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THE FLORIDA BAR v. KEEHLEY
Factual and Procedural Background
The Florida Bar filed a petition charging respondent L. James Keehley with the unauthorized practice of law related to the formation of corporations and other activities. Keehley, not a licensed attorney, admitted to forming two corporations and performing certain acts as a business broker and consultant, but denied that his actions constituted the unauthorized practice of law. The matter was referred to Circuit Judge Victor O. Wehle as Referee, who reviewed pleadings, depositions, exhibits, stipulations, and arguments from both parties. The essential facts were undisputed, and the legal issues were straightforward.
Keehley had previously inquired of the Secretary of State and was informed that it was not compulsory for an attorney to prepare certificates of incorporation. He prepared articles of incorporation for himself and associates in 1962 and later formed two corporations in 1965. In doing so, he assured the Secretary of State that corporate meetings would be held to finalize organization. None of the incorporators fully understood their financial commitments or the legal implications of joint tenancy in stock ownership.
Keehley was unaware of a prior Florida Supreme Court decision (The Florida Bar v. Town) holding that preparation of corporate charters constitutes the practice of law. He argued that unlike the Town case, he did not charge a fee and had personal interests in the corporations formed. Additionally, Keehley prepared various business-related documents as a business broker, often by filling in blanks on printed forms, sometimes reviewed by attorneys. He relied on office procedures and practices observed in the business brokerage field.
Legal Issues Presented
- Whether the preparation of articles of incorporation and related corporate documents by a non-lawyer constitutes the unauthorized practice of law.
- Whether the absence of compensation or close personal relationships affects the legality of such actions.
- Whether a business broker may prepare certain transactional documents without engaging in the unauthorized practice of law.
Arguments of the Parties
Petitioner (The Florida Bar)
- Charged respondent with unauthorized practice of law for preparing corporate formation documents.
- Asserted that preparation of corporate charters and related documents is the practice of law as established by precedent.
- Maintained that the respondent’s actions were impermissible regardless of compensation or personal relationships.
Respondent (L. James Keehley)
- Admitted to forming corporations and preparing documents but denied this constituted unauthorized practice of law.
- Relied on Secretary of State’s statement that attorney preparation was not compulsory.
- Argued no fee was charged and corporations were formed for friends, family, and himself.
- Contended that business brokers commonly prepare similar documents and that his actions were consistent with such practices.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| The Florida Bar v. Town, 174 So.2d 395 | Preparation of corporate charters and related documents constitutes the practice of law. | The court relied on this precedent to determine that respondent’s preparation of corporate documents was unauthorized practice of law despite no fee being charged. |
| Keyes Co. v. Dade County Bar Ass'n, 46 So.2d 605 | Real estate brokers may prepare listing agreements and deposit receipts but may not complete conveyancing documents. | The court distinguished permissible broker activities from unauthorized practice, applying this to business brokers similarly. |
| Cooperman v. West Coast Title Company, 75 So.2d 818 | Limits on real estate brokers’ preparation of legal documents in real estate transactions. | Used to support that business brokers cannot prepare documents beyond initial agreements without engaging in unauthorized practice. |
| Cooperman v. Guarantee Abstract Co. (No. 2), 5 Fla. Supp. 38, 42 | Preparation of bulk sales affidavits and compliance documents is beyond the authority of brokers. | Reinforced prohibition against business brokers preparing certain legal documents related to business sales. |
Court's Reasoning and Analysis
The court accepted the referee’s findings that although respondent was not a lawyer and did not hold himself out as one, his preparation of articles of incorporation and related documents constituted the practice of law under established precedent. The court rejected respondent’s argument that absence of compensation, personal relationships, or his own interest in the corporations excused the unauthorized practice. The court found it contrary to public welfare to permit unqualified persons to perform such legal services.
Regarding respondent’s preparation of business brokerage documents, the court distinguished permissible activities—such as preparing listing agreements and deposit receipts—from impermissible acts like preparing conveyancing or bulk sales affidavits, which require legal expertise. The court emphasized that respondent’s reliance on observed office procedures or real estate broker practices did not alter the legal boundaries established by prior decisions.
The court noted respondent’s good faith reliance on the Secretary of State’s communication and his assurance not to engage in such practices in the future, which was accepted as credible.
Holding and Implications
Holding: The court enjoined respondent L. James Keehley from:
- Forming corporations, including preparing corporate charters, by-laws, resolutions, stock certificates, and other related documents, and advising others on these matters.
- Advising others on the legal effect of joint tenancies or other ownership types.
- Preparing documents for others in connection with purchase and sale of businesses, except for listings and deposit receipts or initial agreements bringing buyers and sellers together.
The court declined to enter a contempt order and approved the referee’s recommendations.
Implications: This decision reinforces the principle that preparation of corporate formation documents and related legal advice is the practice of law restricted to licensed attorneys, regardless of compensation or personal relationships. It clarifies the limited scope of permissible document preparation by business brokers and similar non-lawyer professionals. No new legal precedent was established beyond reaffirming existing rules, but the ruling serves as a clear enforcement of the boundaries protecting the public from unauthorized legal practice.
PER CURIAM.
The cause is before us on petition of The Florida Bar charging respondent with the unauthorized practice of law, respondent's reply to rule to show cause, stipulation of the parties and report of the referee, Circuit Judge Victor O. Wehle. We set out verbatim the Referee's Report:
"TO THE HONORABLE CHIEF JUSTICE AND JUSTICES OF THE SUPREME COURT OF FLORIDA:
"The Florida Bar filed its petition charging the respondent, L. James Keehley, with the unauthorized practice of law in the formation of corporations and otherwise. The respondent replied, admitting that he had formed two corporations and performed certain acts as a business broker and business consultant, but asserted that it is not compulsory that an attorney prepare certificates of incorporation and denied that he was guilty of the unauthorized practice of law. The undersigned Circuit Judge was appointed Referee to try the issues and to report has (sic) findings of fact, conclusions of law and recommendations for final disposition of the cause, pursuant to Article XVI of the Integration Rule of the Florida Bar [31 F.S.A.].
"The matter was submitted to the Referee upon the pleadings, depositions, exhibits, stipulation of the parties, and arguments of counsel for both parties. The essential facts are undisputed and the issues of law are uncomplicated.
"Respondent is not a lawyer and has not held himself out to be a lawyer. Before coming to Florida, he had for many years been engaged by the United States of America in performing services which entailed familiarity with contract documents and business procedures. Since coming to Florida about five years ago, he has been engaged in business as a business broker and business consultant.
"In 1962, he inquired of the Secretary of State and was informed that `it is not compulsory that an attorney prepare certificates of incorporation.' About the same time he researched questions of law pertaining to joint tenancies. During the same year he prepared articles of incorporation for business associates or prospective business associates and himself in Southern Technical (or southern Tech) Electronics School, Inc., which were submitted to a member of The Florida Bar for approval before they were utilized by the incorporators. Armed with this experience, he formed two corporations in Florida during the year 1965. One was Stewart and Coffey Enterprises, Inc., in which the incorporators were his business associates, William M. Stewart, Mr. Stewart's wife, and Mr. Stewart's father-in-law, Guy W. Coffey. The other was James Corjay, Incorporated, in which L. James Keehley, the respondent, Coreene A. Keehley, his wife, and Jay T. Keehley, their son, were the incorporators. In submitting the articles of incorporation which he had prepared, respondent in each instance wrote to the Secretary of State that `the writer will assure a corporate meeting is held to approve the by-laws and otherwise finalize the organization of the company as required by Florida Statutes.' The amounts which each incorporator agreed to subscribe ranged from $500.00 to $2,450.00. Stock certificates were issued to the subscribers and their respective spouses in each corporation `as joint tenants with right of survivorship'. None of the incorporators realized that, by signing the articles of incorporation, they had committed themselves to subscribe to the stipulated amounts and none of them had made the agreed investments in the corporations, nor were they aware of the gift, gift tax and other implications of taking title to the stock certificates as joint tenants.
"Respondent was not aware, prior to the complaint resulting in these unauthorized practice of law proceedings, of the decision in The Florida Bar v. Town, 174 So.2d 395, (sic) in which this Court last year decided that the preparation of corporate charters and related documents constitute the practice of law. However, respondent points out that in the Town Case the respondent had charged a fee for his services, whereas the respondent in the present case made no charge for forming the two corporations, and further that these two corporations were formed for friends and family, with an interest or prospective interest on the part of respondent himself in both ventures. It is the referee's conclusion that neither the absence of compensation, nor the close personal relationship between the respondent and the persons for whom the services were rendered, nor his present or prospective future interest in the transaction, legalizes his formation of these corporations, and his services which undoubtedly constitute the practice of law in connection with these corporations. It is equally inimical, dangerous and contrary to the welfare of the public to permit untrained and unqualified persons, who have not been admitted to The Florida Bar, to perform such services for individuals who desire to incorporate and to operate as corporations under the Florida law, whether a fee is charged, whether the parties are closely related, or whether the untrained person is one of the interested parties.
"In his capacity as a business consultant and business broker, or as an associate of a business broker operating in Tampa, Florida, respondent admittedly has prepared listing agreements, agreements of sale in the form of deposit receipts, bills of sale, general affidavits and other documents, usually by filling in the blanks upon printed forms and tailoring each of these forms to the circumstances of the individual transaction. These services were performed at the request or under the direction of the broker and in some, but not all, instances were reviewed by members of The Florida Bar representing sellers or buyers or both. Respondent states that in doing so he relied upon the office procedures which he encountered when he became associated with a business broker in Tampa, and also he urges that real estate brokers prepare comparable documents.
"While there may be real estate brokers who are violating this Court's decisions in Keyes Co. v. Dade County Bar Ass'n., 46 So.2d 605, and Cooperman v. West Coast Title Company, 75 So.2d 818, it is clear from both of those decisions that real estate brokers may prepare listing agreements and deposit receipts or other forms of agreement first bringing the buyer and seller together; they may not as brokers complete conveyancing forms such as deeds, mortgages, notes, assignments and satisfaction of mortgages or other documents required to consummate the contract. The preparation of bulk sales affidavits, as well as other acts in compliances (sic) with the bulk sales law, are beyond the province of the broker: Cooperman v. Guarantee Abstract Co. (No. 2), 5 Fla. Supp. 38, 42. Business brokers and their associates and employees are similarly prohibited from preparing any documents in connection with the sale of businesses other than listing agreements and deposit receipts or other initial contracts bringing the buyers and sellers together. If respondent is aware of instances of the unauthorized practice of law by real estate brokers, salesmen and employees, he should bring them to the attention of the proper authorities, but he cannot rely upon them as effecting any change in the applicable law.
"Respondent has indicated his good faith by demonstrating that he relied on the Secretary of State's communication to him in 1963 regarding the preparation of articles of incorporation, upon the office procedures to which he was exposed in a business brokers office, and what he has observed being done by other brokers, and he has assured The Florida Bar and the Court that he has no intention in the future to prepare any articles of incorporation, by-laws, minutes or stock certificates for others or to advise on the legal effect of joint tenancies, or to prepare any documents for others in connection with the purchase and sale of businesses with the possible exception of listings and deposit receipts, or to give any legal advice or otherwise engage in the practice of law. The Florida Bar's representatives state that they have no reason to disbelieve respondent, nor does the Referee.
"Accordingly the following recommendations are made for final disposition of the cause:
"1. That respondent be enjoined from forming corporations, including the preparation of charters, by-laws, resolutions, stock certificates, and other documents incidental to the contractual rights of the corporation, its incorporators, and stockholders, and from advising others in respect thereto.
"2. That respondent be enjoined from advising others on the legal effect of joint tenancies or other types of ownership.
"3. That respondent be enjoined from preparing any documents for others in connection with the purchase and sale of businesses with the exception of listings and deposit receipts or other initial agreements bringing buyers and sellers of businesses together.
"4. That no contempt order be entered against respondent.
"Respectfully submitted, /s/ Victor O. Wehle VICTOR O. WEHLE Referee"
The report of the referee is approved and the recommendations adopted. It is therefore, the order of this Court that:
1. Respondent be enjoined from forming corporations, including the preparation of charters, by-laws, resolutions, stock certificates, and other documents incidental to the contractual rights of the corporation, its incorporators, and stockholders, and from advising others in respect thereto.
2. Respondent be enjoined from advising others on the legal effect of joint tenancies or other types of ownership.
3. Respondent be enjoined from preparing any documents for others in connection with the purchase and sale of businesses with the exception of listings and deposit receipts or other initial agreements bringing buyers and sellers of businesses together.
It is so ordered.
THORNAL, C.J., and DREW, O'CONNELL, CALDWELL and ERVIN, JJ., concur.
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