We have addressed in these pages the issue of nonlawyer ownership of law firms, and have made known our opposition to that ill-conceived concept, which has taken root in Australia, England, Wales and even in the District of Columbia in this country. We applaud, therefore, the recent decision of Judge Lewis Kaplan of the U.S. District Court for the Southern District of New York to dismiss the complaint by Jacoby & Meyers challenging the constitutionality of Rule 5.4 of the New York Rules of Professional Conduct and related New York statutes, which prohibit law firms from accepting investments from nonlawyers.
Claiming that its “pioneer[ing]” efforts to provide “ quality legal services at a reasonable cost to economically challenged individuals who would otherwise have no access to the legal system” were being impeded by New York’s prohibition on nonlawyer equity investment in law firms, Jacoby & Meyers sought a declaration that New York’s rule violated the firm’s constitutional rights under the First and Fourteenth Amendments and the dormant Commerce Clause. The district court granted the defendants’ motion to dismiss, finding “the plaintiffs’ constitutional challenges … entirely without merit.”
