A leading legal academic formerly tasked with looking into non-lawyer ownership in the USA says there is almost complete resistance to liberalisation of the market.
Andrew Perlman, who was chief reporter for the American Bar Association’s Commission on Ethics 20/20 until this year, said there was little prospect of any relaxing of current rules preventing non-lawyers from owning law firms.
The ABA has fiercely opposed even minor changes to the existing rules, although last year it agreed to look further into how fee-sharing would work with firms in jurisdictions that allow non-lawyer ownership.
But Perlman (pictured), speaking at the International Bar Association conference in Boston yesterday, revealed that the ABA had even tried to close down that study and stop the commission from issuing any opinion without backing from its house of delegates.
’In America at the moment we have one political party with a very strong ideological position [on the US budget crisis],’ said Perlman. ’It reminds me of what goes on with the ABS on non-lawyer ownership - there is reluctance to even have the conversation or discuss it. It’s ugly the unwillingness to even debate the issues.’
Perlman, professor of law at Suffolk University in Boston, said the only prospect of change would come from individual states changing the law on non-lawyer ownership but it was unlikely to happen soon.
New York-based Anthony E Davis, a partner at Hinshaw & Culbertson, said the US faces the prospect of losing much of its legal market to the UK, where alternative business structures have existed for almost two years.
’New York state is proud to be walking back to the future with a blindfold on,’ said Davis. ’It’s the fundamental objective of most state regulators to maintain a monopoly. As long as we are a self-regulated profession that idea of promoting competition is simply foreign. New York is very inhospitable to the idea of competition.’
Desmond Hudson, chief executive of the Law Society, said there was little evidence that ABSs had posed any harm to legal services consumers, and he warned it was not something other jurisdictions could ignore for long.
’It isn’t about who owns you, it’s about what you do and how you do it. Lawyers don’t have a monopoly on ethics. Because of the advantages they offer to firms and clients, different forms of MDPs/ABS are unlikely to remain confined to our jurisdiction for long,’ he said.
’The profession remains independent and robustly regulated so why is it a bad thing if some lawyers have to compete for business? Other professions do.’