In this context, it is not a surprise that DC's Office of Bar Counsel has never been presented with any complaint, and the Office has never investigated any firm, in connection
with nonlawyer ownership of a law firm.
Not exact matches
The «protectionist instincts» that I and others have are (1) to protect the independence of the bar (sure to be lost eventually under
nonlawyer ownership), (2) to protect the health of the legal marketplace (sure to be badly harmed by the cartelization of ABS (see the 5 % commissions charged by the cartel of real estate agencies who still control the vast majority of the realty market, and especially see the ridiculously high costs of dealing
with the American title insurance industry where four companies have upwards of 87 % of the conveyancing and title insurance market after first decimating the real estate bar
with predatory pricing and other unfair business practices)-RRB-, and (3) to protect the public from those ravages.
The Kutak Commission said over thirty years ago that «[t] he assumed equivalence between [
nonlawyer ownership] and interference
with the lawyer's professional judgment is at best tenuous» and «[a] dherence to the traditional prohibitions has impeded development of new methods of providing legal services» [1].
In the United States, lawyers are prohibited from splitting legal fees
with nonlawyers and therefore banned from sharing
ownership of a law firm.
Just this: the regulations that restrict
nonlawyer ownership and control of law firms combined
with rules on the unauthorized practice of law.
The second change clarified that the ABA has not changed its position
with respect to
nonlawyer ownership of law firms.
In this context, the Commission called for comments on the «potential benefits and risks associated
with ABS,» as well as «evidence or other input» on the relative advantages and disadvantages of different types of ABS (for example,
with limits on the percentage of
nonlawyer ownership and / or multidisciplinary practices).
The Commission ruled out the D.C. approach in favor of a «narrower,» more restrictive approach, which was to require not only that the firm be engaged in legal practice only (not in combination
with non-legal services) and that the
nonlawyer provide services to assist the firm in providing legal services (again, no passive investment), but also imposing (i) a cap on
nonlawyer ownership and (ii) a fit to own test on the
nonlawyers.
In essence, the options were either (1) limited lawyer /
nonlawyer partnerships
with a cap on
nonlawyer ownership and the
nonlawyers would be subject to a «fit to own» test, (2) lawyer /
nonlawyer partnerships
with no cap on
nonlawyer ownership but the firm could provide legal services only (no multidisciplinary services) and the
nonlawyer partner (s) would be required to perform services for the firm (they could not be passive investors; as discussed further below, this option was considered to be the «DC approach»), or (3) the same as Option (2) except the firm could offer multidisciplinary services.
At its meeting on April 12 - 13, 2012, [40] the [Commission] decided not to propose changes to the ABA policy prohibiting
nonlawyer ownership of law firms... The Commission considered the pros and cons, including thoughtful comments that the changes recommended in the [December 2, 2011 paper] were both too modest and too expansive, and concluded that the case had not been made for proceeding
with even a form of
nonlawyer ownership that is more limited than the D.C. model.
The law governing lawyers, that prohibits lawyers from sharing legal fees
with nonlawyers and from directly or indirectly transferring to
nonlawyers ownership or control over entities practicing law, should not be revised.
[42](Later, on August 19, 2013, the ABA Standing Committee on Ethics and Professional Responsibility issued Formal Opinion 464, which clarifies that a lawyer subject to Model Rule 5.4 may share fees
with a law firm practicing in a jurisdiction that permits
nonlawyer ownership, even if those fees might be distributed to a
nonlawyer, provided that there is no interference
with the lawyer's independent professional judgment).
The sharing of legal fees
with nonlawyers and the
ownership and control of the practice of law by
nonlawyers are inconsistent
with the core values of the legal profession.
And Indiana's Bill Henderson warns about the costs to the profession of delay, arguing that our ban on
nonlawyer ownership is driving
nonlawyers to take on various disguises to deliver creatively financed legal services in competition
with lawyers.
The U.K. had a similar rule barring
nonlawyer ownership, but under reforms implemented by the Legal Services Act of 2007 law firms have been able to take on a limited number of non-lawyer partners and lawyers have been allowed to enter into a wide variety of business relationships
with non-lawyers and non-lawyer owned businesses.
Those issues relate to virtual law practice, choice of law problems associated
with conflicts of interest and
nonlawyer ownership, and domestic practice authority for inbound foreign lawyers.