Hi there. It’s Billie Tarascio from Modern Law Practice. And I’ve got some big news about the future of the practice of law. So you may have heard that recently Utah deregulated (the practice of law), and Arizona recently went one step further.
Utah first, now Arizona
So Utah has created a regulatory sandbox for several years where some of the rules are suspended to allow for innovation and investment. Now Arizona has taken it a step further, and I was fortunate enough to be on the task force that made the recommendations to the Supreme court of Arizona, that involved deregulation. The Supreme Court of Arizona unanimously passed these very sweeping radical reforms, including allowing triple LPs or legal practitioners who are not lawyers to practice law with very little limits on the scope within which they can practice specifically for family law. That’s number one.
Non Lawyers Can Own A Law Firm
And that’s a huge deal for family law attorneys.
Number two is the elimination of rule 5.4, which is the rule that prohibits you from fee splitting. So you’re not allowed to pay referral fees and different bar associations have used that to come down on Avvo and other types of referral organizations. You’re not allowed to enter into a reciprocal referral relationship with somebody like a counselor or a chiropractor or things like that.
But now in Arizona, you are, and these rules go into effect on January 1 2021. The other thing that this means is that non lawyers can own pieces of your law firm in Arizona and law firms can be owned by people who are not lawyers by investors, by other professionals, by your parents who might loan you money and take an ownership interest, and any law firm that is not owned by lawyers is still subject to the ethics rules is still subject to regulation from the state bar.
And you have to register as an alternative business structure or an ABS. So these are huge changes, and we have no idea exactly how these changes will play out. But here’s what I can tell you. They’re very controversial. Mostly for lawyers, not so much for the public, the public doesn’t care. If non-lawyers own law firms and the public doesn’t care, the public wants the ability to hire someone to help them. Who’s not a lawyer. And that’s ultimately what made the (Arizona) Supreme Court make the decision it did.
Now, what does this mean for you? Changes happen slowly. Arizona has had certified legal document preparers as an option people for more than 20 years. And while it is a thriving industry that works and that serves a very important function. It hasn’t really impacted lawyer’s ability to work or their livelihood.
You Must Be Prepared
So the sky isn’t falling, but we may see sweeping reform. And if there’s one thing that you should know, it’s just that you need to be prepared. If you have thrived during this pandemic, if you have had the tools to have your law firm continue to function well, then that law firm will continue to function well in this deregulated environment.
If your law firm isn’t functioning optimally now is the time to invest in structurally fixing your law firm. What will that do? It will insulate you from all of the changes that are coming, and it will position you to be prepared to take investment from those people who are very interested in getting in on the legal industry.
So now is the time now is the time to take a hard look at your law firm and fix whatever can be fixed and become the most well oiled machine that you can be and do the accountability chart and figure out your culture, do the hard work to set yourself and your law firm up for success in the future.
I know it’s scary, but I think it’s an opportunity. And I think that we are all going to come out of this stronger and the public is going to have more service and more availability of legal services than they ever had in the past. So good luck Godspeed. Let me know if I can help you in any way.