The Florida Bar

Ethics Opinion

Opinion 68-58

January 17, 1969
Advisory ethics opinions are not binding.
A professional association that includes the designations “Professional Association,” “P.A.,” or
“Chartered” in the firm name gives clients adequate notice of its corporate form. If the corporation
operates under a fictitious name, it is sufficient notice if the client is informed at the outset of the
retainer that the firm is a professional association. It is permissible that a retirement plan for
nonlawyer employees is based in part on firm profits.
Note: Effective July 1, 1996, Rule 4-8.6 of the Rules Regulating the Florida Bar was amended
to permit Florida lawyers to practice law in the form of professional limited liability
companies or registered limited liability partnerships “organized or qualified under
applicable law.” Amendments to Rules Regulating the Florida Bar, 677 So. 2d 272 (Fla. 1996).
See also, Chapters 621 and 622, Florida Statutes.

33, 34
ABA 303, 311

Chairman MacDonald stated the opinion of the committee:
In its Opinion 303 (rendered November 27, 1961), the Committee on Professional Ethics of
the American Bar Association held it proper for attorneys to practice in a corporate form provided
that specified guidelines were observed.
In the course of its interpretation of the various relevant Canons, the Committee observed as
Canon 33 provides that in the selection and use of a firm name, no false,
misleading, assumed or trade name should be used. The name under which a group
of lawyers practices would be misleading if it failed to reveal any restrictions on the
responsibility of the individual lawyers for the legal services rendered.
The Committee concluded this phase of its opinion by requiring the observance of two
safeguards, including the following:
2. Restrictions on liability as to other lawyers in the organization must be made
apparent to the client.
By the latter reference, the Committee referred to those provisions of various state statutes
allowing for the formation of professional associations or corporations which, in effect, provide that
lawyers, other than the ones rendering the legal service to a client, are not under any personal
liability beyond the obvious one extending to the limit of their investment in the corporation. In
other words, such liability of the non-servicing stockholder was not unlimited as would be the case
in a typical partnership.

A firm of Florida lawyers, presently contemplating the formation of a professional
association under the provisions of Chapter 621, Florida Statutes, inquire as to what, if any, means
should be followed by the professional association or corporation and its individual stockholders to
comply with these safeguards.
It should be observed at the outset that, of course, the opinion of the eminent Committee of
the American Bar Association, while highly persuasive, is not necessarily binding upon members of
The Florida Bar. Beyond this, Florida lawyers are confronted with a somewhat different situation
than that confronting the American Bar Association Committee which interpreted the various
statutory procedures then in the course of adoption in several states in the light of the existing
Canons, and in particular, the then existing Canon 33. The American Bar Association has
recommended no amendments to the Canons by reason of the increased popularity of the
professional association as a vehicle for the practice of law. To the contrary, following the adoption
of Chapter 621, Florida Statutes, in 1961, The Florida Bar petitioned the Supreme Court for express
recognition in the Integration Rule and in the Canons of the propriety of the practice of law through
the means of a professional association or professional service corporation. This sanction was given
with appropriate cautionary language, In re: The Florida Bar, 133 So.2d 554 (Fla. 1961). In a
comprehensive opinion by Justice Thornal, the Court discussed at considerable length the basis for
the evolution of this means of practicing law, citing in particular the apparent tax advantages, or
more properly stated, the tax equality, to be granted the self-employed lawyer (whether as a sole
practitioner or as a partner) as contrasted with a corporate employee, in effect counseling that so
long as the traditional professional values, and in particular, the personal nature of the
attorney-client relationship, were safeguarded, such practice will be proper upon the adoption of the
appropriate amendments therein set forth.
In the light of this express approval by the Supreme Court of Florida, and the sanction of the
corporate means of operation by the legislature of Florida, it is manifest that it is entirely proper and
permissible for Florida lawyers to practice law in accordance with the amended Canon 33 and the
newly adopted Article XV of the Integration Rule. In our judgment, a professional association,
including appropriate language in its corporate name, as required by Section 621.12, Florida
Statutes, 1 sufficiently notifies its clients of its nature by including the same within its letterhead.
In the event that the corporation chooses to operate under a fictitious name, as is permissible
under Section 621.12, a possibility clearly recognized and sanctioned by amended Canon 33 and
paragraph 4(d), Article XV of the Integration Rule, it is, in our judgment, only necessary that at the
outset of the retainer the lawyer generally notify the client that in fact the ostensible partnership is a
professional association. There would appear to be no necessity to otherwise engage in a discussion
of the legal consequences unless, of course, inquiry is made by the client, in which instance full
disclosure of the legal nature of the association should be made, just as should be made on the rare
occasion that particular clients might inquire as to the existence or amount of professional liability
insurance. This is not to say that we do not share to some extent the concern of the American Bar
Association Committee that the public not be misled, but it seems to us that its fear is far more
theoretical than practical, and that few, if any, clients come to lawyers relying upon the totally
unlimited liability of all partners; that the few sophisticated clients who might appreciate the
difference would be sophisticated beyond this point to the extent of placing considerably more

“Chartered” or “professional association,” or the abbreviation “P.A.”

reliance upon professional liability insurance now generally carried by most lawyers, and that in the
light of the express sanction of the entire method of operation given by our Supreme Court, we
should render no opinion posing such onerous requirements as to make it impossible for lawyers to
practice in this manner should they so desire.
We are secondly asked whether it is possible for members or stockholders in the
professional service corporation to make contributions to retirement or pension plans for their
employees which find a basis in the profits of the corporation. In its Opinion 303, the American Bar
Association Committee observed:
However, if the salary of a non-lawyer employee is based on the percentage of
the net profits, a division of fees for legal services would be involved and Canon 34
would prohibit it. Thus, if a professional association or professional corporation is
organized to practice law and it is approved as a corporation for federal income tax
purposes, it would not be ethically proper for it to have a profit-sharing plan if
non-lawyers were included as the beneficiaries of the plan.
It seems to us that a subsequent opinion of the American Bar Association Committee,
Opinion 311 (rendered April 8, 1964), may be inconsistent with the quoted portion of Opinion 303.
There the American Bar Association Committee held that a retirement plan by attorneys for
themselves and their laymen employees under federal income tax provisions governing
self-employed persons was not unethical even though the benefits were measured by the employee’s
salary and were payable only if profits existed from which to pay them, commenting that “profits
are not a measure of the additional compensation but only a contingent limitation. . . .” In any event,
and without at all endeavoring to launch into a technical discussion of the niceties of tax law, it
seems to us that so long as a law firm adopts a conventional deferred compensation or retirement
plan for lay and legal personnel, funded by contributions from the firm profits, and if such plan is a
reasonable and ordinary method of giving fringe benefit additional compensation to bona fide
employees, it is irrelevant whether or not the firm is organized as a professional association, and
that the basic concern of Canon 34, to preclude fee splitting, is not offended. As a practical matter,
it is our understanding that lay employees would ordinarily find the contribution of the firm for their
benefit would be based upon their salary even though presumably arising from firm profits just as
the original salary did, and thus, the reasoning set forth in Opinion 311 would apply. However, even
if the particular plan utilized caused contributions to be made on a basis other than salary, we would
be unable to share the concern expressed in Opinion 303, if the plan in fact was a bona fide
retirement or deferred compensation plan as contrasted with a subterfuge to avoid Canon 34.