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Is Non-Lawyer Ownership of Law Firms Coming Soon?
Ask yourself whether the following scenario is fact or fiction in today's U.S. legal market. A large investment firm with $3 billion in assets acquires a U.S. plaintiffs' personal injury law firm after the law firm is listed on the U.S. Stock Exchange. Founded in 1935, the law firm specializes in workers' compensation claims, personal injury cases and class actions. The investment fund's acquisition of the law firm provides the law firm with "a stable capital base and a supportive operating environment," according to the law firm's press release. The fund "looks forward to working with [the law firm's] strong team of lawyers whom we are keen to retain, support and incentivize," according to the fund. The scenario is fact, not fiction. But it's a scenario that happened earlier this year in Australia with Australian law firm Slater Gordon, not in the United States. At least, not yet.
Surely, this nightmare scenario of hedge funds or other non-lawyer entities owning and controlling law firms could never happen in the United States. Don't be so sure. Powerful forces are now pushing regulators in the direction of non-lawyer ownership of law firms in the United States. Some of the forces are completely well-intentioned, but some of the forces are not so well-intentioned. The well-intentioned forces are motivated primarily by access to justice considerations. The not so well-intentioned forces are motivated primarily by crass financial considerations. The parties motivated by financial considerations include hedge funds, accounting firms, insurance companies and corporations seeking cheaper legal services, among others.
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