Reuters has reported that Arizona’s Alternative Business Structures (ABS) programme, which allows non-lawyers to co-own law firms, has reached 101 approved entities as of September 2024. The Arizona Supreme Court recently approved seven more applicants, including an accident law firm and Rocket Lawyer.
Arizona was the first U.S. state to legislate to remove non-lawyer ownership restrictions in 2020, allowing companies like LegalZoom, Elevate, and Axiom to operate under Supreme Court oversight. The example of Arizona offers an interesting contrast to the Utah non-lawyer sandbox experiment.
The State of Utah has been running its seven year sandbox since 2020 and had 43 authorized entities as at June 2024. However recent changes to the Utah Sandbox rules has reduced its attractiveness and some ABS authorised providers are now choosing to withdraw from the Utah experiment. At the December meeting of the Utah Legal Services Innovation Committee, Rocket Legal announced its decision to withdraw from Sandbox authorisation, despite the company’s involvement in the experiment since its inception. Rocket Legal, the professional services arm of Rocketawyer, plans to continue their model through Arizona’s ABS programme. (see the meeting minutes in PDF format)
Arizona’s ABS milestone intensifies the national debate in the US on modernizing legal services, with some states embracing reform while others remain resistant to non-lawyer involvement in legal practice.