Thursday, February 2, 2012

ABA Moves Closer to Letting Nonlawyers Own Stake in Firms - Law Blog - WSJ

American Bar Association Moves Closer to Letting Nonlawyers Own Stake in Firms - Law Blog - WSJ:

Today the ABA Ethics 20/20 Commission held public hearings on non-lawyer ownership of law firms.  Vincent Doyle, New York State Bar President in written remarks delivered in Chicago testified that it is worth considering.
"The American Bar Association appears to be warming to the idea of allowing non-lawyers to hold a stake in law firms. A rule change is still a long way off, but the ABA recorded a baby step in December, 2011 when its ethics commission published a proposal for comment."

The proposal is a far cry from a new U.K. law that allows banks, supermarkets and the like to offer legal services to consumers. Let’s start with what it would not allow:

  • publicly traded law firms
  • passive, outside nonlawyer investment or ownership in law firms
  • law firms that offer both legal and non-legal services separately in a single entity
Under the proposal, lawyers would still have to maintain a controlling financial interest and voting rights in the firm, and nonlawyers couldn’t have their own clients or offer nonlegal services to clients. In other words, law firms with nonlawyer ownership would have to stick topracticing law.

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