Law firms are hard to manage, even for the most experienced lawyers who are in practice.
However, a lot of people are curious about “Can a nonlawyer manage a law firm?”
Being a CEO means you’re part of the business, and in this article, we’ll talk about this topic in detail.
So, can a nonlawyer open a law firm and manage it?
Let’s find out.
Can a Non-lawyer Manage a Law Firm?
The answer to this question depends on the jurisdiction.
For example, in the United States, the rules of opening a law firm without being in practice or having a law degree vary from state to state.
If we look at the American Bar Association (ABA) Model Rules of Professional Conduct, it prohibits non-lawyers from having managerial authority over the law firm in practicing the law.
Hence, a non-lawyer cannot be a partner in a law firm, not be a member of the management committee, and cannot have the power to direct or control the works of a lawyer in a specific law firm.
But there are still some exceptions to the rule.
For example, in many states, non-lawyers are allowed to own a law firm if they don’t manage it or deal with the practice of law.
Of course, they’ll still have a huge responsibility being a shareholder, but they cannot make decisions over the lawyers who have practiced law.
To answer your question, some states allow non-lawyers to become shareholders in a law firm as long as they don’t have any voting rights.
The specific rules on whether a non-lawyer can manage a law firm or not in countries like the United States can be quite complex.
So, for that reason, we can take the example of some of the biggest and most popular jurisdictions where non-lawyers can manage law firms.
- Washington D.C.: You might be surprised, but non-lawyers can own and manage a law firm as long as they’re not directly involved in any law practice.
They won’t have voting rights but can still have a piece of the company to themselves. - Utah: Utah is one of the few states allowing non-lawyers to become partners in a law firm. However, just like Washington D.C., they are prohibited from having any managerial authority over law practice.
- California: Now, let’s talk about California. The state has the same rules of allowing non-lawyers to own and manage tasks that are not involved in the practice of the law. The CEO can be there for payments and management that is not directly related to law.
There are even more restrictions than just not giving non-lawyer CEOs practicing rights.
For example, most states will prohibit non-lawyer managers and shareholders from using the title “Attorney” or “Lawyer” in their firm’s name.
They are also strictly prohibited from giving legal advice or even representing clients in court.
So what is the conclusion?
You Can Lead a Law Firm Without Involving Practice
You’ve heard that right. In many states and after dozens of Texas firms voiced their opinions, the committee revised its decision to let nonlawyers manage a law firm.
Some of these states even let you use the titles of a lawyer or attorney as long as you don’t have practical control over the firm’s legal practice.
But this is because of a good reason.
A regular CEO, business owner, or manager isn’t trained to be like a lawyer.
Only lawyers are trained to be lawyers.
Women make up three quarters of non-lawyer staff in UK law firms.
Lawyers have different mindsets than regular business people because of their responsibilities, experience, and duties.
However, most lawyers indeed become good businessmen because of their sales experience.
They know how to work as a marketer and consultant and practice legal law as well.
When it comes to a businessman, he might be the most qualified person to run the firm, but if he hasn’t gone through all the years of law studies, he just wouldn’t be able to make the firm thrive.
The State of States
While most jurisdictions were quite reluctant to let non-lawyers open or manage a firm, they’ve changed some of their opinions in the past few years.
Two states have taken a fresh look at Rule 5.4 and added some new changes to it.
In August 2020, the Utah Bar created a pilot project that allowed non-lawyer-owned entities to apply to the state’s Office of Legal Series Innovation to get a license to offer a legal service.
Moreover, in March 2022, around 31 organizations got approved to provide various services covering business law, personal injury matters, immigration, and divorce.
In August 2020, the Arizona Bar eliminated rule 5.4 and created a new licensing requirement for the Alternate Business Structure (ABS) that is partially owned by non-lawyers.
However, they must provide legal services as well.
To qualify for the ABS, the firm must have at least one lawyer to serve as compliance counsel.
Other states have also taken action on this subject. In 2021, the California Supreme Court approved a rule change in Rule 5.4 that approved greater fee sharing with non-lawyer-owned non-profit organizations. However, this rule still doesn’t allow the non-lawyer owner to make decisions about matters in which he is not a client.
Letting Lawyers Be Lawyers
Should we let lawyers be lawyers?
Well, John Neruker, one of Australia’s law firm leaders who is an accountant and not a lawyer, has shown an interest in letting non-lawyers manage a firm.
According to the leading accountant, lawyers do their job the best, but sometimes, a manager who is not a lawyer is needed to do certain tasks.
When it comes to legal training, it doesn’t focus on areas like people management and financial management. In other words, having dedicated law firm managers makes a lot of sense and could potentially increase a law firm’s growth.
But even to this date, most law firms are managed by lawyers.
However, some of these firms sought out non-lawyers managing partners or chief executives to improve their management.
But with the increasingly tough rule, it can take another turn in the future.
Final Verdict
So, can a nonlawyer manage and open a law firm?
The answer is yes, but it depends on the state.
Most states still wouldn’t allow you to open or manage a law firm if you’re a non-lawyer manager or partner.
If you are considering starting a law firm with a non-lawyer, it is important to carefully research the laws in your jurisdiction to ensure that you are complying with all applicable regulations.
Saad Ali
Saad started his Content Writing journey in 2019 on Fiverr, where he catered to over 100 businesses in different niches like SaaS, Crypto, Meta, Gaming, Entertainment, and more.
