The Arizona Supreme Court has approved what can only be called a game changer in provision of legal services in America.
The court is the first in the nation to adopt a new rule that permits a new type of legal services firm in the state – an Alternative Business Structure – that can be co-owned by non-lawyers
The court also authorized non-lawyers to obtain a state license to work as a “legal paraprofessional” and provide limited legal services.
Historically, every state’s organized bar association has had a stranglehold on the legal services delivery in their state. They fended off competition from out of state attorneys and industries closely associated with the practice of law, such as insurers and accountants. Their resistance to change and innovation has crippled the ability of poor and middle-class Americans to get legal help, especially for civil matters.
The National Center for State Courts reported in 2015 that at least three-quarters of civil matters disposed of in ten large urban counties over the course of a year involved one or more self-represented litigants. This means people with no legal training were forced to navigate complex divorce and child custody laws, evictions, domestic violence and stalking, tax issues, etc. Clearly, self-represented litigants are at a disadvantage when the other side is represented by counsel.
American Bar Association President Judy Perry Martinez issued an unusually frank plea to members earlier this year to support reform of America’s backward legal system to better serve the public.
She cited the World Justice Project’s ranking of the U.S. in the bottom tier with respect to access to and affordability of civil justice. She said the U.S. is tied for 99th place out of 126 countries. Martinez said low-income Americans receive inadequate or no professional legal help for 86% of their civil legal problems, including child custody, debt collection, eviction and foreclosure.
The Arizona Task Force on the Delivery of Legal Services, in a 157-page report to the state’s high court, said that “lawyers have the ethical obligation to assure legal services are available to the public, and that if the rules of professional conduct stand in the way of making those services available, then the rules should be changed.”
The Arizona Supreme Court eliminated AZ Ethics Rule 5.4 , which barred non-lawyers from having an economic interest in a law firm. It approved a new rule that permits the establishment of Alternative Business Structures in the state. At least one person in an ABS firm must be an active member in good standing of the State Bar of Arizona and legal paraprofessionals must be supervised by a licensed lawyer.