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re: So you wanna be a personal injury lawyer?
Posted on 4/17/25 at 6:31 am to TigerHornII
Posted on 4/17/25 at 6:31 am to TigerHornII
Better call Saul
0
Posted on 4/17/25 at 6:38 am to SuperSaint
quote:By that logic, all laws/rules are pushed by lawyers
so pretty much lawyer
Posted on 4/17/25 at 2:32 pm to AllbyMyRelf
As of now, most U.S. states do not allow non-lawyers to own or have an equity stake in a law firm, due to Rule 5.4 of the ABA Model Rules of Professional Conduct, which prohibits fee-sharing with non-lawyers to preserve legal ethics and independence.
However, a few jurisdictions are experimenting with alternative business structures (ABS) and regulatory reforms.
States That Allow (or Are Testing) Non-Lawyer Ownership:
1. Arizona
• Fully allows non-lawyers to own law firms since 2021.
• Eliminated Rule 5.4 entirely.
• Law firms can now register as Alternative Business Structures (ABS) with non-lawyer investment and management.
2. Utah
• Running a regulatory sandbox through the Utah Office of Legal Services Innovation.
• Allows non-lawyer ownership and innovative legal services under close monitoring.
• Sandbox pilot expected to be extended or made permanent.
3. Washington, D.C.
• Long-standing exception: allows non-lawyers to own a minority share of a law firm, but only if they are part of delivering legal services (e.g., social workers, compliance experts).
States Considering or Studying It:
Several states are studying the issue or have task forces exploring changes to Rule 5.4, including:
• California
• Illinois
• New York
• Florida
• Connecticut
• North Carolina
• Oregon
None of these have approved non-lawyer ownership yet, but the national trend is toward limited experimentation.
Bottom Line:
• Arizona is currently the most open.
• Utah and D.C. have limited versions.
• Most states still prohibit it, but reforms may be coming.
The majority of the investors in these firms are hedge funds.
As for selling this particular firm, they don’t have a base of new cases that justify that price. 8-10 cases a month is nothing. What they are signing up they are making hay with, but that’s not typically what buyers want. Law firm buyers want systems, lead flow and case flow. This firm only has cash flow. That is highly dependent on the lawyers in the firm and not the law firm.
However, a few jurisdictions are experimenting with alternative business structures (ABS) and regulatory reforms.
States That Allow (or Are Testing) Non-Lawyer Ownership:
1. Arizona
• Fully allows non-lawyers to own law firms since 2021.
• Eliminated Rule 5.4 entirely.
• Law firms can now register as Alternative Business Structures (ABS) with non-lawyer investment and management.
2. Utah
• Running a regulatory sandbox through the Utah Office of Legal Services Innovation.
• Allows non-lawyer ownership and innovative legal services under close monitoring.
• Sandbox pilot expected to be extended or made permanent.
3. Washington, D.C.
• Long-standing exception: allows non-lawyers to own a minority share of a law firm, but only if they are part of delivering legal services (e.g., social workers, compliance experts).
States Considering or Studying It:
Several states are studying the issue or have task forces exploring changes to Rule 5.4, including:
• California
• Illinois
• New York
• Florida
• Connecticut
• North Carolina
• Oregon
None of these have approved non-lawyer ownership yet, but the national trend is toward limited experimentation.
Bottom Line:
• Arizona is currently the most open.
• Utah and D.C. have limited versions.
• Most states still prohibit it, but reforms may be coming.
The majority of the investors in these firms are hedge funds.
As for selling this particular firm, they don’t have a base of new cases that justify that price. 8-10 cases a month is nothing. What they are signing up they are making hay with, but that’s not typically what buyers want. Law firm buyers want systems, lead flow and case flow. This firm only has cash flow. That is highly dependent on the lawyers in the firm and not the law firm.
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