Long time readers of this blog will remember that there has been a lot of debate in recent years about whether it is a good idea to continue to prevent law firms from generating capital by allowing non-lawyer investors.
I am writing about this today because I just read that the Arizona Task Force on the Delivery of Legal Services has recommended that the state’s supreme court end the restrictions on non-lawyer co-ownership of law firms. The task force's (very long) report is here.
And, Arizona is not alone. As reported in an article in Bloomberg Law, the "Arizona panel’s actions are part of a growing movement of state and national bar groups currently acting to loosen or repeal law firm ownership and related regulations."
Not everyone is happy with the trend, though. As the article continues, "Big Law leaders have expressed concern about the trend, which could allow the Big Four—EY, Deloitte, KPMG, and PwC—and other alternative legal service providers to take a more direct competitive stance against U.S. law firms, especially if several larger states adopt such changes."
Likewise, one member of the Arizona task force (the chief judge of one of the divisions of the Arizona Court of Appeals) argued that allowing non lawyers to share ownership of law firms would pose “a serious threat to the long-term health of the justice system" and "would not benefit the public"
To become final, the proposal has to be approved by the Arizona Judicial Council, the policy-making body that oversees the state’s justice system, after which the public will have a chance to comment on it. Finally, the proposal would have to be adopted by the seven-member Arizona Supreme Court. If approved, the changes are not likely to be effective before January of 2021.
UPDATE 10-16-19: Law Sites has an article on this topic here.
UPDATE 11/9/19: The Institute for the Advancement of the American Legal System has a comment on the proposals here.