Matthew Sarelson’s article published in the Daily Business Review

By July 29, 2016KYMP in the News

Now that the Florida Bar’s doomed trip down the reciprocity river is over, it’s time we get serious about other issues impacting the practice of law in Florida.

I propose that we take several affirmative steps to both reduce the number of lawyers in this state and to improve the quality of them. Let’s start with basic math. Florida — with a population of 20.2 million people — has about 103,000 licensed attorneys. (Of that, only 84,000 are active members eligible to practice law, and of the active members about 86 percent live in Florida). This is a resident-to-active-lawyer ratio of 240 to 1. California has a ratio of 209 to 1. New York has a ratio of 116 to 1. (New York does not have “inactive” or “ineligible” status like Florida and California, thus the New York ratio is likely closer to 150 to 1.) Texas has a ratio of about 278 to 1. Despite being awash with lawyers, Florida actually has far fewer lawyers per capita than New York and California.

Florida’s economy, unlike the economies of California, Texas and New York, is overwhelmingly supported by small- to medium-sized companies. Large companies, and even smaller businesses with significant dollars at stake, with legal needs in Florida routinely hire out-of-state counsel, much to the dismay of Florida’s widely overlooked legal talent. According to the U.S. Department of Commerce, Florida’s per capita income for 2015 was a mere $44,000 — well below the national average of $48,000. New York, with a population slightly smaller than Florida’s, was $58,000. Texas was $47,000, and California was $52,000.

Why is this relevant? The demand for legal services is driven primarily by economics, not population. (I know my economist friends will correctly say that population is economics, so let me clarify that I’m using economics to mean economic output.) It is easy to say — and I am guilty of saying it myself — that Florida has too many lawyers. But a more precise statement would be to say that Florida’s economy doesn’t require nearly as many lawyers as the state has already. The supply of Florida lawyers greatly exceeds the demand for Florida lawyers. More importantly, the supply of and demand for Florida lawyers is different from the supply of and demand for legal services in Florida.

First and foremost, improving the practice of law in Florida starts with improving the Florida economy. “It’s the economy, stupid” is the answer to virtually every question. Government at all levels should make priority number one the recruitment and retention of out-of-state companies. With better weather and a considerably more favorable tax environment than New York, New Jersey, Illinois and Connecticut, Florida officials (statewide and local) should be sending ambassadors to medium and large companies throughout the Midwest and Northeast on a daily basis. The Florida Bar has very little direct control of this, but it can help on the margins by fostering a better, more efficient legal system.

There are several concrete steps that the Florida Bar could take to improve the overall practice of law. Here are 13 suggestions no one is publicly talking about:

1. Make the Florida Bar exam difficult. Law students love to complain about sitting for the bar exam, but there is nothing to suggest that the Florida Bar exam is a difficult test. Three-fourths of the test is multiple choice. Practicing law is nothing like a multiple-choice test. Only a very small percentage of applicants fails the bar exam, and most of them were distracted by an illness or a death in the family or some other external factor. Most try again and pass without a problem. Nor is there any metric to support any argument that the Florida Bar exam is harder or easier than any other state bar exam. The passage rate of the California bar exam or the Texas bar exam is interesting but irrelevant because the pool of applicants taking the Florida Bar exam is not the same pool of applicants taking another state’s bar exam.

2. Require recertification of all lawyers, including judges, every 10 years. I have no doubt that practicing law makes for a wiser lawyer, but it alone does not make for a smarter lawyer. The law was once primarily common law, where experience and wisdom and basic moral principles guided judicial decision-making. I have frequently said, sometimes to no avail, “The law is what the law should be.” Today, our laws are increasingly codified in highly technical statutes and regulations and rules and regulatory guidance and opinion letters — much of which a poorly written compromise between and among elected officials, unelected bureaucrats and competing special interest groups and lobbyists. Today, the law is what the law is even when it should not be.

3. Encourage, if not mandate, board certification within five to 10 years of practice. Consumers will be better able to make informed decisions about who to hire if a lawyer is board certified in a particular area of law. Putting a new practice area on a website does not make a lawyer competent in that practice area. The joint commission reports that 85 percent of physicians are board certified and over 90 percent of the public believes that seeing a board-certified doctor matters. Board certification works well in the public health arena to make sure patients are seeing the appropriate physician. A similar approach would work well for lawyers.

4. Require judicial applicants and candidates to pass preliminary qualifying exams. Simply being a lawyer for five or 10 years is a woefully deficient qualification. Simply knowing the governor is no more impressive. The quantitative requirements for being a judge should be significantly more rigorous than for being a lawyer.

5. Mandate that all lawyers carry professional liability insurance. To my knowledge only Oregon requires its lawyers to carry insurance. An alternative would be a requirement for lawyers to disclose to potential clients that the lawyer does not carry malpractice insurance. Sophisticated clients generally inquire into the law firm’s professional malpractice coverage, but the overwhelming percentage of clients have no idea that lawyers are not required to carry insurance. There are other benefits to mandatory insurance; insurance carriers place additional requirements on their insureds to minimize risk. These additional requirements, such as having redundant calendaring systems, are good for the profession.

6. Limit pro hac vice admissions quantitatively. Rule 2.510 permits a foreign attorney to make three appearances per year in Florida state courts. This limitation — designed to avoid a general practice in Florida without being a member of the Florida Bar — is no limitation at all because a foreign attorney can represent clients in an unlimited number of cases in Florida at any given time. A loophole in Florida law defines an appearance as only the initial appearance in a case for a client regardless of how long the case remains active. The official comments to Rule 1-3.10 expressly permit a foreign attorney to participate in an unlimited number of cases at any given time. In Ethics Opinion 90-8, the Florida Bar confirmed that Rule 1-3.10’s only limitation is that only three motions to appear pro hac vice can be filed within any 365-day period. As a practical matter, a foreign attorney can file three Florida state court lawsuits in 2014, three in 2015 and three in 2016 and have an active caseload of nine Florida cases. Rule 2.510 must be amended to define an appearance as any participation, not just the initial appearance. A foreign attorney should be permitted to practice in Florida on no more than three cases at any given time or within a 365-day period.

7. Aggregate pro hac vice admissions between and among state and federal courts. Rule 2.510’s three-appearance rule currently only applies to an appearance in a Florida state court because the Florida Bar has no authority to regulate or supervise a federal court. Federal court lawsuits are not subject to Rule 2.510. The U.S. District Court for the Southern District of Florida permits a lawyer not admitted to practice before this court to seek pro hac vice status in no more than three cases within a 365-day period. But this limitation codified in Local Rule 4 applies only to three appearances in the Southern District of Florida. (The local rule does not specify whether any participation qualifies as an appearance or whether an appearance means the initial appearance as is the case in state court; I suspect the Southern District of Florida would follow the state court model.) The U.S. District Court for the Middle District of Florida has no limitation on the number of pro hac vice admissions. Its Local Rule 2.02(a) mandates only that the privilege to appear pro hac vice is not to be abused. The U.S. District Court for the Northern District of Florida also has no limitation on the number of pro hac vice admissions that can be obtained by a foreign attorney. It is easy to imagine a scenario where a foreign attorney is actively participating in dozens of cases in the state and federal courts of Florida at one time without being a member of the Florida Bar.

8. Limit pro hac vice admissions to needs-based. Pro hac vice is just “reciprocity light.” A client looking to hire out-of-state lawyers for a matter in Florida should be required to provide an explanation as to why it needs to go outside the state for adequate representation. Do we not have A-level business litigators, white-collar defense attorneys and corporate finance attorneys in Florida? There is an inherent irony between the Florida Bar aggressively supporting its “no reciprocity ever” position and its lax attitude toward pro hac vice admissions. Florida has outstanding legal talent; we should use it.

9. Empower and encourage the Florida Bar to disbar or suspend lawyers for incompetence. The polestar metric for any profession is competency. Practicing with civility, providing pro bono services and avoiding ethical pitfalls and all the other things lawyers do are uber important, but they are meaningless without core competency.

10. Require a filing fee for each motion. A motion in Bankruptcy Court comes with a filing fee of various amounts depending upon the motion. It costs $25 to file virtually any motion in state court in South Carolina. New York charges various fees for motions and even charges $35 to voluntarily dismiss a lawsuit. It is easy to file a silly motion to dismiss to serve as a placeholder to avoid answering a lawsuit or to file a motion to compel discovery without thinking or conferring with opposing counsel. I am not suggesting that the fee be set so high that it results in denial of access to courts. Indigent litigants could request that filing fees be limited or waived. Any motion fee, like a filing fee, should be treated as a taxable cost. This suggestion, if adopted, would both curtail, albeit slightly, frivolous motion practice while simultaneously raising much-needed funds for judicial administration.

11. Require any law firm with an office in Florida to comply with the rules regulating the Florida Bar without regard to office location. This may be difficult to work out, but it frequently becomes an issue with respect to conflicts of interest. Florida has very tough conflict of interest rules; an attorney who joins a firm with a client conflict cannot be firewalled or placed in a cone of silence to isolate and avoid the conflict. A firm based in Philadelphia or Dallas or Atlanta, however, may be permitted to conform to less onerous conflict of interest rules. If a firm has an office in Florida, then the entire firm abides by Florida’s conflict of interest rules. The alternative gives an unfair competitive advantage to out-of-state firms with a satellite office in Florida. As an alternative, all states could adopt a single, uniform code of conduct that avoids any conflict of laws problem. As it stands now, some states like Florida have very restrictive (if not constitutionally dubious) advertising rules, while other places such as the District of Columbia have virtually no restrictions.

12. Grant the Florida Supreme Court unrestricted certiorari jurisdiction over all cases. Most nonlawyers (and even some lawyers) assume that the Supreme Court is the supreme court in Florida. As it turns, it is nearly impossible for a civil dispute, be it a business or divorce or probate matter, to be resolved by the Florida Supreme Court. Our five intermediate courts of appeal are de facto courts of last resort for 99 percent of cases. Unless the intermediate court certifies the case to the Supreme Court, the Supreme Court cannot hear the case except in very rare circumstances. This makes our intermediate appellate courts oddly more powerful than the Supreme Court.

13. Create a distinct business court. Several judicial circuits, including Miami-Dade Circuit Court, have a complex business division. And the rules authorize any judge to declare a class complex and to apply certain additional procedures. This is a good start, but it fails to go far enough. In addition to having county, circuit and district courts, I would like Florida to create what Delaware calls chancery courts (although the name of the court is not important). One judge would serve as a chancellor in special courts strategically located throughout Florida — perhaps one in Miami, West Palm Beach, Orlando, Tampa, Tallahassee and Jacksonville — where large corporate lawsuits are likely to arise. Certain cases could be automatically assigned to the chancery court, certain cases could seek permission from an administrative judge to be transferred to the chancery court, or the parties could just agree to the chancery court. We could incentivize the use of chancery courts by waiving jury trials as they do in Delaware and assigning established corporate and business litigators to serve as presiding chancellors. Other rules could motivate parties to use these dedicated courts, such as relaxing the rules of evidence, an automatic stay of discovery pending a ruling on a motion to dismiss or a right to appeal an adverse final judgment directly to the Florida Supreme Court.

Certainly there are other ideas worth discussing, and I’m not even sure I like all of my suggestions, but we need to start the conversation about what the practice of law in Florida will look like in the next few decades.