California Bar considers proposal to permit nonlawyers to provide legal advice and limited legal services, and own law firm

Hello everyone and welcome to this Ethics Alert which will discuss the recent proposal of a California State Bar working group to permit licensed paraprofessionals to give legal advice and limited legal services, and own law firms.  The purpose and charter of the California Bar’s Paraprofessional Program Working Group is here: https://www.calbar.ca.gov/About-Us/Who-We-Are/Committees/California-Paraprofessional-Program-Working-Group and the working group’s September 23, 2021 Report and Recommendations are here: https://www.calbar.ca.gov/Portals/0/documents/publicComment/2021/CPPWG-Report-to-BOT.pdf 

Pursuant to the very detailed Report and Recommendations of the California Paraprofessional Program Working Group, licensed paraprofessionals would be allowed to represent parties in court in certain situations; however, with a complete prohibition on representation in jury trials.  In addition, if approved, paraprofessionals would be permitted to provide services in family law, housing, consumer debt, employment/income maintenance, and collateral criminal matters. Paraprofessionals would also be permitted to have minority ownership interests in law firms. 

The report further recommends that an extensive discipline/regulation system be implemented and that recommends that there be no limits on the fees that licensed paraprofessionals will be authorized to charge, except as provided in Rule 1.5.1(c) of the Paraprofessional Rules of Professional Conduct.

The working group cites to the California Bar’s 2019 Justice Gap Study which found that “while 55 percent of Californians experience at least one civil legal problem in their household each year, they received inadequate or no legal help for 85 percent of these problems. A lack of knowledge about what constitutes a legal issue, deciding to deal with the  problem without help, and concerns about the cost of legal services were identified as primary factors that prevent many people from seeking legal assistance.”

There were extensive dissenting opinions and alternative recommendations in the report.  Public comments on the California proposal are due by January 12, 2022 and the California Bar is then expected to consider a final proposal later in the year. Any plan approved by the California Bar would be sent to the California Supreme Court and the California state legislature for review and potential approval.             

As I have previously blogged, the states of Washington, Utah and Arizona have previously created such programs for paraprofessionals, and several other states, including Florida, are considering doing so.  New York is also considering implementation of a working group’s recommendation that it license social workers to perform some legal tasks.  As I also previously blogged, the Washington Supreme Court voted to sunset its Limited License Legal Technicians program, citing to costs and an apparent lack of interest. 

Bottom line: California becomes another state considering allowing nonlawyers (paraprofessionals) to provide legal services and own law firms.  It now seems to be a trend.  Stay tuned and… 

Be careful out there.

If you have any questions about this Ethics Alert or need assistance, analysis, and guidance regarding these or any other ethics, risk management, or other issues, please do not hesitate to contact me. 

Disclaimer:  this e-mail is not an advertisement and does not contain any legal advice 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.

2999 Alt. 19, Suite A

Palm Harbor, Florida

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Joseph Corsmeier about.me/corsmeierethicsblogs

ABA formal opinion addresses passive investment in nonlawyer owned law firms in jurisdictions which allow it

Hello everyone and welcome to this Ethics Alert, which will discuss ABA Formal Ethics Opinion 499 which addresses lawyers’ passive investments in nonlawyer owned law firms in jurisdictions which allow it.  The September 8, 2021 Formal Opinion 499 is here: https://www.americanbar.org/content/dam/aba/administrative/professional_responsibility/aba-formal-opinion-499.pdf   

According to the opinion, a lawyer generally may invest passively in a law firm that includes nonlawyer owners in jurisdictions that permit such alternative business structures. The lawyer may passively invest even if the lawyer practices law in a jurisdiction that does not permit such nonlawyer ownership.

Most jurisdictions, including Florida, follow ABA Model Rules of Professional Conduct, specifically Model Rule 5.4, which prohibits nonlawyer ownership of law firms and prohibits lawyers from sharing fees or forming partnerships with nonlawyers. The opinion addresses whether a lawyer practicing in a jurisdiction that adheres to a version of Rule 5.4 (a “Model Rule Lawyer”) may invest in an alternative business structure in another jurisdiction. 

Arizona, the District of Columbia and Utah have modified their rules to permit nonlawyer ownership of firms and the sharing of legal fees. Arizona eliminated Rule 5.4 and allowed nonlawyer owners or investors in law firms to be certified as alternative business structures earlier this year.  The Florida Supreme Court’s Special Committee to Improve Delivery of Legal Services (of which I am a member) has recommended the authorization of minority nonlawyer ownership of law firms. 

The ABA formal opinion concludes:

A lawyer admitted to practice law in a Model Rule jurisdiction may make a passive investment in  a law firm that includes nonlawyer owners operating in a jurisdiction that permits such investments  provided that the investing lawyer does not practice law through the ABS, is not held out as a  lawyer associated with the ABS, and has no access to information protected by Model Rule 1.6 without the ABS clients’ informed consent or compliance with an applicable exception to Rule 1.6 adopted by the ABS jurisdiction. With these limitations, such “passive investment” does not run afoul of Model Rule 5.4 nor does it, without more, result in the imputation of the ABS’s client conflicts of interest to the investing Model Rule Lawyer under Model Rule 1.10. The fact that a conflict might arise in the future between the Model Rule Lawyer’s practice and the ABS firm’s work for its clients does not mean that the Model Rule Lawyer cannot make a passive investment in the ABS. If, however, at the time of the investment the Model Rules Lawyer’s investment would create a personal interest conflict under Model Rule 1.7(a)(2), the Model Rule Lawyer must refrain from the investment or appropriately address the conflict pursuant to Model Rule 1.7(b).

Bottom line: As I indicated, most jurisdictions (including Florida) still continue to prohibit nonlawyer ownership of law firms and prohibits lawyers from sharing fees or forming partnerships with nonlawyers; however, Arizona and Utah have joined D.C in permitting nonlawyer ownership of law firms.  This opinion provides guidance to lawyers who are admitted in jurisdictions which permit such “alternative business structures”.  .

            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.

2999 Alt. 19, Suite A

Palm Harbor, Florida

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Joseph Corsmeier about.me/corsmeierethicsblogs

Utah Supreme Court approves Rocket Lawyer and other entities to participate in regulatory “sandbox”

Hello everyone and welcome to this Ethics Alert, which will discuss recent approval of Rocket lawyer and other entities to participate in Utah’s pilot regulatory “sandbox program. 

On September 8, 2020, Rocket Lawyer announced that it was one of the first entities approved by the Utah Supreme Court to participate in the regulatory “sandbox” program permitting, inter alia, nontraditional legal service providers.  Rocket Lawyer’s website is here:  https://www.rocketlawyer.com/ 

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 approved the regulatory “sandbox” pilot program as the primary part of a regulatory reform package which was designed to allow the testing of innovative approaches to serving legal consumers will ultimately improve the public’s access to justice.  The Court’s August 14, 2020 Standing Order is here: http://www.utcourts.gov/utc/rules-approved/wp-content/uploads/sites/4/2020/08/FINAL-Utah-Supreme-Court-Standing-Order-No.-15.pdf   

A total of five entities were approved for participation in the sandbox program.  The other approved applicants were:

1. LawHQ: A Salt Lake City law firm which plans to offer equity ownership to certain software developers in the firm and a software application called CallerHQ, which is designed to allow consumers to report spam telephone calls, text messages and voicemails. Consumers who sign up may then be included in a mass tort litigation brought by LawHQ against the spammers.

2. 1Law: An entity which plans to provide no-cost and low-cost legal services to assist clients in completing court documents and also offer related legal advice using chatbots, instant messaging, automated interviews, nonlawyer staff and technology-assisted lawyers. 1Law plans to have more than 50% nonlawyer ownership.

3. LawPal: An entity which plans to provide a TurboTax-like technology platform to generate legal documents in contested and uncontested divorce and custody cases, eviction cases and debt-related property seizure cases. It expects to feature 50% nonlawyer ownership.

4. Blue Bee Bankruptcy Law: The sole owner of this law firm states that he will give his paralegal employee a 10% ownership interest in the firm as an incentive to remain with the firm.

The Utah Supreme Court’s Order creating the pilot sandbox program states that participants must demonstrate that the activities and services “do not cause levels of consumer harm above threshold levels established by” the Court’s innovation office.  Successful sandbox participants may also ultimately receive approval to exit the sandbox program and continue practicing the services after the pilot program ends.

After the two-year pilot program period, which began on August 14, 2020, is over, the Utah Supreme Court will evaluate whether the program should continue “based on a review of data collected from those entities and individuals participating in the program.”  If not approved to continue, the program will sunset after the 2 year period.  

As I previously blogged, the Arizona Supreme Court recently approved rule revisions which will permit alternative legal business structures.  The Arizona rule revisions become effective January 1, 2020 and there are no provisions for a regulatory “sandbox program”.  My blog is here:  https://jcorsmeier.wordpress.com/2020/09/02/arizona-becomes-first-u-s-state-to-authorize-non-lawyer-ownership-of-law-firms-and-fee-sharing/

Bottom line:  As I have said before, if this trend continues, this could become the wave of the future in other states and jurisdictions. 

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.

2999 Alt. 19, Suite A

Palm Harbor, Florida

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Joseph Corsmeier about.me/corsmeierethicsblogs

Utah Supreme Court authorizes pilot program which, inter alia, permits non-lawyers to own law firms and share fees with lawyers

Hello everyone and welcome to this Ethics Alert, which will discuss recent Utah Supreme Court approval of a pilot program which would permit non-lawyers to own law firms, share fees with lawyers, and makes other significant revisions.  The link to the Utah Supreme Court’s Standing Order No. 15 approving the pilot program is here:  http://www.utcourts.gov/utc/rules-approved/wp-content/uploads/sites/4/2020/08/FINAL-Utah-Supreme-Court-Standing-Order-No.-15.pdf and the Utah Bar Rule revisions related to the pilot program are here: http://www.utcourts.gov/utc/rules-approved/2020/08/13/supreme-court-regulatory-reform-effective-august-14-2020/.  The Standing Order and Rule revisions were effective August 14, 2020 and will sunset in two years unless there is a further order of the Court.

The details of the “pilot legal regulatory sandbox” are set forth in the Supreme Court’s Standing Order 15 and in the revisions to the Utah Rules of Professional Conduct.  The program creates a “regulatory sandbox” for non-traditional legal providers and services, including entities with non-lawyer investment or ownership and also creates an Office of Legal Services Innovation, which will assess the sandbox applicants and make recommendations to the Court and also supervise the applicants who are authorized by the Court to offer legal services.

According to the Utah Supreme Court’s August 13, 2020 press release:

“These changes allow individuals and entities to explore creative ways to safely allow lawyers and non-lawyers to practice law and to reduce constraints on how lawyers market and promote their services. In order to assess whether the changes are working as intended, the Supreme Court has authorized the core portions of these changes for a two-year period. At the conclusion of that time, the Supreme Court will carefully evaluate whether the program should continue. The evaluation will be based on a review of data collected from those entities and individuals participating in the program. The Supreme Court’s willingness to experiment with innovation is an important step, especially now, because the need for more affordable legal help has reached crisis levels as a result of the COVID-19 pandemic and its economic fallout.”

According to the press release, after the 90 day period which was allotted for input, the Supreme Court made a number of changes to the initial proposals. These changes “included: (1) increasing transparency into the application and approval process, (2) adding clearer channels for complaints regarding the new legal services, (3) severely restricting any roles for disbarred or suspended lawyers and those with certain felony convictions, (4) more explicitly articulating the program’s access-to-justice goals, (5) and more clearly delineating that the program will sunset in two years absent further order of the Supreme Court.”

The Utah Supreme Court’s press release is here: https://www.utcourts.gov/utc/news/2020/08/13/to-tackle-the-unmet-legal-needs-crisis-utah-supreme-court-unanimously-endorses-a-pilot-program-to-assess-changes-to-the-governance-of-the-practice-of-law/

Bottom line:  If the Utah Supreme Court’s pilot program is made permanent, it will radically change the practice of law in Utah and may also become the wave of the future in other states and jurisdictions.

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.

2999 Alt. 19, Suite A

Palm Harbor, Florida

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

 

Joseph Corsmeier about.me/corsmeierethicsblogs

Utah Supreme Court proposals would permit non-lawyers to own law firms and share fees with lawyers

Hello everyone and welcome to this Ethics Alert, which will discuss recent Utah Supreme Court proposals which would permit non-lawyers to own law firms, share fees with lawyers, and make other significant revisions.  The link with the Utah Supreme Court Regulatory Reform Proposals is here:  http://www.utcourts.gov/utc/rules-comment/2020/04/24/supreme-court-regulatory-reform-proposal-comment-period-closes-july-23-2020/

The proposals would allow non-lawyers to own or invest in law firms, eliminate the prohibition on attorney fee sharing with non-lawyers, and create a new Office of Legal Services Innovation.  These proposals result from a review conducted by Utah’s Implementation Task Force on Regulatory Reform, which was created after a working group issued a report in 2019 recommending a variety of measures to address access to legal services. The Utah Supreme Court is requesting comments by July 23, 2020.

If the proposals are implemented, Utah would join the United Kingdom and Australia in permitting such activities and it would the first U.S. jurisdiction to make these changes, although Washington D.C. does allow non-lawyers to own law firms).

If the proposals are adopted, a pilot regulatory “sandbox” would oversee and evaluate nontraditional legal services providers and entities offering new types of legal services. The oversight would be provided by a new Office of Legal Services Innovation, which would conduct reviews to ensure that “sandbox” participants are meeting the various objectives and principles set forth by the Utah Supreme Court.  A process would also be established for determining which participants would receive the appropriate license to practice law.

The Utah Supreme Court issued a press release on April 24, 2020 describing the proposals and providing information.  The link to the press release is here: http://www.utcourts.gov/utc/rules-comment/wp-content/uploads/sites/31/2020/04/Supreme-Court-Regulatory-Reform-PR-4-24-20.pdf.  According to the press release:

“The Utah Supreme Court has recognized the lack of affordable legal services can be devastating for many people. Between free but limited legal aid, and standard attorney service that can easily exceed $200 an hour, there are few options for affordable legal help.  The current COVID-19 pandemic has underscored the importance of finding new, affordable, and high-quality innovations as quickly as possible.

That is why the Supreme Court is offering expedited review and approval of proposals from individuals and entities who believe they can offer low-cost, or no-cost, legal advice for small businesses, people with unemployment issues, and others.”

Bottom line:  These Utah Supreme Court proposals have been under review and consideration in Utah for a number of years and I have previously blogged about them.  It now appears that the Covid-19 pandemic and the ongoing economic disruption have accelerated the Utah Supreme Court’s view of the necessity for these revisions/programs and that the changes be expedited.

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.

2999 Alt. 19, Suite A

Palm Harbor, Florida

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

 

Joseph Corsmeier about.me/corsmeierethicsblogs

 

Arizona legal advocates program beginning in September 2020 will train non-lawyers to provide limited legal advice

Hello everyone and welcome to this Ethics Alert which will discuss the Arizona licensed legal advocates program beginning in September 2020 which will provide training for non-lawyers to provide limited  legal advice.  A recent news release on the program by the University of Arizona James E. Rogers College of Law is here:  https://law.arizona.edu/news/2020/02/new-licensed-legal-advocates-pilot-program

The Rogers College of Law initiated a two-year pilot project that will license a small group of non-lawyers to give limited legal advice on civil matters related to domestic violence.  The individuals will be known as licensed legal advocates and will be trained to provide legal advice on protective orders, divorce, child custody, consumer protection and housing.

Three to four lay legal advocates from Southern Arizona’s Emerge! Center Against Domestic Abuse are expected to start an eight-week training program at the law school in September 2020.  The individuals must have a bachelor’s degree and at least 2,000 hours of experience as a lay legal advocate.  The Arizona lay legal advocates will be permitted to provide general information about legal forms and court procedures in issues stemming from domestic violence, but are prohibited from providing legal advice.

The training will have an online curriculum and in-person classes.  The Arizona Supreme Court’s Administrative Office of the Courts is working with the Innovation for Justice Program to include a licensing examination for the course. If the pilot is made permanent, the licensed legal advocates will be required to take continuing legal education courses after completing the training.  Individuals who are required to appear in court in a matter will represent themselves; however, the licensed legal advocate will be permitted to sit at that individual’s table.

The pilot project runs until the end of 2021 and includes a research study which will review procedural fairness, whether a licensed legal advocate was able to provide the required level of legal services, and case outcomes.

The 2020-2021 pilot project results from a 2019 Arizona Supreme Court task force report on legal services delivery which recommended, inter alia, the elimination Arizona Rule of Professional Conduct 5.4 (based on Rule 5.4 of the ABA Model Rules of Professional Conduct) which restricts lawyer partnerships with nonlawyers in law firms.  An American Bar Association Task Force Report in October 2019 also recommended elimination of the Model Rule

The October 2019 American Bar Association Task Force on the Delivery of Legal Services Report is here:   https://www.americanbar.org/content/dam/aba/administrative/legal_education_and_admissions_to_the_bar/council_reports_and_resolutions/november2019/arizona-supreme-court-task-force-on-delivery-of-legal-services-final-report-2019-october.pdf

The Arizona Supreme Court is expected to vote on the recommendation to eliminate Arizona Bar Rule of Professional Conduct 5.4 in August 2020.

The Arizona Supreme Court authorized a pilot project creating a legal document preparer program to assist people in domestic violence matters.  As I previously reported, the Utah Supreme Court voted in August 2019 to pursue a regulatory reform working group’s recommendations, which included either eliminating or relaxing Utah’s Rule 5.4 and the Ethics Alert blog on that vote and working group report is here:  https://jcorsmeier.wordpress.com/2019/09/03/utah-supreme-court-approves-pilot-program-to-permit-non-traditional-legal-services-including-non-lawyer-firm-ownership/

The Utah working group report and the Arizona Supreme Court task force report are both referenced in the report accompanying proposed American Bar Association Resolution 115, which is scheduled to be considered and potentially approved by the ABA House of Delegates on Feb. 17, 2020 at the ABA Midyear Meeting in Austin, Texas. The resolution requests that the ABA to encourage jurisdictions to consider regulatory innovation and examine existing regulations, including those related to the unauthorized practice of law.

Bottom line:  This Arizona non-lawyer “legal advocate” pilot program permitting non-lawyers to give limited legal advice is a continuation of the trend toward expanding the non-lawyer practice of law and also authorizing non-lawyers to own legal service entities.  As always, I will be following it and I will keep you advised

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.

2999 Alt. 19, Suite A

Palm Harbor, Florida 34683

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

 

Joseph Corsmeier about.me/corsmeierethicsblogs

 

Washington D.C. Bar considers relaxing Bar Rules related to non-lawyer law firm ownership and fee splitting

Hello everyone and welcome to this Ethics Alert which will discuss a Washington D.C. Bar committee press release announcing a review regarding the potential relaxing of that jurisdiction’s non-lawyer law firm ownership rules, including potential fee sharing/splitting.  The January 23, 2020 D.C. Bar press release announcing the review is here: https://www.dcbar.org/about-the-bar/news/DC-Bar-Global-Legal-Practice-Committee-Seeks-Public-Comment-on-Rule-of-Professional-Conduct-5-4.cfm

Washington D.C. is the only U.S. jurisdiction that allows lawyers to partner with nonlawyers and those partnerships are subject to certain restrictions; however, a D.C. Bar committee has announced that it will be exploring less restrictive rules.  According to the D.C Bar press release, the D.C. Bar’s Global Legal Practice Committee will be taking public comments on its current system and potential changes until March 9, 2020.

The press release identifies “alternative business structures” and “multidisciplinary practice” as areas of interest. United Kingdom rules permit alternative business structures which authorize legal service providers to apply for licenses allowing outside ownership or non-lawyer investment.  Multidisciplinary practice refers to a type of Alternative Business Structures (ABS) firm that provides both legal and non-legal services.

The current Washington D.C. Bar rule permitting non-lawyer ownership is a modification of the American Bar Association’s Model Rule 5.4(b) and was implemented in 1991.  The rule permits lawyers to practice law in a with non-lawyer partners/owners if the non-lawyers provide professional services within the firm, the law firm solely offers only legal services, and non-lawyers follow the rules of professional conduct.

The press release states that the committee would like to receive responses from Washington D.C. law firms that have non-lawyer partners to determine if the current rules have made it easier to retain professionals including medical doctors or nurse practitioners, mental health experts, economists, lobbyists, accountants and law firm managers. The press release also states that it would like to know if there is any client demand for more types of professional services, and whether firms have lost business because of their inability to deliver these services.

The press release also requests comments regarding how law firms could benefit from sharing fees with non-lawyers, and whether this outside investment would allow greater innovation through technology use or increased financial stability.  The committee is also considering how a rule change would impact firms that currently work with third-party litigation funders, or are interested in doing this and will be examining what type of regulatory structure would work best for non-lawyers working within law firms.

California, Utah and Arizona also have Bar task forces which are examining similar potential revisions and the Chicago Bar Association has announced the creation of a task force.  The ABA’s House of Delegates will also consider a resolution that would encourage jurisdictions across the U.S. to experiment with new regulatory models at its February midyear meeting in Austin, Texas.

Bottom line:   As I indicated, Washington D.C. is the only U.S. jurisdiction that currently allows lawyers to partner with nonlawyers and those partnerships are subject to certain restrictions; however, D.C. is considering relaxing its rules and other jurisdictions are considering new rules related to non-lawyer ownership of law firms.

I will keep you advised…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.

2999 Alt. 19, Suite A

Palm Harbor, Florida 34683

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Joseph Corsmeier about.me/corsmeierethicsblogs

Utah Supreme Court approves pilot program to permit non-traditional legal services, including non-lawyer firm ownership

Hello everyone and welcome to this Ethics Alert, which will discuss the unanimous Utah Supreme Court approval of a pilot program to permit non-traditional legal services, including non-lawyer firm ownership.  The report of the Utah Work Group on Regulatory Reform titled Narrowing the Access-To-Justice Gap by Reimagining Regulation is here:  https://www.utahbar.org/wp-content/uploads/2019/08/FINAL-Task-Force-Report.pdf

In an opinion dated August 29, 2019 (which is not yet published), the Utah Supreme Court voted unanimously to approve the recommendations of the work group which called for “profoundly reimagining the way legal services are regulated in order to harness the power of entrepreneurship, capital, and machine learning in the legal arena.”

The work group proposed the creation of a new structure in Utah for the regulation of legal services that would provide for broad-based investment and participation in business entities that provide legal services, including non-lawyer investment in and ownership of these entities.  The report stated that this goal should be achieved in two ways:

1. Substantially loosening regulatory restrictions on the corporate practice of law, lawyer advertising, solicitation, and fee arrangements, including referrals and fee sharing and;

1. Simultaneously establishing a new regulatory body, under the supervision of the Supreme Court, to advance and implement a risk-based, empirically-grounded regulatory process for legal service entities.

The Utah Supreme Court’s approval of the recommendations begins the first stage the report’s recommendations, which includes the creation of an implementation task force that will establish the new regulatory body as a pilot program that will be in place for about two years. The regulatory body will work with the Utah State Bar, which will continue to maintain its authority over lawyers and licensed paralegal practitioners (LPPs) and regulate non-traditional legal services which is not currently allowed under Utah’s rules.

Stage one of the plan also includes the creation of a “regulatory sandbox” which will be managed by the new regulating body, and will allow a limited market of non-traditional legal entities to provide legal services in the state. According to the report, “The goal is to allow the Court and aspiring innovators to develop new offerings that could benefit the public, validate them with the public, and understand how current regulations might need to be selectively or permanently relaxed to permit these and other innovations.”

The report also requested the Supreme Court to order three changes that would allow the pilot to operate as part of the first stage, including:

1. Creation of the regulating body as an implementation task force of the court and delegate regulatory authority to set up and run the regulatory sandbox;
2. Establish that providers approved to participate in the regulatory sandbox are not engaged in the unauthorized practice of law in Utah; and
3. Establish that lawyers will not be subject to discipline for entering into business with or otherwise providing services with providers in the sandbox.

The court has not issued a written order and a Utah Supreme Court Justice who was on the Task Force stated that he expects the court to issue a press release soon providing further details.

As I previously blogged, the Utah Supreme Court previously approved Limited License Practitioner Rules which became effective November 1, 2018 and the first LLPs in Utah were expected to be licensed in 2019.  This makes Utah the most recent state to license non-lawyers to practice law and will allow LLPs practice without a lawyer’s supervision in three areas, including matters involving temporary separation, divorce, parentage, cohabitant abuse, civil stalking, custody and support, and name change, matters involving forcible entry and detainer, and debt collection matters in which the dollar amount in issue does not exceed the statutory limit for small claims cases.  LLPs will not be permitted to appear in court on behalf of a client.

Bottom line:  This is a very significant step toward the acceptance of non-traditional and non-lawyer practice in Utah and in the United States.  All of the states which have approved such rules are in western states, so far.  The beat goes on…stay tuned.

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.

2999 Alt. 19, Suite A

Palm Harbor, Florida

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Please note:  My office has moved and the new office address is 2999 Alt. 19, Palm Harbor, FL 34683.  All other contact information remains the same.

Joseph Corsmeier about.me/corsmeierethicsblogs

 

California Bar examines proposal that non-lawyers be permitted to provide legal advice and have a financial interest in law firms

Hello everyone and welcome to this Ethics Alert, which will discuss the recent proposals of a State Bar of California task force which would, inter alia, permit legal technicians to offer legal advice and also permit non-lawyers to have a financial interest in law firms.  The proposals were approved by the State Bar Board of Trustees on July 11, 2019.

The proposals were developed by the California Bar’s Task Force on Access Through Innovation of Legal Services.  The task force’s proposals would make sweeping changes by modifying the restrictions on the unauthorized practice of law and ethics rules that prohibit fee sharing with nonlawyers and would also permit legal technicians to provide legal advice and practice law.  The California Bar press release announcing the proposals is here: http://www.calbar.ca.gov/About-Us/News-Events/News-Releases/board-approves-public-comment-on-tech-task-forces-regulatory-reform-options-under-consideration.  The California Bar agenda item with the proposals is here:  http://board.calbar.ca.gov/docs/agendaItem/Public/agendaitem1000024450.pdf

The proposals would permit non-lawyers to provide certain specified legal advice and services, with the appropriate regulation, and permit entities that provide legal or law-related services to be made up of lawyers, nonlawyers or a combination of the two. The regulations would differ depending upon the type of entity, and also permit lawyers to be part of a law firm in which a nonlawyer holds a financial interest.

The task force proposed two alternatives.  The first would include provisions permitting non-lawyers to provide services that assist the lawyers or law firm in providing legal services, and state that the nonlawyers have no power to direct or control the professional judgment of the lawyers. The other would permit lawyers to share fees with non-lawyers as long as the client provides written consent.

The proposals also would also permit state-approved businesses to use legal technology to deliver legal services.  Regulatory standards governing the provider and the technology would be established and client communications with such entities would be covered by attorney-client privilege/confidentiality.

According to the California Bar press release:  “The State Bar Board of Trustees on July 11 authorized a 60-day public comment period for a sweeping set of regulatory reform options for improving access to legal services, developed by the Task Force on Access Through Innovation of Legal Services (ATILS).”

“Beginning next week, the State Bar will seek written comment from consumers, legal service providers, technology experts, and lawyers as vital input for evaluating the options. The Task Force also plans to hold a public hearing to receive oral testimony. The hearing, to take place on August 10, 2019, at the State Bar’s San Francisco office, is timed to coincide with this year’s annual meeting of the American Bar Association.”

Bottom line:  These California Bar proposals have a long way to go before being potentially implemented; however, if they are eventually implemented, California will be another one of the few states which would permit legal technicians to offer legal advice and the only jurisdiction (other than the District of Columbia) to permit nonlawyers to hold a financial interest in law firms.  Stay tuned…

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.

29605 U.S. Highway 19 N. Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Joseph Corsmeier about.me/corsmeierethicsblogs

ABA adopts Resolution 105 encouraging states to consider non-traditional legal service providers, including non-lawyer firm ownership

Hello and welcome to this Ethics Alert blog which will discuss the American Bar Association’s February 8, 2016 approval and adoption of Formal Resolution 105, which adopts the ABA Model Regulatory Objectives for the Provision of Legal Services.  The Final ABA Resolution 105 as Revised and Adopted is here: http://www.americanbar.org/content/dam/aba/images/abanews/2016mymres/105.pdf

According to the ABA website, Resolution 105 “(a)dopts the ABA Model Regulatory Objectives for the Provision of Legal Services, dated February, 2016 and urges that each state’s highest court, and those of each territory and tribe be guided by the Model Regulatory Objectives when they assess the court’s existing regulatory framework and any other regulation they may choose to develop concerning non-traditional legal service providers.” https://www.americanbar.org/news/reporter_resources/midyear-meeting-2016/house-of-delegates-resolutions/105.html

The ABA Resolution calls for the adoption of “regulatory objectives for the provision of legal services” that would help “identify and implement regulations related to legal services beyond the traditional regulation of the legal profession.”  With the exception of the District of Columbia, no jurisdiction in the U.S. permits non-lawyer ownership of law firms (although the United Kingdom and some U.K. commonwealth countries do permit it).

The arguments for non-lawyer ownership of law firms include that it would expand consumers’ access to legal services, encourage innovation, and reduce the cost of legal services; however, the Resolution has drawn criticism.  The arguments against non-lawyer ownership include that it would encourage profit making (and taking) over serving clients and the public.

According to a Wall Street Journal “LawBlog” article (quoting AmLaw Daily)”:

(T)he mere mention of “non-traditional legal service providers” raises hackles for some in the ABA. The Texas state bar board, for example, has asked Texas delegates to withhold their support for Resolution 105.  State bar president-elect Frank Stevenson II of Locke Lord said the board opposes the proposal because it seems to presume there’s a place for non-lawyers to provide legal services.”

The LawBlog article also states that “(t)he New York State Bar Association is also fighting against the resolution, saying it would open the door to nonlawyer firm ownership. ‘Nonlawyer ownership of law firms creates a whole new set of fiduciary responsibilities, which have nothing to do with the best interests of the clients we are duty-bound to serve,’ the state bar’s president, David P. Miranda, said in a statement.”

Bottom line: This is has been, and continues to be, a very controversial issue; however, there does not seem to be much support for non-lawyer ownership of law firms in Florida or other jurisdictions.

Disclaimer:  this e-mail is not an advertisement and does not contain any legal advice 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.

2454 McMullen Booth Road, Suite 431

Clearwater, Florida 33759

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com