How ABA Opinion Shifts Alternative Biz Structure Landscape
By Hilary Gerzhoy and Deepika Ravi (September 22, 2021, 6:14 PM EDT) -- Until recently, the American Bar Association and virtually every state aside from the District of Columbia balked at nonlawyer ownership of law firms, referred to as alternative business structures, or ABS. One of the practical effects of that resistance has been a series of hurdles for a law firm wishing to scale its practice.
On Sept. 8, the ABA's Standing Committee on Ethics and Professional Responsibility published Formal Opinion 499, loosening the reins and following a recent trend in Arizona and Utah.
The formal opinion, titled "Passive Investment in Alternative Business Structures," opines that a lawyer may passively invest in an...
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