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/