American Bar Association rejects proposal for non-lawyer ownership in law firms

April 19, 2012 The American Bar Association has rejected a proposal to permit non-lawyers to take ownership stakes in law firms.

The proposed reform would have permitted nonlawyers working at law firms to own up to 25 per cent of a firm, in line with the rules in place in Washington DC.

The proposal’s opponents cite concerns that changing the ownership rules might erode the profession’s ethical obligations of client loyalty and confidentiality, while supporters of the change point out that nonlawyers already help guide business decisions at many law firms and are partners in all but name.

“The commission considered the pros and cons, including thoughtful comments that the changes recommended in the discussion draft were both too modest and too expansive, and concluded that the case had not been made for proceeding even with a form of nonlawyer ownership that is more limited than the D.C. model,” said Jamie Gorelick and Michael Traynor, who lead the ABA Commission on Ethics.


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