Following prior decisions rejecting challenges to state rules of professional conduct prohibiting nonlawyers from investing in law firms, the U.S. District Court for the District of Connecticut dismissed challenges to Connecticut's rule. Some ABA Section of Litigation leaders find the plaintiff's argument against the rule to be unpersuasive to override the rule's ethical rationale.
State's Overriding Interest to Regulate Attorney Conduct
The contested state bar rule restricts lawyers from sharing fees or creating partnerships with nonlawyers. The rule makes no exception even if only a part of the business includes the practice of law. The plaintiff objected to rule, which is in line with all states' rule, because it prevents the firm from raising capital.