Momentum Grows For Change In Law Firm Ownership Rules

December 29, 2020

There is a growing list of states considering a change to their legal system rules that would allow non-lawyer entities to own law firms. New York, Illinois, Connecticut, Florida, and North Carolina are all exploring the possibility of making substantial ownership changes they hope could potentially make civil legal services more affordable to middle class and poor litigants. Some states have already taken steps in that direction.  For example, in August, Arizona became the first state to formally allow non-lawyers to co-own law firms and other legal services.  These changes in Arizona go into effective January 1, 2021.

By easing ownership restrictions, states could open inroads into a traditionally closed-off profession and allow for the emergence of technology to play a greater role as the legal profession expands its reliance on online communications platforms. These changes could also benefit demographics that have historically under-utilized the legal profession due to the financial barriers set up by the current ownership restrictions. They could also provide a market for walk-up or online companies offering basic legal services.

The potential changes in ownership rules could also benefit the Big Four accounting firms, KPMG, PwC, Deloitte, and EY, who have dreamed of practicing law in the United States as they do in other parts of the world. Revisions to the ownership requirements in key legal markets like New York, California, Illinois, and Washington D.C., could renew a push by the Big Four to begin a legal practice in the United States. The Big Four could pose a serious threat to traditional law firms due to their versatile and adaptive business models, which are often viewed as more efficient than those used by traditional firms.

The Chicago Bar Association and the Chicago Bar Foundation sponsored a task force to review the ownership laws in Illinois. They issued a report in late September to the Illinois Supreme Court—among their recommendations was that lawyers should be allowed to partner with non-attorneys to provide legal tech solutions. In response the Illinois Supreme Court has formed a special working group to conduct a review of the Chicago task force’s report and provide a recommendation to the Court early 2021.

For information on changing law firm ownership rules please contact the attorneys at Rock Fusco & Connelly, LLC.

 

 

 

 

 

rockfuscoconnelly