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CHAPTER 5 - 5-3 BUSINESS ARRANGEMENTS WITH NONLAWYERS
Jurisdiction | United States |
5-3 Business Arrangements with Nonlawyers
Lawyers may not enter into a business arrangement with a nonlawyer if any of the activities of the entity consist of the practice of law.39 While for many years, the only domestic jurisdiction that allowed "multi-disciplinary" practices or nonlawyers to be part owners of a firm was the District of Columbia.40 Recently, Utah and Arizona have liberalized their rule regimes allowing nonlawyer participation in law firm ownership and as this book is going to press other states are considering it, prompted, in part, by a desire to create financing opportunities for new legal service delivery modalities as part of the "access to justice" regime. The Connecticut Bar Association has been studying nonlawyer investment in or ownership of firms, but the authors don't believe Connecticut will follow the states that have adopted these rules.
Lawyers may, however, enter into an agreement with a third-party to pay the lawyer's fees as long as there is no interference with the lawyer's professional judgment in rendering services to the client.41 A lawyer may pay part of fee from a settlement or award to a nonprofit that employed, retained, or recommended the employment of the lawyer in the matter.42 The ethical challenges related to such relationships are dealt with above in the section of this text dealing with conflicts.43
Connecticut has not adopted ABA Model Rule 5.7 which deals with "law related" services offered by an attorney.44 The commentary to the model rule defines such services as including "title insurance, financial planning, accounting, trust services, real estate counseling, legislative lobbying, economic analysis, social work, psychological counseling, tax preparation, and patent, medical or environmental consulting."
In the absence of a specific rule on how "law-like" or "law related" services are to be treated, the authors believe that courts and disciplinary authorities are likely to treat the lawyer as providing legal services unless a strong case can be made out that such is not the case. For an example, an out-of-state law firm offering mortgage modification services was able to avoid unauthorized practice charges when it showed that the client had signed a document expressly acknowledging that the services being offered were not of a legal nature, and the firm had urged the client to obtain a lawyer and consider filing bankruptcy.45 In case of a complaint from a client relating to such services, a lawyer...
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- Chapter 5 The Business of Law
- CHAPTER 5 - 5-1 FIRM MANAGEMENT
- CHAPTER 5 - 5-2 FEE SHARING
- CHAPTER 5 - 5-3 BUSINESS ARRANGEMENTS WITH NONLAWYERS
- CHAPTER 5 - 5-4 RESTRICTIONS ON THE RIGHT TO PRACTICE
- CHAPTER 5 - 5-5 UNAUTHORIZED PRACTICE OF LAW
- CHAPTER 5 - 5-6 FIRM NAMES
- CHAPTER 5 - 5-7 CONTACT WITH PROSPECTIVE CLIENTS
- CHAPTER 5 - 5-8 ADVERTISING
- CHAPTER 5 - 5-9 PAID REFERRALS OR RECOMMENDATIONS
- CHAPTER 5 - 5-10 SALE OF LAW FIRMS
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