California is exploring loosening its attorney regulatory framework, which could lead to dramatic changes in the provision of legal services in the State. Areas under consideration include changing the rules for the unauthorized practice of law, non-lawyer ownership of law firms and more. With the country gripped by a pandemic and unemployment at historic levels, the impact on California attorneys who have lost their jobs remains to be seen. Certainly, any loosening of the established attorney regulatory framework will attract not only individuals who have not attended law school or passed a bar examination, but also hedge funds and other professions (such as accounting) who are eager to expand into areas once off-limits.
Difficult questions remain especially for in-house counsel who select outside firms with the expectation that they will avoid conflicts of interest and protect their confidential information. Will companies be comfortable receiving legal counsel from firms that could be owned by their competitors? Will hedge funds end up controlling most large law firms? Certainly, lawyers who have had their employment terminated as a result of the global pandemic will not look kindly upon measures that permit non-lawyers to fill legal roles. Only time will tell as these experiments unfold.
“California could become the next state, after Utah, to establish a regulatory sandbox to explore new methods of delivering legal services, after the State Bar of California Board of Trustees voted 9-2 yesterday to form a working group to explore the development of such a sandbox. The working group will be charged with exploring the development of a regulatory sandbox to evaluate possible changes to existing laws and rules that may inhibit the development of innovative legal service delivery systems…This could include consideration of relaxing rules and laws regarding unauthorized practice of law, fee sharing, nonlawyer ownership and other legal restrictions.”
Read: California Bar Takes Giant Step Towards Regulatory Sandbox at LawSitesBlog