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New York State Bar Votes against Non-Lawyer Ownership

published November 20, 2012

By Author - LawCrossing
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( 3 votes, average: 4.5 out of 5)
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11/20/12

NYSBA votes against non-lawyer ownership
On last Saturday, the New York State Bar Association House of Delegates voted to reaffirm the association's position against allowing non-lawyers entry into law firm ownership. Though Washington has allowed non-lawyers to have stake in law firm practices, 50 states, including New York, continue to prohibit non-lawyers from having any stake in ownerships of law firms.


The New York State Bar Association led a nine-month inquiry over the issue; concluding that non-lawyer investors can possibly influence the objective professional judgments of a lawyer, and law firms are better off without non-lawyer owners.

The task force conducting the inquiry interviewed lawyers and probed into the possible benefits of non-lawyer ownership at law firms, including partnerships with companies that provide relevant services like e-discovery or document review. However, the findings of the task force show that the risk inherent in allowing such non-lawyer ownerships outweighs possible benefits.

The latest decision of the New York Bar follows the ABA decision in April against non-lawyer ownership at law firms.

The question of non-lawyer ownership rose to the fore against the backdrop of economic recession, financial crunches felt by law firms, exorbitant rates of interest charged by external funders who did not own a stake, and a spate of lawsuits filed by Jacoby & Meyers in favor of allowing non-lawyer ownership in order to overcome financial debacles.

Jacoby & Meyers filed separate lawsuits on the issue in New York, New Jersey and Connecticut. The lawsuits at New Jersey and Connecticut are pending, while the New York lawsuit, though dismissed by the court of first instance, has been given a chance by the 2nd U.S. Circuit Court of Appeals to be filed again including new causes.

published November 20, 2012

By Author - LawCrossing
( 3 votes, average: 4.5 out of 5)
What do you think about this article? Rate it using the stars above and let us know what you think in the comments below.

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