AppId is over the quota
iStockLike a zombie that just won?t stay dead, the question of whether non-lawyers should be able to own a piece of American law firms has once again risen. The changes under?consecration, which the WSJ looked at?here, are far more?incremental?than the tectonic shift that has?occurred?in the U.K., where?grocery?stores can offer legal services.
Vocal squads who oppose such plans say opening up law firm ownership will erode professional ethics. Here?s just a snippet of the criticisms that Robert Weber, IBM?s general counsel aired in an interview with Law Blog earlier this year:
Lawyers have a separate set of rules that are used as a defense of the profession policing itself. Once we get to the point that we start behaving like any other business, then I would take the position that we are forfeiting our right to self-regulation.
Backers say expanding ownership could help smaller law firms compete with the big boys, and that it could help make legal services more accessible to consumers. They also say that U.S. firms could find themselves at a competitive disadvantage if more overseas lawyers are allowed to form such businesses.
One difference across the Atlantic: the changes come not from within the British legal community but from government efforts to spur competition in the legal marketplace via the 2007 Legal Services Act, which also imposed an external regulatory scheme on lawyers (here the industry is ?self-regulated). ?Just last week ?U.K. officials approved the first three licenses for ?alternative business structures? where lawyers can team up with other businesses to deliver legal services. The reforms have been dubbed ?Tesco law,” after the ubiquitous British supermarket chain, and one of the three ABS licenses indeed went to a seven-million-member organization called the Co-operative Group that provides not just insurance and banking services, but also — groceries.
In the U.S., the American Bar Association has gone through a couple of rounds on this issue over the decades, pondering whether to allow the provision of legal services via lawyer/non-lawyer combinations. Each time the proposals have been squashed.
This time around, the ABA is considering whether to amend its model rules (used by most state bars as a guide) to allow non-lawyers who work at law firms to own a piece of the action.?To calm the fears of those who see such a plan as the end of professional ethics, an ABA working group has added extra bumpers: ?a 25% cap on the financial/voting interest that non-lawyers could hold, and such partners would have to pass a suitability test and agree to comply with lawyers ethical codes.
That?s even more restrictive than what is now allowed in the District of Columbia, the only U.S. jurisdiction that permits lawyers to share profits with non-lawyers. Members of an ABA ethics commission have not yet decided whether to bring the proposed revision to a vote by the House of Delegates, the group?s policy-making body.
Some law professors and consumer legal advocates applaud the plan — as does the National Federation of Paralegal Associations –?or think it should go even farther. From a letter in support by Thomas D. Morgan,? a professor at the George Washington University Law School:
The critical distinction made in Model Rule 5.4 is that it is lawful for lawyers to employ non-lawyers but not to become their partner if any of the services would traditionally be viewed as practicing law. That is surely a distinction without a difference unless one presumes that lawyers are somehow better people and always deserve to be in control. It is not lawyer bashing to say that no such irrefutable presumption is appropriate. . .
I believe the time has come to put the fact of the rejection of multidisciplinary practice behind us. Multi-service practice is not just of interest only to corporate clients. Social service agencies that want to provide legal services as part of a package of services to the poor have an equal stake in changing the present rules, and as your report notes, most of the applicants for multidisciplinary recognition in the United Kingdom have been relatively small entities.
But state bar associations in New Jersey, Illinois and Arizona aren?t convinced, the U.S. Chamber of Commerce?s Institute for Legal Reform takes a dim view, and a raft of general counsel have also written it to oppose the proposed draft.
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