Two more US states eye allowing ABSs

Utah: Access to justice priority

The idea of alternative business structures (ABSs) is starting to gain a foothold in America after working parties in two more states joined California in recommending non-lawyer ownership of law firms.

Both the Utah work group on regulatory reform and Arizona task force on delivery of legal services identified increase access to justice as the core justification for their recommendations.

The Utah group – which was heavily influenced by the experience in England and Wales – said ABSs, backed by a new regulatory regime, would help foster innovation and promote other market forces “so as to increase access to and affordability of legal services”.

Arguing that innovation “will be the solution to the access-to-justice problem that plagues our country”, the group’s report said that without such reform, “the American legal system will continue to underserve the public, causing the access-to-justice gap to expand”.

It said eliminating or substantially relaxing the rule allowing lawyers and non-lawyers to share fees was “key to allowing lawyers to fully and comfortably participate in the technological revolution”.

The report explained: “Without such a change, lawyers will be at risk of not being able to engage with entrepreneurs across a wide swath of platforms.”

It said the new regulatory structure “should also solicit non-traditional sources of legal services, including non-lawyers and technology companies, and allow them to test innovative legal service models and delivery systems through the use of a ‘regulatory sandbox’ approach, which permits innovation to happen in designated areas while addressing risk and generating data to inform the regulatory process”.

The final report of the Arizona task force has yet to be published but minutes of its meeting from last month confirm that it supported the introduction of ABSs along with entity regulation.

The task force also backed introducing licensed non-lawyers to provide legal services to clients within specific limits.

The State Bar of California last month issued a public consultation on “tentative” recommendations of its task force on access through innovation of legal services, which included allowing non-lawyer owners of law firms.

Washington DC permits non-lawyer ownership if the law firm has as its sole purpose the provision of legal services, all owners agree to abide by the rules of professional conduct for lawyers, and the managing lawyers undertake to be responsible for the non-lawyers.

Leave a Comment

By clicking Submit you consent to Legal Futures storing your personal data and confirm you have read our Privacy Policy and section 5 of our Terms & Conditions which deals with user-generated content. All comments will be moderated before posting.

Required fields are marked *
Email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.


How could instant messaging transform your law firm?

The vast majority of law firms have no instant messaging capability. In what other sector is that the case? Most stick to traditional communications channels. In 2021 there’s no good reason for that.

From cost saving to revenue making – post-pandemic commercial success

Commercial success is the driving force for ambitious law firms and it should come as no surprise that many have a renewed determination to re-evaluate their businesses in the wake of Covid-19.

Success in-house – what people don’t tell you about how to get there

TV dramas have made many people think that the legal profession consists of heroes (or villains) in high-flying firms or public prosecution. In reality, nearly a quarter of solicitors work in-house.

Loading animation