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Legal Notes
December's Self magazine included tips on simplifying from Richard J. Salem, founder of a Tampa international law firm. Salem knows plenty about complications; as a teen-ager he went blind because of a blood clot. His tip: Accept the fact that you can't control everything, and you wind up empowering everyone else.
Vincent J. Rio III, a lawyer and lobbyist with Taylor, Day & Rio, has been appointed counsel to State Farm Companies in Tallahassee. The firm, with offices in Tallahassee and Jacksonville, continues as Taylor, Day, Currie & Burnett.
Holland & Knight continues its aggressive growth strategy [FT, December 1996] by opening a new office in Boca Raton. The first lawyer in the office is Richard Lehman, formerly a Boca Raton solo practitioner. The firm expects the office to grow to about 25 lawyers within two years.
RESTRUCTURING THE FIRM
New Priests In The Temple?
Hoping to anticipate a trend, Florida Bar officials are quietly debating whether law firms should be able to offer partnerships to other professionals, like accountants and engineers.
The changes would unravel centuries of legal tradition that treat law firms like temples that only lawyer-priests may enter. But these days, lawyers and other professionals face pressure to provide better service for less money. One obvious way is to reduce overhead by combining different professional services under one roof.
"There's a sense in our profession as in many others that change in the way we're doing business is inevitable," says Ocala lawyer Jean Bice, a member of the special Florida Bar committee that's looking into law firm regulation.
Accountants around the country also are studying the possibility of combining professional services. In Washington, D.C., Arthur Andersen & Co. recently stirred controversy when it began sending its in-house lawyers to federal tax court on behalf of clients. Other accounting firms are said to be considering similar moves. Among large law firms, the biggest structural change in recent years has been the rapid expansion of subsidiary businesses. Law firm subsidiaries in Florida often offer insurance and financial services; at least one law firm owns its own detective agency. But the legal profession has rules barring non-lawyers from sharing fees with lawyers or owning equity stakes in law firms. Those rules probably would have to be changed before law firms could bring in top-notch professionals from fields like accounting or engineering as partners.
Not surprisingly, the move toward granting partnership to non-lawyers began in the District of Columbia, where law firms traditionally have done a lot of lobbying and other non-legal work. The D.C. rules, adopted in 1991, still require that a firm owned in part by non-lawyers must exist "solely" to provide legal services. Non-lawyers also must agree to abide by the D.C. bar's professional code, and lawyers must supervise their work.
Not all the state's attorneys are eager for Florida to follow D.C.'s example. Some worry, for example, that non-lawyers could lower professional standards and endanger attorney-client privilege.
The Florida Bar special committee hopes to make recommendations by the end of the first quarter of 1997. The state Supreme Court will have to approve any changes to ethics rules.
MEDIATION
Divide And Compete
Illustrating the big changes underway at many law firms, Daytona Beach-based Cobb Cole & Bell in January took the extraordinary step of breaking itself into four separate corporate entities - only one of which is a law firm.
One of the firm's goals is to attract outside capital for its nationally recognized mediation training business, which will be based in St. Petersburg. Mediation, a fast-growing way to resolve disputes through negotiation rather than litigation, has grown rapidly in Florida because of the state's lack of courthouse resources - judges, courtrooms and the like. And Cobb Cole & Bell has emerged as perhaps the state's leading firm in the mediation arena.
When the firm began to consider taking its mediation training business national, some partners balked at providing the capital needed for marketing and other expenses for the new business, ADR Applications Inc. "With a business that's a startup like ADR, you've got to be prepared to not make money for a period of time," says managing partner Sam Bell. Professional rules prevent law firms from seeking outside equity capital. But as a corporate subsidiary, ADR now can seek outside funding.
Bell, a former state legislative leader, says the firm has "a tremendous opportunity" to capitalize on the growth of mediation. Florida is one of the few states that require mediators to be certified; if other states adopt the requirement, Cobb Cole & Bell will be "there on the spot with a fully mature training program," says Bell. The firm already provides training in several states and at the National Judicial College in Reno.
The changes at Cobb Cole & Bell create three general-business corporations, in addition to the law firm. Along with ADR Applications, the firm also formed CCB Mediation Inc., with offices in Maitland and Daytona Beach, to offer mediation and arbitration to businesses and law firms around the country. A third corporation, CC&B Enterprises Inc., will provide administrative services to the other entities, including the law firm, which continues to be known as Cobb Cole & Bell.
