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KPMG’s Bold Move into U.S. Legal Services: A Game-Changer for the Legal Industry
(JDJournal) Jan 15, 2025
Summary: KPMG, one of the Big Four accounting firms, is set to become the first among its peers to establish a law firm in the United States. This initiative leverages Arizona’s Alternative Business Structure (ABS) program, which permits non-lawyers to own law firms—a departure from traditional U.S. regulations. KPMG Law US has received a unanimous recommendation for approval from Arizona’s Supreme Court Committee on Alternative Business Structures, with final approval anticipated on January 28, 2025. The firm plans to focus on large-scale, process-driven legal tasks, such as contract management and compliance services, aiming to complement rather than compete directly with traditional law firms.
Jeff’s Take: KPMG just shook up the legal world by entering the U.S. market through Arizona’s alternative business structure program. This isn’t just another player joining the game – it’s a peek at what might be coming for all of us in family law.
KPMG serves deep-pocketed companies. Their entry will undoubtedly lead to many other accounting and professional firms applying for licenses. I think this high profile entry opens the flood gates. As these big business firms prove out financial success, others will start going “downstream” to small law where we sit as family lawyers.
It’s a “time game” at this point. We need to watch these developments carefully.
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Is Private Equity Coming for Small Law Firms?
(FindLaw) Jan 13, 2025
Summary: This explores the increasing interest of private equity (PE) firms in acquiring stakes in law firms.
While large law firms with revenues exceeding $100 million have been primary targets, the discussion extends to the potential implications for smaller practices. The article highlights concerns about commoditizing legal services, potential conflicts of interest, and the reluctance of lawyers to cede control.
Jeff’s Take: Private equity firms are eyeing family law. They are actively looking for ways to get into our world.
I predict that some big play with lots of cash will make a play to get into small law by challenging the prohibition on non-lawyer ownership. It seems like they need a lawyer to put their law degree on the line to test this. That’s scary for any lawyer. But I can see some firms with deep pockets paying a lawyer to give Rule 5.4 a test.
Whether you’re excited or concerned, these developments are worth watching.
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KPMG aims for 1st non-lawyer firm in Arizona
(Daily Journal) Jan 8, 2025
Summary: KPMG Law US, a subsidiary of the global accounting firm KPMG, has applied for an “alternative business structure” (ABS) license with the Arizona Supreme Court. If approved, KPMG would become the first major accounting firm to own and operate a law firm in the United States without lawyer ownership.
Jeff’s Take: Big firms can now own law practices in places like Arizona. This opens doors for new ways of running legal services and will eventually trickle down to family law.
We absolutely need to be thinking over the horizon on this issue. Non-lawyer ownership beyond AZ will seem to be happening slowly, until all of a sudden.
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WA Approves Non-Lawyer Legal Services in 10-Year Test
(Law Sites) Dec 19, 2024
Summary: For 10 years, non-lawyer companies can offer legal help under strict rules. They must have a compliance officer and share data on how well they’re helping people get affordable legal services.
Key points:
- Each company needs a compliance officer
- The State Bar (WSBA) will watch closely
- Public can file complaints
- Companies must track and prove they’re helping more people get legal help
Jeff’s Take: Many people can’t get legal help when they need it – it’s too expensive or hard to find. Washington’s following Arizona and Utah in trying to fix this.
I think WA is taking a smart approach to non-lawyer ownership by building up the data to support it.
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Professional Responsibility Lawyers Urge ABA to Allow Lawyer-Nonlawyer Fee Sharing
(Law Sites) Dec 17, 2024
Summary: The Association of Professional Responsibility Lawyers (APRL) has formally requested that the American Bar Association (ABA) revise Model Rule 5.4 to permit fee-sharing between lawyers and non-lawyers under specific conditions.
Model Rule 5.4 currently prohibits lawyers from sharing legal fees with non-lawyers, aiming to preserve lawyers’ professional independence. APRL contends that this restriction impedes innovation and limits access to justice. Their proposal suggests allowing fee-sharing provided that:
- Lawyers maintain independent professional judgment.
- Non-lawyer contributions are properly supervised.
- Fees remain reasonable.
- Clients provide informed written consent.
APRL references reforms in states like Arizona and Utah, which have adopted alternative business structures permitting non-lawyer ownership and fee-sharing without compromising ethical standards.
Jeff’s Take: Yet another initiative and voice to modify Rule 5.4. I suspect the ABA will ignore this request. But, add it to the pile of rejected deregulation ideas.
Eventually, it will be too big of a pile to ignore. Then, I believe we will see more serious baby steps in the direction of deregulation.
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Non-attorneys get their day in family court with Colorado’s new legal license
(Denver Post) Dec 4, 2024
Summary: The Colorado Supreme Court has approved the licensure of Licensed Legal Paraprofessionals (LLPs) to address the significant number of self-represented litigants in family law cases. LLPs are authorized to assist clients in specific family law matters, including divorce, legal separation, allocation of parental responsibilities, child support, and protection orders. Their permitted activities encompass advising clients, preparing and filing legal documents, assisting in mediation, and, with certain limitations, appearing at hearings.
Jeff’s Take: I think more states will do this in the near future. It seems to be a good compromise between the law firm ownership regulators v. law firm ownership De-regulators.
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Addressing California’s Access to Justice Crisis by Fundamentally Rethinking Legal Services: A Conversation with Stanford’s David Engstrom and Lucy Ricca
(Stanford Law School) Nov 21, 2024
Summary: This article discusses California’s access-to-justice crisis, highlighting that nearly 70% of Californians facing legal issues receive no assistance.
It explores potential reforms, such as licensing legal paraprofessionals, authorizing community justice workers, and permitting nonlawyer ownership or investment in legal practices, aiming to make legal services more accessible and affordable.
Family Lawyer Application: I don’t think lawyer deregulation will happen anytime soon.
But the conversation is still relevant and is leading to a fountain of new ideas on how to increase access to justice.
It’s wise for us to be aware of what’s being discussed and proposed. Some states are already implementing different concepts.
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Changing of the Tide: Law Firm-Fee Sharing and Ownership with Nonlawyers
(LawNext) Nov 12, 2024
Summary: This article talks about whether non-lawyers should be allowed to own law firms and share in their profits. It explains how traditionally, the American Bar Association’s Rule 5.4 banned non-lawyers from these activities to protect lawyers’ independence and avoid conflicts of interest. Some states are now changing this approach. Arizona removed this rule completely in 2020, and Utah started testing a program allowing non-lawyer ownership under strict oversight. However, states like California still keep the old rules in place, worried about maintaining professional independence and preventing conflicts.
Jeff’s Take: This article is a great summary of what is going on across the states with non-lawyer ownership.