In law firms throughout the United States, there are teams of dedicated and talented individuals that meaningfully contribute to the success of their firms and clients. However, many of these individuals are not lawyers. Instead, they form a diverse group, which includes: paralegals, law clerks, interns, and executive assistants. While their contributions may not be discounted, it is necessary to understand the strict rules in place throughout the country regarding their involvement within the law firm environment.
May non-lawyers own a law firm?
In the United States, the only jurisdictions which permit non-lawyer ownership of law firms are Washington, D.C. and Washington state. In all other jurisdictions, there are strict ethics rules which prohibit non-lawyers from owning a percentage, even if it is a minority stake, of a law firm. In Florida, a Special Committee was created in late 2019 to investigate and conduct research on the possibility of allowing non-lawyer firm members to have a minority ownership in a law firm. However, in November 2021, the Florida Bar Board of Governors unanimously voted to oppose amending the Florida Bar Rules to allow minority ownership by non-lawyers.
May lawyers form partnerships with non-lawyers?
In accordance with the American Bar Association’s Rules of Professional Conduct, lawyers are prohibited from forming partnerships with non-lawyers if any of the activities of the partnership concern the practice of law. While many lawyers have recognized the potential setbacks to this policy, such as depriving law firms of new and innovative ideas by partnering with creative individuals and companies, there is also a need for lawyers to maintain a significant degree of independence due to the high-stakes and sensitive nature of their work.
What are the rules for fee sharing with non-lawyers?
In Florida, the Bar Ethics Rules prohibit a lawyer or law firm from sharing legal fees with a non-lawyer. However, they exist a few exceptions for particular circumstances. One of the exceptions allows for the payment of legal fees to a deceased lawyer’s estate or beneficiary for the work performed by the attorney prior to their passing. Another popular exception allows for bonuses to be paid to non-lawyer employees based on their work performance. The Florida Bar Rules permit such bonuses only when a non-lawyer employee has demonstrated extraordinary efforts on either a particular case or over a specified time period. However, any bonus provided to a non-lawyer employee may not be calculated as a percentage of legal fees received by the lawyer or law firm.
May law firms enter into consulting agreements with non-lawyers?
As of now, the Florida Bar Rules only allow for bonuses with non-lawyer employees that work for the same law firm. As a result, fee sharing agreements with external non-lawyers is strictly prohibited. Given the encumbrance of such a rule, one of the proposed amendments to the Florida Bar Rules by the 2019 Special Committee was to allow fee sharing with non-lawyers. However, the Florida Bar Board of Governors unanimously voted to oppose the amendment. If the amendment had passed, it would have allowed law firms and lawyers to share legal fees with online legal service companies, as well as with non-lawyers working either independently or for other firms.