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D.C. Latest Jurisdiction to Mull Law Firm Ownership Rule Changes

Jan. 23, 2020, 10:45 PM

Washington D.C.'s bar will study alternatives to existing law firm ownership rules, joining a growing list of states and cities weighing whether to loosen these rules.

A D.C. Bar committee announced Thursday it will study evolving legal service delivery models in the U.S. and abroad, including non-lawyer ownership of law firms. It will also seek public comment on these matters.

Bar members will be able to weigh in through March 9 on whether loosened rules involving fee-sharing and other “alternative business structures” might prove beneficial to firms and their clients.

Such changes have been supported by access to justice advocates across the country who seek more affordable options for Americans seeking legal help. But opponents of rule changes have expressed concerns, including about threats posed to attorney independence and legal ethics.

The D.C. Bar’s notice follows the state bar task forces in Arizona, California, and Utah, as well as Chicago, which for the last several months have been weighing similar changes. Many involve modifying Bar Rule 5.4 and its strict limits on law firm ownership.

Andrew Perlman, dean of Suffolk Law School in Boston, said in a written statement that the D.C. Bar announcement is “an encouraging development.”

“Decades ago, D.C. became a leader in this area, and D.C. has the opportunity once again to play a leadership role,” he said.

The possibility of loosened law firm ownership rules in the nation’s capital could be of special interest to the Big Four accountancies. Law firm leaders have noted that the Big Four and other alternative legal service providers could take advantage of such a change by opening new legal operations that compete more directly with law firms.

D.C.'s version of Rule 5.4 is already slightly less restrictive than the American Bar Association’s Model Rule 5.4 that most states have adopted, which forbids partnerships between lawyers and nonlawyers if any of the activities of the partnership consist of the practice of law.

The bar committee studying the issue, called the Global Legal Practice Committee, may propose recommendations that include proposed bar rules revisions to the D.C. Court of Appeals, which governs the practice of law in the capital, D.C. Bar spokeswoman Andrea Williams said in a statement.

At that point, the court could decide to pursue rule changes, she said.

To contact the reporter on this story: Sam Skolnik in Washington at sskolnik@bloomberglaw.com

To contact the editors responsible for this story: Jessie Kokrda Kamens at jkamens@bloomberglaw.com; Rebekah Mintzer at rmintzer@bloomberglaw.com

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