US firms consider non-lawyer partnerships

The American Bar Association (ABA) is considering the inclusion of non-lawyers in US law firm partnerships ahead of the implementation of alternative business structures (ABS) in the UK.

The ABA Commission on Ethics 20/20 launched a consultation earlier this month (5 April) seeking feedback on three potential forms of ABS for the US legal market.

The proposals include capped non-lawyer partnerships similar to the UK’s legal disciplinary partnerships (LDPs), which allow non-lawyers to form up to 25% of a firm’s partnership; uncapped non-lawyer partnerships; and multidisciplinary partnerships, which allow firms to offer both legal and non-legal services.

In the paper, the ABA highlights the LDP conversion of US firm Kobre & Kim’s London office as an example of the changing competitive environment in which US firms operate internationally. Kobre’s LDP switch in June 2010 saw former Serle Court barrister James Corbett QC join the trial specialist firm’s partnership.

The consultation paper states: “While the regulatory environment elsewhere may not directly map the regulatory structures in place in the US, US firms and lawyers are already participating in ABSs abroad. The discussion is no longer simply theoretical.”

The news comes ahead of this October’s implementation of the UK Legal Services Act, which will allow firms to take on non-lawyer partners, accept external investment and float on the stock exchange. However, the ABA has already ruled out external investment and the public trading of shares in law firms as not “appropriate at this time”.

Ethics 20/20 commission reporter Paul Paton said: “The feedback and comments will help inform the working group’s deliberations so it can come back with recommendations at the ABA’s meeting in August.”