SALT LAKE CITY — The Utah Supreme Court agreed to begin reforming the state’s legal service regulations in a recent ruling to loosen certain restrictions and allow nonlawyers to own and invest in law firms.
The changes, recommended by a joint Supreme Court and Utah Bar Association work group in a 71-page report, are meant to broaden access and affordability of legal services.
“Most people perceive lawyers as, first of all, pretty expensive. Second of all, they don’t quite know what the lawyer is going to do for (them),” said John Lund, former president of the state bar and co-chairman of the work group.
He said allowing nonlawyer associates to bring “innovative ideas” to the industry could create a more consumer friendly and affordable market.
Offering the example of someone filing for divorce and wondering how they would be affected financially and in terms of child custody, he said, “Suppose you could go to a webpage, fill out your vital information about all those kinds of things and be able to get a pretty good prediction about what you (might be) looking at.”
He noted that once changes are enacted, tech industry professionals could step in and create such a platform in partnership with a law firm.
Though the state’s high court vote issued Aug. 28 will get the ball rolling on an issue long debated by the legal community globally, Utah will be one of the first states to pioneer it.
Cory Talbot, who sits on the Utah Supreme Court Advisory Committee on Rules of Professional Conduct, said allowing nonlawyers to own and invest in law firms “has been something that’s been raised often in the legal community.”
He noted that the argument against the change has been that “legal services need to be independent, we need to be able to, you know, separate ourselves from other professions.”
However, he said, “I think (with the changes) there are going to be some really good opportunities to provide services in a much more effective way than attorneys can right now.”
A similar reform was passed in the United Kingdom with the 2007 Legal Services Act, and Arizona, Oregon and California are also looking into similar types of legal service reforms. Washington, D.C., is currently the only jurisdiction in the United States that allows for lawyers to practice in partnership with nonlawyers under certain circumstances.
Lund noted that unlike these other legal service reforms, Utah’s approach will involve a regulatory board tasked with monitoring the nonlawyer agencies in a “sandbox” environment.
He said this would allow for “somebody (who) comes in with an idea about something that they could do around legal services (to) try it out for a while in the sort of controlled environment.” After an idea is piloted, the regulatory board would examine its applications to make sure it is “valuable to people” and does not “cause undue risk.”
“The bottom line is, there’s huge numbers of people that don’t ever conceive that they would ever involve a lawyer,” he said, adding that changes will allow lawyers to “provide services that are beneficial to a much wider portion of the population.”
The Utah high court decision will now prompt the creation of a task force to look at which state bar rules will need to be modified to accommodate the reform — a process Lund said could take “several months.”
A public comment period is required before changes can be adopted.