The complete advisor - one attorney's case for ancillary practices.

• Author: Taylor, Stephen A.

Any attorney who has ever had a troubled, angry, and confused client walk through the office door knows that a daunting task most likely lies ahead. The issues facing that client may span beyond the attorney's practice area, but the most pressing and immediate issue is to let the client know everything will be all right. A 30-minute appointment quickly turns into a two-hour consultation on everything under the sun, sending your client on his or her way with hope and confidence that things will work out. Through one afternoon of listening and caring, that attorney has been transformed from the client's hired gun to a trusted advisor and confidant without even discussing a legal issue. The client (and now friend) is going to come to you with any and all future problems, and the question then becomes: How well equipped are you going to be to handle the client's multiple problems?

As an associate in the international section of a boutique estate planning law firm, I realized that I did not know many foreign nationals with estate tax problems whom I could help. None of my friends or family truly understood what it was that I did and to explain it to them I needed a flow chart that would render them cross-eyed. In light of the limitations I saw on the scope of my practice, I soon ventured out into the financial services arena with the idea that I would be able to help my friends and family in a more meaningful way and that I was leaving the legal world behind me. Upon taking out my Rolodex and setting up meetings with everyone I knew, I quickly noticed my strongest selling point was that I was an attorney and this fact imparted a great deal of credibility to what I said. As I would parse through fact finders with prospective clients trying to put together the best financial plan possible, they would ask me various legal questions such as whether I could prepare their will or trust which I was telling them was so essential to their financial plan. My answer eventually became, "yes," and thus began my quest to marry my estate planning background with my financial services focus to become not only my client's trusted advisor, but more so, to become my client's "complete advisor."

The focus of this article will be on the ethical concerns facing the attorney and financial services professional individually and those facing an individual who is serving both as an attorney and financial services professional, which I refer to as a "complete advisor." It is the perceived heightened possibility for conflicts of interests that can arise by serving as a complete advisor that concerns many attorneys and The Florida Bar Professional Ethics Committee regarding attorneys engaged in ancillary practices. It is my belief that an individual serving as a client's complete advisor does not face any additional ethical problems that the ethical rules governing attorneys and/or financial services professionals do not already address. Rather, it is the committee's overly broad definition of "legal services" and perceived effect upon an attorney's independent professional judgment that leads to its findings of an inherent conflict of interest to which a client cannot consent. While I strongly believe an attorney can and should act as a complete advisor, more guidance is needed to allow the number of qualified practitioners to enter the financial services arena. For purposes of this article, my discussion of ancillary practices will be limited to financial services and products. (1)

Ethical Obligations of an Attorney

The issue of attorneys engaging in ancillary practices has been around for a number of years. In April 2002, the Supreme Court of Florida gave us Rule Regulating The Florida Bar 4-5.7.--Responsibilities Regarding Nonlegal Services. The gist of the rule is that an attorney who provides ancillary services must make "reasonable efforts" to explain to the client that the attorney-client privilege does not apply to the nonlegal services being provided. (2) Should the provision of the legal and nonlegal services be indistinguishable, or should the client believe the privilege applies to the nonlegal services provided, the rule states that the attorney providing the service is subject to the Rules Regulating The Florida Bar. As addressed below, the committee has apparently yet to address a situation where the legal and nonlegal services being provided by an attorney are able to be distinguished. Regardless of this fact, it is my belief that a proper understanding of the privilege and when it applies does not pose any additional ethical concerns to a complete advisor than it would to any other attorney.

Attorney-Client Privilege

Florida has codified the privilege in F.S. [section] 90.502. In case law interpreting this statute, the courts have found that the elements necessary to create the privilege are: 1) where legal advice of any kind is sought; 2) from a professional legal advisor in his capacity as such; 3) the communications relate to the purpose of obtaining advice; and 4) the communications are made in confidence. (3) Furthermore, the existence of the privilege does not depend on whether the client ultimately hires the attorney, but whether the communication was made when the client was considering hiring the attorney. (4) The fact that the speaker must intend to possibly hire the attorney does away with any notion of the privilege being applicable in any "I have a legal question" statement. (5) In practice, I have inserted language into my engagement letter to ensure that my clients are aware of the distinction in privilege for my serving as a complete advisor. I counsel my clients that if they intend for the privilege to apply, that they need to make it clear that...