Injury lawyers voice concerns over specter of non-lawyer ownership of law firms

Charlotte Personal Injury Attorney Matthew R. Arnold of Arnold & Smith, PLLC answers the question “Should I trust the insurance adjuster?”


The American Bar Association—prodded by American businesses like Legal Zoom, Inc.—is studying the issue of non-lawyer ownership of law firms.

medivac Charlotte Injury Law Firm North Carolina car accident lawyerIn the United States, lawyers are generally prohibited from “creating, owning or managing law firms” with non lawyers. Multidisciplinary practices—or those practices that combine the provision of legal services with non-legal services—are greatly restricted.

This is not the case in the United Kingdom, the fount from which the United States’ Common-Law legal tradition sprang. In the United Kingdom, restrictions of non-lawyer ownership interests in law firms have largely been eliminated, leading to the development of so-called “alternative business structures.”

The United Kingdom lifted its restrictions on alternative business structures in 2007. Since then, by most accounts, it has encouraged the establishment of alternative business structures for largely the same reason that they are prohibited in the United States: for the benefit of clients.

The 2007 Legal Services Act—which lifted the prohibition against alternative business structures—was passed after a study of the legal industry in the United Kingdom revealed a glut of unmet but nonetheless needed legal services.  The new Act focused on the functions of advocates as opposed to the identity of law-firm owners, restricting the performance of certain activities to authorized lawyers. Those activities include the right to appear as an advocate in court, to certify documents and transactions, to probate estates, administer oaths, cause the consummation of a transfer of real property and to conduct litigation.

The interplay between the work of lawyers and non-lawyers in the legal services industry has served as a source of confusion and consternation in the United States. Companies like Legal Zoom have pushed the limits of the kinds of non-lawyer legal services and advertising that states including North Carolina will allow.  The Tar Heel State has engaged in years-long litigation against the California-based company over its alleged unauthorized practice of law. In general, it is illegal in North Carolina to practice law unless a lawyer has been admitted to practice in the state—even if the lawyer has been admitted to practice law in another state or country.

The state premises its requirement that only licensed lawyers provide certain legal services on consumer protection. These protectionist ideals also underlay the resistance some lawyers have to alternative business structures. Charles Gluckstein, a personal injury attorney from Ontario, Canada, voiced concerns about interest in alternative business structures in Ontario, worrying that if states or provinces sanction non-lawyer ownership of law firms, insurance companies will control claims processes from A through Z, which will harm injured persons.

“Imagine the circle of care the insurance company is looking to control when persons injured in an accident are insured with them,” Gluckstein said. The insurance company would control not only the amount of any damages payable to the injured person, but also the attorney fees payable to an attorney representing the injured person and the medical costs to be paid on the claim. “The whole problem is covered under their umbrella,” Gluckstein said. He said that will mean “only negative outcomes” for claimants.

If you or someone you know has been injured as a result of someone’s negligent or intentional conduct, please do not hesitate to contact me to set up an appointment today.If you or someone you know has any questions regarding potential personal injury claims, feel free to contact the experienced personal injury attorneys at Arnold & Smith, PLLC in Charlotte, North Carolina for a free consultation. Call toll free at (955) 370-2828 or click here for additional resources.



About the Author

ARNOLD & SMITH LAWMatthew Arnold is a Managing Member of Arnold & Smith, PLLC, where he focuses on the areas of family law, divorce, child custody, child support, alimony and equitable distribution.

Mr. Arnold was raised in Charlotte, where he graduated from Providence Senior High School. He attended Belmont Abbey College, where he graduated cum laude, before attending law school at the University of North Carolina at Chapel Hill on a full academic scholarship.

A certified Family Law expert, Mr. Arnold is admitted to practice in all state and administrative courts in North Carolina, as well as before the United States District Court for the Western District of North Carolina and the Fourth Circuit Court of Appeals in Richmond, Virginia.

In his free time, Mr. Arnold enjoys golfing and spending time with his wife and three children.






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