New-model law firms face barriers in the US
UK law firms seeking to practise on US soil under new business models still face barriers in most US jurisdictions, the US’s largest legal representative body said this week.
The American Bar Association (ABA) has yet to change its rules of professional conduct to allow externally financed UK law firms to practise, Tommy Wells, president of the 400,000-strong ABA, told the Gazette. Barriers also remain to alternative business structures in most US jurisdictions. Wells said the concept of ABSs raised ‘important regulatory and ethical issues that must be examined and addressed’.
If the ABA does not change its stance by the time ABSs are permitted in 2011, UK law firms that choose to become ABSs will be barred from practising in the US – potentially affecting a number of City and national firms that have a US presence and are contemplating becoming ABSs.
The Law Society said it will ‘work hard’ to persuade the ABA and the US regulatory authorities that ABSs are viable business models, while the Legal Services Board urged the ABA to respond to its recent ABS discussion paper and ‘enter into an ongoing dialogue’ with the regulator.
Bob Heslett, Law Society vice-president, said: ‘We will work hard to seek to persuade the Americans on this, but we will only be likely to succeed if we can demonstrate that ABSs are just another law firm, subject to the same requirements and regulated by the same regulators as existing law firms, and in particular that client confidentiality is fully preserved and protected.’