ABA ethics commission may recommend limited outside ownership of law practices

The UK began this month to allow groups other than lawyers to own and control law practices, and it’s possible the U.S. could follow suit.

Current rules of professional conduct dictate that non-lawyers may share legal fees only under narrow circumstances. The professional conduct rules also prohibit lawyers from forming partnerships to practice law with non-lawyers, and that lawyers shall not practice law in for-profit corporations if non-lawyers act as owners, directors or officers. The purpose of these rules is to protect the independent professional judgment of lawyers in rendering legal services.

According to an article published in the October 28, 2011 edition of the New York Times, the ABA Ethics 20/20 Commission is expected shortly to propose an amendment to Rule 5.4 that would permit other professional service providers, such as accountants, economists, and social workers, to partner with lawyers and own up to 25% of law firms.

Proponents of the move believe it could result in more accessible and affordable legal services, and would provide law firms access to capital required to invest in technology. Opponents worry that nonlawyer professionals may not adhere to the same ethical rules imposed upon attorneys, and that the attorney-client privilege could be compromised.

The potential outcomes of such a development are varied. Some experts argue that few firms will take advantage of such an arrangement, and those will mostly be small firms with less access to capital. Others suggest that legal services could soon be offered by chain establishments or in retail stores.

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