The debate surrounding nonlawyer ownership in law firms is heating up, and with some potentially drastic consequences.
Personal injury firm Jacoby & Meyers is currently suing New York for the right to accept capital investments from nonlawyers. The American Bar Association appears favorable to this request, as it is proposing an amendment to the similar Model Rule 5.4.
But then we have England, where such ownership is allowed. Lawyers there are now providing services in grocery stores.
As of this writing, the District of Columbia is the only jurisdiction to allow limited nonlawyer ownership, reports Reuters. But that nonlawyer must perform services that assist the firm in providing legal services to clients.
The ABA's proposed rule, decided upon in August, would allow other professionals to own up to 25% of a law firm so long as they are of good moral character. This is contrary to the current rules which prohibit the sharing of legal fees with nonlawyers.
Some are questioning such a change, citing differing codes of ethics. Confidentiality and privilege may also be an issue, reports the New York Times, especially when shareholders want information.
Those who favor the change cite outside capital investment as a way to increase efficiency and lower prices. More people will be able to afford basic legal services.
Then again, look at England. Should Walmart own a law firm? Or how about McDonald's? Should people be able to get a will while out for a quick meal? What will nonlawyer ownership do to American lawyers?
- Jacoby & Meyers Continues Push to Allow Nonlawyers to Own Stake in Firms (Wall Street Journal)
- North Carolina May Allow Non-Attorneys to Invest in Law Firms (FindLaw's Strategist)
- Jacoby & Meyers Sues to Allow Nonlawyers to Own Law Firms (FindLaw's Strategist)