In August 2020, Utah created a limited-time pilot program that allows businesses, including those owned by non-lawyers, to apply to the state`s newly created Office of Legal Services Innovation for authorization to provide legal services. The program was originally designed to last two years, but was recently expanded to seven years. Applicants must explain how they intend to provide legal services through technology or a non-traditional organizational structure, and successful applicants are eligible to provide legal services in their province or territory (e.g., health care or housing) using their approved template for the duration of the program. There are currently 26 companies licensed under the program, including established firms such as Rocket Lawyer, two nonprofit efforts focused on medical debt relief, and a number of majority-owned non-legal law firms. In March, the first U.S. law firm wholly owned by non-lawyers, Law on Call, opened as part of the Utah program. Strange said his team is involved “from the beginning” in the company`s strategic planning process, when department heads determine what priorities are in terms of financial performance, prospect goals and lateral hires. The team creates various objectives and pricing scenarios that are made available to the customer. When a plan is approved, the team tracks its performance against the plan and shares alerts with stakeholders. Four of the five major U.S. law firms have employed pricing specialists for several years. What`s new is the combination of pricing and legal project management, said Toby Brown, who led pricing at Akin Gump Strauss Hauer & Feld in Houston before joining Perkins Coie in Seattle in 2016. The debate on the most cost-effective ways to improve access to legal services will continue to fuel conversations about the non-legal ownership of law firms.

Online providers of legal forms and adjacent legal services – such as Rocket Lawyer and LegalZoom – are already bringing significant innovations to the field of legal services, offering services needed by many ordinary citizens who may not be able to afford a full-service law firm. The success of accounting firms in providing litigation discovery management services also underscores that changes in the legal industry can occur at all levels. The debate on the future of Article 5.4 is almost certainly just beginning. With a few inappropriate exceptions, ABA Model Rule 5.4 prohibits lawyers from sharing attorneys` fees with non-lawyers and prohibits law firms from having non-legal owners or officers. The rule is intended to protect the professional independence of lawyers by isolating them from supervision by non-lawyers, who may prioritize profit over duty to clients. One of the practical effects of the rule is that law firms generally do not provide services outside the law, as non-lawyers who provide these services could never become partners or exercise oversight over lawyers in a firm. The prohibition on non-legal ownership also prevents law firms from offering equity to attract non-legal employees and raising debt capital to fund major expansions or innovations. For two centuries, law firm partners across the country decided which lawyers should be hired, hired and fired.

which practice groups should be expanded, reduced or even eliminated; and which clients will be represented and how much legal services will be charged. It seems reasonable that due to the ease of starting the business, sole proprietorship is a favorable option for lawyers who assume a low litigation risk and do not employ other lawyers or employees (due to liability). However, you should be aware that the IRS considers this entity not only as “one in the same,” but also by law. This company does not offer liability protection for the owner. Any suit or claim against the Company will be directed equally against you and your personal property. Over the past five years, nearly every major law firm operating in Texas — including Houston-based firms Baker Botts, Bracewell, Norton Rose Fulbright and Vinson & Elkins — has hired non-legal professionals to lead key marketing and human resource development efforts, according to interviews with Texas Lawbook law firm executives. It is clear that competition is coming, with or without an amendment to Rule 5.4. Many of the country`s largest accounting firms, which are not bound by the state bar association`s code of conduct, have added new areas of service – such as fact-finding management, document review, etc.

– that compete directly with traditional law firms. The fact that these new services are successful – and cost-effective – shows that customers at all levels are interested in cost-effective ways to develop and resolve their disputes. Legal industry experts say such attitudes are part of a decades-old movement to run commercial law firms more like corporations. Critics argue that the commercialization of legal services marks the end of law as a noble profession and puts corporate revenues ahead of clients`. The Texas governor`s small business. The Governor`s Handbook for Small Business. The current push for looser regulation in some U.S. jurisdictions appears to be driven by concerns about access to justice. In states that have adopted or are considering more permissive rules, the changes are often presented as an attempt to encourage the development of legal business models and technologies that reduce the often prohibitive costs of legal representation. However, some regulators also appear to recognize that changes to Rule 5.4 may result in external investment in large companies or even the ownership of law firms. Until recently, all 50 states followed a version of Rule 5.4, with the only significant exception being the District of Columbia. The DC rule has allowed ownership to non-lawyers since 1991, and a small minority of DC firms have one or more partners who are lobbyists or public relations professionals, rather than lawyers.

However, ABA Formal Notice 360 prevents these companies from expanding into jurisdictions that follow Model Rule 5.4. When starting a law firm as a sole proprietor, most lawyers use their personal name. It is not mandatory by law for a sole proprietor to register the name of the corporation with the Secretary of State, but we recommend it. The last thing you want is to know a year or two after your practice that another company has the same name and has registered it. Always check the availability of the name, then register so you can move forward with confidence. If the sole proprietor chooses to do business under a name other than their own, “Doing Business As” registration with the District Officer is required. Rule 7.01 of the Texas Disciplinary Rules of Professional Conduct describes the applicable rules regarding the names of law firms. Texas law firms are increasingly outsourcing some of their most strategic decisions to non-lawyers in a seismic and, some say, long-awaited shift. A Texas professional business is a standard business, but it consists of a group of certain types of professionals and uses the PC by name.

Law firms often form professional corporations. Owners must be licensed in the same profession, and the state requires members to obtain approval from the government organization for the specific profession, such as the state bar association or state medical licensing board, to form a professional society. The changes in Arizona are significant, but the state`s ABS directory so far lists only three licensed ABSs, none of which appear to be very large or present beyond the Southwest. Despite the program`s seemingly slow launch, other apps are in the works, including one from Rocket Lawyer. In addition, the new rules make it clear that the licensing system will eventually attract multinational companies – the most expensive level of the fee schedule for ABSs is specifically aimed at international companies. Lawyers now receive refresher training from the moment they join the firm until they become partners, she added. Customer interviews are monitored by Ward and his team. The Florida Bar Association`s Special Committee on Improving Legal Service Delivery is expected to submit a report to the Florida Supreme Court by July of this year. According to its latest quarterly report, the committee will most likely recommend that, subject to certain regulations, companies be allowed to have non-legal owners (but not passive investors). Minutes of recent meetings show that the committee sees Utah`s pilot program as a possible model.

Contact us for a free demo so one of our experts can demonstrate how your organization can securely transform the quality of its strategic decisions with reliable and robust data. Texas Center for Legal Ethics. Texas Disciplinary Rules for Professional Conduct. It is important to note that most other jurisdictions in the United States are not currently following the lead of Utah and Arizona, even though their prosecutors and courts are grappling with the issue. In fact, some jurisdictions are still explicitly opposed to opening this door. In Florida, on November 8, 2021, the Board of Governors of the Florida Bar unanimously (46-0) rejected a list of proposed amendments to its Rule 5.4 that would have allowed, among other things, minority stakes in law firms by non-legal employees and fee-splitting with non-lawyers. In March of this year, the Florida Supreme Court accepted this position, leaving the current Rule 5.4 in effect. Source: But companies are finding that their corporate customers are also driving change.