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Solos: Don't Go Partnering With Non-Lawyers Quite Yet

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By George Khoury, Esq. on October 06, 2017 7:00 AM

When it comes to the question of non-lawyer ownership of law firms, there are often a few voices in the crowd that seem to insist it would be good for one reason or another. But, even being as fair as possible, none of those reasons are ever really that good.

And when it comes to non-lawyer ownership saving solo law firms, well, that just seems oxymoronic. If a non-lawyer owns a solo law firm, is it even a solo law firm?

How Solo Can You Go?

For most solo, and even small firm, practitioners, taking on a non-lawyer business partner could be a huge, career ending, mistake.

First off, outside of foreign jurisdictions and Washington D.C., law firms cannot have non-lawyer partners or owners, so there's that little piece of professionalism to deal with. But apart from the whole attorney discipline thing, if you can't create enough value to hire on that non-lawyer you're considering partnering up with, what makes you think there'll be enough profits to share?

A Double Standard

For law firms that are currently being crushed under the weight of bank debts, it may seem like an irrelevant double standard. The big fear on non-lawyer ownership is the clouding of an attorney's professional judgment. However, banks that offer financing to law firms, often impose restrictions on those firms. Banks, unlike private owners/investors, are less likely to be flexible when it comes to the terms of financing.

An Ethical Quandary

At this point, it seems that allowing non-lawyer ownership wouldn't be much of a leap from what already exists, given that banks can dictate how lawyers run their practices based on the terms of a loan. However, the ABA's Rule 5.4 on the professional independence of a lawyer has yet to be updated, even to reflect our modern times where lawyers are available via multiple web platforms.

Potentially breaking the mold is the new firm Atrium LLP, which is the first ever venture backed "technology-first" law firm. Though Atrium LLP is closely associated with Atrium LTS, as it farms out all of the technology and operations side of the business to it, each operate as separate entities, allowing the Atrium LLPs lawyers to operate and exercise their judgment independently.

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