7 discuss joint ventures between separate law firms and a lawyer’s dual employment, respectively.  While 93-6 states that the ethics rules do not contemplate the creation of a joint venture, 93-7 explains that a lawyer is not ethically prohibited from being simultaneously employed by two distinct law firms. However, the opinions caution that each law firm created by the lawyers must be organized and operated as a separate, bona fide law firm in compliance with the attorney advertising rules, may not exist for the sole purpose of evading the fee-division rules, and cannot operate as a “parallel law firm” where the ownership of two or more firms is identical.

In addition, ABA opinion 507 notes that having an office-sharing arrangement does not necessarily bar two attorneys from representing different clients with adverse interests in a court proceeding or a transaction provided that the lawyers protect the confidentiality of their clients’ information and do not hold themselves out as members of the same law firm. “This determination will ultimately turn on specifics of the office-sharing arrangement and the nature of the proposed representations,” the opinion said, adding disclosure of the arrangement and communicating efforts to maintain confidentiality should be provided in writing.

https://www.floridabar.org/the-florida-bar-news/ethics-opinions-provide-guidance-for-unaffiliated-lawyers-sharing-offices-and-resources/

Law firm may not allow a non-lawyer marketing director to solicit business for the firm in any manner forbidden to lawyers themselves.

Non-lawyer marketing directors may not be paid commissions representing a percentage of fees generated from business brought to the firm by the non-lawyer.

Click here to view the Florida Bar Ethics Opinion - 89-4

Ethics – By David Hirsh:

When a plaintiff in a personal injury claim settles his/her personal injury case for less money that there is necessary to pay the client’s outstanding medical bills received for the client’s subject injury and the Plaintiff has arguably given Letters of Protection Liens to the various medical providers, can the lawyer handling the case pay the funds from the settlement which are in dispute over to his client who demands them without payment of the medical bills if:

A.  A Letter of Protection Lien promising to pay for medical services and treatment from the settlement proceeds of a particular legal matter is given by the client did not specify the exact injury date of the one claimed in the complaint and the Client has had multiple accidents since the injury date in 2012 for which he/she sought treatment from various providers?

B. The Letter of Protection Liens were signed only by the Client not the lawyer?

C. The Letter of Protection Liens were signed by the Client more than Five years prior to the settlement which would make them contractually beyond the Florida Statute of Limitations?

D. The Liens claimed was for a statutory hospital lien which by case law have been held to be invalid?

Question 2: 

Does the Lawyer even have to tell these claimants who’s claims appear legally invalid that he has received the funds?

Question 3: 

Can the lawyer take his money even if the Client’s portion of the funds is in dispute?

Answer - 

Rule 5-1.1, Rules Regulating the Florida Bar, states in pertinent part:

(e) Notice of Receipt of Trust Funds; Delivery; Accounting.  

Upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person.  Except as stated in this rule or otherwise permitted by law or by agreement with the client, a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third person, shall promptly render a full accounting regarding such property.

(f) Disputed Ownership of Trust Funds.  

When in the course of representation, a lawyer is in possession of property in which 2 or more persons (1 of whom may be the lawyer) claim interests, the property shall be treated by the lawyer as trust property but the portion belonging to the lawyer or law firm shall be withdrawn within a reasonable time after it becomes due unless the right of the lawyer or law firm to receive it is disputed, in which event the portion in dispute shall be kept separate by the lawyer until the dispute is resolved. The lawyer shall promptly distribute all portions of the property as to which the interests are not in dispute.

The comment to the rule elaborates:

Third parties, such as a client’s creditors, may have lawful claims against funds or other property in a lawyer’s custody.  A lawyer may have a duty under applicable law to protect such third-party claims against wrongful interference by the client. 

When the lawyer has a duty under applicable law to protect the third-party claim and the third-party claim is not frivolous under applicable law, the lawyer must refuse to surrender the property to the client until the claims are resolved.

However, a lawyer should not unilaterally assume to arbitrate a dispute between the client and the third party, and, where appropriate, the lawyer should consider the possibility of depositing the property or funds in dispute into the registry of the applicable court so that the matter may be adjudicated.  (emphasis added)

Thus, the Lawyer is required to notify third persons with an interest in the funds held in trust and deliver those funds to persons that are entitled to receive them.  Further, if there are disputes regarding the entitlement to funds held in trust, the Lawyer must maintain those funds in trust until the dispute can be resolved.

Ultimately, if the dispute cannot be resolved, depositing the funds into the court registry is a possibility.

Lawyer Advertising:

Can a lawyer hire an actor to provide a testimonial?

No. 

Florida Bar Board of Governors ruled that this would be considered false and misleading advertising.

The lawyer cannot write the testimonial by a client, or pay the client to provide the testimonial.

Further, they cannot hire, retain or pay anyone to read or provide the testimonial on behalf of the actual client either.

So for now, all those funny “Bill-Boards” we see are actual clients who said the actual things.

“Sort of……”

Whether is a Lawyer/Doctor financial relation is discoverable?

In a 4 to 3 opinion issued by the Florida Supreme Court on April 13, 2017 overturned a ruling from the 5^th Circuit that provides the following:

A Law firm referring a client to a treating physician is protected by the attorney/client privilege, and that the law firm may not be subject to costly records requests to determine if it has a “cozy relationship” with a medical provider.

The court further stated that to hold otherwise – would severely undermine the purpose of the privilege, which is to encourage the free flow of information between attorneys and their clients.

The court further reasoned that if Doctor’s were required to reveal how their patients were referred to them – that it would have a chilling effect on the ability of injured people to be treated - as may medical providers would avoid treating them to avoid the hassles and cost of litigation and discovery.

What is the current status on Florida Lawyers Advertising with AVVO?

According to a recent Bar Board of Governors informational release and the January 1, 2018 issue of the Florida Bar News, the BOG Review Committee on Professional Ethics responded to a lawyer inquiry regarding the status of AVVO Advisor and unanimously recommended that the lawyer be advised that Avvo Advisor, which is described as “a private for-profit company’s online system for connecting potential clients to lawyers for 15-minute consultations for $39”, is a lawyer referral service under Florida’s rules. 

The Board of Governors voted unanimously at its December 8, 2018 meeting to approve the committee’s recommendation and opinion.

As a for-profit lawyer referral service, AVVO Advisor will now be required to comply with Florida Bar Rule 4-7.22 or Florida lawyers will not be permitted to participate in the service. 

Florida Bar Rule 4-7.22 requires that the services receive no payment that constitutes a division of fees, it must furnish or require lawyers to have professional liability insurance, it must affirmatively state in advertisements that the system is a lawyer referral service, and comply with the other requirements in the rule.   

According to the BOG release, there are twenty-eight lawyer referral services which are current in their quarterly reports to The Florida Bar.

Florida Bar - Click this Link Ethics Opinion guides Lawyers on How to Respond to Negative Posts.