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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
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,


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