by Brian F. Spector

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We begin by stating the obvious: Arbitration is firmly rooted in our culture as a means of resolving disputes. Anyone who has recently purchased “pricey” products or services knows that predispute agreements to arbitrate are typically non-negotiable parts of everyday bargains. Notwithstanding the ubiquitous nature of arbitration clauses, or perhaps because of their widespread use, the legal enforceability of such agreements is frequently challenged by those who insist on exercising a constitutionally guaranteed right to have their day in court before a judge sworn to uphold the law or a trial by a jury of their peers.¹ More often than not, such challenges run aground because judges favor extra-judicial resolution of disputes via arbitration.² But attitudes change, as do notions of propriety, when the agreement to arbitrate is between lawyer and client, requiring arbitration of all potential client claims against the lawyer for breach of fiduciary duty, malpractice, or any other common law or statutory claim arising out of the engagement and the attorney-client relationship. To ask for such an agreement is considered by some as a faux pas at best, and, at worst, an act repugnant to and inconsistent with the highest principles of the profession.

In Florida, hostility to predispute agreements requiring the arbitration of legal malpractice claims has existed in high places among important people. It was evidenced most recently in the December 2003 decision of the Board of Governors of The Florida Bar to withdraw Proposed Advisory Opinion 02-9 of The Florida Bar’s Professional Ethics Committee. This proposed ethics advisory opinion concluded that “an agreement for mandatory binding arbitration to resolve all disputes between an attorney and a client is ethically permissible under specific circumstances.” To this day, those Florida lawyers tracking the path of Opinion 02-9 have found little, if any, intellectual satisfaction in, or practical guidance from, the reasons cited by the Board of Governors as justifying withdrawal of Opinion 02-9. Those of us who hoped for clarification of the ethical issues raised by predispute arbitration provisions have no deep-water safe harbor. We did not receive a clear pronouncement that such arbitration provisions were per se unethical, nor did we receive any guidance regarding the circumstances under which such provisions would be deemed ethically permissible. However, as explained more fully below, Opinion 02-9 lives on in the recent amendment to Rule 4-1.5(i) of the Florida Rules of Professional Conduct.

This article revisits Opinion 02-9 in light of the recent amendment, effective March 1, 2008, to Rule 4-1.5 of the Florida Rules of Professional Conduct.³ This amendment — the addition of a new subparagraph (i) — expressly authorizes the use of predispute agreements requiring arbitration of fee disputes.⁴ This article begins by discussing Opinion 02-9. It then recites the reasons underlying the Board of Governors’ decision to withdraw the proposed opinion and continues by tracing the genealogy of the most recent amendment to Rule 4-1.5. The concluding section of this article identifies the Rules of Professional Conduct applicable to the issue at hand, offers a sample arbitration clause, and suggests policies and procedures for those who decide to skate on ethically thin ice and use such provisions in their standard “retainer” letters.⁵

Opinion 02-9
On April 1, 2003, formal notice was given of then Proposed Advisory Opinion 02-9.⁶ The opinion was written because “[a] member of The Florida Bar [had] inquired about the ethical propriety of including a clause in a retainer letter requiring mandatory binding arbitration to resolve all disputes between the lawyer and client.” The Florida Bar’s Professional Ethics Committee’s proposed opinion concluded that “an agreement for mandatory binding arbitration to resolve all disputes between an attorney and a client is ethically permissible under specific circumstances.” The circumstances specified were:

the arbitration clause must be fair and reasonable;

the arbitration clause should not be written so broadly as to require disciplinary matters to be submitted to arbitration;

the clause must be disclosed to the client, and the lawyer must disclose that the client is waiving the right to a jury trial and discuss the benefits and the detriments of arbitration:

the client must be given the opportunity to consult with another lawyer, although the client need not actually be represented by independent counsel in making the agreement; and

the client must consent in writing.

The committee emphasized that the “majority of bar ethics committees that have analyzed this issue have concluded that a lawyer’s retainer agreement may include a clause for mandatory binding arbitration to resolve future fee and malpractice disputes.” Using string citations and explanatory parentheticals, the majority view⁷ was summarized as follows:

ABA Formal Ethics Opinion 02-425 (attorney may include provision for mandatory binding arbitration for malpractice claims in retainer agreement if attorney discloses benefits and detriments of arbitration and gives informed consent); Arizona Ethics Opinion 94-05 (attorney may agree with client to mandatory binding arbitration to resolve all disputes if the attorney follows the rule on business transactions with clients); California Formal Ethics Opinion 1989-116 (attorney and client may agree to binding mandatory arbitration for potential malpractice claims; if there is an existing attorney-client relationship, the attorney must fully disclose the terms and consequences and obtain client’s knowing consent); Connecticut Informal Ethics Opinion 99-20 (attorney may include a mandatory arbitration clause in retainer agreement to resolve fee and malpractice claims, but must fully disclose to client the benefits and detriments of arbitration); New York County Ethics Opinion 723 (attorney may include clause in retainer agreement for binding arbitration to resolve malpractice and contract disputes, but only if the arbitrator can award punitive damages, the attorney fully discloses the difference between jury trial and arbitration, and the attorney gives the client the opportunity to seek separate counsel); Oklahoma Ethics Opinion 312 (attorney may include clause in retainer agreement for binding arbitration to resolve all disputes if the attorney follows the rule on business transactions with a client and with full disclosure of the differences between arbitration and jury trial to the client; the attorney need not require the client to obtain other counsel); Philadelphia Ethics Opinion 88-2 (mandatory binding arbitration clause in retainer agreement to resolve malpractice claims is permissible if the attorney complies with the rule on business transactions with clients, including full disclosure that the client is waiving the right to jury trial, the client has the opportunity to seek independent counsel, and the client consents in writing); Virginia Ethics Opinion 638 (attorney may include provision in retainer agreement for binding arbitration of malpractice claims after full disclosure of the meaning of the provision and recommending that the client seek the advice of separate counsel).

Withdrawal of Opinion 02-9
At its December 2003 meeting, The Florida Bar’s Board of Governors approved a recommendation by its Review Committee on Professional Ethics that Opinion 02-9 be withdrawn.⁸ The public record reveals very little concerning the basis for the Board of Governors’ actions. The record reflects:

One member of the Board of Governors stated that “[t]he very idea of arbitrating malpractice is repugnant to me, and this opinion as proposed would allow that.”

The same member of the Board of Governors said that “a law professor testified that such a clause literally could mean if the client disagrees with the selection of an expert witness in a case, that could go to arbitration.”

The [c]hair of the Board of Governors’ Review Committee on Professional Ethics, in explaining the recommendation to withdraw Opinion 02-9, stated: “The thought was why create a problem if you don’t have one?”⁹

The formal minutes of the Board of Governor’s December 2003 meeting offer no basis, reasoned or otherwise, for withdrawing Opinion 02-9, stating as follows on the subject:

On July 2, 2002, an attorney requested a written staff opinion regarding including a clause in the inquiring attorney’s fee contract requiring arbitration of disputes between the attorney and client. Staff denied an opinion on the basis of a Professional Ethics Committee policy not to review specific contracts and a lack of direct Florida precedent. On July 19, 2002, the attorney requested Professional Ethics Committee review of the staff opinion. Official notice of the committee’s intent to consider rendering an opinion on this issue was published in the November 15, 2002 issue of The Florida Bar News. The Professional Ethics Committee adopted Proposed Advisory Opinion 02-9 at its meeting of March 7, 2003. Proposed Advisory Opinion 02-9 concludes that an attorney may include a clause in the attorney’s fee contract requiring mandatory arbitration of disputes between the attorney and the client. Official notice of the Professional Ethics Committee’s adoption of Proposed Advisory Opinion 02-9 was published in the April 1, 2003 issue of The Florida Bar News. The Professional Ethics Committee reconsidered Proposed Advisory Opinion 02-9 at its June 27, 2003 meeting in light of comments received by Florida Bar members and affirmed the proposed advisory opinion. One of the Florida Bar members who timely filed comments on Proposed Advisory Opinion 02-9 subsequently requested Board of Governors review. The attorney request review believes the opinion should limit the arbitration clause to fee and malpractice disputes only. The BRC voted 4-0 to recommend that the board withdraw Proposed Advisory Opinion 02-9. The board concurred in the recommendation.¹⁰

There is no record of anyone offering a reasoned basis for disagreeing with the substantive analysis contained in Opinion 02-9 or the other ethics opinions cited in it. As noted above, those Florida lawyers tracking the path of Opinion 02-9 have found little, if any, intellectual satisfaction in or practical guidance from the reasons cited by the Board of Governors as justifying withdrawal of Opinion 02-9. It left some of us humming the tune “Is That All There Is?”¹¹ Many of us feel as though we crossed the boundary into an ethical Twilight Zone, not sure whether predispute agreements to arbitrate malpractice claims are ethically verboten or merely ethically suspect in the absence of certain conditions. In other words, the absence of an advisory opinion on this subject leaves practitioners on ice which may, or may not, be ethically thin.

The Long and Winding Road to Rule 4-1.5(i)
Withdrawal of Opinion 02-9 did not close the book on arbitration provisions in retainer letters. At the October 15, 2004, meeting of the Board of Governors, it appears there was consideration — a “first reading” — of two possible amendments to the Florida Rules of Professional Conduct: 1) A proposal to amend Rule 4-1.5 by adding subdivision (i), which would permit a lawyer to use a mandatory arbitration clause to resolve fee disputes in the lawyer’s fee agreement; and 2) a proposal to amend Rule 4-1.8(h) to permit lawyers to include in contracts with clients provisions calling for arbitration of malpractice claims, if such arise, and continuing the duty to advise a prospective client to seek independent advice about such clauses.¹²

The same two proposed amendments came for a “second reading” at the December 10, 2004, meeting of The Florida Bar Board of Governors and were referred back to the Disciplinary Procedure Committee of the Board.¹³

The issue arose again at the April 8, 2005, meeting of The Florida Bar Board of Governors. The minutes of this meeting are both interesting and confusing. In relevant part, the minutes state:

16. Disciplinary Procedure Committee Report

Chair Greg Parker reported that the committee met and dealt with the following items:

a. The board approved the following items on second reading:

b) The board rejected proposed rule 4-1.5 removing arbitration of malpractice claims, and then voted to direct the DPC to draft a rule that such an arbitration requirement cannot be in a fee contract unless requested by the client. (bold in original)¹⁴

Again, without offering any rationale or discussing the analysis found in Opinion 02-9, the Board of Governors took seemingly inconsistent positions — approving “on second reading” an amendment to Rule 4-1.8(h) permitting mandatory arbitration of fee disputes and then rejecting a proposed amendment to Rule 4-1.5 removing arbitration of malpractice claims but seemingly approving such a provision if requested by a client. Of course, without the benefit of the agenda materials, it is impossible to discern whether the scrivener of the minutes mistakenly referred to Rule 4-1.5 when the proposed action was being taken on Rule 4-1.8(h), and vice versa. Clearly, the description of the proposed rule amendments in the April 8, 2005, minutes are inconsistent with the description of the proposed rule amendments in the October 15, 2004, minutes. What is clear, however, is that The Florida Bar Board of Governors did not like clauses in retainer agreements requiring arbitration of malpractice claims. While such positions are within the prerogative of the Board of Governors, the ethical propriety of such arbitration clauses has never been condemned by the Florida Supreme Court or any opinion of The Florida Bar’s Professional Ethics Committee.

On April 26, 2006, The Florida Bar petitioned the Florida Supreme Court to amend the Rules Regulating The Florida Bar. The petition was assigned Case No. SC06-736. The petition,¹⁵ beginning at page 8, addresses the proposed addition of subdivision (i) to Rule 4-1.5, and states:

Explanation: Creates new subdivision (i) — “Arbitration Clauses” — that would add language permitting lawyers to contract with clients to resolve, through mandatory arbitration, any fee dispute that may arise; prohibits such arrangements unless the lawyer first advises the affected person in writing of the opportunities of independent representation; sets forth required language for any such attorney-client agreement.

Reasons: The bar has received numerous inquiries regarding the use of binding arbitration to resolve fee disputes. These proposed amendments would allow such practice and are in keeping with the concept of encouraging alternative dispute resolution mechanisms — seemingly now recognized in paragraph 11 of the Statement of Client’s Rights within Rule 4-1.5, which states, in pertinent part: “Usually fee disputes must be handled in a separate lawsuit, unless your fee contract provides for arbitration.” This suggested provision would provide safeguards for clients, by requiring a lawyer to inform the client of the client’s right to seek independent counsel in such matters, and by requiring the lawyer to include information about the rights a client would waive by entering into such an agreement.

Source: Board Review Committee on Professional Ethics.

Commentary / Collaboration: Citizens’ Forum and Disciplinary Procedure Committee.

Committee Action: The Citizens’ Forum discussed and recommended the proposed amendments to the Disciplinary Procedure Committee on May 27, 2004; Disciplinary Procedure Committee and staff drafted the amendment based on the Citizens’ Forum recommendation and added language for disclosure of such mandatory clauses and a specific procedure for giving clients advice to seek independent counsel concerning execution of such clauses; redrafted amendments, including amendments creating 4-1.5(i), and a proposed memorandum to the board explaining the Disciplinary Procedure Committee’s action were approved by a vote of 4-0; the Board of Governors reviewed them at its October 15, 2004 meeting; further clarifying edits were discussed by the Rules Committee and accepted by staff; Rules Committee favorably reported with additional edits by voice vote of 6-0 on November 22, 2004 conference call; referred back to Disciplinary Procedure Committee by board at its December 10, 2004 meeting; on January 27, 2005 Disciplinary Procedure Committee discussed board member and Rules Committee concerns regarding the addition of language indicating that a lawyer may include such provisions in a proposed contract, but the lawyer may not require such a provision as a condition of employment, as well as other comments opposing the amendments; after debate, the Disciplinary Procedure Committee voted 6-0 to ask the board not to include language obligating the lawyer to accept the representation if the client rejects the provision for arbitration — premised on the committee’s view that such a limitation amounted to a reverse contract of adhesion that severely limited the lawyer’s otherwise appropriate ability to negotiate the terms of a contract.

Board Action: Board of Governors approved at April 8, 2005 meeting.

Dissent: None.

There is nothing in The Florida Bar’s petition referring to Opinion 02-9 or the request giving rise to that opinion. In short, The Florida Bar has not asked the Florida Supreme Court to address, nor has the court addressed, the ethical propriety of an arbitration clause in a retainer agreement encompassing malpractice claims. To be clear, and to reiterate a statement above, the absence of an advisory opinion on this subject leaves practitioners on ice which may, or may not, be ethically thin. And no action by The Florida Bar Board of Governors in rejecting a proposed rule amendment can be deemed controlling authority when the Florida Supreme Court has the only real say on the issue and has not spoken.

Skating on Ethically Thin Ice
We all know that simply because one “can” do something does not mean that one “should” do it. Hopefully, this grain of common sense survives graduation from law school. Therefore, we leave for others to discuss the threshold issue — whether a Florida lawyer “should” include in a retainer letter a provision requiring arbitration of the client’s malpractice claims. In the “can/should” equation, each lawyer must answer the “should” question personally, under the circumstances presented at the beginning of every attorney-client relationship. Therefore, the author believes it more useful to focus on the “can” element of the equation, hoping to provide practical guidance for Florida lawyers who choose to include in their retainer letter provisions requiring clients to arbitrate fee disputes and all other claims arising out of the engagement and provision of professional services. To be clear, despite being repugnant to some, predispute agreements to arbitrate legal malpractice, breach of fiduciary duty, and other claims are here to stay, as is the debate concerning their ethical propriety.¹⁶

• The Applicable Florida Rules of Professional Conduct
Based on the reasoning of, and the authorities cited in, Opinion 02-9, one may assume — albeit with some risk — that 1) an arbitration clause in a retainer letter requiring arbitration of a client’s malpractice, breach of fiduciary duty, and other claims against the lawyer does not violate Rule 4-1.8(h);¹⁷ and 2) Rule 4-1.8(a) prescribes the minimum requirements for the lawyer’s obtaining informed consent from the “potential” client, even though the rule is expressly limited to a lawyer’s business transactions with an “existing” client.¹⁸ Newly adopted Rule 4-1.5(i), while addressing only provisions mandating arbitration of fee disputes, is instructive in a broader sense.¹⁹ First, any predispute agreement requiring arbitration of a client’s breach of fiduciary duty or malpractice claims against the lawyer must be preceded by the lawyer “first advising that person in writing that the potential client should consider obtaining independent legal advice as to the advisability of entering into an agreement containing such mandatory arbitration provisions.” Second, the retainer letter should contain a notice substantially similar to that required by Rule 4-1.5(i). The terms of the arbitration provision and accompanying notice are discussed below. Before doing so, however, one must consider the concept of “informed consent.”

Under Rule 4-1.8(a)(3), a client must give “informed consent, in a writing signed by the client, to the essential terms of the transaction and the lawyer’s role in the transaction, including whether the lawyer is representing the client in the transaction.” Consent which is less than “informed” simply will not do.

The Florida Rules of Professional Conduct state: “‘informed consent’ denotes the agreement by a person to a proposed course of conduct after the lawyer has communicated adequate information and explanation about the material risks of and reasonably available alternatives to the proposed course of conduct.”

The comments contained in the terminology section of the Florida Rules of Professional Conduct expand on the concept of “informed consent,” providing in pertinent part as follows:

Many of the Rules of Professional Conduct require the lawyer to obtain the informed consent of a client or other person . . . . The communication necessary to obtain such consent will vary according to the rule involved and the circumstances giving rise to the need to obtain informed consent. The lawyer must make reasonable efforts to ensure that the client or other person possesses information reasonably adequate to make an informed decision. Ordinarily, this will require communication that includes a disclosure of the facts and circumstances giving rise to the situation, any explanation reasonably necessary to inform the client or other person of the material advantages and disadvantages of the proposed course of conduct and a discussion of the client’s or other person’s options and alternatives. In some circumstances it may be appropriate for a lawyer to advise a client or other person to seek the advice of other counsel. A lawyer need not inform a client or other person of facts or implications already known to the client or other person; nevertheless, a lawyer who does not personally inform the client or other person assumes the risk that the client or other person is inadequately informed and the consent is invalid. In determining whether the information and explanation provided are reasonably adequate, relevant factors include whether the client or other person is experienced in legal matters generally and in making decisions of the type involved, and whether the client or other person is independently represented by other counsel in giving the consent. Normally, such persons need less information and explanation than others, and generally a client or other person who is independently represented by other counsel in giving the consent should be assumed to have given informed consent.

These comments make clear that “one size does not fit all” when a lawyer is required to obtain informed consent. Because informed consent, in a writing signed by the client, is the sine qua non of an ethically proper arbitration clause, the task of obtaining informed consent should be undertaken via 1) the wording of the arbitration provision and accompanying notice; and 2) the policies and procedures used in obtaining informed consent.

• A Sample Arbitration Provision and Accompanying Notice
Based in large part on the arbitration provision considered by The Florida Bar’s Professional Ethics Committee in Opinion 02-9, that opinion’s view that it is ethically improper to require clients to arbitrate disciplinary matters, and newly adopted Rule 4-1.5(i) of the Florida Rules of Professional Conduct, the following arbitration provision and accompanying notice are suggested:

Agreement to Arbitrate

You agree that, with one exception, any and all disputes arising under or relating to this letter agreement, or the engagement and legal services to be rendered, including but not limited to fee disputes, legal malpractice claims, and claims of breach of fiduciary duty, breach of contract, or any others, shall be resolved exclusively through binding arbitration before [specify arbitral forum and/or rules to be used]. The one exception to your agreement to arbitrate concerns ethical grievances which you may have. Nothing in this agreement limits, in any way, your right to file and pursue any ethical grievance against me or my firm to the fullest extent permitted by applicable law.

You understand that by agreeing to arbitration as a mechanism to resolve all potential controversies, disputes, or claims between us, you are waiving certain rights, including the right to bring an action in court, the right to a jury trial, the right to broad discovery, and the right to an appeal. You understand that in the context of arbitration, a case is decided by an arbitrator (one or more), not by a judge or a jury. You agree that, in the event of such controversy, dispute, or claim between us, the prevailing party will be entitled to recover from the losing party all costs and expenses he, she, or it incurs in bringing and prosecuting, or defending, the arbitration, including reasonable attorneys’ fees and costs.

Please review this letter carefully to be certain that it accurately sets forth our agreement. In the event that you do not understand anything in this letter, please let us know so further written explanations can be provided.

We strongly recommend that before signing this letter you consult an independent attorney to counsel you on whether it is fair or appropriate for you to agree, as we have asked, that all disputes which may arise between us be resolved by arbitration. With regard to this letter agreement, we are not your counsel and our interests are adverse to yours. Moreover, understand that you can and should take as much time as you feel necessary to communicate with independent counsel before signing this letter. You are not obligated to sign this letter. If you chose to do so, your decision should be one made after careful reflection, not on the spur of the moment.

Notice: This agreement contains provisions requiring arbitration of fee disputes as well as any controversy, dispute, or claim between us, whether based on this agreement, on a claim of inadequate representation or breach of fiduciary duty, or on any other grounds. Before you sign this agreement you should consider consulting with another lawyer about the advisability of making an agreement with mandatory arbitration requirements. Arbitration proceedings are ways to resolve disputes without use of the court system. By entering into agreements that require arbitration as the way to resolve fee and all other disputes which may arise, you give up (waive) your right to go to court to resolve those disputes by a judge or jury. These are important rights that should not be given up without careful consideration.

• Suggested Policies and Procedures
Obviously, one can practice law ethically and successfully without requiring clients to sign retainer letters requiring arbitration of fees and all other potential claims arising out of the attorney-client relationship. Thus, a lawyer’s decision to include a broad arbitration provision in a retainer letter is based on preference, not need.²⁰ In obtaining this preferred arbitration agreement, lawyers would be well advised to observe the following policies and procedures.

First, absent exigent circumstances, insist that potential clients refrain from signing the retainer letter “on the spot.” As a matter of policy, insist that potential clients wait at least 24 to 48 hours before signing and returning the retainer letter.

Second, exercise judgment in selecting potential clients whom you will ask to sign retainer letters containing arbitration clauses. The less sophisticated and experienced the potential client is, both generally and with regard to legal matters, the less inclined you should be even to ask for an agreement to arbitrate all claims. On the other hand, if the potential client is very sophisticated in legal matters, a sophisticated consumer of legal services or, in fact, obtains counsel from an independent attorney regarding the arbitration provision (and that other lawyer confirms in writing his or her role in the “informed consent” process), the more inclined you should be to include an arbitration provision in your retainer letter.

Third, and perhaps most important, if you ask a “suitable” potential client to sign a retainer letter containing an arbitration clause of the type set forth above and the potential client demurs, write an appropriate letter declining the proffered representation, identifying applicable statute of limitations or other procedural issues/deadlines, and suggesting other attorneys whom the potential client may want to consider for the representation. Remember, often the most important decision made by a lawyer in a matter is deciding, in the first instance, whether to undertake the potential client’s representation. If it appears the attorney-client relationship is likely to get off on the wrong foot, one should abandon the journey.

Caveat Emptor
Before closing, a disclaimer is in order. If one were to call The Florida Bar Ethics Hotline and ask about the ethical propriety of an arbitration clause in a retainer agreement requiring the client to arbitrate legal malpractice claims, one is almost certain to receive a response that such a clause is not recommended because the attorney would be at risk to use it. I say this with some degree of certainty having spoken personally to an ethics counsel who expressed concern about the initial draft of this article submitted to The Florida Bar Journal. So in fairness to those who read this article, please remember that Proposed Advisory Opinion 02-9, although drafted by The Florida Bar’s Professional Ethics Committee and never substantively criticized, was withdrawn by The Florida Bar’s Board of Governors even though the opinion is correct and reflects the majority view of those state bar ethics committees which have considered the issues as well as the American Bar Association. Should readers who adopt the suggestions found in this article have the misfortune of finding themselves before a Florida Bar grievance committee, I recommend that you offer Opinion 02-9 in support of your position and then call as expert witnesses the members of The Florida Bar’s Professional Ethics Committee who authored that opinion. Having said that, I must still conclude by saying caveat emptor.

¹ See, e.g., Fla. Const. art I, §21 (“Access to courts — The courts shall be open to every person for redress of any injury, and justice shall be administered without sale, denial or delay.”).
² “In Florida as well as under federal law, the use of arbitration agreements is generally favored by the courts.” Global Travel Marketing, Inc. v. Shea, 908 So.2d 392, 397 (Fla. 2005). See also id. at 398 (“Agreements to arbitrate are treated differently from statutes compelling arbitration. The difference arises because the rights of access to courts and trial by jury may be contractually relinquished, subject to defenses to contract enforcement including voidness for violation of the law or public policy, unconscionability, or lack of consideration.”).
³ See In Re: Amendments To The Rules Regulating The Florida Bar, No. SC06-736 (Fla. Dec. 20, 2007), available at www.floridasupremecourt.org/decisions/2007/index.shtml.
⁴ The newly added subparagraph (i) provides: “Arbitration Clauses. A lawyer shall not make an agreement with a potential client prospectively providing for mandatory arbitration of fee disputes without first advising that person in writing that the potential client should consider obtaining independent legal advice as to the advisability of entering into an agreement containing such mandatory arbitration provisions. A lawyer shall not make an agreement containing such mandatory arbitration provisions unless the agreement contains the following language in bold print: Notice: This agreement contains provisions requiring arbitration of fee disputes. Before you sign this agreement you should consider consulting with another lawyer about the advisability of making an agreement with mandatory arbitration requirements. Arbitration proceedings are ways to resolve disputes without use of the court system. By entering into agreements that require arbitration as the way to resolve fee disputes, you give up (waive) your right to go to court to resolve those disputes by a judge or jury. These are important rights that should not be given up without careful consideration.”
⁵ Practitioners use various phrases, e.g., “retainer letter,” “retainer agreement,” “engagement letter,” “retention letter,” and “fee agreement,” in referring to the document that memorializes the terms and conditions of the agreement between lawyer and client. All references above to “retainer letter” are intended to include all comparable phrases typically used.
⁶ See Notices, The Florida Bar News, April 1, 2003, available at www.floridabar.org/DIVCOM/JN/JNNews01.nsf/Articles?OpenView&Start=117&Count=30&Expand=117#117.
⁷ The committee noted the minority view, stating: “At least one state has concluded that a mandatory arbitration clause is impermissible. Ohio Ethics Opinion 96-9. The Ohio Board of Commissioners on Grievances and Discipline concluded that the lawyer would act against the client’s best interest by using such a clause, because the client is not in a position to decide for or against arbitration until the particular dispute arises. Id.”
⁸ See Gary Blankenship, Committee to define ‘past relationships’, The Florida Bar News, January 15, 2004, available at www.floridabar.org/DIVCOM/JN/JNNews01.nsf/Articles?OpenView&Start=88&Count=30&Expand=98#98. With regard to the procedures for obtaining advisory ethics opinions and the role played by the Board of Governors of The Florida Bar, the reader is directed to a) Ch. 2 of the Rules Regulating The Florida Bar entitled “Bylaws Of The Florida Bar,” in particular Bylaw 2-9.4; and b) The Florida Bar Procedures For Ruling On Questions Of Ethics, availble at www.floridabar.org/tfb/TFBETOpiavailblen.nsf/ca2dcdaa853ef7b885256728004f87db/
7b6858c726e19c8a85256b2f006ca50b?OpenDocument.
⁹ Id.
¹⁰ The minutes of the December 5, 2003, meeting of The Florida Bar Board of Governors may be found at www.floridabar.org/TFB/TFBResources.nsf/Attachments/
1EDEB23FBC2599FA85256E40006
FD52A/$FILE/2003Decembermin.pdf?OpenElement.
¹¹ To bridge the generation gap for those younger members of the bar, the lyrics for “Is That All There Is?” were written by Jerry Leiber and Mike Stoller. Perhaps the most famous rendition of the song was performed by the incomparable Peggy Lee. The lyrics may be found at www.leoslyrics.com/listlyrics.php?id=9115. The last verse of song reads as follows:“Is that all there is, is that all there is. If that’s all there is my friends, then let’s keep dancing. Let’s break out the booze and have a ball, if that’s all there is.”
¹² The minutes of the October 15, 2004, meeting of The Florida Bar Board of Governors may be found at www.floridabar.org/TFB/TFBResources.nsf/Attachments/27DEF328BCEED83085256F5C005
1BA7F/$FILE/2004Octoberbogmin.pdf?OpenElement.
¹³ Minutes of the December 10, 2004, meeting of The Florida Bar Board of Governors may be found at www.floridabar.org/TFB/TFBResources.nsf/Attachments/71E491CF44E48B6E85256F9C007
D5CA5/$FILE/bogmin12-04.pdf?OpenElement.
¹⁴ Minutes of the April 8, 2005, meeting of The Florida Bar Board of Governors may be found at www.floridabar.org/TFB/TFBResources.nsf/Attachments/02DAB51B088BE3F2852570210059
D8DC/$FILE/bogminutesApril%202005.pdf?OpenElement (emphasis in original).
¹⁵ The petition of The Florida Bar may be found at www.floridasupremecourt.org/clerk/comments/2006/index.shtml.
¹⁶ Matthew J. Clark, The Legal and Ethical Implications of Predispute Agreements Between Attorneys and Clients to Arbitrate Fee Disputes, 84 Iowa L. Rev. 827 (1999); Mark Richard Cummisford, Resolving Fee Disputes And Legal Malpractice Claims Using ADR, 85 Marq. L. Rev. 975 (2002); Robert J. Kraemer, Attorney-Client Conundrum: The Use of Arbitration Agreements For Legal Malpractice in Texas, 33 St. Mary’s L. J. 909 (2002); Matthew C. Mickelson, Enforcement Of Binding Arbitration Provisions In Retainers, 28 Los Angeles Lawyer 12 (2005); Jean Fleming Powers, Ethical Implications of Attorneys Requiring Clients to Submit Malpractice Claims to ADR, 38 S. Tex. L. Rev. 625 (1997); Steven Quiring, Attorney-Client Arbitration: A Search for Appropriate Guidelines for Predispute Agreements, 80 Tex. L. Rev. 1213 (2002); Louis A. Russo, The Consequences Of Arbitrating a Legal Malpractice Claim: Rebuilding Faith in the Legal Profession, 35 Hofstra L. Rev. 327 (2006); Robert Summers, Arbitration Between Attorneys and Clients, 61 Tex. B. J. 330 (1998); David Hricik, Lawyer-Client Arbitration Agreements, I E-Ethics II (April 2001), available at www.hricik.com/eethics/1.2.html; Walter W. Steele, Jr. & David J. Moraine, From The Dark Tunnel . . . Arbitration Clauses, III, 9 Ethics Chat 3 (Summer 2006), available at www.waltersteele.ws/Summer2006.pdf.
¹⁷ Rule 4-1.8(h) of the Florida Rules of Professional Conduct provides: “(h) Limiting Liability for Malpractice. A lawyer shall not make an agreement prospectively limiting the lawyer’s liability to a client for malpractice unless permitted by law and the client is independently represented in making the agreement. A lawyer shall not settle a claim for such liability with an unrepresented client or former client without first advising that person in writing that independent representation is appropriate in connection therewith.”
¹⁸ Rule 4-1.8(a) of the Florida Rules of Professional Conduct provides: “(a) Business Transactions With or Acquiring Interest Adverse to Client. A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security, or other pecuniary interest adverse to a client, except a lien granted by law to secure a lawyer’s fee or expenses, unless: 1) the transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing to the client in a manner that can be reasonably understood by the client; 2) the client is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel on the transaction; and 3) the client gives informed consent, in a writing signed by the client, to the essential terms of the transaction and the lawyer’s role in the transaction, including whether the lawyer is representing the client in the transaction.”
¹⁹ A lawyer’s use of the Rule 4-1.5(i) in the client retainer letter may have unintended consequences. For example, the scope of the arbitration clause is limited to fee disputes. Should the lawyer seeking to recover fees due from a client commence an arbitration proceeding, the client is not obliged to assert otherwise compulsory counterclaims for breach of fiduciary duty or garden variety malpractice. In all likelihood, the client will sue the lawyer in court, seek a stay of the fee arbitration, prosecute the civil action to verdict and judgment, and try to use the jury’s verdict as the basis for collaterally estopping the lawyer from contesting various issues in the fee arbitration. It is this lack of symmetry of claims, defenses, and counterclaims subject to mandatory arbitration under Rule 4-1.5(i) which renders the amendment a perilous choice for use in a retainer letter.
²⁰ If, prior to the commencement of a representation, a lawyer felt as though he or she “needed” to have the prospective client agree to arbitrate all potential disputes, the lawyer would be well advised to forego the representation.


Brian F. Spector, a lawyer since 1978, presently concentrates on alternative dispute resolution, principally mediation. He is a member of the Supreme Court of Florida’s Commission on Professionalism and Committee on Standard Jury Instructions — Contract and Business Cases. He is a member of the American Law Institute and has served as an adjunct professor of law teaching a variety of courses, including professional responsibility. While actively engaged in the practice of law, he was certified for 10 years by The Florida Bar in business litigation, having served on the inaugural Business Litigation Certification Committee.

This column is submitted on behalf of the Business Law Section, Merrick Gross, chair, and Melanie Damian, editor.