September 08, 2011 Articles

Non-Lawyer Ownership of Law Firms: A Historical Debate

By Norayr Zurabyan

The question of whether non-lawyers should be permitted to own law firms has been debated for many years. The issue is addressed in Rule 5.4 of the American Bar Association's (ABA) Model Rules, entitled "Professional Independence of a Lawyer," and bans the ownership of law firms by non-lawyers. The comments that follow Rule 5.4 indicate that the limitation is intended to guard lawyers' professional judgment in providing legal services from outside third parties' influence.

Recent Constitutional Challenges
The question was raised recently in a lawsuits filed by the personal injury law firm of Jacoby & Meyers, LLC (J&M).  In the lawsuit, J&M challenges the ban in New York, Connecticut and New Jersey on non-lawyer ownership of law firms. For example, the suit in New York is filed against the presiding justices of the four appellate divisions who implement changes to the disciplinary rules pertaining to attorney conduct. The lawsuit is premised upon various constitutional violations: the First Amendment's right to freedom of association; the Fourteen Amendment's due process and equal protection rights; and several other Constitutional provisions. Additionally, the New York complaint asserts claims for violation of New York's Judiciary law. The Complaint generally alleges that the presiding judges may only control the conduct of the attorneys, not "commerce."

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