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ABA Commission on Ethics 20/20 Recommends Amending Lawyer Ethics Rules Re: Choice of Law

ABA Commission on Ethics 20/20 Recommends Amending Lawyer Ethics Rules Re: Choice of Law

By Daniel Buchanan

CHICAGO, Dec. 5, 2011 — The American Bar Association Commission on Ethics 20/20, in its release of initial proposals for comment, is recommending two amendments to the ABA Model Rules of Professional Conduct that address choice of law problems that arise due to jurisdictional inconsistencies regarding nonlawyer ownership interests in law firms.

While most U.S. jurisdictions do not currently permit nonlawyer ownership interests, jurisdictions including the District of Columbia, Australia, Canada and England do permit such arrangements. The commission believes the issue of fee-sharing between firms in jurisdictions with differing rules must be addressed.

Recommendations address:

  • Model Rule 1.5(e) – If lawyer fees generated by a particular legal matter are to be divided between firms, and the firms are governed by different rules on nonlawyer ownership, the recommendation is to allow such a fee division.
  • Model Rule 5.4 – For law firms with offices in multiple jurisdictions, some of which do allow fee-sharing with nonlawyers and others that do not, the recommendation is to allow fee-sharing if the nonlawyer’s professional services assist the firm in providing legal services to clients and the form of fee sharing is permitted by the jurisdiction.

A copy of the commission’s initial draft proposal on Choice of Law Issues Relating to Nonlawyer Ownership Interests in Law Firms is available here.

The ABA Commission on Ethics 20/20 was created in 2009, and charged with performing a thorough review of the ABA Model Rules of Professional Conduct and the U.S. system of lawyer regulation in the context of advances in technology and global legal practice developments. The commission’s priorities and initiatives are listed here.

The commission’s Initial Draft Proposals are posted on its website, and will also be circulated for comment. The recommendations may undergo further revision before being presented to the association’s policymaking House of Delegates.

In developing all drafts, reports and proposals, the commission solicits feedback from a wide array of legal entities, including courts, domestic and international bar associations, law schools and individuals.

Learn more about the Commission on Ethics 20/20, its mandate and its membership here.

With nearly 400,000 members, the American Bar Association is the largest voluntary professional membership organization in the world. As the national voice of the legal profession, the ABA works to improve the administration of justice, promotes programs that assist lawyers and judges in their work, accredits law schools, provides continuing legal education, and works to build public understanding around the world of the importance of the rule of law.

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