Jacoby & Myers argues for reform of US legal industry
Jacoby & Myers has brought a suit challenging the rules of the US legal industry, arguing that non-lawyer investors should be permitted to put money in a law firm.
Currently the only permissible structure for law firms is a partnership owned only by lawyers. Jacoby & Myers argues that the rules violate its freedoms of speech and assembly, and unfairly thwart its growth. With outside capital, the argument goes, firms could afford to upgrade technology and take advantage of scale. With greater economies, the argument proceeds, firms could offer low-cost legal services, thus increasing access to justice.
For its part, the American Bar Association opposes the change on the basis that an increased profit motive could interfere with the professional and ethical standards of the industry.
This article in The Economist argues that the change suggested by Jacoby & Myers might introduce greater efficiency to an industry that sorely needs it.
Beyond the present litigation, all eyes are on Australia and Britain, where non-lawyers are now able to have an ownership stake in law firms. If few serious ethical complaints arise in those jurisdictions, and legal services are able to be offered at lower fees, a powerful argument for reform in the US might be made.