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ABA may relax rules on legal business structures

BOSTON — Lawyers and non-lawyers may be able to form law firms or businesses that provide non-legal services, in light of changes the ABA Commission on Ethics 20/20 is weighing.

The commission formed a working group to look into the ability of U.S. lawyers to participate on a level playing field in the global legal market and to consider whether law firms should be able to structure themselves differently than currently permitted under the Model Rules of Professional Conduct.

Currently, nonlawyer ownership or management of law firms is prohibited in every U.S. jurisdiction except Washington, D.C.

“We are considering the Washington, D.C. rule, which is a relaxation of Rule 5.4, and our understanding is it has worked without a problem for over 10 years,” said Michael Traynor, an attorney at Cobalt LLP in Berkeley, Calif. who co-chairs the ABA Commission on Ethics 20/20.

The commission is seeking public comments on four questions relating to alternative business structures: whether lawyers should be allowed to offer client services, or share fees with non-lawyers, which is currently prohibited by Rule 5.4; whether and how restrictions in the rules impede lawyers from competing in the global legal services marketplace; what types of non-lawyer service providers lawyers are using to help serve clients; and whether Washington, D.C.’s version of Rule 5.4 adequately protects clients or could be tweaked to do so.

The deadline for comments is June 1.

For more information on the working group and where to send comments, see the ABA Commission on Ethics 20/20’s Issues Paper Concerning Alternative Business Structures.