ABSs become a reality in America as Arizona approves the first two

Timmer: Exciting moment

America now has its first two alternative business structures (ABSs), approved in the state of Arizona, to go alongside an increasing variety of businesses in a regulatory sandbox in Utah.

They are the first two states to allow non-lawyer ownership of law firms in the USA, although several other states are considering it.

The Arizona Supreme Court – in the US, state courts regulate the profession – has approved as ABSs estate planning business Trajan Estate and Payne Huebsch, a tax and accountancy firm that will now offer legal services too.

Vice Chief Justice Ann A Scott Timmer said: “It’s exciting to launch the first ABS entities, and I am certain that such arrangements will serve both the public and legal community in the delivery of quality legal services.”

Mike Payne, a principal of Payne Huebsch, said providing legal, accounting and tax services for businesses under one roof “will afford clients earlier, more frequent, and more affordable access to the protective tools and strategies available under the law”.

Trajan Estate is owned by non-lawyer ‘fiduciary advisor’ Jeff Junior and lawyer Kent Phelps.

Mr Junior said: “We have been referring clients to estate attorneys for years. It’s great to now have the ability to continue such an important aspect of clients’ lives.

“As the first company ever to be approved for this structure, I am confident in saying this will prove to be very beneficial to anyone preparing for their financial future.”

The court said three additional providers have applied to the for authorisation.

Arizona became the first state to drop the rule against non-lawyer ownership at the start of the year.

However, since last autumn law firms owned non-lawyers, a multi-disciplinary practice and a legal centre supporting victims of domestic abuse have all been granted permission to operate in the state of Utah as part of a two-year pilot.

The Utah Supreme Court’s Office of Legal Services Innovation is running a regulatory sandbox to test business models not otherwise allowed under strict US rules that determine who can provide legal services.

The first six – including Rocket Lawyer – were named last year and 20 have now been approved by the court in total.

The latest batch include Law on Call, created by Northwest Registered Agent, a non-lawyer company that specialises in providing registered agent and corporate filing services in all 50 states.

Clients will pay just $9 a month to receive unlimited phone access to lawyers for business law, end of life planning, contracts, employment, housing and real estate advice. Clients have the option to hire those lawyers to do legal work at “steeply discounted rates” starting from $100 an hour.

“With Law on Call, clients will receive a high-level product for a fraction of the traditional cost, in a sliver of the usual time frame,” the company said.

Pearson Butler is a Utah-based law firm that has been approved to create a “multi-professional services model” in which it would be part of a group with a financial services firm and a registered investment advisor firm. A minority of non-lawyers will form part of the ownership of the group holding company.

The Timpanogos Legal Center was approved to have its domestic victim advocates provide more substantial legal services to clients, specifically so they can draft legal documents and provide legal advice to secure protective orders and stalking injunctions.

DSD Solutions is to establish small legal offices/clinics offering legal services for fixed fees to consumers in traditionally underserved geographic areas.

The authorisation said: “Those locations will contain computer terminals loaded with legal document completion software. Consumers can access the software service for fixed fees and will also have access to non-lawyer staff to help answer informational questions and assist with using the software…

“Each location will be overseen by an attorney employee who will review each consumer file – either in person or via remote access. The company will also have a centralised attorney team to which more complex matters may be referred for services beyond the fixed fee model.”

Initially DSD will have minority non-lawyer ownership but this will become majority ownership as capital is raised.

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