The Florida Bar

Florida Bar News

Lawyer ad, fee sharing, firm ownership rules examined

Senior Editor Top Stories

Rule booksBar advertising rules could be shortened and simplified — including ending the requirement that many ads be Bar reviewed before being aired or published — and rules that prohibit sharing fees with nonlawyers and partial nonlawyer ownership of law firms should also be looked at.

The Special Committee to Improve the Delivery of Legal Services received reports from its subcommittees on those topics at its December 8 meeting.

The full committee took no action on any of the reports. Chair and immediate Past Bar President John Stewart said the panel may begin refining its positions when it meets January 14 as part of the Bar’s virtual Winter Meeting. Its final report is due to the Supreme Court and the Bar Board of Governors in late June.

Santo DiGangi, who chairs the subcommittee looking at advertising rules, said that panel has prepared a draft that cuts the length of advertising rules by more than 50%. The proposal also would end the requirement that lawyers submit ads that contain more than basic information to the Bar for review before they are disseminated and instead make filing voluntary.

Josias Dewey, chair of the subcommittee examining the Bar rule on fee sharing and firm ownership, said that panel is looking at recommending that lawyers be allowed to share fees with nonlawyers, such as online companies that offer various legal services. It is also studying whether nonlawyers who actively work in a law firm could be part owners. No decisions have been made by the subcommittee or the full committee.

The committee is charged with studying “whether and how the rules governing the practice of law in Florida may be revised to improve the delivery of legal services to Florida’s consumers and to assure Florida lawyers play a proper and prominent role in the provision of these services,” according to the Supreme Court order that created the committee last year.

DiGangi said his subcommittee voted to reduce ad regulations, while keeping the principle that ads must not be misleading or deceptive. Prohibitions against using celebrities in lawyer ads would be removed, although ads would still have to give an office locale or say whether the lawyer is practicing online virtually.

The proposal would drop the long-standing requirement that ads containing more than basic information must be reviewed by the Bar before they are used. The Bar now reviews more than 5,000 ads annually.

“We did add a safe harbor provision that’s voluntary. If a law firm does submit its advertisement to the Bar and the Bar says the ad complies with the advertising rules, they would be immune from grievance prosecution,” DiGangi said.

There aren’t many ad-related grievances now, he added. Last year, there were only 19 complaints and more than a third were dismissed without any investigation being started. In the past 10 years, there have been only 10 lawyers punished for ad rule violations. And virtually all the complaints come from other lawyers, not the public.

Dewey’s subcommittee is looking at Bar Rule 4-5.4, which governs fee sharing and firm ownership.

“Ultimately, the basis for the rule is a desire to protect the independent judgment of the lawyer,” Dewey said, adding that would remain in any suggested amendments.

The subcommittee is looking at recommending lawyers be allowed to split fees with online “technology” companies that now in many cases offer forms and other legal services and have also offered to link consumers with lawyers for some kinds of work.

“It offers consumers legal services and improved access to less expensive services and opens opportunities for lawyers to partner with technology companies,” Dewey said. “Absent the ability to share fees, it might leave lawyers in the position where we can’t compete with the services of technology companies.”

As for nonlawyer ownership of firms, the subcommittee is looking at allowing that for someone who is actively supporting the firm, such as for data analysis or IT work, and limiting it to minority ownership, he said.

“We could take the approach that the D.C. [District of Columbia] bar took where they do allow for nonlawyer ownership as long as the individual is actively supporting the practice of law within that firm,” Dewey said.

Stewart said he expects the full committee will begin making decisions in January including “refining and fleshing out a structure on advertising rules and fleshing out and putting a structure on Rule 4-5.4.”

The special committee is planning to include questions on those and related issues in a survey the Bar plans to conduct early next and Stewart said he expects the committee’s final recommendations may be controversial.

He added questions about what data supports making changes, but he said the questions should be “what does the data suggest about the current system…. The data is really all the same. Frankly it is suggesting the system is not working for the average citizen….

“We probably have the best system in the world and it’s still not working the way it should,” Stewart continued. “If there is no change, then change is going to be forced on us. We are doing this out of the knowledge there has to be improvement. I’d rather us be the architect of that change than have it forced upon us.”

More information about the committee and its reports and information can be found on its webpage.