Fee sharing, ad rules under committee’s scrutiny Feb 18, 2021 By Gary Blankenship Senior Editor Top Stories Panel takes non-binding conceptual votes John StewartA potential rule change that could allow non-lawyer law firm employees to become partners and ease fee sharing rules with nonlawyers is getting a closer look from a special committee.The Special Committee to Improve the Delivery of Legal Services, at its February 16 meeting, also voted to approve in concept a simplification of Bar advertising rules, including doing away with the mandatory review of ads instead making filing voluntary.The committee also heard a report about a proposal to allow an as yet unspecified legal aid office to operate a pilot program using Florida Registered Paralegals to help clients.Josias Dewey heads the subcommittee that is looking at Bar Rule 4-5.4, which prohibits sharing fees with nonlawyers.He said the committee is tentatively recommending four findings:• Allowing law firms to offer partnerships to non-lawyer employees who assist the firm in the practice of law. That could include a key technical support staffer or a doctor employee of a personal injury firm who evaluates claims. Dewey said lawyers would have to maintain a controlling interest in the firm to avoid concerns over maintaining lawyer independence and professional judgment. The proposal is similar to what has been allowed in Washington, D.C., for many years.• Not allowing passive investment, or partners, in law firms, such as from private equity companies or other investors who do not work for the firm. Dewey said such partners have been cited as a way to raise investment capital for firms, but the subcommittee found little or no need for that.• Allowing some revenue-sharing arrangements with some nonlawyer entities. Dewey said that would allow lawyers to partner with online technology companies that might sell forms to consumers but also seek to link consumers with lawyers for simple divorces or wills with the fee being split between the company and lawyer. It also would mean changes in lawyer referral rules he said, which prohibits lawyers from sharing fees with for-profit referral companies. That could be changed to allow a fee-per-case-accepted charge, Dewey said, but not a fee based on the expected value of a case. The specifics of the proposal still need to be determined and may best be placed in a “regulatory sandbox.”• Setting a definition of non-profit law firms. Committee member Sarah Sullivan said legal aid agencies essentially operate as non-profit law firms, including having nonlawyers on their boards of directors, but there is no provision in Bar rules for that.The committee voted in concept to approve exploring those changes further. Dewey said amendments in other rules would be needed to carry out any changes in Rule 4-5.4, including advertising and lawyer referral service regulations.Committee Chair John Stewart said the vote only authorizes further exploration of those changes with needed related amendments to other rules and the committee could ultimately decide the changes aren’t practical.The committee also voted in concept to approve a paring down of Bar advertising rules, as presented by committee member Santo DiGangi.“The biggest change is the removal of the filing requirement of an advertisement by The Florida Bar,” DiGangi said. Bar rules now require ads that contain more than basic information and are not firm websites to be reviewed by the Bar before they are aired or published.Lawyers could still voluntarily have their ads reviewed, he said, and if approved by the Bar they would not face a grievance if the ad was later found to violate Bar rules.DiGangi said the rewrite cut the length of ad rules by more than 50%, with much of that coming from moving examples and details about advertising from the rule to the comments.One proposed addition to the rule was to require lawyers who are practicing from a virtual office to say that in the ad.The goal, DiGangi said, is to simplify ad regulations “but still have teeth and hold people responsible for advertising that is deceptive or misleading.”“We should be able to reach the legal needs of our citizens as easily as we can without misleading them,” Stewart added, noting most of the rules were written before the internet revolutionized advertising and the delivery of legal services.Sullivan reported on the advanced paralegal issue. That started with the Supreme Court’s Commission on Access to Civil Justice considering a change to Bar Rule 20 on Florida Registered Paralegals that would allow registered paralegals with more training and education to provide, while still remaining under an attorney’s supervision, more services to clients in specific legal areas.That met with a mixed reception by the Bar Board of Governors, and the Family Law and Real Property, Probate and Trust Law sections voiced reservations about paralegals being able to do more in family law and on wills and estate documents.That led to the issue being referred to the special committee. Sullivan chaired a subcommittee looking at that and said its tentative solution is not to change the rule but to have a time-limited pilot program to get hard information. That pilot would be run by a legal aid organization that would not otherwise be prohibited by its grants or charter from running the program.In response to a question, Sullivan said the paralegals — tentatively referred as a Florida Registered Pilot Paralegal — would have slightly more authority to help clients with Supreme Court forms or forms created by the law firm while still remaining under a lawyer’s supervision.Stewart noted many of the authorized activities in Sullivan’s proposal, such as advising how to dress and act in court and taking notes for a limited representation client, are not legal services and can be done by any nonlawyer.The committee did not vote on the proposal and Sullivan asked for input to present a final recommendation at the special committee’s March 8 meeting.The committee’s final report is due to the Supreme Court and the Board of Governors by June 30.The committee is charged by the court “to study whether and how the rules governing the practice of law in Florida may be revised to improve the delivery of legal services to Florida’s consumers and to assure Florida lawyers play a proper and prominent role in the provision of these services.”The report will specifically address lawyer advertising, referral fees, fee splitting, entity regulation, regulation of online service providers, and regulation of nonlawyer providers of limited legal services. Additional topics consistent with those subjects may also be addressed.More information about the committee and related documentation can be found on the committee’s webpage at www.floridabar.org/about/cmtes/cmtes-me/special-committee-to-improve-the-delivery-of-legal-services/.