Arizona and Utah lead the way on legal industry change

(Reuters) – When it comes to embracing change, the legal profession is about on par with my 93-year-old grandmother, who believes boats are not intended to be rocked.

That’s what makes Utah and Arizona’s ongoing experiments with loosening attorney regulations in a bid to spur innovation so noteworthy.

No need for pearl clutching though. As my colleague Karen Sloan reports, a new study by Stanford Law School shows that the programs are offering lawyers “a host of new opportunities to extend their reach” without triggering an increase in consumer complaints.

Per the report, 58 legal service providers have taken advantage of the new programs – Utah’s regulatory “sandbox” which launched in August 2020 and is authorized through 2027 and Arizona’s narrower “alternative business structure” option, which went into effect in 2021 and is permanent.

Bar ethics rules have traditionally prohibited non-lawyers from holding an ownership stake in law firms. As the report notes, such restrictions are meant to protect clients from profit-focused outside owners who might “undercut lawyers’ independence and loyalty to clients, thereby driving a ‘race to the bottom.'”

October 18, 2022
By Deborah L. Rhode Center On The Legal Profession
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