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Board tentatively approves no new fees Bar budget

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Dori-Foster-Morales

Dori-Foster-Morales

At a March 5 virtual meeting, the Board of Governors, among other things, tentatively approved a $44.09 million budget for 2021-2022, recommended a rule change that could increase access to justice funding, and learned “The Florida Bar Recommended Best Practices Guide for Remote Court Proceedings” is ready for distribution.

And in a sign that the COVID-19 pandemic is waning, President Dori Foster-Morales announced that the board intends to meet in person in May, the first time it has done so in more than year.

“It will be safe and secure,” Foster-Morales said, adding that the meeting, scheduled for Duck Key, will feature outdoor activities, and also be streamed live via videoconference. The format for the June Annual Convention, however, remains undecided.

Meanwhile, the board voted 44-0 to tentatively approve the Bar’s General Operating Budget for Fiscal Year 2021-2022 that projects $41.44 million in revenues and $44.09 million in expenditures, with a $2.65 million operating loss. Even with a projected deficit, the projected ending fund balance of $27.5 million at June 30, 2022, will be sufficient to support basic operations for a few additional years and will not require the consideration of a fee increase.

Executive Director Joshua Doyle said the plan reflects a host of spending reductions, including the elimination of selected long-term vacant positions and transitioning several paper operations to digital operations.

The operating budget will be published for member feedback before the board considers a revised proposal in May. A final proposed budget will be submitted to the Supreme Court in June.

In other business, the board voted 45-0 to approve a proposed amendment to Rule 5-1.1 (Trust Accounts) that would require banks to pay a set rate for lawyers’ IOTA trust accounts.

The proposal would set the minimum interest rate on IOTA accounts at 25 basis points [the current rate averages 11 basis points] and allow it to rise when the interest rates increase.

The move was suggested by public member Jody Hudgins, a banker who also serves on the board of The Florida Bar Foundation. Hudgins said the change would give a voice to those that have no voice in the administration of interest rates in Florida banks.

“Generally, as bankers, we react to interest rate changes based on market conditions primarily, and customer feedback secondarily, with the latter playing a significant role in the decision process,” Hudgins said. “We’ve all heard the phrase ‘it’s the squeaky wheel that gets the grease,’ but in the case of the rates paid on IOTA accounts there has been no one squeaking.”

Hudgins estimated that every extra basis point paid on IOTA accounts yields an extra $670,000 for the Foundation and its grant programs.

Hudgins said while his banking friends might take exception to the floor rate, or minimum rate of 0.25%, the rate differential accrues to the banks when non-maturing deposit rates return to normalized levels.

“Florida banks and credit unions want to meet the needs of their customers and communities in the markets they serve, this rule change will assist in meeting those needs,” he said.

Board Technology Committee Chair Jay Kim also reported that the “Florida Bar Recommended Best Practices Guide for Remote Court Proceedings” is complete and will be posted on the Bar’s COVID-19 Pandemic Resources and LegalFuel websites.

“It will be updated as necessary as more things develop,” Kim said, before thanking all the members of a subcommittee who worked on revisions.

In another matter, the board voted 41-4 to affirm a Board Review Committee on Professional Ethics recommendation that Palm Coast lawyer Marc Dwyer’s website — “500Bankruptcy.com” — does not comply with Bar rules.

Dwyer, a partner with Chiumento Dwyer Hertel Grant, voluntarily submitted the webpage for review late last year, although he was not required to do so by Bar rules.

At a March 4 meeting, the Board Review Committee voted 8-4 to reverse a Standing Committee on Advertising decision that the advertisement was permissible.

The webpage’s most prominent feature is “500Bankruptcy.com,” but it also includes Dwyer’s name and the name of his firm, in fine print.

The Standing Committee on Advertising decision overturned a staff opinion that found the advertisement does not comply with Rule 4-7.21 (c) and Ethics Opinion 94-6. They require a firm to use a trade name consistently on signed court filings, communications, ads, letterheads, business cards, office signs, and fee contracts.

Dwyer argued the advertisement is not a trade name and is not misleading to consumers. He said he chose it because it’s easy to remember, and ties to a firm promotion for $500 discounts and a $500 down payment in a fee schedule.

But board member Gary Lesser warned that allowing the webpage would lead to a flood of misleading advertising.

“This is very, very important, the staff got it right, period,” Lesser said. “Where does it lead?”

Board member Jay Kim disagreed, saying he was worried that Bar rules don’t reflect the “technologically evolving” legal marketplace.

“500Bankruptcy.com is only a website address, it’s a URL, it is not, as far as I can tell, used in any other context,” he said. “I look at this URL as nothing different than a phone number.”

In an unrelated matter that did not require board action, the board received, on first reading only, a proposed rule drafted by the Special Committee on Judicial Referrals on Discipline Matters.

The committee drafted proposed Rule 3.718 Disposition of Inquiries or Complaints Referred to the Bar by Members of the Judiciary.

The proposed rule sets out a series of procedures for reviewing discipline matters referred to the Bar by judges.

Co-chair Paige Greenlee said the committee met several times and surveyed other state bars to determine how they handle similar cases, but found few examples.

“The committee pretty quickly came up with a consensus of what the rule should look like,” she said.

The proposal will go through the normal rule amendment process, including a fiscal, strategic and procedural review, before the board is expected to take final action in May.

In other business, the board approved three new additions to the Member Benefits Program, as approved by the Member Benefits Committee at a January 14 meeting.

• Ally Bank digital home mortgage: Company material describes the service as “competitive pricing at all mortgage tiers for new and refinanced mortgage loans.” Florida Bar members are eligible for $500 off closing costs, and the Bar will receive non-fee revenue quarterly based on traffic on the co-branded Florida Bar and Ally landing page on the Member Benefits pages of The Florida Bar website.

• Axel Go private file sharing platform: According to company material, Axel Go is a private file-sharing platform supercharged by blockchain. “Axel Go helps attorneys comply with Professional Rules of Conduct by mitigating breaches and preventing the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client.” The company is offering complimentary access to AXEL Go “Basic” accounts and discounted access to higher tier subscription plans. Axel is offering promotional allowance non-fee revenue to The Florida Bar equivalent to 10% of subscription sales and will also provide an education component to Florida attorneys to assist in the development of best practices related to privacy and security.

• LawMatics Client Intake and Marketing CRM: Company material says the product helps lawyers with such things as the automation of any part of the intake and marketing process, online custom forms, email marketing, SMS/text messaging automation, e-signatures and document automation, as well as marketing analytics and custom reporting. LawMatics will offer Bar members a 20% discount on all LawMatics subscription pricing. The company will pay a quarterly marketing fee to the Member Benefits Program.

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