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Supreme Court declines to adopt recommendations on nonlawyer ownership, fee splitting, and expanded paralegal work

Editor News in Photos

Tasks the Bar with putting forth its own proposals to 'improve the delivery of legal services to Florida’s consumers and…assure Florida lawyers play a proper and prominent role in the provision of these services'

Supreme Court of FloridaThe Florida Supreme Court “does not intend to adopt” most of the recommendations from the final report of its Special Committee to Improve the Delivery of Legal Services. The recommendations the court will not adopt include proposals to test nonlawyer ownership in law firms, fee splitting with nonlawyers, and broadly expanding the work paralegals are allowed to perform.

The Supreme Court communicated its position to the Bar in a March 3 letter, saying that it plans to adopt only one recommendation from the Special Committee’s report — amending Bar rules to permit not-for-profit legal service providers to organize as a corporation and to permit nonlawyers to serve on the boards of directors of not-for-profit legal service providers.

The court emphasized that it remains committed to ensuring that the rules governing the practice of law in Florida not only enforce appropriate ethical standards among Florida lawyers, but also meet the needs of Floridians for timely and affordable legal services.

The court “therefore requests that The Florida Bar provide alternative proposals to ‘improve the delivery of legal services to Florida’s consumers and…assure Florida lawyers play a proper and prominent role in the provision of these services.’”

The court has given The Florida Bar until December 30, 2022, to provide those alternative proposals for “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.”

In a December 27, 2021, letter to Chief Justice Charles Canady, the Board of Governors — after months of study — said that allowing nonlawyer ownership, fee splitting with nonlawyers, and broadly expanding the work of paralegals “would be so profoundly transformative of the practice of law in Florida” that such proposals should not be allowed, even on a test basis, without “clear and compelling empirical data” that they would help solve access to justice in a meaningful way with little or no risk to the public.

In urging the court not to adopt those recommendations, the Bar said the data currently available from other jurisdictions experimenting with changes to their law firm ownership and fee sharing rules, and expanding the use of paralegals, either fails to show that those changes improve access or show the negative effects of the changes.

“I think it’s fair to say that the court has fully acceded to our request that it not adopt the recommendations in the Special Committee report which we rejected and has now given us the unique opportunity to take the lead in shaping our profession’s approach to access to justice,” Bar President Mike Tanner said in a March 7 email to the Board of Governors.

Tanner said he and President-elect Gary Lesser have already started planning the Bar’s process to be followed between now and December “to give the court, for the benefit of our fellow citizens, a first-rate set of recommendations on the access issues.”

Tanner said more about the process will be communicated in the weeks ahead.

The court’s March 3 letter to the Bar is the latest in a process that began in 2019 when the Supreme Court directed the Special Committee to study how legal services to consumers could be improved with lawyers playing a “proper and prominent role in the provision of these services.” The committee was directed to look at lawyer advertising, referral fees, fee splitting, regulation of lawyers, regulation of online legal service providers and nonlawyer providers of limited legal services, and related matters.

The Special Committee filed its report with the court and the Bar June 28, 2021, and the court then agreed not to take it up until early this year, giving the board time to make its views known. Those views were strongly expressed at a number of special board meetings and in the Bar’s December 27 letter.

The board held two special meetings last year to discuss the Special Committee’s recommendations with the committee’s chair, Melbourne attorney John Stewart.

The Board of Governors began debating and voting on the Special Committee’s recommendations at a meeting on November 8. At that meeting, the board voted unanimously to reject amending Bar Rule 4-5.4 on fee sharing to allow ownership of law firms by nonlawyers (a 46-0 tally) and fee splitting with nonlawyers (a 45-0 tally). The board then voted 43-0 to reject the Special Committee’s recommended revision of the Bar’s advertising rules, including a proposal to end the requirement that certain lawyer advertisements be reviewed by the Bar before they are published or broadcast. The concept of having a statewide legal lab to test new ways of providing legal services was also unanimously rejected by the Bar Board of Governors when it met again December 2.

The board did endorse the idea of allowing legal aid organizations to organize under Bar rules as nonprofit corporations, and to have nonlawyer members on their boards of directors, the only recommendations the court indicated it plans to implement. That change would conform the rules to federal requirements for funding.

Florida lawyers, including sections and committees of The Florida Bar and various voluntary bar groups, submitted nearly 300 comments on the Special Committee’s report, many signed by multiple lawyers (one comment, opposing the nonlawyer ownership and fee splitting proposals, was signed by 327 Bar members). Those comments overwhelmingly opposed most of the Special Committee’s proposals. The Bar made those comments available to the court through a link in its December 27 letter. (See story here.)

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