Can someone who is not a lawyer own part of a law firm? In D.C., yes.

April 8, 2012

An American Bar Association group plans to meet this week to mull a question stirring up debate around the legal community: can someone who is not a lawyer own part of a law firm?

For 21 years, the answer has been no — except in the District of Columbia, the only jurisdiction in the United States that allows law firms to share fees and profits with non-lawyers.

Now, the ABA Commission on Ethics 20/20, is considering whether to urge the organization to endorse extending D.C.’s rule to other states.

The commission, scheduled to meet Thursday and Friday at WilmerHale in the District, has yet to take a position on the matter. But a working group within the commission, co-led by George Jones, a Washington partner at Sidley Austin, is recommending the commission propose a limited form of nonlawyer ownership that lets non-lawyers have financial interest in the firm and share in its profits.

“Small firms in particular are increasingly interested in having non-lawyer partners,” according to a December draft letter the commission published to seek comments from lawyers and bar associations. “These firms believe that there is or will be client demand for the legal services that firms with non-lawyer partners are well-positioned to provide.”

The concept of non-lawyer partners has long prompted a philosophical debate among lawyers, with one side cautioning that non-lawyers with no legal ethics training shouldn’t be allowed to influence how a law firm represents clients.

“Traditionally, law firms have been owned and controlled solely by lawyers, and they’re bound by a certain regulatory structure,” said Jamie Gorelick, a partner at WilmerHale who co-chairs the Commission on Ethics 20/20. “The concern is that a non-lawyer would not be similarly bound and doesn’t have the same ethical rules as lawyers.”

On the other side are those who say bringing in non-lawyer partners presents an opportunity for law firms to add client services, and that just because a firm is owned by non-lawyers doesn’t mean attorneys lose their independent judgment.

“There is no evidence that lawyers are incapable of practicing in conformance with [ethical] rules in organizations owned by or run by non-lawyers,” said Jones, of Sidley Austin. “In-house lawyers practice law in conformance with the rules even though the organizations from which they practice are owned by non-lawyers.”

Lobbyists as partners

Many D.C. firms that have non-lawyer partners do so in the government affairs area — such as election law boutique Utrecht & Phillips, co-founded by former Hillary Clinton attorney Lyn Utrecht, which lists on its Web site government relations specialist and former Clinton campaign manager Patti Solis Doyle as a non-lawyer partner. Likewise, at Ryan, MacKinnon, Vasapoli and Berzok, legislative specialist Jeff MacKinnon has been a non-lawyer partner for 16 years, according to the firm’s site. Neither firm responded to requests for comment.

The rule has much broader reach, giving architects at land-use firms, social workers at family law firms and scientists at intellectual property firms a chance to share in the profits. There are some limitations: non-lawyers must be employees of the firm, not simply an outside investor, and the firm’s sole purpose must be to provide legal services; non-lawyers cannot have their own clients separate from those of the law firm.

D.C.’s unique rule attracts some attention from firms outside the Beltway that want to move to, or open offices in Washington because they’re barred from having non-lawyer partners in their own state, said Zuckerman Spaeder attorney Mark Foster, a legal ethics expert who advises law firms that want to add non-lawyer partners on how to comply with the rules.

“One is a well-established personal injury firm that has a doctor who finds cases for them,” Foster said. “They want him to be partner to share in profits. Another firm is in a state that has restrictive bar rules and they want the benefit of the looser rules in D.C.”

No D.C. law firm with non-lawyer partners has faced disciplinary action over non-lawyers interfering with lawyers’ professional judgment, the commission’s draft letter noted.

Elsewhere, a 2007 law passed in the United Kingdom allows law firms there to have non-lawyer partners, and rules prohibiting the practice here — with the exception of D.C. — could hinder cross-border mergers, Jones said.

“If a D.C. firm wanted to partner with a U.K. firm that had non-lawyer partners, that would be permitted, but if a New York firm wanted to merge with a U.K. firm with non-lawyer partners, it’d raise substantial questions,” he said.

Catherine Ho covers law and lobbying for Capital Business, which she joined in 2011. She was previously a reporter at the Daily Journal in Los Angeles, covering LA civil courts and labor and employment law.
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