New York State Bar Association Task Force on Nonlawyer Ownership

Albany Law Review, Winter 2012 | Go to article overview

New York State Bar Association Task Force on Nonlawyer Ownership


VII. POSITIONS OF OTHER STATES AND COMMITTEES

In addition to our NLO Task Force, several committees and bar associations from other jurisdictions or from NYSBA sections have issued formal opinions or reports in response to the ABA's nonlawyer ownership proposals. The Task Force has considered each of the positions from these associations, sections and committees of which we are aware, each of which is summarized in this section. In addition, substantial comments were posted on the Ethics 20/20 Commission's website. (156)

A. Opinions in Opposition

1. New Jersey

In a January 2012 Report, the New Jersey State Bar Association's Professional Responsibility and Unlawful Practice Committee recommended that the Association's Board of Trustees oppose the ABA's then-existing proposal on nonlawyer ownership of law firms. (157) The Committee consists of lawyers from various fields of the profession.

The New Jersey Report concisely stated several bases for opposing the ABA NLO Proposal. The Report noted that the existing system serves the public well and requires personal accountability of lawyers to the judiciary. (158) It emphasized that no Committee member knew of an interest by the local bar, the business community, or general public in allowing nonlawyer ownership. (159) It also noted that the existing rules governing law firm ownership already permit firms to employ nonlawyers and compensate them as they see fit. (160) The New Jersey Report emphasized a general concern about "encroachment on attorneys' accountability and independent professional judgment," and a concern that the proposal "may be tantamount to MDP in sheep's clothing," which New Jersey has long opposed. (161) Overall, the New Jersey Report position can be summarized in its statement that the Committee was "wary of changing the status quo without good reason to do SO." (162)

The New Jersey Report was adopted by the New Jersey State Bar's Board of Trustees in January 2012.

2. Illinois State Bar Association

In March 2012, the Illinois State Bar Association ("ISBA") adopted a resolution opposing the ABA's proposals to change Model Rule 1.5 and Model Rule 5.4(b). (163) The Resolution set forth two ISBA policies: "permitting the sharing of legal fees with non-lawyers or permitting ownership and control of the practice of law by non-lawyers threatens the core values of the legal profession"; and it is ISBA "policy to oppose any effort by the American Bar Association to change the Model Rules of Professional Conduct to permit lawyers to share legal fees with non-lawyers or permit law firms directly or indirectly to transfer ownership or control to non-lawyers over entities practicing law." (164)

The Illinois Resolution recited that the changes proposed by the Ethics 20/20 Commission would be inconsistent with both prior ABA policy established in July 2000, as well as Illinois Rule of Professional Conduct 5.4. (165) Further, the Resolution noted that "there has been no demonstrated need or demand from the public or profession for such changes in the Model Rules" and that the sharing of legal fees with nonlawyers adversely impacts core values of the profession such as the exercise of independent judgment and regulation by the judiciary. (166) The Illinois Resolution affirmed and proposed that the ABA affirm and re-adopt "the policy adopted by the American Bar Association in July, 2000, to wit:

   The sharing of legal fees with non-lawyers and the
   ownership or control of the practice of law by non-lawyers
   are inconsistent with the core values of the legal profession.
   The law governing lawyers that prohibits lawyers from
   sharing legal fees with non-lawyers and from directly or
   indirectly transferring to non-lawyers ownership or control
   over entities practicing law should not be revised." (167)

ISBA further resolved that the ABA should reject all proposals to amend Model Rules 1. …

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