Can a Florida law firm affiliate with a corporation solely to qualify for group health insurance rates?

Plain-English summary

A member's firm represented a Florida advertising corporation, and one firm member sat on the corporation's board. The firm had been told that its relationship with the corporation was close enough that the two could be treated as affiliated for the purpose of obtaining group medical and hospitalization insurance at rates lower than the firm could get on its own. The inquiry was whether such an affiliation, just to obtain the insurance benefits, was proper.

The committee said it is improper for lawyers in general practice to associate with other organizations in a way that costs them their independent status and their identity as lawyers practicing for the public. But provided the affiliation was nothing more than a technical one for the purpose of obtaining the insurance benefits, the arrangement would not be improper. The committee stressed that the Canons prohibit dividing fees or legal compensation with a layman or like organization, and that care must be taken so the insurance benefits are in no way calculated to represent fees for services rendered to the advertising corporation. Its conclusion rested on the assumption that the insurance benefits were in no way related to compensation for professional services.

Currency note

This opinion was issued in 1965, before The Florida Bar's adoption of the 2006 revisions to the Rules of Professional Conduct. The opinion applied former Canons 34 and 35 of the Canons of Professional Ethics, concerning the division of fees with laymen and the lawyer's professional independence; these subjects are now governed by Rule 4-5.4 of the Rules Regulating The Florida Bar (Model Rule 5.4). 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 Treat this page as historical context, not current guidance.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: Could the firm affiliate with the corporation to get cheaper group insurance?

A: Yes, but only as a technical affiliation for that purpose. The committee said the firm could not associate with the organization in a way that cost it its independent status as lawyers.

Q: What was the committee most concerned about?

A: Fee division. The Canons prohibit sharing legal compensation with a layman or like organization, so the committee required that the insurance benefits not be calculated to represent fees for services rendered to the corporation.

Q: On what assumption did the opinion rest?

A: That the insurance benefits were in no way related to compensation for the firm's professional services.

Background and rules framework

The opinion applied former Canons 34 and 35 of the Canons of Professional Ethics, which barred dividing fees with non-lawyers and protected the lawyer's professional independence. Those subjects are now consolidated in Rule 4-5.4 of the Rules Regulating The Florida Bar (Model Rule 5.4). The committee allowed a purely technical affiliation while guarding against any arrangement that would function as fee-sharing with the corporation.

Citations and references

Rules of Professional Conduct:

• Canons 34, 35 [Canons of Professional Ethics; division of fees with laymen; professional independence; see current Rule 4-5.4]

See also

• FL Bar Ethics Op. 65-12: Drafting Trust Guidelines for a Bank
• FL Bar Ethics Op. 65-4: Partnership With a Non-Lawyer for Agency Practice

Source

• Landing page: https://www.floridabar.org/etopinions/etopinion-64-75/
• Original PDF: https://www-media.floridabar.org/uploads/2017/04/FL-Bar-Ethics-Op-64-75.pdf

Original opinion text

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

FLORIDA BAR ETHICS OPINION
OPINION 64-75
January 13, 1965
Advisory ethics opinions are not binding.
It would be proper for a law firm to become affiliated with an advertising corporation for the sole purpose of obtaining group medical and hospitalization insurance benefits.
Canons: 34, 35
Chairman Smith stated the opinion of the committee:
A member of The Florida Bar states that his firm represents a Florida corporation engaged in the general advertising business in this state. One member of the law firm is a member of the board of directors of the corporation. The inquiring lawyer has been advised that the relationship between his firm and the corporation is such that the two organizations may be considered affiliated for the purpose of obtaining group medical and hospitalization insurance at rates lower than those which normally would be available to the law firm. The inquiry is whether it would be ethically proper for the law firm to become affiliated with the advertising corporation for the purpose of obtaining the insurance benefits mentioned.
It is, of course, improper for lawyers engaged in the general practice of law to so associate themselves with other organizations as to lose their independent status and their identity as lawyers engaged in the practice of law for the benefit of the public. Provided, however, that the affiliation suggested would be nothing more than a technical one for the purpose of obtaining the insurance benefits, it is the opinion of this Committee that the arrangement would not be improper. Of course, the Canons prohibit the division of fees or legal compensation with a layman or like organization. Care should be taken that the insurance benefits are in no way calculated to represent fees for services rendered to the advertising organization. Our opinion is based upon the assumption that the insurance benefits are in no way related to compensation for professional services rendered.