The powerful American Bar Association appears to have ruled out any immediate adoption of non-lawyer ownership of law firms.
In a report on the future of legal services in the US, published over the weekend, the ABA said it supported the ‘continued exploration’ of alternative business structures of the kind already adopted in England and Wales.
This will involve gathering more evidence and data about the risks and benefits associated with these entities, but effectively diminishes any prospect of ABS being supported on a wider level.
In the US, just two jurisdictions permit forms of ABSs: the District of Columbia allows non-lawyer ownership, while non-lawyers may own a minority interest in law firms in the state of Washington. As well as in England and Wales, alternative business structures are allowed in some form in Australia, Canada, and Singapore.
The ABA, which guides policy among all bar associations in the US, has shown little enthusiasm for non-lawyer ownership in the past, with members often appearing hostile to the idea. The organisation made an attempt to acknowledge its growing influence by setting a checklist of aims for services providers to uphold earlier this year.
But the ABA’s Commission on the Future of Legal Services, delivering its report to the annual conference, was noticeably unwilling to support any change in policy, merely stating that continued exploration of the idea would be ‘useful’.
The report added: ‘The Commission urges the ABA to engage in an organised and centralised effort to engage in an organised and centralised effort to collect ABS-related information and data, which should include information and data compiled at the jurisdictional level.’
The Commission said it had received some support for market liberalisation following the release of a paper on the topic, but the majority of comments reflected ‘strong opposition’ and some even criticised the very idea of considering ABSs.
Opponents said non-lawyer owners would force lawyers to focus on profit and the bottom line to the detriment of clients and professional values. Critics also said there was no proof that ABSs had made any impact on improving access to legal services in countries such as the UK.
Empirical evidence included a report from the UK Legal Services Consumer Panel, which pointed out ABSs had caused no deterioration of lawyers’ ethics or professional independence.