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Adams and Reese Partner and leading legal ethics attorney Lucian Pera poses the question “Time to Lift the Ban on Nonlawyer Ownership?” published in the American Bar Association Law Practice magazine.
Pera discusses how the ban is outdated and unsupported by current policy or evidence. Economic and regulatory changes are reshaping legal services, and reform offers a chance to address the access-to-justice crisis and modernize the legal profession, said Pera.
“It’s time for more jurisdictions to seriously consider authorizing nonlawyer ownership of law practices,” Pera writes. “There are strong public policy rationales for change — the access-to-justice crisis and the need to try to fix the broken legal services market.”
Pera continues: “But I’d like to focus on the powerful argument that the traditional ban makes no policy sense anymore, considering our experience as a profession. Our independent professional judgment as lawyers — the important value the ban on nonlawyer ownership is supposed to protect — has been shown to be resilient even in the face of more powerful threats.”
At least seven jurisdictions have authorized nonlawyer professionals, including paralegals and community justice workers, to directly deliver legal help to consumers. More than a dozen others are in various stages of serious consideration of this reform, according to the Institute for the Advancement of the American Legal System’s Allied Legal Professionals Knowledge Center.
A few changes to the traditional ban on nonlawyer ownership of law practices have also been enacted. Since 1991, D.C. Rule of Professional Conduct 5.4(b) has permitted individual nonlawyers who participate in the work of a law firm to own an interest in a law firm. As of 2021, Arizona has permitted the authorization of nonlawyer-owned law firms, called alternative business structures (ABSs) by its Supreme Court. In August 2020, the Utah Supreme Court authorized the approval of nonlawyer-owned law practices within a special regulatory “sandbox.”
The 48 other U.S. jurisdictions maintain the traditional ban, but many states are pondering the implications of nonlawyers using generative artificial intelligence (GenAI) to directly deliver legal help in light of the traditional law barring the unauthorized practice of law (UPL).
“For a long time, I have guided law firms and law departments through the implications of all sorts of business relationships concerning their operations,” writes Pera. “I also have had recent intense experience with nonlawyer-owned firms in D.C. and Arizona. It has become clear to me that the primary rationale asserted to support the ban on nonlawyer ownership — protection of the professional independence of lawyers — is weaker today than it ever has been.”
At Adams and Reese, Pera is a Partner in the Memphis office. His practice includes legal ethics, media law, and commercial litigation. He represents lawyers, law firms, and others on issues of legal ethics and lawyer professional responsibility.
A graduate of Princeton University and Vanderbilt University School of Law, Pera was a member of the ABA “Ethics 2000” Commission, which rewrote the ABA Model Rules of Professional Conduct. He chaired the Tennessee Bar Association committee whose work led to the adoption of significantly revised Tennessee ethics rules patterned after the Model Rules. He has chaired the editorial board of the ABA/BNA Lawyers’ Manual on Professional Conduct and served as President of the Association of Professional Responsibility Lawyers. He served for three years as chair of the governing board of the ABA Center for Professional Responsibility.
The ABA Center for Professional Responsibility bestowed upon Pera the Michael Franck Award, their highest award for work in the field of ethics and professional responsibility. Pera is a past Treasurer of the ABA and a past President of the Tennessee Bar Association. He currently serves as a member of the ABA Board of Governors representing the Section of Business Law.