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For Release: Immediately
November 20, 2012
Contact: Mark Mahoney
Associate Director, Media Services and Public Affairs
Mmahoney@nysba.org
518-487-5532
NEW YORK STATE BAR ASSOCIATION REMAINS
OPPOSED TO NONLAWYER OWNERSHIP OF LAW FIRMS
The New York State Bar Association has continued its long-standing
opposition to nonlawyer ownership of law firms by approving a report
that concluded that nonlawyer ownership should not be permitted in New
York State at this time.
The Association’s House of Delegates, at its November 17
meeting, approved the recommendations contained in a 115-page report
issued by the Task Force on Nonlawyer Ownership. Former State Bar
President Stephen P. Younger of New York City (Patterson Belknap Webb
& Tyler) chaired the task force.
“Clients, attorneys and the legal community are best served
when the financial interests of lawyers and nonlawyers remain
separate,” said State Bar President Seymour W. James, Jr. (The
Legal Aid Society in New York City). “After careful consideration
of this issue, the State Bar Association continues to believe that, at
this time, nonlawyer ownership of law firms would have a negative impact
on the practice of law in New York state.”
The State Bar Association historically has opposed nonlawyer
ownership of law firms, citing the need to protect firms against undue
influence by nonlawyers over the delivery of legal services.
However, in response to new proposals put forth by a commission of
the American Bar Association (ABA), then-State Bar President Vincent E.
Doyle III of Buffalo (Connors & Vilardo) in February appointed the
task force to re-examine the issue.
Specifically, the task force considered a draft proposal by the
ABA’s Commission on Ethics 20/20 that would have allowed a limited
form of nonlawyer ownership. The proposal, which the Commission
ultimately withdrew in April, would have permitted nonlawyers employed
by a law firm to hold a minority financial interest in the firm and to
share in its profits.
The 31-member task force—comprised of practicing attorneys,
retired judges, ethics scholars and educators—continued to study
the issues after Ethics 20/20 withdrew its proposals.
The task force recommended that the Bar Association should remain
opposed to the nonlawyer ownership of law firms, and also should oppose
the sharing of fees with nonlawyer owners in an office of the same firm
located in a jurisdiction or nation where nonlawyer ownership is
permitted.
However, it approved allowing a New York firm to share a client fee
with a firm in a jurisdiction that permits nonlawyer owners and, in
fact, has nonlawyer owners, unless a lawyer knows that a nonlawyer owner
is directing or controlling any lawyer’s professional
judgment.
The report kept open the possibility of further review of proposals
based on studies from jurisdictions where nonlawyer ownership is
currently allowed. Factors to be considered in any reassessment of the
Bar Association’s position would include “a sufficient
demonstration that change is in the best interest of clients and
society, and does not undermine or dilute the integrity of the legal
profession,” according to the resolution approved by the House of
Delegates.
In the United States, the District of Columbia permits a limited form
of nonlawyer ownership of law firms while the 50 states prohibit it. Law
firms in the United Kingdom, Australia and Canada can opt to have
nonlawyer owners.
The New York State Bar Association is the largest
voluntary state bar association in the country, with 77,000 members. It
was founded in 1876.
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