The State of Arizona Supreme Court is leading the way in its efforts to eradicate Rule 5.4, according to an August 28, 2020 article on Law.com. As it states, the Arizona high court is the first U.S. jurisdiction to remove the rule that prohibits fee sharing and prevents non-attorneys from having a financial benefit in law firms. This movement was led by Vice Chief Justice Ann A. Scott Timmer, who has worked for the past two (2) years to identify ways to lower the costs of legal services.
As stated by Chief Justice Robert Brutinel:
“The court’s goal is to improve access to justice and to encourage innovation in the delivery of legal services. The work of the task force adopted by the court will make it possible for more people to access affordable legal services and for more individuals and families to get legal advice and help.”
As stated in the above-referenced article, these efforts have paved the way for “alternative business structures” to obtain the needed licenses, beginning January 1, 2021. This change will also create “legal paraprofessionals,” which Law.com likened to the “legal profession’s equivalent of ‘nurse practitioners.’”
Other states have made similar modifications to Rule 5.4 to loosen the restrictions placed on law firms. Specifically, the Supreme Court for the State of Utah has established a two-year trial program to “liberalize the practice of law” by allowing “approved businesses” to practice law through a “regulatory sandbox.” This can include non-attorneys to “experiment with the provisions of legal services.”
The Supreme Court of California has also introduced similar measures by allowing fee-sharing opportunities with nonprofit entities.
Advocate Capital, Inc. will continue to work hard to provide current and relevant information that could potentially affect our clients and their practice.
Executive Client Manager
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