First Alternative Business Structures approved in USA

The first two fully licenced alternative business structures (ABSs) have been approved by the state of Arizona. On the 17th March 2021, two businesses, Trajan Estate LLC and Gilbert and Payne Huebsch PLC received their ABS license after the State Supreme Court approved their bids. Trajan Estate is a legal service provider focused on estate planning while Payne Huebsch provides transactional legal services paired with tax and accounting advice.

Last year Arizona became the first state to fully allow alternative business structures and non-lawyer ownership in law firms,  revoking state professional conduct rule 5.4 which barred nonlawyers from fee-sharing and holding an interest in law firms. The change came into effect in January 2021, allowing business to begin the approval process.

The licenses follow the approval of the first non-lawyer owned law firm in Utah, as part of the state’s two-year regulatory sandbox. Law on Call opened at the beginning of March 2021, allowing consumers unlimited over the phone access to lawyers, in a business entirely owned by non-lawyers. The business will however be subject to license reviews, as per the conditions of the sandbox.

Read more about the Arizona licences here, or the Utah licences here.

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Utah to be First US State to Trial Non-Lawyer Ownership

Utah has become the first state in the US to allow non-lawyer ownership of legal services providers. This month the State Supreme Court unanimously voted in favour of approving a 2-year sandbox programme which would licence new forms of legal services ownership.

The move has come about in the face of continued concerns over access to justice, particularly in the face of the ongoing COVID-19 pandemic. The courts have cited the reasoning that regulation should focus primarily on serving the consumer, and acting in their best interests, with Utah Supreme Court Justice Deno Himonas saying “changes will enable individuals and entities to explore creative ways to safely allow lawyers and non-lawyers to practise law and to reduce constraints on how lawyers market and promote services. New forms of providers could include partnerships, corporations and companies and non-profit organisations partnering with other entities to offer legal services.”

Whilst the Utah profession is comparatively small, with 26 lawyers per 10,000 residents compared with 92 in New York and 43 in California, the result of the sandbox will be closely watched by other state bars, particularly in the light of similar moves being discussed in California, and calls by the ABA for other states to follow suit.

Read more about the decision or view the standing order.

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Washington Supreme Court grants bar exam exemption

On the 12th of June the Washington Supreme Court issued an order allowing graduates, currently registered to take the July or September UBE in Washington, with a J.D. from an ABA accredited law school, to be admitted to the Washington State Bar Association and practice law in the state without taking the bar exam.
The court has said that the order is in recognition of “the exponential impact of the crisis caused by the killings of George Floyd, Ahmaud Arbery, and Breonna Taylor and the resulting unrest and social action and activism that have affected this set of graduates and applicants, particularly those of color, on top of the already stressful conditions caused by the pandemic and its fallout.”
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