The Debate Over Non-Lawyer Firm Ownership Is Officially Closed, For Now

May 17, 2016, 11:36 AM

There was no funeral, but the prospect that the American Bar Association would consider non-lawyer ownership of firms at its annual meeting this summer has quietly died.

The ABA’s House of Delegates needed to see a formal proposal on so-called “alternative business structures,” which allow non-lawyer ownership, by May 10.

Alas, the Commission on the Future of the Legal Profession, the ABA group in charge of the debate over ABS, allowed the deadline to pass without submitting anything.

The Commission’s decision to stand down isn’t surprising, given the largely negative feedback from lawyers to its April paper on ABS. At 16 pages, the paper noted ABS could increase access to justice by lowering the cost of legal services, but also create risks around lawyerly independence.

In a series of blunt public comments, more than 30 legal organizations and over 40 individual attorneys sounded off on the question of non-lawyer ownership.

Forty-two of the 43 individual attorneys who made comments voiced opposition to lifting the ABA’s ban on non-lawyer owned firms.

“The only thing you are going to do is make it possible for people without law degrees to start making money, or taking money, from those of us that actually have to practice the stuff,” wrote Thomas Buck, a lawyer in Metairie, Louisiana.

Presently, the ABA’s Model Rule 5.4, a template for state bar associations, prohibits non-lawyer ownership of law firms. The commission’s paper called for feedback from other ABA entities, courts, courts, state bar associations, and others.

It’s not the first time the question of non-lawyer firm ownership has been shot down. In 2012, after negative feedback from the legal community, the ABA’s Commission on Ethics 20/20 decided not to propose changes to the ban.

“WHAT PART OF ‘NO!’ DO YOU NOT UNDERSTAND?,” a delegate in the ABA’s family law section wrote earlier this month. “We remain unalterably opposed to these repeated, previously failed efforts to foist ABS upon our profession or our ethics.”

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