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March 15, 2014
Board of Governors to meet in Palm Coast in March

Approving a budget for the 2014-15 fiscal year, voting on new rules for lawyers belonging to private lawyer referral services, and rule amendments affecting trust account compliance reporting will headline the Bar Board of Governors meeting March 28 at Palm Coast.

The board also will consider a Bar member petition to raise annual Bar membership fees by up to $100 with the extra funds going to The Florida Bar Foundation.

It will also look at rule amendments about what confidential information law firms can share when they merge or a lawyer leaves one firm for another and clarifying issues about nonrefundable, advance, and retainer fees.

Finishing touches were still being put on the new Bar budget as this News went to press, and preliminary figures were not available. But the budget does not call for any raise in the $265 annual membership fee for active members and the $175 membership fee for inactive members. It is the 13th year in a row there has been no increase in membership fees.

The 2013-14 budget projected revenues before investment income of nearly $38 million, with membership fees accounting for almost $24.9 million of that total.

The lawyer referral service rule amendments are a multi-year effort that began with the Special Committee on Lawyer Referral Services and its report that has been reviewed by the Board Review Committee on Professional Ethics.

Among the suggested rule changes are requiring lawyers who belong to lawyer referral services to report their participation to the Bar, requiring that clients make the initial contact after being referred to a lawyer, and strictures against suggesting a referred client use other services provided by the referral service — such as medical treatment — unless the lawyer is satisfied that the referral is in the client’s best interest and the client gives written confirmation that he or she has been told about the potential conflict.

The special committee had recommended banning referred clients from being sent to other services offered by the referral service, but the BRC decided that went too far.

The Disciplinary Procedure Committee has presented the board with two trust account-related rules.

One would end the requirement on the annual membership fee form that Bar members verify compliance with the trust accounting rules. (There are actually three options for members: complying, not complying, or their practice does not require them to have a trust account.)

DPC Chair Jay Manuel told the board in January that lawyers who followed the Bar rule requiring them to report compliance with trust account rules were facing more severe punishment for minor trust account violations than lawyers who did not check any of the three options. Committee members felt that was unfair and thus recommended the change.

The second rule amendment encourages lawyers to replace shortages in their trust accounts — whether from lawyer malfeasance, unexpected or erroneous bank changes, or employee theft — but also requires that the shortfall be reported to the Bar. Manuel noted that Bar rules prohibiting commingling of trust account and other funds could discourage trust account shortages from being addressed.

To protect clients, the committee wanted to encourage the replacement of funds, regardless of the cause of the shortage.

President Eugene Pettis told the board in January that a group of Bar members were working on a petition to raise annual membership fees by up to $100, with the extra money going to The Florida Bar Foundation to make up for its recent declines in attorney trust account interest income (see story, here).

Bar rules allow any 50 members to petition the Supreme Court for a rule change, although the petition must be submitted to the Board of Governors for its comment before it is filed with the court.

Pettis said he expects the board to discuss the issue at its March meeting. The petition was submitted to the Bar late last month.

The Rules Committee has given the board two rules for action at the March meeting.

A change to Rule 4-1.6 would add subsection (c)(6) to provide for the limited disclosure of information “to detect and resolve conflicts of interest between lawyers in different firms arising from the lawyer’s change of employment or from changes in the composition or ownership of a firm, but only if the revealed information would not compromise the attorney-client privilege or otherwise prejudice the client.”

It would also add subsection (e) to provide: “A lawyer must make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client.”

The second amendment defines retainers, flat fees, and advance fees in Rule 4-1.5 and specifies that nonrefundable retainers and flat fees are the lawyer’s property and should not be deposited in trust accounts.

It also requires that advance fees must be held in a trust account until they are earned.

Aside from those actions, the board will pick one lawyer for a two-year term on the Supreme Court’s Bar Admissions Committee.

[Revised: 11-06-2014]