Fla. Bar Skeptical Of Legal Services Expansion Proposals

By Carolina Bolado | June 3, 2022, 9:52 PM EDT ·

The Florida Supreme Court amended the Florida Bar rules Thursday to allow nonlawyers to help govern nonprofit legal service providers, but it's just one of many recommendations from a committee at odds with the Florida Bar over how to improve access to legal services and adapt to changing technology.

The Florida Supreme Court signed off on one of the few changes the committee and the bar could agree on: an amendment to Florida Bar Rule 4-5.4, which prohibits law firm ownership by nonlawyers, that allows nonprofit legal service providers to organize as corporations and to have nonlawyers serve on their boards of directors.

The court said the amendment "recognizes the existing charitable corporate structure of many not-for-profit legal service providers."

"This is just a recognition of reality," GrayRobinson PA's John Stewart, who chaired the Special Committee to Improve the Delivery of Legal Services, said. "This is the way that they're operating across the country. You can imagine a board that is dealing with not-for-profit legal services is often going to comprise of members of the community who are not lawyers."

But the court has so far rejected the Florida Bar-opposed changes proposed by the committee, like allowing fee splitting with nonlawyers and permitting them to hold minority equity interests in law firms. 

"These changes would be so profoundly transformative of the practice of law in Florida that they should not be allowed, even on a test basis, without clear and compelling empirical data that they will help solve access to justice in a meaningful way with little or no risk to the public," Florida Bar President Michael Tanner wrote in a December letter responding to the committee's recommendations.

Stewart, a former Florida Bar president, pointed out that one cannot gather data on something that is prohibited.

"We were proposing a lab concept, to allow the rules to be bent in a specific environment for a limited period of time, so that we could see if needs are being met and the public is being protected," Stewart said.

The Supreme Court's decision on Thursday was a "really light touch," according to Stewart, and was forecast in a letter the court sent to the Florida Bar in March asking for alternative proposals. In the letter, the court said it would adopt the recommendation to amend Rule 4-5.4 but not the others and asked the bar to come up with other options to "improve the delivery of legal services to Florida's consumers."

The bar has since announced its own group, the Special Committee on Greater Public Access to Legal Services, to address the issue and come up with a proposal by the court's deadline: Dec. 30, 2022.

"The Florida Bar looks forward to further looking at improving the delivery of legal services to Florida consumers, as directed by the court," Florida Bar spokeswoman Jennifer Krell Davis said.

Stewart first wrote to the Supreme Court to suggest looking into changes to the regulations in 2019, during his one-year term as president of the Florida Bar. In his letter, he suggested a study into how the rules governing the practice of law could be changed to improve how Florida consumers access legal services.

Chief Justice Charles Canady appointed Stewart to chair a committee to study the issues of lawyer advertising, referral fees, fee splitting, entity regulation, regulation of online service providers, and regulation of nonlawyer providers of limited legal services, according to the letter.

Stewart said the committee's focus was not on aid to the lowest income residents but on "the vast majority of middle class Americans and small businesses that aren't getting legal help."

"Our mission was driven by people and businesses who can afford to pay for lawyers in some way but aren't or can't because of the way we price ourselves," Stewart said.

In June 2021, the committee issued its recommendations, which include creating a Law Practice Innovation Lab Program to test some of the proposals like allowing nonlawyer employees to acquire minority interests in the law firms where they work, permitting fee sharing with nonlawyers, and letting paralegals provide certain services to clients.

The committee looked to Arizona and Utah, both of which have relaxed their regulations regarding nonlawyer involvement in the provision of legal services. Utah did it in a "regulatory sandbox" where these changes could be tested in a controlled environment, according to the committee's report.

The committee said the work of the nonlawyer equity owner would have to actively support the work of the law firm. A nurse who analyzes medical records for a personal injury firm could have a non-controlling interest in the firm, for example.

This could open up new ways for lawyers to work with technology companies and others to provide more innovative ways to deliver services, according to the report. Removing the prohibition on fee sharing could allow a technology company and law firm to streamline referrals and improve how services are delivered to clients, the committee said.

The response from the Florida Bar Board of Governors was a resounding no. In the letter sent last December, Tanner said allowing nonlawyers to own interests in law firms would compromise the independence of the legal profession by creating a conflict of interest between lawyers bound by certain ethical obligations and nonlawyers whose focus would be on increasing firm profitability.

Tanner pointed out that a similar proposal was considered and rejected 20 years ago, but the special committee did not review this work.

"The basic response to the special committee's arguments in the report on these two proposed changes is essentially the same response made 20 years ago in opposition to nonlawyer ownership law firms: it is undeniable that the incentive of nonlawyers to own a law firm is to make money," Tanner said.

The bar also received hundreds of comments, most of them negative, from bar members in response to the committee's proposals. Attorneys expressed concerns about lawyers getting pressure from non-attorney owners to engage in unethical behavior like inflating claims against insurance companies or not acting in the best interest of the client.

"When the practice of law becomes just another business like a laundromat, corners will be cut by those that do not have much to lose when something goes wrong," attorney Mario Musil said in a comment. "A nonlawyer has no license to worry about, no name to protect."

Stewart said he thinks the Supreme Court's instruction to the bar to come up with its own solutions is an indication that the justices "want to see some movement happening." But he acknowledges that when it comes to regulations of the legal profession, change happens slowly.

"My committee was taking us from 0 to 100, and generally the profession gets uncomfortable with that," Stewart said. "When I came in as president in 2019, I said this is happening, and if we want to be architects of what that change looks like, we're going to have to get in the game."

--Editing by Emily Kokoll.

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