What Are The Ethical Rules Regarding Business Partnerships Between Florida Lawyers and Non-Lawyers?
Many lawyers form partnerships and/or business relationships with non-lawyers, which are not per se prohibited under the Rules Regulating The Florida Bar. This article will briefly discuss the Bar rules and other considerations regarding business relationships between lawyers and non-lawyers.
Rule 4-5.4(a), Rules Regulating The Florida BarRule 4-5.4(a), Rules Regulating The Florida Bar sets forth the general rule that attorneys are prohibited from sharing fees with a non-lawyer unless an exception applies. The exceptions include payment of legal fees to a lawyer's estate or authorized representative, bonuses to non-lawyers for extraordinary efforts, sharing court awarded fees with a nonprofit, pro bono legal services organization that employed, retained, or recommended employment of the lawyer in the matter, and inclusion of non-lawyer employees in Qualified Pension Plans. Rule 4-5.4 (c) prohibits a lawyer from forming a partnership with a non-lawyer if any of the activities of the partnership constitute the practice of law. Rule 4-5.4(e) prohibits a lawyer from practicing with or in the form of for profit business entity authorized to practice law if a non-lawyer owns any interest, is a director or officer, or has the right to control the professional judgment of the lawyer.
The Florida Bar v. Glueck, 985 So.2d 1052 (Fla. 2008)The Supreme Court of Florida disbarred the lawyer for, inter alia, forming a partnership with a non-lawyer business entity which engaged in the practice of law. The opinion in Glueck stated that Mr. Glueck represented a non-lawyer named Elayne Bechtinger in a prior Bar unlicensed practice of law (UPL) investigation. The UPL matter was settled with a Stipulation for Permanent Injunction prohibiting Ms. Bechtinger and her company, B & L Business Legal, Inc. from advising persons and entities of their rights, duties, and responsibilities under the law in any legal matters and immigration and naturalization matters. After the UPL matter was finalized, Ms. Bechtinger sold the entity to two friends and it was renamed Millennia Consulting Services. Ms. Bechtinger remained as manager of the business and Mr. Glueck opened an office in the same suite as Millennia. The opinion noted that Mr. Glueck "entered into a partnership or business relationship with Bechtinger, wherein he provided legal services to the clients of Millennia..." and he "allowed Bechtinger to be in control of Millennia's legal services and his law office's day to day operations." Further, Millennia's activities and Mr. Glueck's law practice "blended together into one operation and Glueck only went to the Aventura location approximately every two or three weeks." (Glueck @ 1054). Further, Mr. Glueck benefited financially from the partnership by paying no rent or overhead and receiving fees generated by the activities of Ms. Bechtinger and Millennia. Mr. Glueck also "allowed Bechtinger to use his name and title in return for legal business generated by Millennia" (Glueck @ 1054). Mr. Glueck received fees from Millennia under this arrangement and "admitted that this financial arrangement was flawed and inappropriate." (Glueck @ 1055). The referee recommended that Mr. Glueck be found guilty of numerous Bar rule violations, including dishonesty, fraud and deceit, and recommended a three (3) year suspension form the practice of law. The opinion noted that Mr. Glueck was admitted to practice in Florida since 1976 and had no prior discipline; however, after consideration of the facts, Bar rule violations, and aggravating factors, the Court disbarred the lawyer.
ConclusionWhile the above opinion describes an arguably extreme case, it certainly highlights some of the dangers and pitfalls of engaging in business relationships with non-lawyers without thoroughly examining the Bar Rules and maintaining careful control over the non-lawyer's activities to insure that they are in compliance with the lawyer's professional and ethical obligations. Be careful out there!