Why Lawyers Should Embrace Reform for Legal Services
Lawyers once had a firm hold on the ability to offer legal services. Until recently, most jurisdictions had adopted a rule of professional conduct that prevented nonlawyer ownership of a law firm. Today, however, it appears that the tides are turning. Utah and Arizona have more or less led the charge in this kind of reform.
Utah’s Regulatory Sandbox
Utah has implemented a regulatory sandbox where nonlawyer ownership of a law firm is permitted. The legal sandbox, run by The Office of Legal Services Innovation, is aimed at “narrowing the access to justice gap.”
The legal sandbox allows new legal business models, including:
· Law firms taking on nonlawyer investment or ownership
· Fee-sharing with nonlawyers
· Nonlawyer owned entities employing lawyers
· Legal-tech companies and nonlawyer service providers offering legal services
· Joint ventures between lawyers and nonlawyers
The idea is that by allowing more companies to provide legal services, it will become more affordable for consumers.
Arizona’s Alternative Business Structure
Beginning this year, alternative business structures (ABS) are allowed to operate in the State of Arizona. Businesses that can include “nonlawyers who have an economic interest or decision-making authority in a firm and provides legal services” must seek approval through the Arizona Supreme Court.
Again, the goal is to “improve access to justice and the delivery of legal services.” With new businesses entering the market, it will inevitably be more competitive, thus driving down prices. LegalZoom recently became the largest ABS approved by the Arizona Supreme Court.
Why Lawyers Should Embrace Reform
Lawyers, quick to judge, should look at these new ways to deliver legal services as opportunities instead of obstacles. There is a large, underserved community that could never afford legal representation, despite the fact that it was greatly needed.
This gives lawyers more options. A solo practitioner may benefit from joining a nonlawyer-owned company that offers legal services. A small law firm may decide to provide a less expensive, more niche service in order to compete with ABS’s like LegalZoom that have learned how to package their product.
Either way, these new ventures are not being established to put lawyers out of business but rather help consumers get the legal assistance they need at an affordable cost.
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