Business of Law
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The State Bar of California is asking for public comment on proposals that would allow legal technicians to offer legal advice and nonlawyers to hold a financial interest in law firms.
The bar will be seeking comment for 60 days beginning this week, according to Law360 and a press release. Above the Law and Bloomberg Law have prior coverage of the proposals by the bar’s Task Force on Access Through Innovation of Legal Services.
The task force’s proposals would allow the sweeping changes by modifying restrictions on the unauthorized practice of law and ethics rules that ban fee sharing with nonlawyers. The proposals call for:
• Allowing nonlawyers to provide specified legal advice and services, with appropriate regulation.
• Allowing entities that provide legal or law-related services to be made up of lawyers, nonlawyers or a combination of the two. Regulation would be required and could differ based on the type of entity.
• Allowing lawyers to be part of a law firm in which a nonlawyer holds a financial interest.
Two alternatives would accomplish this change. One would add requirements requiring the nonlawyers to provide services that assist the lawyers or law firm in providing legal services, and requiring that the nonlawyers have no power to direct or control the professional judgment of the lawyers. The other alternative would simply allow lawyers to share fees with nonlawyers as long as the client provides written consent.
• Allowing state-approved businesses to use legal technology to deliver legal services. A regulator would have to establish ethical standards governing the provider and the technology. Client communications with such entities would be covered by attorney-client privilege.
The task force adopted the proposals after commissioning a report by Indiana University Maurer School of Law professor William Henderson.
Henderson’s report found that ethics rules which prevent lawyers from working with other disciplines is driving up the cost of legal services and pricing consumers out of the legal market.