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35 Ohio Law. 6 (2021)
Non-Lawyer Ownership of Law Firms Is Trending - But Is It a Good Idea?

handle is hein.journals/ohiolawr35 and id is 8 raw text is: The prohibition against a non-lawyer having any ownership interest in a law firm is enshrined in our ethics rules1 and in many of our ideas about the structure of the U.S. market for legal services. Until recently, the only exception to the prohibition was the District of Columbia, where lawyers have long been permitted to form partnerships with non-lawyers.' But the D.C. model primarily arose and functions today in the context of the large number of governmental lobbying practices there, an environment particular to the District. For the rest of the country, the idea of alternate structures for law-firm ownership has generally been met with a firmly closed door. An Opening Door Increasingly, however, the door is being cracked open. In February 2020, the American Bar Association (ABA) overwhelmingly passed Resolution 115,3 aimed at encouraging practice innovations at the state level that could increase access to civil legal services for low- and middle-income Americans. Last-minute compromises resulted in a disclaimer in the resolution: that the organization was not endorsing an ethics rule change that would open the way for non-lawyer law firm ownership. Nonetheless, the resolution appears to have spurred several developments that may have that result. Effective Jan. 1, 2021, Arizona became the first jurisdiction outside of the District of Columbia to amend its ethics rules to permit non-lawyers to hold economic interests in law firms. The Grand Canyon State also established a detailed regulatory framework for licensing the anticipated alternate business structures.4 In Utah, the state supreme court approved a regulatory sandbox in August 2020, including a temporary green light for legal services entities with non-lawyer investors or owners.' (For those not up on the jargon, a regulatory sandbox is a concept under which a governmental entity tries to promote innovation by temporarily suspending the operation of some otherwise-applicable regulatory limitations, often on an experimental basis.) As of the end ofJanuary 2021, there were 20 approved participants in the two-year pilot project, including the well-known Rocket Lawyer, Law Pal (which plans to offer TurboTax-like help in resolving divorce and eviction disputes), a solo bankruptcy practice, an accounting firm, and a law firm that will be owned by a corporation with subsidiaries offering financial planning, taxes and insurance advising.6 In Illinois, a joint task force of the Chicago Bar Association and Bar Foundation in September 2020 recommended a package of modernizing innovations to the state's supreme court.7 Although the task force stopped short of proposing a change to the ban on non-lawyer ownership, 61

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