Is it possible to own a law firm with a non attorney? If not, does anyone have experience on structuring a deal to compensate a non attorney for providing a stream of business? This is for franchise law work.

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Ethically, per the ABA, I don’t think it’s possible to compensate for referrals, even less so to a non-attorney.

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Delaware allows non lawyers to receive profit-shares and own equity as long as they have no authority or governance powers.

Each state is different, but I’ve never heard of non-attorneys being an owner of a law firm (whether structured as an LLP, LLC, PLLC, PA, or a PC). I know in NY we cannot take any money for a referral, but in IL you can, for example. The ABA doesn’t really matter, you just have to make sure what you’re doing is kosher in your state. Each state bar association has (at least in my experience) an ethics hotline that can answer these questions.

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Thank you very much for info!

I wrote a paper on this during law school. Most states do not allow non attorneys to have any interest in a law firm. However some states are changing that. You should look into your state laws. Arizona for example has started a trial program for this.

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Yes, I heard that about AZ. I will look into it. Thank you for the info.

Arizona provides for a ABS Law-firm structure which does not allow ownership by non attorneys but if rules followed under this ABS incorporated and approved law firm then the law firm can provide referral fees to non attorneys. You need to look into proper structure, qualifications and ethics counsel but just a general search on ABS firms in Arizona will give you some direction.

Also to some extent DC allows for non lawyers to own a law firm but there are specific requirements in terms of hours and compensation requirements.

Of course deferring to each states bar association as a starting point for ethics as well as the state you practice in is first steps to gain insight.

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Thank you very much. This is very helpful.

Any attorneys with an expertise in corporate franchise law looking for per diem work?

Delaware allows non lawyers to receive profit-shares and own equity as long as they have no authority or governance powers.

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