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President's perspective: Should lawyers be able to partner with nonlawyers and split fees?

By Judge Patrick F. Fischer

Many thanks to all of you who responded to my last column seeking your thoughts and ideas about whether Ohio needs another law school and how we may best use the growing number of attorneys in Ohio to serve the legal needs of the poor. Your answers were thought-provoking and thorough. We have placed some excerpts in the sidebar on page 5, and others on the OSBA website. They will provide guidance as that debate continues.

Continuing my intent to use my column to raise issues facing the legal profession or justice system, i.e., to listen to your views instead of just telling you what I think, I have another topic to discuss with you. There is a revived, substantial debate at the American Bar Association level about whether nonlawyers should be allowed to be part-owners of law firms, and whether lawyers should be permitted to share legal fees with other firms that have non-lawyer partners and owners. I would like your input on whether the Ohio State Bar Association should continue its historical opposition of such changes.

In 2009, the ABA established its Commission on Ethics 20/20 to consider the impact of technology and globalization on the legal profession and to determine whether the Model Rules of Professional Conduct should be changed as a result. In December 2011, that commission issued a discussion paper with a recommendation to allow a limited form of nonlawyer ownership in law firms. The commission also proposed draft amendments to Model Rules 1.5 and 5.4 to allow a lawyer in a jurisdiction that prohibits nonlawyer law firm ownership to split fees with a lawyer in a firm located in a jurisdiction where nonlawyer ownership is permitted. The proposed amendments also would allow intra-firm fee sharing where a firm has offices in multiple jurisdictions, some of which allow nonlawyer ownership and others that do not.

Subsequently, that commission announced that it has decided not to pursue all of the proposed changes to ABA policy prohibiting nonlawyer ownership of law firms, but indicated it would continue to consider the issues the proposed amendments to Model Rules 1.5 and 5.4 would have addressed. These issues are likely to come up again when the ABA House of Delegates meets in February, so the debate rages on.

Proponents of allowing nonlawyer ownership in law firms say the prohibition is antiquated and ignores the current globalization of legal services and the proliferation of online legal outsourcing. In addition, proponents say they will be better poised to meet client demands. For example, a law firm that focuses its practice on land use planning could partner with engineers and architects. Proponents also believe differing ethics rules on intraand inter-firm fee splitting causes confusion for law firms that have multiple offices that include some locations in jurisdictions that permit nonlawyer ownership (e.g. the District of Columbia, Canada, England and Australia).

In my view, these proposals are directly contrary to the sacred core values of our profession in Ohio, including undivided loyalty to our clients, client confidentiality and our duty to competently exercise independent legal judgment for the benefit of our clients. Nonlawyers are not bound by these duties, but as shareholders or partners in a law firm, they could have access to information pertaining to clients and the specifics of their cases. This leads to questions about whether the attorney- client privilege is compromised.

Opponents also properly ask whether these changes will lead to the values of our profession being “sold” just to make it easier to compete. Investment interests of the nonlawyer owners might incline them to favor more profitable clients and more profitable kinds of work over others. This may even further reduce public access to legal services by reducing the willingness of firms to engage in pro bono work.

Others say, and I strongly agree, that letting nonlawyers own law firms and/or share fees with lawyers is another step toward making lawyers into a trade rather than a profession—and I do not want to be a tradesman. There is significant concern that the legal profession’s historic self-regulation prerogative would be eroded or destroyed if lawyers and nonlawyers are permitted to practice in a single entity or share fees, also.

In Ohio, as all of you know, the Supreme Court has the authority to regulate the practice of law. Nonlawyer law firm owners, however, would be regulated by very different and sometimes conflicting state and federal statutes, rules, regulations and codes. This too could lead to a dual or hybrid system that would likely include legislative authority over lawyers’ professional conduct.

When these proposals were discussed at an ABA meeting last July, representatives of the OSBA, including myself, spoke out against these changes. But am I missing something? Am I “out of step” or too “old school”? Should I change my position against sharing with nonlawyers? Should the OSBA alter its position on these values? Should lawyers be able to partner with nonlawyers and split fees with them? Will these changes, if adopted, affect the independence of our profession or our judgment? Most importantly, would these changes hurt the public, whom we must protect?

Please take two minutes or so to let me know your thoughts.

Your response may be provided by writing a letter to the editor, posting on the OSBA’s Facebook page or contacting us through the OSBA’s Twitter feed. You may also call me the old-fashioned way or contact me through email if you would like to discuss this issue further.

Judge Patrick F. Fischer is president of the Ohio State Bar Association.

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