Thursday, February 25, 2010

Who Will Own Your Law Firm? It May Not Be The Lawyers...

As reported by LegalWeek in the UK, the Legal Services Board, body responsible for overseeing the regulation of lawyers in England and Wales, has approved the launch of alternative business structures for law firms and set forth a timetable that could see new organizations in place by October 2011. This development is significant for the legal industry as these structures will enable non-lawyers to hold ownship stakes in law firms.

As an LSB official summarized: "The basic proposition of ‘Alternative Business Structures’ is to enable non-lawyers to own law firms, whilst guaranteeing that lawyers adhere to their professional principles (this is effected through a combination of detailed statutory requirements and strong regulation)." For those interested in the detailed history a 60-page discussion paper the Legal Services Board issued in 2009 detailed background information is available here, and the news release regarding the 2011 timetable is available here.

Australia is well ahead in this regard, with rule changes that have resulted in one law firm going public in 2007.

Interestingly, the US legal community explored modifying rules around firm ownership (ABA Model Rule 5.4) in 1999-2001, looking at Multidisciplinary Practices, but decided against significant changes. Interesting historical documentation outlining: the issues explored in that initiative, and dialogue that took place, including concerns about the implications of non-lawyer management on adherence to rules of professional conduct, including conflicts.

No comments:

Post a Comment