The ISBA’s prominent role in the adoption of an ABA resolution reaffirming the ABA’s long-standing postions on nonlawyer ownership of law firms and sharing fees with nonlawyers.

As your president, I have the opportunity to wear many hats and make a difference on many levels important to our members and our professional values. One such example is that, as president, I’m also a delegate to the ABA House of Delegates—the ABA’s version of our Assembly. In that role, I was honored to participate in an ad hoc group of bar leaders from across the country capably organized and led by ISBA Past President John Thies to reaffirm the ABA’s long-standing policies of 40+ years against nonlawyer ownership of law firms and fee-sharing with nonlawyers.

On Aug. 9, 2022, history was made by the ABA House of Delegates. In an age where other professionals are being bought and sold like commodities, the ABA’s House of Delegates reaffirmed a decades-old ABA policy that nonlawyer ownership of law firms and fee sharing with nonlawyers are contrary to the core values that have sustained our profession for generations. In the legal profession, protection of the public—particularly against predatory pecuniary policies—is paramount and will continue to be the primary focus of our profession for at least the next 10 years, thanks to the adoption of ABA resolution 402, as amended.

An aside about innovation

A brief digression is in order. As many of you know, it has become trendy in recent years to suggest that nonlawyer ownership of law firms and fee sharing with nonlawyers is being sold as an “innovative” way to address and solve the significant issues we face in providing access to justice to all our citizens, including the increasing number of self-represented litigants in our courts. In fact, during the recent meeting of the National Conference of Bar Presidents, held in conjunction with the ABA Annual Meeting in Chicago, a speaker, having made the long trek down from the pulpit of his ivory tower in academia, stated: “We cannot ‘human’ our way out of this.” In short, the good professor believes that lawyers not only can but need to be replaced in whole or in part by AI and software programs.

Never mind that the only hard data we have from experiments with alternative business systems (nonlawyer ownership) or nonlawyers providing legal services (licensed paraprofessionals) have proven to be for the benefit of the rich (see Arizona, where nonlawyer-owned firms are doing business organization, advanced tax planning, wealth management, and estate planning) or have failed (see Washington, whose Supreme Court recently abandoned its Limited License Legal Technicians program-LLLTs). In fact, there is no data to support the assertions of the proponents of these experiments that any demonstrable increase has taken place in affording the indigent and lower to middle classes greater access to legal representation or reducing the number of self-represented litigants.

Back to ABA Resolution 402

The ISBA is proud to have been the initial sponsor of Resolution 402, the ABA House of Delegates’ reaffirmation of this long-standing policy of protecting the public from profiteers. This victory did not come without a fight, but in the end the Illinois Delegation, led by ISBA Past President John Thies and Board of Governors member Emily Masalski, put together a coalition of cosponsors featuring the state bars of New Jersey and New York; the ABA’s own Tort Trial & Insurance Practice and Solo, Small Firm and General Practice committees; and with support from the Chicago Bar Association, California Lawyer’s Association, and the Iowa State Bar Association among others (organizations that represent more than 200,000 lawyers nationwide) that resulted in the 350-plus members of the House of Delegates overwhelmingly adopting Resolution 402 as amended. Board of Governor’s member Masalski’s considerable efforts breaking down and analyzing opposition points and providing cogent and effective counter points were of particular and notable assistance in our efforts. The final amended resolution ultimately was supported by those who opposed us initially.

This great day would not ever have occurred without the exemplary vision, passion, and just plain hard work of ISBA Past President John Thies. For the better part of the last eight months, John organized and coordinated efforts to stop seemingly endless schemes to terminate the ban against nonlawyer ownership of law firms set forth in ABA Rule of Professional Conduct 5.4 and grew the support and coalition of bar leaders who ultimately secured the victory against those who would commoditize our profession at the public’s expense. The importance of John’s leadership cannot possibly be overstated; without him, this day would not have come about, and this historic vote would never have happened. That John was able to ultimately secure the support and cooperation of those attempting to eliminate Rule 5.4, or significantly roll back its prohibitions, is truly a testament to his leadership. It has been said that a great leader takes people to where they don’t necessarily want to go, but ought to be. John Thies is that great leader. 

We know we’re not finished. In fact, having reaffirmed the preeminent role of lawyers in our justice system, it is incumbent upon lawyers to innovate and address the legal needs of all citizens with real solutions. Access-to-justice deficiencies are real and need to be addressed, and I pledge that the ISBA will be at the forefront of exploring practical and innovative ways to address them.

However, Resolution 402 assures that insofar as the ABA is concerned, these new proposals will need to be in conformity with the Rule 5.4 bans on nonlawyer ownership and fee sharing with nonlawyers. The ISBA is proud to have sponsored Resolution 402. And it is proud of the House of Delegates for reaffirming that the ABA’s core values are aligned with our association’s core values. As we pursue innovation and the expansion of the delivery of legal services to the indigent and the needy, we are thankful that, in large measure, due to Resolution 402, it will be ISBA members who provide those innovations to the people of Illinois.

Finally, be sure to look out for next month’s issue of the Illinois Bar Journal, which will feature a cover story on Resolution 402 and a feature article that explores the ethical implications of nonlawyer ownership of law firms.