Monday, 17 February 2014 19:00

Guest Post on Legal Innovation for UpCounsel

Recently, we wrote a guest post for our friends over at UpCounsel on Fee Sharing, Innovation, and the Consumer Interest.  You’ll have to click through to read the whole thing, but (briefly) the argument runs as follows:

American Bar Association Model Rule 5.4 prohibits lawyers and law firms from sharing legal fees with non-lawyers, and while this might sound innocuous, in reality Rule 5.4 is hurting everyone who doesn’t have a law degree.  The two justifications often given for the ban on fee sharing (the pernicious influence of non-lawyers and fear about the commercialization of the practice of law) simply don’t stand up to scrutiny.  The most salient impact of Rule 5.4 is that it stifles innovation in the legal services industry – innovation that could provide consumers with more value for their dollar when faced with a legal situation.  Despite successful liberalization of similar rules in other common-law countries like Australia and the UK, here in the US the American Bar Association has refused to even consider relaxing Rule 5.4.  The ray of hope?  An underreported Jacoby & Meyers lawsuit against the states of New York, Connecticut, and New Jersey is still working its way through the court system.  If successful, these cases could overturn the prohibitions on fee sharing and outside investment, giving the American legal services industry a much-needed breath of fresh air - and consumers’ wallets a much-needed break.


Danny Foster is a Responsive Law intern.

Published in Blog
Monday, 05 April 2010 20:00

New Jersey bans virtual law offices

The New Jersey State Bar Association's Advisory Committees on Professional Ethics and Attorney Advertising issued a joint opinion on March 26th effectively banning lawyers from creating virtual law offices. The decision requires every attorney to maintain a permanent address. This comes as virtual law offices, in which the attorney maintains an online or "virtual" law office and rents office space as needed, are growing in popularity. According to New Jersey State Bar Chief Allen Etish, "[t]he need for a bona fide office is necessary," while acknowledging "that the idea of a virtual office needs more study," noting that virtual law offices are "not totally wild-eyed or preposterous."

It is very good to hear that the New Jersey State Bar is interesting in further examining the use of virtual offices, but in rendering its opinion has shown a reluctance to embrace current trends in legal practice that might help make the law more affordable for consumers. The decision effectively requires an attorney to either maintain a permanent office or to create one in their home, which creates problems for attorneys who'd like to keep a home office, but do not want to use it to meet with clients or to list the address for privacy and security reasons. For consumers, office space contributes to the attorney's overhead, which can increase the costs for that attorney's services. Allowing attorneys to maintain virtual offices would help them provide consumers with lower cost alternatives to a traditional law office.

Published in Blog