Florida Bar’s rejection of non-lawyer property thwarts innovation

On the whole, the provision and access to legal services is disrupted. Very slowly, jurisdictions across the United States are beginning to consider ways to improve access to justice, with illegal ownership of law firms being a major candidate for institutional improvement. There was hope in 2021 that Florida – our home state – would be one of the leaders in innovation in this field. But, adopting the definition of insanity, the Florida Bar Council decided that doing the same thing would lead to different results.

Most people who need legal services do not get them because they cannot afford them. In 2017, the Legal Services Corporation released a report stating that the vast majority (86%) of low-income Americans are not receiving the civil legal services they need, usually related to basic life-altering issues including evictions, child custody procedures, and debt. Collection.

Although the United States has one of the highest concentrations of lawyers in the world, it ranks 108 out of 128 countries in access to justice, after Zimbabwe, Nicaragua and Afghanistan. Sixty percent of small business owners who have what they consider a “great” threat to their business do not have a lawyer to help them.

With these facts in hand, the Florida Supreme Court appointed a special commission focused on how to “improve the provision of legal services.” That panel — made up of the former president of the Florida Bar Association and some other prominent Florida attorneys — released a report in June to look at ways to improve the relationship between attorneys and consumers.

In the preface to its conclusions, the report acknowledged that the ban on allowing non-lawyers to own parts of law firms created a threshold for increased access to justice. The report’s research strongly suggests that only attorney ownership leads directly to failed innovation in marketing, financial systems, and project management (ask a lawyer you know to do some Excel calculations or prepare a compelling slideshow).

This ban impedes access to justice as it stifles outside investment, reduces capital, and thus makes it difficult for law firms to innovate their business practices. Shared risk with other service providers becomes impossible, resulting in inefficient processes, useless interfaces, and unintegrated services.

Meanwhile, lawyers are forced to run a business – something they don’t teach in law school – instead of practicing law.

For these reasons, Sister Pub in Arizona realized that allowing non-lawyers to take ownership stakes in law firms would be a boon to its citizens. The Arizona Bar Association noted that the original ban (dating back nearly 100 years) on illegal ownership of law firms is rooted in economic protectionism; Not the ethereal desire to “protect the public”.

Arizona revised its rules in August 2020 to allow non-lawyer ownership of law firms, following in the footsteps of England, Wales and British Columbia. This will lead to more innovation, better service to consumers, and lower prices.

But our bar policies here are governed by the Florida Bar Council of Governors, and while wrangling by hand over access to justice, in its June 28, 2021 report, they voted unanimously to reject the committee’s recommendations to allow minority ownership in law firms by non-law firm employees.

Ultimately, concerns were that illegal ownership could lead companies to be profit-driven rather than pursuing the “best interests of customers”. In other words, under the guise of “non-lawyers will cause law firms to focus too much on profits and not focus on clients,” the board rejected the proposal.

Florida union turns a blind eye to the realities of the legal profession

Desire to turn a blind eye to the current realities of the legal profession, while holding on to pearls about profit-focused law firms is disingenuous. Major US law firms have grown exponentially over the past five years, proudly broadcasting their “earnings per partner” to reflect their continued growth.

These companies have devised arbitration clauses, class action exemptions, limitation of liability clauses, and other complex legal strategies geared toward undermining consumer rights. However, at the same time, the free commitments of the vast majority of civil law firms are poor at best.

One need not be particularly insightful to understand the reasons behind the Florida Bar Board’s decision: protectionism and the persistence of the myth of exceptional lawyers. But non-lawyers are not evil. And sometimes lawyers are bad at their jobs.

The system needs an overhaul, or at least we need to try. If we truly care about our commitment to our clients, the Florida Bar should allow – on a trial basis – non-lawyer (minority) law firm ownership. The Florida Bar will continue to have the authority to hold the (majority) owners of lawyers to account for these firms’ continued commitment to the best interests of clients.

If the Florida Board of Governors really cares about protecting the public, it won’t lessen the chance of fixing a broken system. If the Board of Governors, instead, is more concerned with protecting its land, it should spare us vulgarity and have the courage to say just that.

This column does not necessarily reflect the opinion of the Office of National Affairs or its owners.

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Eitan Mark He is the founder of the boutique Florida law firm Mark Migdal & Hayden. With over 15 years of experience as a commercial litigator, he serves clients in multiple jurisdictions involved in complex commercial disputes.

Josh Magdal He is the founder of the boutique Florida law firm Mark Migdal & Hayden. As a trusted advisor and commercial litigator, Josh represents clients such as banks, public and private companies, real estate developers, investors, owners, tech entrepreneurs, game operators, family offices and hotels.

Donald J Hayden He is the founder of the boutique Florida law firm Mark Migdal & Hayden. A commercial litigator specializing in cross-border commercial disputes and international arbitration.

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