Can a lawyer who is a corporation's general manager have his corporate salary reduced by his outside law-practice fees over a threshold?

Plain-English summary

A member was employed full-time as general manager of a publishing corporation and planned to enter the practice of law while continuing as general manager. A corporate resolution provided that a portion of his salary from the corporation would be reduced by any amount he earned as attorney's fees above a certain sum during any six-month period.

The committee said the contemplated procedure would expose him to possible criticism for violation of the Canons. It directed attention to Canon 34, which prohibited the division of fees for legal services except with another lawyer on a basis of service or responsibility, and said the facts available were insufficient to determine whether the arrangement would in fact be improper, but that it was open to the interpretation that it amounted to a division of his attorney's fees with a lay agency. The committee also directed attention to Canon 27 and to the Bar's publication "Your Privileges and Responsibilities As A Lawyer in Florida," noting that while an attorney may be engaged in business, that business must be kept separate and distinct from the practice of law and should not be used to "feed" the attorney's practice.

Currency note

This opinion was issued in 1962, before The Florida Bar's adoption of the 2006 revisions to the Rules of Professional Conduct. The opinion applied former Canons 27 and 34 of the Canons of Professional Ethics; the division of fees with a nonlawyer and a lawyer's outside business activity are now addressed by Rules 4-5.4 and 4-5.7 of the Rules Regulating The Florida Bar (Model Rules 5.4 and 5.7). Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against the current rules before relying on any specific requirement mentioned here.

Common questions

Q: What was the problem with tying salary to law-practice fees?

A: The committee said it was open to the interpretation that the salary offset amounted to dividing the lawyer's attorney's fees with a lay agency, which Canon 34 prohibited.

Q: Did the committee actually rule the arrangement improper?

A: No. It said the available facts were insufficient to determine whether the arrangement would in fact be improper, only that it was subject to criticism and exposed the lawyer to that risk.

Q: Could the lawyer keep his business role at all?

A: The committee noted that while an attorney may be engaged in business, the business must be kept separate and distinct from the practice of law and should not be used to "feed" the lawyer's practice.

Background and rules framework

The opinion applied former Canons 27 and 34 of the Canons of Professional Ethics. Canon 34's bar on dividing legal fees with a nonlawyer is now in Rule 4-5.4, and a lawyer's involvement in outside and law-related business is now addressed by Rule 4-5.7 of the Rules Regulating The Florida Bar (Model Rules 5.4 and 5.7). The committee framed the concern as both an impermissible fee division with a lay agency and the broader principle that a lawyer's separate business must not feed the law practice.

Citations and references

Rules of Professional Conduct:

• Canons 27, 34 [Canons of Professional Ethics; see current Rules 4-5.4, 4-5.7]

Other authorities:

• The Florida Bar, Your Privileges and Responsibilities As A Lawyer in Florida

See also

• FL Bar Ethics Op. 62-3: Fee Split With a Non-Practicing Lawyer

Source

• Landing page: https://www.floridabar.org/etopinions/etopinion-62-7/
• Original PDF: https://www-media.floridabar.org/uploads/2017/04/FL-Bar-Ethics-Op-62-7-1.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

FLORIDA BAR ETHICS OPINION
OPINION 62-7
July 30, 1962
Advisory ethics opinions are not binding.
An arrangement whereby the general manager of a corporation agreed that his salary from the corporation would be reduced by fees earned in his law practice in excess of a certain sum in a stated period is subject to criticism.
Canons: 27, 34
Vice-Chairman Smith stated the opinion of the committee:
A member of The Florida Bar states that he is presently employed on a full-time basis by a publishing corporation as general manager of that corporation but contemplates entering the practice of law, at which time he will continue as general manager of the corporation. A corporate resolution has been passed regarding financial arrangements with his present employer whereby a portion of his salary from the corporation will be reduced by any amount earned as attorney's fees in excess of a certain sum during any six-month period.
It is the opinion of the Committee that the procedure contemplated will expose him to possible criticisms for violation of the Professional Canons. Attention is particularly directed to Canon 34, which prohibits the division of fees for legal services rendered except with another lawyer on a basis of service or responsibilities. The facts available are insufficient for the Committee to determine whether the arrangement would in fact be improper. It is open, however, to the interpretation that an arrangement in effect would amount to a division of his attorneys fees with a lay agency.
Attention is also directed to Canon 27 and to the opinions of the Committee set forth in the publication of The Florida Bar entitled "Your Privileges and Responsibilities As A Lawyer in Florida." These materials point up the fact that while an attorney may be engaged in business, such business must be kept separate and distinct from the practice of law and should not be used to "feed" the attorney's practice.