The American Bar Association (ABA) on Monday announced that it has decided to let go of a proposal that would allow nonlawyers to have an equity interest in law firms. And just like that, the dreams of a million children who wanted to own a law firm, but not actually go to law school, died.
While both Australia and the U.K. allow nonlawyers to have ownership stakes in law firms, in the U.S. it is only permitted in Washington, D.C. Last year, the firm Jacoby & Meyers filed lawsuits in Connecticut, New Jersey and New York, claiming that the ban on nonlawyer ownership in those states was keeping it from getting contributions from outside investors. The lawsuit was thrown out last month, but it prompted the New York State Bar Association to form a task force to look into the question of nonlawyer firm ownership.
Even with all the hubbub, the ABA abandoned its proposal, which would have gone to the association’s House of Delegates in 2013, upholding the bans which are meant to keep nonlawyers from damaging attorney-client confidentiality.
“Based on the commission’s extensive outreach, research, consultation and the response of the profession, there does not appear to be a sufficient basis for recommending a change to the ABA policy,” the ABA Commission on Ethics 20/20 said in a statement.