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19 April 2012 at 12:47 BST

ABA rejects plans for non-lawyer investment in law firms

The American Bar Association Commission of Ethics 20/20 has decided to shelve plans for developing a proposal on whether non-lawyers should be allowed limited ownership in US law firms.

The decision is a major setback to those looking enviously across the pond after the UK Legal Services Act allowed external investment in law firms. Washington DC is currently the only state which accepts any kind of non-lawyer ownership structure.
According to the ABA Journal, co-chairs Jamie Gorelick and Michael Traynor confirmed that the campaign to give non-lawyer ownership consideration at the February 2013 ABA Midyear Meeting in Dallas has been dropped, and will not be put before the association’s policy-making House of Delegates. It was indicated that the decision was influenced by feedback received from other bar associations as well as individual members.

'Sufficient basis'

The decision marks an end to a three-year phase of discussions over the US non-lawyer ownership question. Legal Week reports that the ABA has released a statement explaining: ‘There does not appear to be a sufficient basis for recommending a change on ABA policy on the non-lawyer ownership of law firms.’
Among those disappointed with the decision is Thomas Gordon, legal and policy director for Washington DC-based non-profit firm Responsive Law. He told Legal Week: ‘We’re sitting here well into the twenty-first century, and the ABA has decided not to even bring the business of the practice of law to the 1980s. They will not even adopt proposals DC has had in place for well over a couple of decades.'

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