Board rejects family-related contingency fee
Board rejects family-related contingency fee
A lawyer handling only the division of a pension after a divorce has been granted may not charge a contingency fee, the Bar Board of Governors has decided, ratifying a Professional Ethics Committee position.
The board acted at its January 31 meeting in a case that could have implications for a Family Law Section initiative to revamp how fees are charged and collected in some divorce and related cases. In taking its action, the board went against the recommendation of its Board Review Committee on Professional Ethics (BRC).
The board also addressed advertising appeals and other ethics matters.
The pension case involved a couple who had been divorced in Germany, but the German court said it lacked the jurisdiction to decide how to divide up the husband’s military pension. The German attorney, who is also a member of The Florida Bar, then
asked if he could charge a contingency fee for handling the pension matter only.
A Bar ethics staff opinion said that would be prohibited under Bar rules, and the PEC agreed.
BRC Chair Louis Kwall said that panel decided it would be permissible, but noted its decision was limited to the facts of this case only. “It doesn’t deter reconciliation and the wife has no other means to retain an attorney,” he said.
Bar President Tod Aronovitz noted the Family Law Section is pushing for changes in the way fees can be charged in family law cases, including allowing some contingency fees and allowing liens on the marital homes in some limited circumstances. Those matters are still under study by the Disciplinary Procedure Committee.
“The Family Law Section has contacted me repeatedly on this subject,” he said. “This is a particular case dealing with a specific set of facts. There is a bigger issue out there and this vote will probably have an impact in the future.”
Kwall said that is why the BRC limited its decision to the case facts only.
Board member Larry Ringers noted if the lawyer had taken the case under a contingency fee arrangement, there was no rule that would allow the Bar to prosecute him.
But other board members were skeptical. “It’s my understanding you can’t take a contingency fee in a divorce case or any part of it, period,” said board member Jay White. “That’s what we’re being asked to do.”
“I am adamantly opposed to contingency fees in family law matters on any matter,” said board member Chris Lombardo, who noted he does family law work. “You kind of encourage taking an unreasonable position to get more than 50 percent [of the pension] because it increases your fee. When you get the extremely large cases, the abuse potential is going to be huge.”
He also argued lawyers might tend to bifurcate cases to get the contingency fee on asset division, noting it’s not uncommon to get a divorce granted fairly quickly while leaving financial issues to be sorted out later.
The board voted to reject the BRC recommendation and support the PEC and staff opinion that a contingency fee could not be charged.
On a second matter, the board agreed with the BRC that no opinion should be given because a court had already ruled on the question. The attorney involved had represented a condominium association and individual unit holders in a construction defects case against the project developer. He was now defending the association in suits over the same issue brought by individual unit holders, including possibly some he represented in the earlier suit.
Kwall said the committee decided the case was moot since a court already found there was no conflict of interest. The board agreed, and declined to give any advice.
The board also approved a suggestion by board member Ian Comisky that a letter be prepared to the Security and Exchange Commission over proposed federal rules governing the conduct of corporate attorneys. Comisky said the rules, released for comment the day before the board meeting, contravened a Bar ethics opinion.
“The letter would state that the Florida ethics opinion was correct and the attempt to federalize the ethics rules should be carefully thought about,” he said.
The BRC also reported on two advertising appeals.
In one, the board voted to reverse its holding that televised ads could not show the exterior of a law office.
Bar President-elect Designate Kelly Overstreet Johnson said the board has already approved changes to the rules which would allow showing the outside of a law office. Those changes will be filed with the Supreme Court later this month.
She noted the rule allows a lawyer to show his office and the board had interpreted that as being limited to the inside of an office, not a building exterior. “I don’t see why we’re not going to go ahead and reverse our prior decision,” she said.
She also argued that the Standing Committee on Advertising finding the ad violated the rules seemed to be based mostly on the board’s prior position.
Kwall said the BRC voted 3-2 to uphold the advertising committee on the premise the rules should continue to be enforced until the rule amendments are approved by the court.
The board also agreed with the BRC’s 4-0 vote to overturn the Standing Committee on Advertising and allow a law firm to show its phone book ad as part of a television ad. Kwall said although Bar rules do not allow the showing of phone books in TV ads, in this case the phone book ad included only information that would be allowed as part of a TV ad.
The board voted 24-7 to allow the ad.