At a January 2024 meeting of the Texas Access to Justice Commission, the commission voted against a recommendation to create a pilot program that would have allowed non-attorney ownership of entities licensed to provide limited legal services to low-income Texans.
The topic of nonlawyer ownership in legal entities has been a topic of growing interest in recent years.
Currently, Texas Disciplinary Rule of Professional Conduct 5.04 prohibits nonlawyers from having any economic interest in entities practicing law.
Many other states have their own versions of this rule, which is modeled on the American Bar Association (ABA)’s Model Rule 5.4.1
In 2020, Arizona became the first state to eliminate this rule,2 creating “alternative business structures,” or ABSs, to allow lawyers to share ownership of their law firms with nonlawyers.
In the years since, the Committee on Alternative Business Structures has released an annual report as required by the Arizona Code of Judicial Administration (ACJA) § 7-209.
As of May 10, 2024, the Certification & Licensing Division (CLD) of the Arizona Judicial Branch has 72 licensed entities, 71 of which are currently active.3
In its first full year, Arizona’s ABS program received 32 applications. The ABS committee recommended 15 of these to the Arizona Supreme Court for licensure. All 15 were approved.