Arizona becomes first U.S. state to authorize non-lawyer ownership of law firms and fee sharing

Hello everyone and welcome to this Ethics Alert, which will discuss the Arizona Supreme Court’s recent implementation of rule revisions which will permit non-lawyers to own law firms and share fees with lawyers, and also makes other significant rule revisions.  The link to the Court’s August 27, 2020 press release explaining the rule revisions is here:  http://www.azcourts.gov/Portals/201/Press%20Releases/2020Releases/082720RulesAgenda.pdf

When the rule revisions become effective on January 1, 2021, Arizona will become the first U.S. state to implement revisions to its Bar rules permitting non-lawyer ownership of law firms and permitting non-lawyers to share fees with lawyers.

According to the press release, the rule revisions are intended to promote innovation and make legal services more affordable and still protecting the public.

“The court’s goal is to improve access to justice and to encourage innovation in the delivery of legal services. The work of the task force adopted by the court will make it possible for more people to access affordable legal services and for more individuals and families to get legal advice and help.”  “These new rules will promote business innovation in providing legal services at affordable prices.”

The press release states that, after the revised rules become effective, the court will adopt a new licensure process to allow non-lawyers, called “legal paraprofessionals,” to provide limited legal services to the public, including representing clients in court proceedings.  The revisions also eliminate rule 5.4, which prohibits non-lawyers from having an ownership interest in a law firm; however, these “alternative business structures” will be required to obtain licenses.

The Arizona Supreme Court also made revisions to the Bar rules regulating lawyer advertising “most of which align with recent changes made to the American Bar Association’s Model Rules.”

The press release states that more information about the revisions is on the Court’s Access to Legal Services webpage at https://www.azcourts.gov/accesstolegalservices/

Bottom line:  The Arizona Supreme Court’s decision to revise the Bar rules continues the growing trend toward permitting non-lawyers and non-traditional entities to become involved in legal practice and the legal process.

As I previously blogged here: https://jcorsmeier.wordpress.com/2020/08/18/utah-supreme-court-authorizes-pilot-program-which-inter-alia-permits-non-lawyers-to-own-law-firms-and-share-fees-with-lawyers/, the Utah Supreme Court also recently approved a two-year “regulatory sandbox” pilot program permitting non-lawyers to experiment with different methods of delivering legal services outside of the existing regulatory framework.  Washington, D.C. and other states are also considering potential revisions related to the restrictions on non-lawyer involvement in the practice of law.

Stay safe and healthy and be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

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Palm Harbor, Florida

Office (727) 799-1688

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