ARIZONA : THE NEW FRONTIER
ABS VS . TRADITIONAL LAW FIRMS
ABS IN THE WILD WEST
By Nic Edgson , CEO and Managing Attorney of Big Auto & Laura Ruhl , Compliance Lawyer
When envisioning what the Wild West was like , one might picture a lawless society , where outlaws and law enforcement were often one in the same . Hollywood capitalized on the mythology of the Wild West with endless movies depicting cowboys , outlaws and a life so far from any norm that most would never wish to experience . But the essence of the Wild West was that it was inhabited by the many who ventured there to create a new existence , braving the unknowns , thriving in the challenge . . . all while dreaming of the plentiful opportunities ahead , and perhaps some gold .
One could argue that the present day Wild West is not so different , at least as it pertains to the practice of law . The Supreme Court of Arizona made trailblazing changes in an attempt to provide better access to justice , among other things , as did the many progressive attorneys who sought “ Alternative Business Structures ” ( ABS ) licensure . 1 The originating ABS are pioneering in the new landscape of the law , with no roadmap or guarantee the program will survive . These ABS stand alone , surrounded by the vast majority of states that retain vice-like grips on the old ways of operating a law firm – not to mention a large percentage of practicing attorneys in Arizona and nationwide who remain skeptical of these changes and those who seek to shoot them down .
ARIZONA : THE NEW FRONTIER
Effective January 1 , 2021 , Arizona lawyers were unbridled from the restrictions of Ethical Rules 5.4 and 7.2 ( b ), which meant sharing ownership of law firms with , and giving referral fees to , non-lawyers was officially above board . Yee-Haw ! This was terrific news for nationwide / worldwide supporters of ABS , yet many lawyers were seemingly left rattled , exclaiming tarnation !
When the Arizona Supreme Court unleashed these changes , the court made the intent of the changes clear : protect the public interest , increase access to legal services and justice , increase the strength and effectiveness of the legal profession , and ensure adherence to professional codes of conduct . All lofty and admirable goals . ABS are currently allowed , in varying versions , in Arizona , Utah and the District of Colombia . But it ’ s the new frontier of Arizona that has most drastically changed the legal landscape .
ABS VS . TRADITIONAL LAW FIRMS
When it comes to providing legal service , there is very little difference between ABS and traditional law firms . The difference comes in the ability to bring financial and intellectual resources together to support the providing of legal services . ABS allow for greater flexibility in ownership , management , and investment , in that non-lawyers are eligible to participate in those roles . In return , ABS endure heightened scrutiny throughout the licensure process and during yearly renewals - both of which are saddled with hefty fees . Arguably , forming ABS carry more risk due to that heightened scrutiny , not to mention the unknowns . The
The opinions expressed are those of the authors and do not necessarily reflect the views of the firm . This article is for general information purposes , is not intended to be taken as legal advice and does not create an attorney-client relationship with authors .
1
For purposes of this article , we will use ABS in the plural form and all ABS commentary will relate to Arizona , unless there is a specific reference to a different state .