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Last Post 23 Jun 2020 09:44 AM by  Yolanda Fox
R-20-0034 Petition to Restlye and Amend Supreme Court Rule 31; Adopt New Rule 33.1; and Amend Rules 32, 41, 42 (Various ERs from 1.0 to 5.7), 46-51, 54-58, 60, and 75-76
 243 Replies
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Jennifer Albright
New Member
Posts:3 New Member

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30 Jan 2020 01:03 PM
    Dave Byers
    Executive Director, Administrative Office of Courts
    Member, Task Force on the Delivery of Legal Services
    State Courts Building
    1501 West Washington
    Phoenix, Arizona 85007
    Telephone: (602) 452-3301
    Projects2@courts.az.gov

    Petition to restyle and amend Rule 31; amend Rules 32, 41, 42 (ERs 1.0, 1.5-1.8, 1.17, 5.1, 5.3, 5.4, 5.7), 46-51, 54-58, 60, 75 and 76, Ariz. R. Sup. Ct.; and adopt new Rule 33.1, Ariz. R. Sup. Ct. This petition proposes substantial rule changes to implement recommendations resulting from the Task Force on the Delivery of Legal Services extensive review, fact-finding and analysis of the changing consumer legal market and the well-documented access-to-justice gap. This petition includes rule changes developed through a subsequent workgroup on entity regulation established at the recommendation of the Task Force.

    The bulk of this petition focuses on the Task Force’s recommendation that the Court eliminate Ethical Rule (ER) 5.4 of the Arizona Rules of Professional Conduct, Rule 42, Ariz. R. Sup. Ct. and develop a regulatory structure for regulation of legal services businesses that involve nonlawyer owners, managers, and decision-makers. This petition also proposes expanding the universe of legal professionals in Arizona by adopting a new category of nonlawyer legal-service provider: the limited license legal practitioner (“LLLP”). Finally, the petition includes a proposed restyling of Rule 31 as recommended by the Task Force.

    Petitioner requests that a staggered comment period as follows be ordered: (a) initial comments due on March 30, 2020; (b) response to initial comments on April 27, 2020; (c) second round comments due on May 26, 2020; and (d) reply and final amended petition due on June 22, 2020.

    Would amend Sup. Ct. Rules and ethical rules to facilitate the delivery of legal services.

    ******The original 'Appendix 1 Various ERs 1.0 through 5.7' and
    'Appendix 2 Proposed Rules 31 through New Rule 33.1' are available upon request******

    Filed January 30, 2020

    March 30, 2020: First set of comments are due.

    April 27, 2020: Petitioner’s Response and, if needed, an Amended Petition are due.

    May 26, 2020: Second set of comments are due.

    June 22, 2020: Petitioner’s final response and, if needed, a Second Amended Petition are due.


    See Petitioners Final Reply and Final Amended Petition at the end of page 13.
    For additional information contact Jennifer Albright, Sr. Policy Analyst, AOC at jalbright@courts.az.gov.
    Attachments
    Michael Kielsky
    New Member
    Posts:4 New Member

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    13 Feb 2020 01:31 PM
    These proposed changes are long overdue -- the work-product presented here is very well thought-out, thorough, relevant, and timely. I urge the adoption of these proposed changes, if possible on an expedited basis, so that barriers to Access to Justice may be further diminished sooner rather than later. Creating ABS and LLLP options will expand the delivery of legal services, spur innovation, and improve the quality legal counsel in the aggregate.

    Michael Kielsky
    Attorney At Law
    480.461.5309 Direct | 480.461.5300 Main | 480.833.9392 Fax
    1138 N. Alma School Rd., Suite 101 | Mesa, AZ 85201
    MK@USazLaw.com | MK@UdallShumway.com | http://UdallShumway.com/
    Michael Kielsky
    New Member
    Posts:4 New Member

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    13 Feb 2020 02:11 PM
    This Rule Petition is succinct, well-thought-out, researched, timely, and relevant. I urge adoption of this petition, preferably on an expedited basis.

    Michael Kielsky
    Attorney At Law
    480.461.5309 Direct | 480.461.5300 Main | 480.833.9392 Fax
    1138 N. Alma School Rd., Suite 101 | Mesa, AZ 85201
    MK@USazLaw.com | MK@UdallShumway.com | http://UdallShumway.com/
    DavidF
    New Member
    Posts:1 New Member

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    13 Feb 2020 03:25 PM
    David Francis
    541 W. Palm Lane, Phoenix, AZ 85003
    602-628-1330
    david.francis@francislaw-az.com
    Bar no. 029799

    I oppose the proposed creation of the Limited License Legal Practitioner (LLLP) for the following reasons:

    First, the very premise for a need to create an entirely new profession within the Bar is suspect. The Petition claims that "[t]he purpose of creating this new tier of licensed legal service provider is to fill a gap that exists between medium- and low-income individuals needing legal services and the cost of securing those services from the traditional legal market." What indication is there that the same barriers preventing bar-licensed attorneys from filling this gap would not also serve to prevent LLLPs from profitably providing these lower-cost services? That traditional law firm cost structures may prevent firm attorneys from profitably providing these services is entirely irrelevant; rather, the appropriate inquiry is twofold – first, whether this gap can be filled by small-firm, solo, and even newly licensed attorneys; and second, if not, what can the Bar do to assist its existing membership in order to help them fill that gap themselves. The Bar should remember, in addition to its mission to serve the public, its obligation to its supporting membership.

    Second, the Petition claims that "no jurisdiction that allows certified nonlawyers to provide limited legal services has reported any diminution in lawyer employment," but this question is less relevant than determining the extent to which the creation of LLLPs and the like has diminished earning potentials for those lawyers who, by choice or necessity, have endeavored to perform legal services within the so-called justice gap. The Petition claims that the Task Force was not able to find “empirical” evidence of economic harm from LLLPs, but it is unclear what parameters were used to make that determination, and the Petition's focus on aggregate lawyer employment (while ignoring the basic economic fact that increasing the supply of professionals performing the services "targeted for LLLPs" will necessarily reduce rates for, and thus harm the livelihoods of, Arizona attorneys working in the so-called justice gap) calls into question the veracity of its research on this point.

    Third, the Petition claims that "the legal needs targeted for LLLPs involve routine, relatively straight-forward, high-volume but low-paying work that lawyers rarely perform, if ever" while simultaneously failing to define what precisely are "the legal needs targeted for LLLPs." Aside from ignoring the obvious question (why the fact that a task is "rarely" performed by lawyers should have any bearing on the question whether to amend a rule allowing only lawyers to perform it), this statement lays bare the pointlessness in asking for comment on the creation of a new class of membership whose privileges have not been defined with any specificity.


    Kevin Ganser
    New Member
    Posts:1 New Member

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    14 Feb 2020 08:36 PM
    Kevin Ganser
    3333 N. Hayden Rd.
    Scottsdale, AZ 85251
    Subject: RE: R-20-0034 Petition to Restlye and Amend Supreme Court Rule 31; Adopt New Rule 33.1; and Amend Rules 32, 41, 42 (Various ERs from 1.0 to 5.7), 46-51, 54-58, 60, and 75-76

    I would like to register my opposition to the proposed rule change.

    While I appreciate the desire to expand access to legal services to low income or indigent clients, particularly with respect to repetitive or less desirable high volume legal work (and do not oppose "paralegal type" representation for such matters), I strenuously oppose the premise that non-lawyers should be allowed to own an economic interest in law firms. In reality, I have personally witnessed the bending or outright disregard of the preexisting rules to effectuate this result, where the "tail" of financial institutions/advisors and other outside financial interests "wag the dog" with respect to the exercise of independent legal judgement of attorneys owning to financial incentives for such attorneys to do engage in such behavior. Estates and Trusts practices are particularly rife with this type of arrangement (and it merely requires an observation of an social security recipient's physical mailbox to see that this is true), wherein the estate attorney is financially incentivized to recommend or coax lay clientele to utilize certain affiliate financial products or services provided by non-lawyers through explicit or implicit arrangements that necessarily interferes with an attorney's independent legal judgement, fiduciary duties to their clients which, in some cases, should be certainly be subject to attorney discipline. The proposed rule codifies this arrangement as presumptively ethical and legal, and while there is a patina of regulatory control to prevent such financial arrangements from interfering with independent judgment, practically speaking this proposed rule destroys any ethical disincentive or reservation that a lawyer might otherwise have to participate in facially self-dealing arrangements, lest they be caught, and indeed puts the non lawyer financial industry in the driver's seat to directly effect the lawyer's advice on the basis of outsized financial returns to the attorney, separate and apart from legal fees for services rendered.

    Moreover, the idea outlined in the petition that legal technology is being impaired on hindered by current rules, in my opinion, is not based in reality. In practice, services like Rocket Lawyer, LegalZoom, Avvo and Certified Legal Document Preparers, among many others, have arguably filled this gap with respect to financial or testamentary documents for clientele that feel confident enough to "do it yourself". With that said, in my practice, these services, while low cost, often result in a) higher expenses to resolve financial affairs at death due to poor drafting or the use of "one size fits all" inflexible documents, and b) the veneer of the non lawyer service provider refraining from providing legal advice, when the preparation of such documents necessarily require the exercise of legal judgement and the rendition of legal advice to adequately address client needs. Indeed, I would argue that lawyers who wish to participate in the provision of legal services vis a vis legal technology companies are largely already doing so.

    Finally, the proposed rule acts to make a lawyer out of anyone who chooses to be one (similar to the referenced real estate agency model where the barrier to entry is extremely low - the participation in a 90 hour school program -- while the overwhelming majority of transactions are done by a very small percentage of licensed agents), when practically speaking, this country's legal education system has overproduced both barred and unbarred lawyers that could clearly fill this access gap by simply liberalizing recognition of law school graduates, whether to practice in a limited or unlimited capacity, who were trained outside the state (i.e. California). A rule along these lines (i.e. the requirement of a minimum amount of acceptable legal training to provide limited legal services), rather than adoption of the proposed rule, would ensure a modicum of protection to the public for the rendition of educated legal advice that is otherwise arguably defanged by the proposed rule.

    In short, I do not believe the preexisting rule is not outmoded or outdated due to protectionism of the practice of law -- its a reflection and protection of the public to prevent unqualified or minimally qualified individuals from affecting citizens against adverse legal outcome. Moreover, I do not believe the State Bar or judicial branch current has, or will, in the future have, sufficient allocated financial resources to adequately police misbehavior or bad outcomes that will inevitably grow out of this proposed rule.

    Thank you for your consideration.
    anngeisheimer
    New Member
    Posts:1 New Member

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    15 Feb 2020 02:02 PM
    While I am for access to justice, I am very concerned about lifting the prohibition on lawyers and non-lawyers jointly operating a law as a means to accomplish this goal.
    Throughout my career, I have had the opportunity to represent numerous plaintiffs and defendants within the personal injury arena.

    From a defense perspective (excluding an in-house perspective), hired outside counsel has the duty to operate in the best interest of the client, which can sometimes conflict with what an insurance company perceives as a threat to its bottom line. As an example, insurance carriers (ultimately assuming and paying for the defense of its insured) could issue global requests to use certain court reporters or liability or damages experts that they consider to be cost effective (but not necessarily the best or appropriate for a particular case). These types of broad requests (made by a non-lawyer business entity) could affect the outcome of a case if such provider of services was not the best approach to build a defense for the third-party defendant.

    From a plaintiff perspective, non-lawyer investors/managers could hypothetically similarly make decisions to affect overall profitability of an entity that again does not reflect acting in the best interest of an individual client. Examples would include cost cutting of services and expenses (such as the examples listed above in the previous defense paragraph) that would reduce a lawyer’s ability to effectively give the best representation to an individual client or clients.

    For these reasons, I am against lifting the prohibition on lawyers and non-lawyers jointly operating a law unless these types of flaws (as addressed above) could be overcome by the language of such a significant rule change in the practice of law.

    Ann Geisheimer, Esq.
    Bar No. 022871
    GEISHEIMER LAW, PLLC
    PO Box 25428
    Scottsdale, Arizona 85255
    ageisheimer@geisheimerlaw.com
    (480) 467-8800
    Matthew Fendon
    New Member
    Posts:1 New Member

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    18 Feb 2020 10:18 AM
    I oppose the created LLLP for multiple reasons including but not limited to a non lawyer practicing law, lack of oversight on a non lawyer practicing law, and complete watering down of the legal profession - you're essentially giving paralegals the ability to practice law.

    I also vehemently oppose fee sharing with non lawyers - can you imagine the venture capitalists, major corporations and other wealthy entities frothing at the mouths to have ownership in law firms? You will essentially have non lawyers supervising the work of attorneys; these non lawyers are not held to our high standards of ethics.

    In addition, I can already see law firms hiring "runners" aka non lawyers to go around town soliciting cases for commissions. It will turn our profession into a horrid joke.

    For all these reasons, and many more, I strongly oppose these provisions.
    Matt Fendon
    Managing Partner, Matt C Fendon PLC dba Matt Fendon Law Group
    Geoff Trachtenberg
    New Member
    Posts:3 New Member

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    18 Feb 2020 04:51 PM
    Geoffrey M. Trachtenberg
    Levenbaum Trachtenberg, PLC
    362 N. 3rd Avenue
    Phoenix, AZ 85003
    602-271-0183
    Bar No. 19338

    I am a former President of the State Bar of Arizona and, while I applaud attempts to legitimately increase access to justice, I'm strongly opposed to the Petition, particularly the amendment eliminating ER 5.4, in order to permit nonlawyers to own or manage law firms, or make decisions concerning legal disputes. To quote Judge Peter B. Swann, who elegantly wrote in opposition to the original proposal submitted by the Task Force, “bad legal advice is never a bargain,” no matter the price, and that assumes the price of legal services will actually decrease. Setting aside the conspicuous lack of any empirical support for such a speculative proposition, experience with analogous changes in the medical profession reveals that costs have increased at a rate that far outpaces inflation. Some would also point out that the quality of healthcare services has suffered too.

    But regardless, the entire purpose of ER 5.4 is to "ensure the independence and ethical conduct of lawyers.” E.g., Jacoby & Meyers, LLP v. Presiding Justices of the First, Second, Third & Fourth Departments, Appellate Div. of the Supreme Court of New York, 852 F.3d 178, 181 (2d Cir. 2017). Indeed, the title of ER 5.4 is the “Professional Independence of a Lawyer,” and the Comment to the rule states that it is to protect the lawyer’s "professional judgment.” Simply put, the rule promotes quality and ethical lawyering. It is as well-grounded in the practice of law as is the universal requirement that those who practice law must be minimally educated and licensed before being allowed to dispense legal advice to the public. Surely, the cost of legal advice would be less expensive to the public, at least on its face, if anyone could practice law despite their lack of education or competence—but it wouldn’t take long to see that the reduced upfront cost came at another price.

    Whether or not the proposal actually decreases the cost of legal services, there’s no question that the proposal undermines the special fiduciary relationship between an independent attorney and their client. In doing so, it puts the public at risk. See New York State Bar Association: Report of the Task Force on Nonlawyer Ownership, 76 Alb. L. Rev. 865, 877 (2013) (concluding that “nonlawyer control of legal practice presents considerable risks to the legal system and the justice system . . . and should not be permitted in New York.”). Since the Task Force itself claims that our rules must only be changed “in a way that continues to protect the public,” see pg. 12, it’s baffling the Task Force summarily rejected a “sandbox” approach, favored by other jurisdictions considering such a change, which would at least give some empirical basis for whether the proposal was effective and whether the proposal poses, as Judge Swann observed, “a serious threat to the long-term health of the justice system.”

    In my view, the Petition proposes a “pound of cure” without even an “ounce of prevention.” Common sense tells us that a nonlawyer entity likely to be attracted to investing in a law firm would be financially dominant and have its own conflicting duties to shareholders or other owners. It’s also logical to conclude that such entities would not put their money to work in smaller, rural, and poorer communities, but would target taking over prosperous law firms in well-served urban markets or developing "law firms" in those well-served areas.

    Moreover, even with a “compliance attorney,” as suggested by the Petition, standing between the “nonlawyer owners and managers,” common sense tells us such an inherently-conflicted employee is nothing more than an artificial strawman. Do we really think a business’s “compliance attorney” will stand as a genuine barrier to profit-hungry owners who seek to interpose their views into an attorney's independent professional judgment?

    And, setting aside inherent conflicts, how exactly would a "compliance attorney" work? What are the indicia of nonlawyer influence on the professional judgment of a lawyer? At what point does the behavior of a nonlawyer rise to the level of inappropriate interference with the practice of law? And how does such inappropriate interference get remedied? Is the compliance attorney supposed to turn his nonlawyer employer into the Bar? Will the client be informed that their lawyer was subject to improper influence and that the same lawyer is still employed by the nonlawyer who tried to exert such influence?

    The Petition is a recipe for mischief—and in this regard a personal anecdote is instructive. I take very good care of my teeth and, a few years ago, I was sitting in a dentist’s chair at a new dental office where the dental hygienist began recommending various types of expensive dental procedures that seemed suspiciously unnecessary to me. Thereafter, the dentist came in a dutifully agreed with the hygienist’s suggestions. After some digging, however, I was shocked to learn the dentist was only an “employee" of the dental office and that the dental practice was, in fact, owned by the hygienist. I then went to an independent dentist and was assured that all the recommended procedures were, in fact, unnecessary.

    Needless to say, this revelation radically undermined my trust in the dental profession in Arizona and, had I not done the digging myself, I’d have thought that the dentist’s opinions were those of an independent professional. The same is undoubtedly going to be true of the legal profession if this Court permits the abrupt erosion of lawyer independence by experimenting with the entire justice system in Arizona and allowing nonlawyer investors to own any type of law practice. Although I’d hope the Court rejects the Petition insofar as it eliminates ER 5.4, if the Court truly wants to venture into this fray I’d respectfully suggest piloting it in a limited practice area which is underserved, such as landlord-tenant disputes, or some similar “sandbox” approach.
    Theodore Julian
    New Member
    Posts:1 New Member

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    19 Feb 2020 11:25 AM
    Theodore A. Julian, Jr.
    702 E. Osborn Rd, Suite 200
    Phoenix, AZ 85014
    SBA# 012765

    I oppose the Petition which would eliminate ER 5.4 and 5.7 and allow non-lawyers to co-own law firms. I'm a 3rd generation lawyer and have been practicing in Arizona for over 30 years. The Petition may have been intended to increase access to legal services, but at what cost for those who are in need of competent legal counsel and have no idea they just walked in the front door of a "mill" for legal services? I've seen it happen in the medical profession where unlicensed people own medical clinics. Not only does the quality of care suffer, but the services are often more expensive given the clinic's business operations. We should not allow the legal profession to devolve to the point that it is a business run by non-lawyers; it hurts the legal profession and the clients we serve.
    Hutson
    New Member
    Posts:3 New Member

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    25 Feb 2020 09:56 AM
    I respectfully oppose the proposed rule. When I went to law school, the professor of my ethics course, and the dean of the law school, instilled heavily among the class, and myself, that the practice of law is a profession, rather than a business. It is my belief that allowing non-lawyers to own law firms would put an undue burden on lawyers by creating added business pressures and potential conflicts that I believe would arise if non-lawyers are permitted to own law firms. Also, I do not believe the public would easily be able to make informed-choices when trying to determine what representation is needed and by who.

    Randal Hutson
    22849 N. 19th Avenue, Suite 135
    Phoenix, AZ 85027
    SBA #028522
    George Riemer
    New Member
    Posts:3 New Member

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    25 Feb 2020 10:16 AM
    I appreciate that this rule petition has multiple comment and response periods built in. The following are my initial comments and questions concerning the proposed rule changes set forth in the petition. I look forward to a robust discussion of these proposals over the course of time.

    George A. Riemer
    623-238-5039
    Arizona Bar Member No. 017034
    garpho@outlook.com

    The American Bar Association (ABA) still has Model Rule 5.4 as do most states. If the rule was blatantly protectionist from the beginning, why is it still on the books in most jurisdictions? Is it because it has been effective in protecting the independent professional judgment of lawyers on behalf of their clients? It is worthwhile noting that the ABA House of Delegates recently passed Resolution 115 resolving that the ABA “encourages U.S. jurisdictions to consider innovative approaches to the access to justice crisis . . .”, but the resolution also states “That nothing in this Resolution should be construed as recommending any changes to any of the ABA Model Rules of Professional Conduct including Rule 5.4, as they relate to nonlawyer ownership of law firms, the unauthorized practice of law, or any other subject.”

    What evidence-based data exits to support the establishment of Alternative Business Structures (ABS)? What data has been obtained from Washington, D.C., Canada, Australia, England, and Wales? How effective have New Jersey and New York’s law firm regulations been to date? Data appears to have been a consideration of the Task Force when it concluded it “was not able to find empirical evidence that lawyers are at risk of economic harm from certified LLLPs who provide limited legal services to clients with unmet legal needs.” What empirical evidence exists to support that ABS will help close the “access-to-justice gap” without also creating myriad new ways to take advantage of the public? As mentioned above, ABA House of Delegates Resolution 115 goes on to resolve “That the American Bar Association encourages U.S. jurisdictions to collect and assess data regarding regulatory innovations both before and after their adoption to ensure that changes are effective in increasing access to legal services and in the interest of clients and the public[.]” (emphasis added).

    While I appreciate that the Task Force on the Delivery of Legal Services considered and rejected a pilot program approach to the elimination of Rule 5.4, California’s Task Force on Access Through Innovation of Legal Services appears to be in the process of recommending that the State Bar of California Board of Trustees “consider possible changes to existing laws that would permit innovative legal services delivery systems, including technology driven legal advice and services, within the constraints of a regulatory sandbox, pilot program or other similar time-limited approach that will provide data on any potential benefits to access to legal services and any possible consumer harm when prohibitions on the unauthorized practice of law, fee sharing, nonlawyer ownership, and other legal restrictions are relaxed or completely suspended for the sandbox or pilot program participants.” (emphasis added). I believe insufficient consideration has been given to a pilot program approach to the elimination or modification of Rule 5.4. Public protection must be the paramount consideration in making such an important change. Another critical consideration must be whether ABS will actually provide increased access to affordable legal services.

    Who will pay for the regulation of ABS and LLLPs? It appears the great bulk of the cost will be incurred by Bar members unless extraordinary costs are incurred on a case by case basis? What will constitute an extraordinary cost subject to recoupment? What procedures will be adopted to ensure that recoupment?

    Will clients of LLLPs be entitled to file Client Protection Fund claims? How about clients of ABS? If they will, where will the funds to pay such claims come from?

    What consideration has been given to the impact of the duty to regulate ABS and LLLPs on bar counsel, the probable cause committee, the presiding disciplinary judge, and the Supreme Court?

    It is proposed that complaints against ABS must be established by a preponderance of the evidence for sanctions to be imposed. Complaints against lawyers must be established by clear and convincing evidence for sanctions to be imposed. Has this difference been thought through for purposes of the consistency of enforcement of the applicable rules?

    What evidence-based data exists to support the establishment of another tier of legal service provider (Limited License Legal Practitioner (LLLP))? What has been the actual effect on the “access-to-justice gap” on the licensure of Legal Document Preparers in Arizona since 2003? What data exists that Washington and Utah’s similar licensure regimes have helped close the “access-to-justice gap” in those states?

    Why does the justification for the establishment of a LLLP regime include that it will not “undermine the employment of lawyers”? Isn’t the principal goal closing “the access-to-justice gap”? Worrying about the impact of the regime on the employment of lawyers seems anti-competitive. If impact on employment is a legitimate consideration, what about the impact of the proposed new regime on legal document preparers?

    How are nonlawyers to be sanctioned if they do not comply with “appropriate nonlawyer ethics procedures”?

    Does the attorney-client privilege protect client information concerning nonlegal services provided by a nonlawyer within an ABS?

    Are disbarred lawyers nonlawyers for purposes of participation in ABS?
    Jeffrey Marks
    New Member
    Posts:4 New Member

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    25 Feb 2020 04:36 PM
    I have been practicing in Tucson since 1978, so I have seen just about everything. I would want to STRONGLY suggest against allowing non-lawyers and lawyers going into business together to provide legal services. The thought that it could bring cheaper legal services to the masses is totally misplaced. What it will do is cause a deluge of chiropractors and heavily advertising PI law firms to go into business together to further attempt to corner the market. When O'Steen was decided, the hope was that it would open the doors to the public understanding their options. Instead all we have is endless television ads and billboards for PI lawyers. I have yet to see a billboard for a discount probate lawyer. For the sake of leaving some honor with the profession rather than a charade that mega chiropractic-lawyer practices are in the public's best interests, I would urge that the proposed rule NOT be amended.

    As for limited practitioners, we have all seen the complete mess that document preparers have caused. I believe that if you want to practice law you need to go to law school rather than letting an uneducated person appear in court and decimate a case. The remedy to providing services to low income people \ is to allow qualified law students, those awaiting to take the bar exam or receive the results, or those who are licensed to practice in other states do that job without supervision. I fear that a "limited legal provider" will just gum up the system and trials, as persons attempt to do what they have no business doing. Even the most simple OTA can draw in constitutional, juvenile, guardianship,, etc. issues that a non-lawyer would never spot nor know how to resolve.

    Jeffrey A. Marks, PC
    4773 E. Camp Lowell Drive
    Tucson, AZ 85712
    Bar No. 005670

    Jeffrey Marks
    New Member
    Posts:4 New Member

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    25 Feb 2020 05:28 PM
    I have practiced law in Tucson since 1978, so I think I have some very germane comments to add to the proposed rule changes.
    First, I would strongly urge the considered change allowing lawyers and non-lawyers to go into business together be declined. When O'Steen was decided, the hope was that it would permit the public to better understand what legal services are available and how to better choose a lawyer. Instead, we have incessant media advertisements and billboards everywhere pushing personal injury law firms. I am genuinely afraid that all the proposed rule would do is allow for the formation of large chiropractor-lawyer personal injury firms to try to corner the market, without adding any benefit to the general public. The only benefit would be to the chiropractors and advertising PI law firms who would be in a race to see who could spend the most money to corner the market. True, we live in a free market society, but I see nothing but gimmicks and bad motives coming from the proposed rule. Lawyers hold a sacred trust with the public and I do not see that being furthered with lawyers going into business with non-lawyers to provide services or referrals. Lawyers can still refer clients to preferred providers and lawyers can still rent space in Wal-Marts or Costcos without making their landlords part of a legal practice. As an aside, supporting my assertion is that the proposed rule would be utilized by no one other than lawyers and those trying to form a cottage industry within the PI field, one can recognize that rarely does one see an overwhelming number of billboards or media spots touting probate lawyers. Second, I also strongly urge the court to decline to allow non-lawyers from providing legal counseling or in-court representation. It is a nice thought, but we've already seen the constant problems that legal document preparers are causing. My thought is that if one is to provide genuine legal services, the services should be provided by someone knowledgeable. We are running the real risk of having those uneducated in the law gumming up the system and throwing it into chaos. If lower priced options are necessary for the public, the answer is to allow qualified law students to practice family law without supervision, allow law students waiting to take the bar exam or waiting for the bar results to handle simpler matters, or by allowing persons licensed in other states but not Arizona to do the same. The issue of providing services to lower income persons will not be met by allowing non-lawyers to attempt to practice law. Even a simple family law OTA can include constitutional issues as well as matters such as guardianships, juvenile law, evidence, emancipation, procedure etc. that a lay person would never spot or understand.

    Jeffrey A. Marks
    4773 E. Camp Lowell Drive
    Tucson, AZ 85712
    Bar No. 005670
    Sai Manthra
    New Member
    Posts:1 New Member

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    26 Feb 2020 09:25 AM
    Sai Manthra
    https://law.arizona.edu

    I would like to plead that this petition be denied. I plan to provide detailed comments.
    Jacque Rambo
    New Member
    Posts:1 New Member

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    26 Feb 2020 02:50 PM
    Jacqueline Rambo (SBN 023414)
    11811 N. Tatum Blvd., Ste. 3031
    Phoenix, AZ 85028
    800-966-5215
    jacque@rambolawoffices.com


    I have volunteered at the bankruptcy court's self help center for over a decade. Many of the folks who come to us (often sent to us by the judges and/or the bankruptcy trustees) need help fixing the mess created by legal document preparers. And often times, the amount of money they lose in bankruptcy as a result of not having proper legal guidance from the outset is significantly more than they would have paid for an attorney, who would have been able to prevent the loss. Most of the time, the damage can't be reversed once it's done. That's not SERVING people; that's HARMING people. And it's utterly traumatizing for them. I spend more time helping people cope with the trauma of this type of thing than I do practicing law.

    Similar results happen in family law, as well. People wind up with legally insufficient consent decrees or judgments (or whatever), and then it comes back to bite them down the road.

    I've seen the painful consequences of many issues, over and over again. The idea of having inexpensive legal assistance is great in theory. But the reality is, it causes more harm than good in the end in too many cases.

    And, people have no idea whatsoever the risk they're taking in using someone unqualified. They have a false sense of security that the person is competent since surely the State of Arizona wouldn't allow an unqualified person to do the work, just like a physicians assistant would surely not be allowed to perform surgery. Both the client and the doc preparer simply don't know what they don't know, and many clients wind up stepping on unforeseen landmines as a result.

    Allowing the unlicensed practice of law is misleading the public and luring them into a false sense of security. That's NOT in the best interest of the public.

    In terms of non-lawyer owned firms, corporatizing the legal industry would be just as tragic as the corportization of the veterinary industry is. Bottom line profits become the priority so there's going to be a huge conflict between the profit driven motives of the non-lawyers and the ethic rules lawyers are bound to, and the quality of work clients receive. Money always wins, so it's just inviting an increase in ethical rule violations and a compromised quality of work. That's NOT in the best interest of the public.

    The idea of having a non-lawyer investor help me build my firm has crossed my mind many times over the years. But I realized that the rule against it served a very valid purpose. As someone who has owned a variety of businesses over the years, I was very aware of how drastically different business practices are for law firms compared to other businesses. I could foresee the many struggles and conflicts that would occur having a non-lawyer partner because they simply don't understand what's required of lawyers, and they would never be willing to limit themselves (and their profits) to that degree. That union would be a ticking time bomb. That's NOT in the best interest of the public.

    And on top of that, it will probably put many small firms out of business. I paid $300,000 for my education, which I'm STILL paying for 16 years later. I invested 19 years of my blood, sweat and tears into law school, my small business, and continuing legal education. I've done thousands of hours of pro-bono and other legal volunteer work. And now some non-lawyer investor who has no clue what's going on can swoop in and put me out of business by providing sub-quality service, and who will likely NEVER provide pro bono service. That's NOT in the best interest of the public. And it's a huge slap in the face to lawyers who have invested their lives in this industry.

    If the bar truly wants to help and serve the "public," these ideas are NOT the way to do it. These ideas only help and serve profit-making. Surely there are other more effective ways we can help the public.
    Dianne Post
    New Member
    Posts:6 New Member

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    27 Feb 2020 12:59 PM
    Dianne Post, 1826 E Willetta St Phoenix, AZ 85006-3047
    602 271 9019, postdlpost@aol.com, Attorney

    We do need access to justice for poor and moderate-income people. We also need drastic measures taken to equalize income in this country as we soar to the top in income inequality. Then we would have fewer poor and moderate-income and more people who could afford the services of a lawyer. The best way to deliver quality legal services to the poor and moderate income is to fund legal services. Give CLS 10 times more money and let them go to town. Take off the shackles that prohibit them from doing class actions or suing the government. Fund public defenders the same as prosecutors. That would help.
    Secondly, we can simplify the process.
    Third, if non-lawyers own some or all of a firm, they have to be held to the same professional code lawyers are. There is simply no other way to do it and maintain any trust in the legal profession. I recall when we needed a law – not so long ago- to tell financial advisors that their first duty was to their client - shouldn't it have always been that way? What kind of complete nonsense says a financial advisor or lawyer should have loyalty to something else - like money or a corporation.
    Corporatization of the law has brought us the problems we have and we do not need more of it - we need less. The race for the bottom – Walmart style – results in inferior product, abuse of those producing the product, taking advantage of those buying the product, and huge profits for corporations and families that need zero more money.
    In addition, I find it very disconcerting that family law is always put into the mix as an area where people can do it themselves or use a non-lawyer. What it indicates is that the drafters think, as many lawyers do, that family law is not important. Yet it often means life or death for a battered spouse. Life or death for children of that couple. It means poverty or a decent living regarding property and debts and child support and spousal maintenance. It may mean violence and being stalked the rest of a person's life or sharing custody with your rapist rather than some semblance of peace. These issues are certainly as important as those in criminal law and much more important than questions in business law about who owns a patent or where is the comma in an agreement. Those have to do with money and power - not life and death. Often such “important” lawsuits turn out to mean nothing like a huge law suit of Exxon v. Mobil that I was invited to work on when I first started practicing law and declined only to see them merge a few years later. So what was all the money spent for?
    Even in property issues family law practitioners need to know many things such as pensions and federal benefits, insurance and social security, taxes and bankruptcy, not to mention the right to move, the right to change your name or that of the child etc. Change and technology brings us difficult questions regarding custody of sperm and egg, same sex marriage, gender surgery for minors etc. Knowledge of all of these issues is necessary to give proper legal advice. Most lawyers cannot do this let alone non-lawyers.
    A recent immigration case is an illustration - the defendant was not advised by his lawyer that to plead guilty made him subject to deportation when he got out of prison. Knowing criminal law was not enough, one had to know immigration law too. Non-lawyers are not going to be able to navigate this space.
    If you want to provide services for poor and moderate income, require 100 hours of pro bono a year , mandate a sliding scale fee, and prohibit lawyers from charging the ridiculous hourly rate they do now.


    Frank Verderame
    New Member
    Posts:3 New Member

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    27 Feb 2020 04:57 PM
    Frank Verderame
    Address: 316 E Flower St
    Phoenix, AZ 85012
    Phone: (602) 266-2002

    I'm strongly opposed to the Petition, particularly the amendment eliminating ER 5.4, in order to permit non-lawyers to own, manage, and make decisions concerning legal disputes. I do not want to repeat all of the objections raised by others, but will say that I do agree with them.
    I believe there is a great potential for conflicts of interest to arise, and there may well be conflicts of interest that are undetectable without significant investigation. For example, imagine the circumstance where a major insurance company creates a corporation for the purpose of purchasing a law firm. Once created, that corporation then buys a law firm, or a significant equity position in a law firm. When a client is injured in an automobile collision, they could well find themselves being represented by a firm that is owned by a corporation that is tied to the insurance company that is on the other side of the lawsuit. This situation is not limited to tort claims, these problems will exist with real property disputes, contract disputes, and a myriad of situations.
    When we consider the fact that multiple levels of corporate ownership can be used to conceal, or at least make it difficult, to identity of the true owners and decision makers, there may be conflicts that exist but will be difficult to identify. I believe this will create many problems for the bench and the bar.
    The rule appears to put forth an idea without adequate protections for the public. What type of investigation will need to be made in every instance to determine that conflicts of interest do not exist? Also, how will the bar monitor this situation? Will law firms owned by corporations and non-lawyers be required to identify those owners, and will those corporations be required to disclose other relationships with corporations and individuals related to those owners?
    Non-lawyers and corporations are not required to attend mandatory CLE on ethics. What requirements will be imposed upon the non-lawyer owners? We used to be a profession. We hear complaints from the bench and bar about a lack of civility and professionalism by lawyers. Does anyone think that adding non-lawyers as owners will improve that problem? If non-lawyers own law firms, they will likely push back when the lawyers in the firm insist on conduct required by the ethics rules. Ethical lawyers will follow the rules, but they may face pressures—including the loss of their job—if the firm is owned by a non-lawyer. The non-lawyers could terminate the lawyer, bring in a new lawyer, and conceal the information that created the conflict or ethical violation from the new lawyer.
    This rule change is fraught with peril and should not be adopted. Arizona should let some other state that is imprudent enough to pass this new rule do it first. Arizona should not be on the bleeding edge of this change. We should learn from the experience of others on this novel concept and only consider the rule when we have a better idea of the problems that will surface.

    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    28 Feb 2020 08:19 AM
    Arthur E. Lloyd
    AZ Bar No. 010049
    art@lloydlawaz.com
    113 East Frontier
    Payson, AZ 85541
    928-474-6727

    I would like to express my opinions about the proposed rule to allow now-lawyers to have an ownership interest in Arizona law practices. To do so, I would like to tell you of an experience I had shortly after I started practicing law in Payson.

    There was a well-known local doctor who brought a new doctor into his family practice and shortly thereafter moved out of town. I became friends with the new doctor and did some minor legal work for him and his wife (who was a nurse). One day, a year or so later, the doctor came into my office very worried and told me his story.

    We had all assumed he had bought the medical practice from the first doctor, but he explained that, to the contrary, the first doctor had sold the practice to a group of investors from California who decided medical practices could be good investments for their corporation. My friend was just an employee of the practice, but none of the patients knew it.

    About six months before the doctor came into my office, the corporation ran into financial difficulties and stopped paying the bills of the medical practice. For the last three months, none of the labs would process patient samples without upfront payment and all the medical supplies were COD. The doctor got tired of bill collectors harassing him, even though the bills were not his responsibility. He finally quit, moved down the street and opened his own clinic.

    He came to see me because the corporation had filed a lawsuit against him for violating the non-competition clause in his employment agreement, and they were seeking a temporary restraining order. A hearing was set the following week. I represented him at the hearing, and the TRO was granted by the court because the contract plainly prohibited him from practicing medicine within 25 miles of Payson for a period of 2 or 3 years as I remember.

    As a last-ditch effort to keep his practice open so his patients could continue seeing their family doctor, I put him into a Chapter 11 bankruptcy. To make a long story shorter, the corporation eventually got tired of paying the attorney’s fees to fight him after the bankruptcy court refused to lift the stay blocking enforcement of the TRO, and it dropped the lawsuit.

    I had no idea that a non-doctor could own and operate a medical practice, and I was so happy that the law profession saw the folly of permitting non-lawyers to own law practices. Apparently, the ethics are changing. If this petition is approved, what will keep insurance companies from operating their own law firms and requiring their insureds to use those firms? Or hospitals from opening law practices and requiring, as a condition of treatment, for patients to use their law firms if there are any disputes? Farfetched? I don’t think so once that pandora’s box is opened. Take a look at admission papers at hospitals or uniform real estate purchase contracts, they all have mandatory arbitration clauses that are obviously one-sided.

    Our courts can’t even effectively enforce the unauthorized practice of law by non-lawyers, so why would we seriously consider allowing non-lawyers to own legal practices when the non-lawyer is not subject to the regulations of the bar?

    This petition should be denied.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    28 Feb 2020 09:21 AM
    Jason M. Kelly, Bar Number 020525
    4747 N. 7th St., Ste 402
    Phoenix, AZ 85014
    (602) 595-9299
    Email: jkelly@fblegalgroup.com

    Access to competent, affordable legal representation has, and always will be, an issue that society at large – and attorneys in particular – must address. We should always be looking for new and better ways to deliver quality services at more affordable prices. The question therefore becomes, "How best to address this?" Rather than suggest an incremental approach, which permits changes to be studied and analyzed, the October 4, 2019 report from the "Task Force on the Delivery of Legal Services," proposes a wholesale restructuring of important aspects of the business side of the legal practice in a move reminiscent of Representative Pelosi's famous line that, "We need to pass the bill so you can find out what is in it."

    This letter primarily addresses non-lawyer ownership of a firm and unlicensed persons practicing law; it briefly addresses advertising issues. Particular ethical concerns have been voiced, and are being voiced, by Judge Swann and other members of the Bar. I will not endeavor to repeat them, because, while I share their concerns, I cannot improve upon what they have already said. I write with my concern that this has moved far too quickly and without nearly enough analysis.

    The Task Force's hurried rush is highlighted by disturbing language on page 2 of the Report:

    "Due to the number and complexity of topics the task force was charged with addressing and the limited time it had to explore those topics, task force members divided into two workgroups."

    (emphasis added1).

    I do not doubt that the Task Force members spent a great deal of time and energy on this project. I question, however, the wisdom of assigning the members such a large, complex task with a short time fuse. This flies in the face of centuries of collective legal experience which suggests that we address narrow issues, learn from experience, and then build upon that experience.

    On page 3, in Abbreviated Recommendation #1, in which the Task Force recommends that non-lawyers be permitted to own law firms it incomprehensibly recommends that we put the cart before the horse: "In anticipation of these rule changes, the Supreme Court should immediately convene a group to explore regulation of legal entities in which nonlawyers have a financial interest." Should not this group exist before any nonlawyer has a financial interest in a firm?

    Abbreviated Recommendation ## 7 and 8 appear to address a narrow issue of domestic violence advocates. Having no experience in that area of law, I am unable to directly comment on the propriety or advisability of such recommendations. Similarly, Recommendation #9 appears to be a targeted approach to declared concerns. I would contrast what appears to be narrow exceptions in the domestic violence and LDP areas to the wholesale changes reflected in my previous paragraph. The contrast highlights the Task Force's inability to adequately address the sweeping nature of the proposed changes as to non-lawyer ownership and un-licensed practitioners.

    ____________________
    1 See also, page 14: "Given the limited time afforded to the task force for its work, it did not explore the advisability of legal entity regulation or what such regulation would entail." (emphasis added). And see, footnote 56 to Judge Swann's opposition at page 57: "The task force modestly supported having court-employed navigators but lacked sufficient time to formulate a recommendation." (emphasis added).

    2 I know that Judge Swann has issued an objection to this Recommendation. My point is simply that the Task Force has taken a measured approach in this instance.
    ____________________

    Further, not all concerns about access to justice should are properly addressed by the Judicial Branch. Unfairness in the legal schemes of evictions, foreclosures, and debt collection 3 are legislative concerns. What purpose is served by allowing the businesses that funded their lobbyists to enact the complained-of legislation to own law firms? Is anyone so naïve to think that persons looking to invest in law firms are looking to invest in low-cost legal representation for those looking to stay in their homes or apartments? Although "small firm lawyers" likely struggle to earn a living representing the under-privileged,4 does anyone actually believe that allowing for-profit corporations to run these firms would actually result in services being provided? Why, exactly, would a fund manager with fiduciary duties to his investor seek to invest in a law firm with a low profit margin?
    _____________________
    3 See Report at pp. 6-7.

    4 See Report at pp. 7-8.
    _____________________

    Other aspects of the proposal appear laudable – such as providing more information and education to self-represented parties. This, of course, begs the question of why the laws, regulations, and rules are so difficult to navigate. I would submit that the rising cost of legal services is not being driven by the current ethical rules, but that the largest driving force is the legislative and procedural scheme in which we operate.

    Nor should we forget that the Arizona Constitution already provides non-lawyers with a limited ability to practice law. Article XXVI allows licensed real estate agents and brokers to prepare instruments incidental to property transactions. Therefore, the discussion pages 15-16 of the report simply sets up a straw-man argument. If there truly are concerns about the ability of consumers to refinance home loans, stop foreclosures, or participate in short sales, those concerns can be dealt with narrowly in the legislature.

    Page 16 continues with a discussion of the alleged benefits of elimination of ER 5.4. These simply offer solutions to problems that do not exist. Officers (such as a CFO or CTO) are typically employees of a corporation and not owners, and non-lawyers are currently permitted to offer non-legal assistance to consumers. The only truism in the middle of page 16 is that elimination of ER 5.4 would allow a non-lawyer to own a partnership interest in a law firm, but there is no discussion as to how that will provide greater public access to legal services.

    Recommendation #6 proposes the creation of a system with un-licensed attorneys providing legal services with a "steering committee" to determine what that may look like in the future. The recommendations as to domestic violence survivors (Recommendation #7) appears to me based on University work that was compiled by research, study, and experience. I cannot fathom why needs in other discrete areas of law should not be subjected to the same academic rigor. I am suggesting that such licensing occur only if and when there is a demonstrated need, and corresponding benefit, to allowing the same. This type of thorough analysis would then provide the framework for the program – rather than the other way around. And, again, this can be dealt with legislatively as necessary and appropriate.

    As you can see, my main concern was the non-lawyer ownership of firms. Advertising and referral fees must also remain at the forefront of ethical concerns. I fear that the Task Force has not fully addressed the impact of fee-sharing with non-lawyer agencies. In this area, I do not know much, but I know two things. First, all costs are eventually borne by the client. Currently, when there is fee sharing between lawyers, the referring lawyer simply shares in a portion of the typical fee. It is not clear to me where this protection remains in place for the client in the new advertising rules. Second, we must take measures to protect privacy. There are numerous reports and studies as to how best to address privacy protection for consumers who participate with referral sources, and I will not attempt to recreate any of that here. I simply suggest that the ethical rules as they related to advertising incorporate current realities and put the burden on lawyers to comply.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    28 Feb 2020 09:51 AM
    Carl A. Piccarreta
    State Bar #007151
    3507 N. Campbell Ave. Ste. 111
    Tucson, AZ 85719
    520-623-3799
    carl@capicclaw.com

    I write you today in opposition to the above Petition, in general and the Amendment eliminating ER 5.4, in particular. I do not believe non-lawyers should be allowed to own, manage or make decisions involving legal disputes.

    I have been a practicing lawyer for nearly 40 years. In that time, I have regularly and routinely attempted to counter the negative public image of lawyers. Specifically, I have been actively involved in both the legal and non-legal community always attempting to advance/improve the public perception of attorneys. I have done this through numerous speaking engagements, including at both the middle and high school levels. I have been actively involved in Community Boards. I have taught at the University of Arizona law school emphasizing ethics and professionalism.

    I see the Petition as a significant threat to all our efforts to improve the image of attorneys. Although I join in the comments and opinion expressed by former State Bar of Arizona President Geoffrey Trachtenberg, I add my concern over our future image. I see the Petition allowing law clinics being operated by non-lawyers such as Walmart, Walgreens, Costco, etc. I see non-lawyers skirting ethical and professional concerns with profit “coaching” legal advice being given, emphasis on quantity over quality, etc.

    Justices, as an attorney, I take pride in my professionalism, ethics and those of the vast majority of my colleagues. I am proud to be an attorney. I will continue to sing the praises of our profession. However, adopting the Petition will make my efforts near-futile and will ultimately allow further embarrassment to our profession.

    Please do not hamper our collective efforts to improve the image of attorneys with the adoption of Petition #20-0034.

    erob
    New Member
    Posts:1 New Member

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    28 Feb 2020 12:39 PM
    I oppose the Petition and believe allowing non-lawyers to own or have an ownership interest in law firms will have severely negative consequences on the practice of law and access to justice. As an attorney, my duty is to my client and I shouldn't have to worry about balancing the interests of a for-profit owner with the interests of my clients. Sometimes, we who represent Plaintiffs take on challenging cases and spend significant amounts of time and money chasing justice for our clients. I hate to think this ability to fight for the underprivileged might be hampered by a corporate accounting department trying to cut costs. I think it creates many more problems than it solves.

    Eric W. Robinson
    State Bar No. 029954
    7135 E. Camelback Rd., Ste. F240
    Scottsdale, AZ 85251
    ericrobinsonlaw@gmail.com
    Jonathan Darner
    New Member
    Posts:1 New Member

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    28 Feb 2020 12:43 PM
    Jonathan D. Darner
    State Bar #031498
    6816 E. Brown Rd., STE 101
    Mesa, AZ 82507
    jd@smithalstonlaw.com

    I would like to express my opposition to the petition and proposed rule change. As many wise individuals have already expressed, the proposal simply does not and can not ensure increased access to legal services. Alternatively, it does create the inevitable opportunity for undeniable conflicts of interest in the future. Allowing non-lawyers to own and profit from legal services only serves to assure that profits will be placed ahead of ethical, high-quality legal representation. I do not foresee any good coming from these proposed changes; however, I can immediately see all be negatives.

    Perhaps changes can be made to improve access to such valuable services, but this simply is not the way to achieve the same.

    Jonathan Darner
    Smith Alston Darner & Lee
    Page Marks
    New Member
    Posts:1 New Member

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    28 Feb 2020 01:09 PM
    I strongly oppose R-20-0034. I absolutely agree with Judge Swann’s comments against the Petition and all of the replies here in opposition of the Petition.

    In my opinion, this proposal will 100% change the practice of law from a respected profession to a disaster. Also, I do not believe it will change the costs of legal service. In my mind, this Petition will potentially throw all necessary and required ethics out the door.

    Thank you.

    Page Chancellor Marks
    Management Attorney
    Goldberg & Osborne

    Mike Moldoveanu
    New Member
    Posts:2 New Member

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    28 Feb 2020 02:27 PM
    Mike Moldoveanu
    SB 029914
    4423 E. Thomas Rd., Suite 3
    Phoenix, AZ 85251

    I reviewed the above Petition and am writing today to voice my strong opposition to non-lawyers being able to own or manage law firms. This Petition is ripe to create conflicts of interest, unethical practices, and bring shame on our profession. I share all the concerns that my colleagues have eloquently raised above, and do not want to see our profession become the laughingstock of the nation.


    ChristyT
    New Member
    Posts:1 New Member

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    28 Feb 2020 02:38 PM
    Christy Thompson
    AZ Bar # 020301
    3100 W. Ray Rd. Ste 201
    Chandler AZ 85226

    I am writing in opposition to this Petition. Non-lawyers should not be allowed to own and operate a law firm and offer legal services. I adopt the comments of my colleagues Kevin Gasner and Jason Kelly. If the intent is to make our justice system more accessible, then adopt the suggestions of Dianne Post. There is already a model that is similar in function to what the petition proposes, the licensed document preparer. That marketplace is choked with misdeeds at the peril of its low income and indigent customers. Read the remarks of Jacqueline Rambo to understand how poorly people have been treated by those who hold themselves as providing "legal documents". Our community will not gain any advantage by implementing this business model and our justice system will suffer as a result of implementing a for profit rather than the professional, ethical model it currently has in place.

    Juliann DuBerry
    New Member
    Posts:1 New Member

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    28 Feb 2020 02:58 PM
    I do not support the proposed rule change as the proposal is not so much about reducing the cost of legal services, but rather allowing others who are not under the auspices of the Supreme Court of Arizona or the ethical rules to profit from legal services with no recourse for the public. I concur with the statements made by other from the AZAJ in opposition to this proposal.

    Juliann DuBerry
    4105 N 51st Ave, #117
    Phoenix, AZ 85031
    #033343
    Peter Donovan
    New Member
    Posts:1 New Member

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    28 Feb 2020 03:41 PM
    I would like to add my voice and comments regarding this Petition and urge that it be denied. I am an Arizona native and have been licensed to practice law in Arizona since 2004. I recognize the need for an increased access to justice and legal services to the Arizona community overall. However, this Petition is, in my opinion, not the way to accomplish it. Allowing non-lawyers to have ownership interest in legal entities / firms will negatively affect the quality of legal services and will allow for consideration of factors that are not in the best interest of the client. As lawyers, we are bound by the ethical rules that govern our conduct and the practice of law overall. A non-lawyer with ownership would create an impermissible risk that important decisions would not include upon ethical considerations and certainly not in the best interest of the client. I have observed situations involving medical / dental practices that are not owned by a medical / dental professional and in my view it has created an increased risk of compromised care for the patient. It is my hope that this risk will not be permitted in a legal setting. Thank you in advance for consideration of my comments.
    Peter T. Donovan (023183)
    Dieker Voightmann Donovan
    15333 N. Pima Rd. #200
    Scottsdale, Arizona 85260
    Dev Sethi
    New Member
    Posts:1 New Member

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    28 Feb 2020 03:51 PM
    I add my voice to the chorus of thoughtful comments opposing non-lawyer ownership structures of law firms and practices. Access to justice is an important goal. The Arizona bench and bar has worked to innovate a wide range of solutions that lower to the barrier to legal assistance and the civil justice system. But allowing non-lawyer ownership is a bad idea. At its most simple, the goals of a lawfirm cannot be consistent with the goals of a for profit entity. Sometimes they may well align, but it is in the times when they don't that the difference between the Ethical Rules that guide us and the profit motives that guide corporations will come into sharp focus. And the client will be the victim of the conflict.

    This proposal should be carved out of what is an otherwise meaningful and meritorious set of recommendations.

    Dev Sethi
    Schmidt Sethi & Akmajian
    1790 E. River Rd.,. #300
    Tucson, AZ 85718
    Don Burnett
    New Member
    Posts:2 New Member

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    28 Feb 2020 03:58 PM
    Donal E. Burnett, Esq.
    Burnett Law Office, PLC
    1744 South Val Vista Drive, Suite 208
    Mesa, AZ 85204
    Phone: 480-347-9116
    don@burnettlawaz.com
    Bar No. 028800

    I join my many colleagues above in opposing the petition. There's no guarantee these changes would decrease legal service fees, and any decrease would likely come with a more detrimental decrease in diligence, candor, competence, and care for the client. The proposed changes, while perhaps not the intent, will likely create more ethical issues and conflicts of interest for licensed attorney's, while at the same time leave non-lawyers free to "practice" as they will without repercussion. The real players that benefit here are the non-lawyers who wish to line their pockets without work or consequences, at the expense of the public. I echo the comments of Jacqueline Rambo, Geoff Trachtenberg, and many of the others above in objecting this petition. It should be denied.
    Thomas Burnett
    New Member
    Posts:2 New Member

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    28 Feb 2020 04:33 PM
    Thomas Burnett
    State Bar #026509
    Burnett Law Office, PLC
    1744 South Val Vista Dr., Suite 208
    Mesa, AZ 85204
    480-347-9116

    I join Geoffrey Trachtenberg's comments, and so many others. The elimination of Rule 5.4, to allow non-lawyer ownership interest in law firms would result in an increase in legal fees. For the reasons posited by others before me, it would be disastrous to allow non-lawyers to own law firms. Corporate interests will invest in firms with the sole purpose of satisfying investor's thirst for increased profits from year to year. It would be extremely naive to believe that any corporation or group of investors would enter the legal arena for the purpose of offering pro-bono or low-cost legal services to assist the economically disadvantaged. This is to say nothing of the ethical conflicts that are sure to arise when investor/non-lawyer financial interests collide with a lawyer’s ethical duties to their clients and the Bar.
    I also strongly oppose the broad scale introduction of LLLP’s practicing law. This will almost certainly result in bad legal advice and practice from well-meaning folks who don’t understand the law.
    For these reasons, along with those voiced by others before me, I do not believe this petition should be passed.
    ACAJ Workgroups
    New Member
    Posts:2 New Member

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    28 Feb 2020 05:12 PM
    Hello,

    My name is Eric Logvin. I am the managing partner at the Law Office of James R. Vaughan, a collection law firm that employs 7 lawyers and 30 others across 3 states. Though commenting in my personal capacity, I am also the president elect of the Arizona Creditor Bar Association, whose members make up a significant number of civil filings in the state of Arizona. I’ve participated in Justice Court best practices committees, spoken on panels at judicial conventions, taught CLEs on collection, community property, and ethics at the State Bar, and this week delivered my once-per-semester talk at the mediation clinic at ASU’s law school. I always present from the creditor’s perspective, but our firm has a reputation for producing quality work while being fair and reasonable with consumers. Our law firm is very tech heavy and I support innovations that make the legal profession more cost effective. So now, you hopefully understand my perspective.

    As to the committee’s recommendations, I strongly object to Recommendation 1 (removing ethical barriers to allow nonlawyers to own law firms), and Recommendation 6 (development of a tier of nonlawyer legal service providers). Both of these objections are explained very articulately in Judge Swann’s well-written 9-page opposition statement which I encourage everyone to read. It is a very fast 9 pages - check it out!

    I have three points to emphasize:
    1) There is ZERO evidence connecting delivery of legal services to nonlawyer ownership of law firms. None.
    2) No other state has done this, so why on earth are we the first? Why would you want to thrust us to the front of the country, but delay building out the regulation scheme of these mixed ownership entities for some unknown time in the future? Nobody should vote for this rule change until they know exactly how the bar is going to regulate these future non-lawyer owners.
    3) Once implemented, there will be no going back. When money starts coming in, this change will be irreversible. Corporations exist for one purpose: profit. Private equity, Big 4 accounting firms, faceless corporations, invisible silent partners, and entrepreneurs with hustle will figure out ways to exploit these rules.

    This rule change is a bad idea - it will be bad for consumers, it will be bad for lawyers, and it will be bad for the legal profession. But some people are going to make a LOT of money. Please read Judge’s Swann’s opposition and consider delaying acceptance of these recommendations.

    My comments are not meant to disrespect the committee in any way. I attended some of the meetings where these rules were being discussed - it is a very big job for a lot of very smart people and I am thankful for all of the people that are trying to make the practice of law more accessible and better for all.

    Thank you,
    Eric Logvin
    11445 E Via Linda 2-610, Scottsdale, AZ 85259
    Phone: (602) 279-0778
    Eric Shapiro
    New Member
    Posts:1 New Member

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    01 Mar 2020 08:20 PM
    Eric S. Shapiro
    Shapiro Law Group
    722 E. Osborn Road, Suite 400
    Phoenix, Arizona 85014
    (602) 274-7400
    esqshapiro@shapirolawgroup.net
    Az Bar No. 018915

    I oppose this petition and concur with the substance of the other opposing replies to the petition. These changes, if adopted, are likely to impair an attorney's independent judgment and ability to fairly advise his/her clients. Additionally, allowing unlicensed individuals access to practice law will result in countless acts of malpractice to the detriment of "lower income" individuals (whom this change was "intended" to benefit), and whose recourse will be significantly limited. Ask any attorney that has had the experience of litigating a case against a pro per party that is "represented" by a paralegal. The outcomes are quite a sight to behold. Although the purpose of this petition may be altruistic in nature (which I seriously doubt), the practical implementation will have a negative impact upon the legal community as a whole.
    John Evans
    New Member
    Posts:1 New Member

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    01 Mar 2020 08:58 PM
    I oppose the petition, and I join in the comments of Matthew Fendon, Geoffrey M. Trachtenberg, Theodore A. Julian, Jr., Frank Verderame, and Arthur E. Lloyd.

    As those comments illustrate, the petition will result in the cheapening of the legal profession, and likely will do harm rather than good to the consumer.

    John Evans
    012133
    Attorney at Law
    Law Offices of John Evans, PC
    6619 North Scottsdale Road
    Scottsdale Arizona 85250
    (480) 922-3676


    Liz Harris-Wylde
    New Member
    Posts:1 New Member

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    02 Mar 2020 09:13 AM
    I join my colleagues in opposition to this rule change. This is a philosophically “bad” idea that will have disastrous practical results. The natural consequence of this rule change would be to further monetize the practice of law, creating profit incentives for non-lawyer owners and decreased value of services for clients at a disproportionately increased cost—when considering the value of services rendered (“Bad legal advice is not a bargain at any price.”) I appreciate the goal of decreasing costs and increasing value for clients, but real-world experience tells us that using a profit-based model is not the path to get there.
    Liz Harris-Wylde
    #029336
    15836 East Kipling Drive
    Fountain Hills, AZ
    85268
    Angela Poliquin
    New Member
    Posts:1 New Member

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    02 Mar 2020 09:38 AM
    I would like to register my opposition to this rule change. I echo the reasoning of Geoff Trachtenberg.

    Angela Poliquin
    2705 S Alma School Rd, Chandler, AZ 85286
    Phone: (480) 800-2522
    Jeffrey Gautreaux
    New Member
    Posts:1 New Member

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    02 Mar 2020 10:16 AM
    Jeffrey D. Gautreaux
    SBN 028104
    Musgrove Drutz Kack & Flack, PC
    1135 Iron Springs Road
    Prescott, AZ 86305

    I oppose the proposed rule change that would allow non-lawyers to have ownership interests in law firms. This is unlikely to increase the access to justice for lower income Arizonans, and it is likely to cause problems for lawyers who are trying to represent clients and simultaneously appease non-lawyer owners who are concerned only with the bottom line. I concur with the other comments provided in opposition to this proposed rule change.
    briansnyder11
    New Member
    Posts:1 New Member

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    02 Mar 2020 10:25 AM
    Brian Snyder
    2200 E Camelback Rd, Phoenix, AZ 85016
    Phone: (602) 224-0005

    After reading the initial report and the final report, and discussing the proposed rule change with Justice Bales and Mr. Byers, it is my opinion that this change will lead to unexpected circumstances that will lead to the degradation of legal services in Arizona. I am therefore staunchly opposed to the change.

    As it currently stands, lawyers must carefully balance the "business of law" with doing everything in their power to support their clients. In medical malpractice and personal injury cases, this results in spending hundreds of thousands of dollars to litigate a case. If a firm is owned by an outside entity, there will be a serious risk to the client that the investor will NOT want to spend that money, and will instead instruct the lawyer to hire the 3rd or 4th best expert in the field, at a significantly reduced hourly rate. While this may save money, it will also result in the client receiving lesser representation, without him or her even knowing it. Furthermore, another unexpected byproduct of this change would be that cases will become increasingly more difficult to settle. If one (or both) firm(s) has an investor that demands a higher return, the only way to achieve that result will be to bill more hours. Again, the client will likely not even know this is occurring. While the initial cost of the attorney may be a few dollars less than it currently is, the ultimate cost to the client will be much more.

    With regard to expanding the scope of paralegals and document preparers, this, too, will have unexpected consequences. In my medical malpractice work, 50% or more of our cases are now against nurse practitioners and physician assistants. This is because these people are given expansive rights to practice medicine, and they THINK they know how to do it, when in reality they are woefully unequipped. They are killing patients at a scary rate. While there is no risk to killing anyone with this rule change, the rate of malpractice is nearly certain to increase. These are practitioners who may not have even graduated from college, but because they can pass a test they are now able to represent people in court? This is a disaster waiting to happen.

    These rule changes are not good for the people of Arizona. They may work out well for some lawyers who figure out how to bill higher rates for mid-level practitioners to increase their profits, or for firms who get bought out by large corporations, but there is no tangible benefit to the people of our state. This is a solution in search of a problem, and it is my fear that the many likely outcomes have not been fully thought out or addressed.
    AmyHernandez
    New Member
    Posts:1 New Member

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    02 Mar 2020 11:12 AM
    Amy Hernandez
    Dwyer Hernandez, P.C.
    1670 E River Road, Suite 270
    Tucson, Arizona 85718
    520-209-1855
    ahernandez@dwyerhernandezlaw.com
    022892

    I join in Geoff Trachtenberg's comments dated February 18, 2020. This is a horrible idea and will lead to unethical conduct. As a lawyer who handles legal malpractice claims, there is enough unethical conduct out there without adding more opportunities. It has not improved other professions such as medicine or accounting. It will not improve access to justice and will further dilute the legal profession. Amy Hernandez
    Robert D. Bohm
    New Member
    Posts:1 New Member

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    02 Mar 2020 11:21 AM
    Early in my career I worked as a public defender, and I have seen the difficulties in court access due to financial limitations. I enthusiastically support attempts to increase access to justice. In my nearly 42 years of practice if there is one thing I have learned, it is that professional responsibility on the part of lawyers is a key to maintaining integrity in our legal community. This proposed rule, especially the elimination of ER 5.4 will do nothing to increase access to justice.

    When I was a young lawyer the opinion in Bates and O’Steen vs State Bar of Arizona came down. It was heralded as a step towards increasing access to justice. Although I am not opposed to lawyer advertising given our First Amendment rights, I do not believe that it is really done anything to reduce costs and improve access to justice. Instead it created a new class of lawyers who spend significant amounts on advertising budget without any decreased fees for members of the public.

    I see this proposal as an erosion of the very rules that are designed to protect the public without there being any real benefit in reducing costs. After considering this proposal in detail, I am strongly opposed to the Petition, particularly the amendment eliminating ER 5.4, in order to permit nonlawyers to own or manage law firms, or make decisions concerning legal disputes.

    The purpose of ER 5.4 is to "ensure the independence and ethical conduct of lawyers.” E.g., Jacoby & Meyers, LLP v. Presiding Justices of the First, Second, Third & Fourth Departments, Appellate Div. of the Supreme Court of New York, 852 F.3d 178, 181 (2d Cir. 2017). Indeed, the title of ER 5.4 is the “Professional Independence of a Lawyer,” and the Comment to the rule states that it is to protect the lawyer’s "professional judgment.” Simply put, the rule promotes quality and ethical lawyering.

    The practice of law as had a long-standing requirement that those who practice law must at least be minimally educated and licensed before being allowed to dispense legal advice to the public. If you really want to make the cost of legal advice less expensive, then allowing anyone to practice law without having to meet any specific educational or licensing requirements would probably accomplish that goal. However, it would become clear very quickly that eliminating these requirements would come at the cost of competent legal representation.

    Whether or not the proposal actually will actually decrease legal costs and increase access to justice is clearly uncertain but what is clear is that the proposal undermines the special ethical relationship between an independent attorney and their client. In doing so, it puts the public at risk. This was succinctly stated in New York State Bar Association: Report of the Task Force on Nonlawyer Ownership, 76 Alb. L. Rev. 865, 877 (2013) (concluding that “nonlawyer control of legal practice presents considerable risks to the legal system and the justice system . . . and should not be permitted in New York.”). Since this Task Force itself claims that our rules must only be changed “in a way that continues to protect the public,” see pg. 12, it’s baffling to understand why the Task Force believes that this proposal will result in reduced legal costs. There is no empirical evidence that the proposal will be effective and whether the proposal poses, as Judge Swann observed, “a serious threat to the long-term health of the justice system.”

    If we are really concerned about reducing legal costs, then there should be a focus on streamlining and simplifying the legal system. Proposals such as expanding jurisdictional limits of the justice court system and requiring that Justices of the Peace meet certain minimum education requirements, such as graduating from an approved law school and being licensed in the state of Arizona would certainly go a long way towards reducing the time and expense of lawsuits. These courts could have simplified discovery and disclosure rules and provide for more rapid processing of smaller lawsuits. This would seem to be a more effective proposal than allowing venture capitalists to buy law firms.

    Although I’d hope the Court rejects the Petition insofar as it eliminates ER 5.4, if the Court truly wants to allow for such nonlawyer ownership of law firm it appears that a pilot program focused on an where it is clear that there are not enough lawyers willing to practice in that area (such as the tenant side of landlord-tenant disputes) to see if this proposal has any effect on the availability and price of legal services.

    Robert D. Bohm
    2141 E. Camelback Rd., Suite 100
    Phoenix, AZ 85016
    Rich Dillenburg
    New Member
    Posts:1 New Member

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    02 Mar 2020 11:26 AM
    Richard A. Dillenburg
    2173 East Warner Road Suite 101
    Tempe, AZ 85284
    Bar # 013813

    I join my colleagues in opposition to this amendment, and in particular those comments made by former State Bar President Geoff Trachtenberg posted on February 18, 2020.
    John C. Breslo
    New Member
    Posts:1 New Member

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    02 Mar 2020 12:00 PM
    John C. Breslo
    The Breslo Law Firm
    9375 E. Shea Boulevard, Ste. 100
    Scottsdale, Arizona 85260
    014972
    jbreslo@breslolaw.com

    I am a personal injury trial attorney and I am opposed to the Petition, particularly the amendment eliminating ER 5.4, in order to permit non lawyers to own or manage law firms, or make decisions concerning legal disputes. I have read the proposals and I have read Judge Swann's opposition. I want to particularly comment on Judge Swann's statement that the proposal will result in a "race to the bottom" for legal services in Arizona and explore what this means in actual practice. Without legal training, non lawyers, almost by definition, cannot compete on quality but can only compete in the legal marketplace on price. Thus, decisions that used to involve legal judgment -- which experts to hire, how many depositions to take, what type of jury research to conduct, etc., will now simply be dictated by the low cost provider. Legal judgment will be replaced by a corporate non attorney supervisor issuing orders to "cut costs," "make the numbers" and "do more with less."

    In the current legal marketplace, for the most part, the most successful attorneys are the most successful attorneys - i.e., those who do the best for their clients and gain reputations based upon their results. As we race to the bottom, these successful attorneys will be replaced by non attorneys who use capital to corner large market share -- not legal prowess. The Walmart example is apt. While at first it was great to have a low cost provider of low quality merchandise in your community, it did not take long before main street was empty and Walmart was the only provider of goods in town. Once the market becomes dominated by the low cost producer and everyone else is out of business, competition is gone and the objective of the Petition is never realized. For these reasons I oppose the Petition.

    John C. Breslo
    Michael Rich
    New Member
    Posts:1 New Member

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    02 Mar 2020 02:25 PM
    Michael Rich
    2198 E Camelback Rd Ste 375, Phoenix, AZ 85016
    Phone: (602) 802-8900

    I strongly oppose the proposed rule. There are many reasons why I oppose such a rule and would urge you to accept the points made by Judge Peter Swann and Geoff Trachtenberg. Lawyers are professionals guided (and bound) by ethical rules. A non-lawyer owner of a law firm -- be it an individual or a huge corporation -- would have profits in mind before the client. I can only imagine a non-lawyer "boss" or "owner" telling his lawyer employee to do something in the interest of profits as opposed to the interest of the client. The conflicts of interest and pressure to make decisions focused on numbers would ruin a profession which already fights unfair stigmas. As the old bromide goes, a few bad apples can spoil the bunch, but if this petition is not rejected, there is little doubt the rotten apples will far exceed the good ones.
    sherri franzen
    New Member
    Posts:5 New Member

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    02 Mar 2020 03:11 PM
    Petition No. 20-0034 - Rule Comment

    JOHN A. MICHEAELS (005917)

    BEALE MICHEAELS SLACK
    & SHUGHART, p.c.
    ATTORNEYS AT LAW
    (602) 650-2465
    jam:_ti bmsslaw.com

    I have read Petition No. 20-0034. While I agree with attempts to legitimately increase access to justice, I am strongly opposed to the Petition, particularly the amendment eliminating Ethical Rule (ER) 5.4, in order to permit non-lawyers to own, manage and make decisions for law firms and their clients.

    As I understand it, the entire purpose of ER 5.4 is to ensure the independence and ethical conduct of lawyers. ER 5 .4 promotes quality and ethical lawyering, including the requirement that those who practice law must be minimally educated and licensed before being allowed to dispense legal advice to the public.

    Further, as lawyers, we are officers of the Court who take an oath to support the Constitution and the rule of law and are expected to abide by that oath. Our ultimate loyalty is to the Constitution and the rule of law, and certainly not to a corporate employer and non-lawyer employer and his/her/its economic interests. The proposal to allow non-lawyers (who are not bound by this oath) to invest in and control the practice of law will only take the practice of law and our justice system further away from the realization of that oath and the principles set forth in that oath.

    In my humble opinion, access to the justice system will be far better and more directly served if we devoted more money and resources into actually supporting our judicial system, as opposed to allowing non-lawyers (who most certainly will be able to afford legal counsel) to control and profit from the practice of law and our justice system.

    Accordingly, it is my hope that the Court rejects the Petition insofar as it eliminates ER 5.4.
    RAR
    New Member
    Posts:1 New Member

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    02 Mar 2020 03:56 PM
    I strongly oppose the Petition, especially as it attempts to eliminate ER 5.4 and allow non-lawyers to unduly influence the practice of law for which those of us who practice have devoted and continue to devote so much of our lives. I likewise agree with the comments already expressed in opposition to the Petition and would like to reiterate some things that come foremost to mind.

    My firm is a very small firm consisting of two trusted assistants and myself as a solo practitioner. While competition is fierce, there is still room for the solo practitioners/small firms to complete and deliver a more personal experience to clients. As a solo and owner of my firm, I do not have to answer to any purely profit-driven entity or person to justify which cases I accept on a contingency basis year in and year out. That freedom allows me to accept many cases that I know upfront won't result in great financial gain for the firm, but that do provide greater access to many individuals who might otherwise be ignored in a solely for-profit scenario that surely would result from allowing non-lawyers (think big business) to control how legal services are delivered to those in need of them.

    I also worry about clear conflicts of interest that will occur if non-lawyers are allowed to own law firms. Every day, I negotiate on behalf of my clients with entities who would be prime candidates to become owners of law firms. My efforts are 100% focused on the best interests of my clients. Those entities' efforts are not focused on what's best for the client, but on what's best for themselves. If they become owners of the law firm, who will be left to truly advocate and protect the most important interest in the equation -- that of the client?

    Rodolfo "Rudy" Resendez (016717)
    531 E Thomas Rd Ste 104
    Phoenix AZ 85012
    Kent Hammond
    New Member
    Posts:2 New Member

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    02 Mar 2020 06:07 PM
    Kent Hammond
    Rudolph & Hammond, LLC
    8689 E. San Alberto
    Scottsdale, AZ 85258
    (480) 951-9700
    kent@rudolphhammond.com

    I am writing to voice my opposition to the Petition, particularly the amendment eliminating ER 5.4, in order to permit non-lawyers to own, manage, and make decisions concerning legal disputes. I also do not want to repeat all of the objections raised by others, but strongly agree with the points made by Judge Swann and former State Bar President Geoffrey Trachtenberg.

    While I appreciate the intent to make justice more accessible, these proposed changes go too far too fast. More importantly, there is no empirical evidence the changes will increase access to justice. This rule changes are fraught with peril and should not be adopted.
    SIP
    New Member
    Posts:2 New Member

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    03 Mar 2020 11:01 AM
    I oppose the Petition 20-0034 and join in the comments provided by my colleagues, Geoff Trachtenberg, Dev Sethi, Brian Snyder, John Micheaels and Robert Bohm. While we would all like to see the 'access to justice gap' close, I have seen nothing to indicate that these rule changes will accomplish that goal.

    Scott I. Palumbo
    2800 N. Central Ave., Suite 1400
    Phoenix, Arizona 85004
    602-265-5777
    RMK
    New Member
    Posts:3 New Member

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    03 Mar 2020 11:53 AM
    Ronda Kelso, SBN 023301
    2390 East Camelback Road, Suite 403
    Phoenix, Arizona 85016
    (602) 777-7000

    I oppose the petition to restyle and amend as identified. While I can appreciate the attempt to expand access to legal services, I am concerned about the ownership and management of law firms by non-lawyers and the impact such ownership would have on the public needing to access legal services.
    John Coste
    New Member
    Posts:1 New Member

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    04 Mar 2020 09:30 AM
    John Coste
    Central Phoenix Office
    2417 North 24th Street
    Phoenix, AZ 85008
    (602) 433-2323

    I oppose the proposed amendment. I do not believe this proposal will increase the public's access to the legal system and it is unlikely to decrease the cost of legal services. It is likely to further erode the general public's perception of the legal system, which will no longer be a profession.
    Michael Boreale
    New Member
    Posts:1 New Member

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    04 Mar 2020 09:55 AM
    I am adding my name to the long list of attorneys and others opposed to the proposed rule change regarding efforts to expand the role and scope of non-attorneys providing legal services and allow non-attorney ownership of law firms.

    I am concerned that such an expansion will be detrimental to the public and will actually have the unintended effect of increasing the cost of legal services. I want to share a recent experience.

    My practice is primarily transactional in the areas of business, employment, and real estate. We also take some immigration cases. Just last month, I met with a woman who was defrauded by an individual claiming to be a notary and legal document preparer.

    My potential client paid this person approximately $2,000 to prepare and file immigration documents for her to obtain lawful residency. Unfortunately, this individual did not file the documents properly and diverted the substantial filing fees for personal use. Nearly a year later, the potential client was informed that her case was on hold due to failure to pay filing fees. When confronted, the so-called notary provided a check to resubmit to USCIS for filing fees. Unfortunately, the check was NSF and this person has now absconded. A police report was filed, but my potential client now cannot afford to pay the substantial filing fees a second time.

    Through the Secretary of State’s website, I was able to determine that this person’s notary privileges were revoked; however, the AZ Supreme Court site for revoked or suspended LDPs is down. This is just one example, but I’m sure there are numerous instances of this behavior. I’m afraid the public will not be well-served by the proposed expansion; in particular, if the oversight level is a minimal as it currently is. Moreover, as an attorney who is often asked to fix the mistakes made by non-attorneys, I can tell you that the cost of doing a task right the first time is significantly less than if the client has to pay multiple times to obtain a legally sound document or result.

    I realize that “Access to Justice” is a Court priority, but I’d ask that the Court and committee consider the various unintended consequences of expanding the scope of legal services to non-attorneys.

    Further, while this expansion might help in the short-term, it will likely result in an increase in the cost of legal services in the long-term. The cost of attending law school continues to increase. If making a living as a practicing attorney is not an attractive career option, fewer people will be willing to take on the burden of obtaining a legal education. As such, the number of practicing attorneys will decrease over time.

    Basic economic principles make clear that a smaller supply of attorneys coupled with a steady demand will lead to an increase in attorney rates. Worse, more attorneys will be drawn to specialized areas that justify higher fees, leading to a dearth of general practitioners similar to what has happened in the medical field.

    I set up my practice specifically to serve the needs of small business owners and have used technology to provide cost-effective, flat-fee services to my clients, many of whom are first-time business owners. I recognized that there was a market for more accessibly priced legal services and have filled it successfully. The idea that only non-lawyers or out of state corporations are capable of filling this niche is preposterous.

    Michael Boreale
    Boreale Law, PLC
    177 N. Church Avenue, Suite 1100
    Tucson, AZ 85701
    Alexandra S. Rubin, esq.
    New Member
    Posts:1 New Member

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    04 Mar 2020 04:25 PM
    Alexandra S. Rubin, esq.
    3550 N Central Ave, Phoenix, AZ 85012
    Phone: (602) 235-9525

    As a solo practitioner who decided to hang my shingle rather than join an established firm, I oppose this change.
    Brett Slavicek
    New Member
    Posts:1 New Member

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    04 Mar 2020 04:37 PM
    Brett Slavicek
    5500 North 24th Street
    Phoenix, Arizona 85016
    (602) 285-4425
    brett@slaviceklaw.com

    I vigorously oppose Petition No. 20-0034. In particular, I am opposed to the Petition’s amendment eliminating Ethical Rule 5.4, allowing non-lawyers to own, manage, and make decisions for law firms and their clients.

    While I agree with the goal of attempting to increase access to lawyers, this Petition would allow non-lawyers to take control of the practice of law, which certainly would lower ethical standards in Arizona.

    Respectfully, I ask the Court to reject Petition No. 20-0034 which eliminates Ethical Rule 5.4.
    Chris Bode
    New Member
    Posts:1 New Member

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    04 Mar 2020 04:59 PM
    Chris Bode
    The Law Office of Chris Bode
    7373 E. Doubletree Ranch Road #120
    Scottsdale, AZ 85258
    Bar Number 007346

    I oppose the rule change principally for the reasons stated by Judge Swann in his opposition to the Task Force proposal. I have practiced the profession of law in Arizona for almost forty years. I am close enough to retirement that, if adopted, this rule change will have very little impact on my personal practice. Still, in the last forty years, I have seen the "profession" of law morph more and more into the "business" of law. Adoption of this proposed rule change will only accelerate and finalize this result. Instead of having lawyers with ethical obligations requiring competence and adherence to ethical standards, the proposed rule would allow for-profit entrepreneurs with no legal backgrounds to establish and run law firms. This will put the public at risk for incompetent (but profitable!) provision of legal services and will further degrade the legal profession.
    Victor Garnice
    New Member
    Posts:2 New Member

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    04 Mar 2020 06:11 PM
    I have been a member of the Bar for over 43 years. I respectfully oppose the petition.

    I would note that the other state court jurisdiction to which I am admitted is New York. New York requires that not only must practitioners appearing in court be admitted, but that they must maintain an actual office to practice within the state of New York and, that if they reside outside the state, that they must reside in an adjoining state. While this requirement might serve to limit the numbers of persons who might represent clients, it helps ensure the quality and effectiveness of that representation.

    About 20 years ago, a then-member of the Superior Court bench whom I will not name addressed a CLE audience and told us that he felt that family law practice should be rendered obsolete and that Family Court should be accessible to the public in a manner akin to the Motor Vehicle Bureau. This proposal is another step down that road.

    Leaving aside the troubling issue of non-attorneys owning firms and skewing the marketplace with for-profit operation schemes, telling Family Court litigants that they can be served in Family Court by non-attorneys not only devalues the attorneys but also devalues the court itself. The attitude will develop that Family Court is not a "real" court because one can be advised and represented by persons who are not real lawyers.

    What standards will these non-attorneys be subject to in litigation? Will the litigant represented by a traditionally-admitted attorney be held to a higher standard by the tribunal to the detriment of his or her client? Will litigants be able to seek 25-324 fee awards for these non-attorneys? Will they be permitted to submit China Doll affidavits seeking compensation for their services? Will a litigant respect an order from what they perceive as a tribunal that is somehow less than a real court? What about participation by one of these non-attorney individuals in a hearing involving another state's court like a UCCJEA conference.

    The court has developed a comprehensive Self Service Center, providing not only a myriad of forms, but also instructions. The FLAP program assists those who may have difficulty with those forms despite the detailed instructions. Judges are respectful and professional when dealing with self-represented parties. However, if despite the Self Service Center and FLAP there are parties who are unrepresented and this is a problem, you might consider imposing a mandatory minimum of pro bono hours. We in family law practice would better serve the profession in this role than serving as involuntary arbitrators in civil cases where family law attorneys don't usually practice. But don't devalue the worth of the courts or the practitioners by conveying the message that lawyers who worked hard to get a legal education, procure juris doctorate degrees, are subject to significant continuing legal education requirements and professional ethical standards are unnecessary. And don't devalue these litigants by conveying the message that they and their problems are unworthy of deserving real courts and real lawyers.

    Victor Garnice
    Scottsdale, Arizona
    480-556-5800
    victor@garnicelaw.com
    John Briggs
    New Member
    Posts:1 New Member

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    05 Mar 2020 08:10 AM
    Improving access to affordable and essential legal services is a noble cause, which I hope all members of the Bar support. However, I submit that eliminating ER 5.4 and creating LLLPs are not effective measures to further that cause.

    Allowing non-lawyers, particularly corporations and venture capital groups, to infiltrate the profession will undermine the integrity of the profession and its members. As lawyers, we each have taken a solemn oath to serve the public, justice and the profession. Among other things, that oath serves to restrain our conduct and causes us to try to always exercise good judgment. A corporation will not take the oath. The sole reason for such a corporation’s existence is to make money. Despite the proposed rule changes, a corporation will not consider that oath when exercising control and making decisions that may negatively impact the lawyers it engages. What’s more, allowing corporations and other non-lawyers to have an interest in the legal profession will place significant burden on bar counsel and the Supreme Court to try to effectively manage and discipline their conduct. The public and the profession are better served to invest such resources not in more staff for bar counsel but rather in legal clinics or supporting low cost legal services.

    Allowing corporations and non-lawyer investors to infiltrate the profession undermines the efficient delivery of justice through the courts. This is supported by the effect that litigation funding companies have had on civil litigation. By flooding the market with cash to pay for ever more expensive experts and technology, these businesses have driven up the cost of legal services and litigation. As a result, it is ever more challenging to settle cases because of their “investment” in lawsuits. One can only imagine if these companies that already exist and are doing business today are actually allowed to invest in the practice of law itself. Presently, ADR and negotiation account for more than 96% of the means to lawsuit resolution. If the proposed rule changes are enacted, these investors will refuse settlement and force cases to trial, which in turn drives up costs of the court system and ultimately increases costs to all members of society.

    Finally, permitting non-lawyers and corporations to invest in the practice of law will likely drive up the cost of legal services while diminishing the quality of those services. This is plainly evident looking to the state of healthcare/medicine and higher education in Arizona and the United States. Historically, delivery of healthcare and higher education served primarily to further society and the public good. Yet, they have become commodities to be traded and subject to investment solely for profit. Commoditizing healthcare and higher education have not benefited society. As corporate and private investment in healthcare and higher education has evolved, one is challenged to disagree with the proposition that they are both much more expensive. Commoditizing the legal profession and access to the justice system will lead to the same result.

    For the foregoing reasons, I vigorously oppose the proposed rule changes.
    John Briggs
    SBA #026853
    480-367-5405
    7233 E BUTHERUS DR
    Scottsdale, Arizona, 85260-2410
    SHoggard
    New Member
    Posts:1 New Member

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    05 Mar 2020 09:42 AM
    Shiloh Hoggard
    Law Office of Shiloh K. Hoggard, P.L.L.C.
    850 Cove Parkway, Suite C
    Cottonwood, AZ 86326
    (928) 649-3400
    shiloh@hoggard-law.com
    Bar No. 023271


    I want to add my name to the list of attorneys who are opposed to Petition R-20-0034. For the reasons specified by Judge Swann and so many others on this forum, I have legitimate concerns with this proposal.
    Wayne Carroll
    New Member
    Posts:2 New Member

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    05 Mar 2020 01:42 PM
    Wayne Carrol
    AZ Bar Number 024120
    (480) 733-6800
    wayne@inspiredideasolutions.com

    I write in favor of the changes proposed. Most attorneys did not go to law school to run a business, but to learn to practice law. The training in law school has no training for properly running a business, and the ethics rules are not a significant guide on how to properly run a business.

    The rule changes will allow those who have training and expertise for running a business to work hand in hand with attorneys to make sure that law firms are efficiently AND ethically operated. Many ethics complaints and challenges with unethical behavior relate to poor business practices of attorneys. With the ability for non-attorneys to participate in the profits of a law firm, a law firm can better attract and retain talent that will protect the profession and the clients.

    Businesses do not become successful by hurting clients or customers, and allowing business people to become more involved in law firm businesses will allow those who are good at setting up quality businesses and processes to help the legal profession become better in Arizona.

    It is my hope that Arizona can show the benefits of this model and that other states and jurisdictions will follow. The current rules will only be beneficial to those practices that are Arizona only practices. Attorney that are licensed in multiple states or jurisdictions cannot make this change unless other states also allow this change.

    Thank you for considering this change and how to improve the practice of law in Arizona. Please make the changes suggested.

    Wayne Carroll
    Stewart Gross
    New Member
    Posts:1 New Member

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    05 Mar 2020 01:53 PM
    Stewart Gross
    5353 N 16th St, Phoenix, AZ 85016
    Phone: (602) 795-4904

    I strongly oppose the above Petition to permit non-lawyer ownership in law firms. Clearly access to justice is a problem in this country. But allowing non-lawyers to influence how a client's legal issues should be handled only compounds the problem, not fix it. I have already experienced how non-lawyers can create havoc because of their bad advice to others. Part of my practice is in real estate. During the housing crisis of the mid to late 2000s, many real estate agents took advantage of homeowners who wanted to "short sell" their homes to avoid a foreclosure. In "counseling" their clients, real estate agents wrongly advised some of their clients to pay the banks to obtain a short sale or enter into deficiency payment agreements when these homeowners would likely have had better options. These actions only favored the real estate agents who wanted to make quick commissions. Subsequently, some of these wrongly advised homeowners ended up in litigation having to spend tens of thousands of dollars in legal fees to undue some of the bad advice from these agents. While most real estate agents in this state are ethical, they rarely understand the some of the nuances and consequences of real estate law and are usually motivated by their own financial interests. If we enter a world where non-lawyers are influencing lawyers to advise clients against their best interests in general, just to make more profit, we are doing a disservice to the community. And most likely, these persons are likely to have to seek out traditional law firms to clean up the messes from these non-lawyer owned firms.
    Zachary Mushkatel
    New Member
    Posts:1 New Member

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    05 Mar 2020 02:33 PM
    Zachary Mushkatel
    Mushkatel, Robbins & Becker, PLLC
    15249 N. 99th Avenue
    Sun City, AZ 85351
    623-889-0691

    Thank you for the opportunity to respond to the proposed changes and rule adoptions. I am in agreement with the prior comments provided by my colleagues,
    Geoff Trachtenberg, Dev Sethi, Brian Snyder, John Micheaels and Robert Bohm-- among others in opposition to the proposed changes to Rule 5.4. Access to justice for all socio economic classes is a must, but the proposed changes permitting non-lawyers obtaining an ownership interest in law firms will have only negative effects upon such access.

    bfmember
    New Member
    Posts:4 New Member

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    05 Mar 2020 02:52 PM
    I am writing to object to the adoption of this proposal. If access to justice is the goal, allowing unlicensed individuals to serve that population is a disservice to the very people who need assistance. We already have a corporation commission with self services documents, the court has self service documents, many services on the internet allow people to do all kinds of legal services without an attorney. Why do we need to encourage those who are not educated in or trained in the law to provide legal services? Would you want someone who was not a licensed contractor to do a "routine" job such as change our your AC unit? It is routine and it is "high volume." Is that the standard by which we decide the level of knowledge and training for which no license is required? What about getting a filling repaired in your tooth? Does it make sense to say you don't have to be licensed dentist to do that work because it is routine and high volume and we can find someone less expensive to do the work?
    Lawyers provide legal services. Lawyers carry malpractice insurance so that the client can be made whole if the advice falls below the standard of care. Summit Law School lost its accreditation because it failed to provide sufficient education to its students so they could pass the bar and become licensed attorneys. Now someone thinks it is a good idea to add another category of unlicensed people to the category of document preparers to provide legal services? Who decides which services do not require legal advice. Is a "simple will" something an unlicensed person should prepare? As a probate attorney, it is not only offensive to say there is something that is a "simple will." Lawyers provide counseling. Lawyers are not paid to produce documents. They are paid to use their education, knowledge and research to provide counseling to ensure the client understand the nature of the work and is able to make an informed decision about the next steps. Why would anyone go to law school or take the bar exam or attempt to be licensed if they can do the same without a license. The purpose of the process is to protect the public. Removing the standards to becoming a licensed attorney will only harm the community.
    Additionally, allowing non attorneys to own law practices is a terrible idea. As was stated in another comment, do you want to see the chiropractor own the personal injury attorney business. Should we have real estate brokers own probate law firms? Whose interests are being served? How does any of that possibly benefit the customer. They won't know if they are going to buy a house or buying the legal services of the real estate attorney. Does that attorney represent the broker or the buyer?
    This proposal does nothing to further the needs of the community. It will only further harm those most vulnerable.
    Emily B. Kile
    Kile & Kupiszewski Law Firm, LLC
    8727 E. Via de Commercio
    Scottsdale, Arizona 85258
    480-348-1590
    Eric Post
    New Member
    Posts:1 New Member

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    05 Mar 2020 03:20 PM
    I do not support this rule change. As a plaintiff personal injury attorney I regularly am called by folks who tried to avoid an attorney and handle the case themselves. They have missed mandatory Notice of Claim requirements, Statute of Limitations deadlines, UIM notice requirements, filed lawsuits in the wrong court and a host of other errors, some fatal. Particularly I handle bicycle and aviation cases and bicycle law is something more obscure than regular vehicle law. Many of these folks have sought guidance from others and have been given bad information. Even attorneys have a challenging time obtaining the proper medical records/bills. When it gets to lien laws, there is a fine line between not paying a legitimate claim and squandering client money for claims that can and should be voided or negotiasted. Some reductions allow for legal fees. So if there is no attorney, there are no legal fees to reduce the lien. I and other attorneys are often reluctant to take a case where these errors are made. By allowing non-attorney UPL, it may result in more prejudice to otherwise valid claims than the current system.

    As for other kinds of law, people are always allowed to self represent in criminal cases, or often qualify for an appointed attorney, or the Pima County Bar QUILT program of reduced fees, or Legal Aid. We have a number of very fine certified document preparers that are regulated and allowed to assist in form driven legal actions such as domestic relations, incorporating a business, bankruptcy, etc.

    The law can change rapidly and since appeal court cases are generally retroactive, there is no grace period or notice period. Non-attorney representatives can miss this and often do not have up to date subscriptions with a case finding service or know how to Shepherd the cases.

    Sincerely,

    Eric Post
    Law Office of Eric Post, PLLC
    651 N. Swan Road
    Tucson, AZ 85711
    (520) 207-9601
    RMK
    New Member
    Posts:3 New Member

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    05 Mar 2020 03:21 PM
    Ronda Kelso, SBN 023301
    2390 East Camelback Road, Suite 403
    Phoenix, Arizona 85016
    (602) 777-7000

    I would also like to register objection to the proposed Alternative Business Structures which is not covered in R-20-0034. The licensing for non-lawyer entities is a slippery slope which permits a style of law firm which appears legitimate and full service to the public, but is not a true law firm. The nuances and intricacies of representation are ours, as attorneys, to hold, understand and be accountable for.
    Jonathan Negretti
    New Member
    Posts:1 New Member

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    06 Mar 2020 09:56 AM
    I oppose this petition for a variety of reasons. Allowing non-lawyers to practice law without proper oversight is a recipe for disaster. The legal profession already finds itself ranked low on lists regarding consumer confidence. Opening up the practice of law to non-lawyers will dramatically increase the potential for abuse within the profession. Linking lawyers, who are barred and monitored by a regulatory commission to non-lawyers (who presumably will not be governed in the same way) creates a melting pot that could ultimately drive consumer confidence even lower.

    Fee sharing with non-lawyers also causes consternation. It opens the doors to major corporations to commercialize and commoditize law firms. It promotes an industry solely driven by profit with justice and client concerns falling by the wayside.

    It also seems that this petition and rule change directly conflict with the rules of ethics for a variety of reasons. Although I may not agree with every rule that I am subject to as an attorney, I appreciate and understand the rules and certainly abide by them. This petition and rule change seem to allow non-lawyers to sidestep rules that don't suit their initiatives.

    It appears that more conversations must occur before rules are changed and/or amended to allow non-lawyers to practice law.

    Jonathan Negretti
    Principal Attorney
    Negretti & Associates
    2415 E Camelback Rd Ste 700
    Phoenix, AZ 85016
    Phone: (602) 531-3911
    Trevor Orme
    New Member
    Posts:1 New Member

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    06 Mar 2020 10:22 AM
    Trevor Orme
    5500 North 24th Street
    Phoenix, Arizona 85016
    (602) 285-4411
    trevor@slaviceklaw.com

    I echo the words and sentiments of the long list of those here who oppose Petition No. 20-0034.

    While the goal of the amendment is praiseworthy, the means by which it accomplishes it (eliminating Ethical Rule 5.4, allowing non-lawyers to own, manage, and make decisions for law firms and their clients) creates a different, perhaps worse, problem.
    Michael Resare
    New Member
    Posts:1 New Member

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    06 Mar 2020 11:17 AM
    Michael B. Resare
    King & Frisch, P.C
    6226 E. Pima Suite 150
    Tucson AZ 85712
    520-790-4061
    mresare@kfazlaw.com

    I oppose this petition because I do not believe that implementing it will solve the issue surrounding access to justice. Other comments have already explained in detail how creating Limited License Legal Practitioner (LLLP) depreciates the value of the legal profession and is not thoroughly researched, so I will not reiterate it.

    Simply put, the issue for access to justice is that there are groups of people who are excluded from legal service because they cannot afford it. The proposal being considered to fix the issue is it is to create a new group of LLLP to provide that service.

    I would propose an alternate solution to the issue, one with an easier solution that keeps in place all the well-established ethical rules. My proposal would be to lower the State Bar Pass Score requirement from 273 to 260. This would allow more qualified legal professionals into the State that have to comply with all of the current ethical rules and requirements that have been long established.

    These additional lawyers would be more qualified than any LLLP because they would have gone to law school and have a tested understanding of the ethical rules and requirements. It is a supply and demand issue. If the state allows more attorneys into the practice of law in Arizona, attorneys’ fees would become more affordable due to competition and thus would result in more affordable legal service to the groups of people currently lacking it. Instead of recreating the wheel by adding many less qualified LLLP to the legal profession in Arizona, it would be more effective to add more qualified lawyers to the profession.

    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    06 Mar 2020 12:33 PM
    Randal L. Hutson, Esq.
    The Hutson Law Firm, PLLC.
    22849 N. 19th Ave.,Suite 135
    Phoenix, Arizona 85027
    Direct Line: (623) 628-7400

    While I strongly oppose the Petition in its entirety and believe it is a very bad proposal, if non-lawyers are permitted to have an ownership interest in law practices, it is my opinion that any non-lawyer ownership should be limited to a nominal amount. Is there no limit to the ownership interest non-lawyers will be able to have? Will non-lawyers be able to own law practices in fee simple absolute, or near it, and run that that way? Also, although I object to any non-lawyer ownership, I also believe there is a significant difference between permitting entities and big money to own law practices, versus allowing an actual human being, such as a parent or child to have a nominal interest, capped, to provide some assistance to their child or parent who is an attorney, with the expectation of a small benefit, which would not suffer from the same or similar perils that entity ownership and big money will wreak upon the profession. All persons with any interest in a law practice should be subject to the exact same Character and Fitness investigation and requirements that lawyers are subject to. As an aside, I wonder how the cost of professional liability insurance for lawyers might change if non-lawyers are permitted to have an ownership interest in law firms. I can't it becoming less expensive. Please do not let this Petition pass.
    Robert Greer
    New Member
    Posts:2 New Member

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    09 Mar 2020 11:23 AM
    Word fail me in opposing this appalling proposed remedy to a too complex and too expensive court system. I am grateful for and unqualifiedly join in Judge Peter Swann’s Opposition Statement.

    I write from the experience of having practiced in a small firm in a small town, a solo practitioner in rural Arizona, an associate in an insurance defense firm, in house litigation counsel for an insurer, a partner in a national aviation law practice, a partner in a small defense based litigation boutique and in a small but growing consumer focused personal injury practice. I have seen the economic pressures on a small practice, the corporate pressures on captive counsel, and the retain-the-client pressures from insurers, all the time keenly conscious of my primary obligations to my represented client.

    We can find a parallel in Bates v. State Bar of Arizona which changed the legal climate about the time I left law school. Under First Amendment rubric it lifted prohibitions on lawyer advertising noting that the “ban in fact serves to perpetuate the market position of established attorneys.” It treated as anachronisms traditional personal knowledge and word of mouth referrals to counsel whose reputation merited it. It noted that “the middle 70% of our population is not being reached or served adequately by the legal profession."(Citation omitted) Among the reasons for this underutilization is fear of the cost, and an inability to locate a suitable lawyer. Advertising can help to solve this acknowledged problem.” 433 S.Ct 250, 376 (1977).

    We have seen in forty years just how helpful advertising has been in addressing that. A few anecdotes illustrate. As a defense lawyer, I got better settlements for the benefit of insurers when plaintiff’s counsel is working for prominent advertisers. Whenever I have advertised for a paralegal, whether on the defense or plaintiff’s side of personal injury work, I am inundated by applications from folks who work for heavily advertising injury mills who cannot wait to get out. They punch time cards, have to maintain a certain volume of cases, have case closing deadlines, and are paid below market. They have little time for personal attention to clients. On the plaintiff’s side, I am often approached by clients who have been rejected by advertising firms who deem their cases too hard or too time consuming or which might require litigation. They charge the same percentage for low hanging fruit as any other firm.

    My point is that experience tells us that the well-intentioned proposed changes to the business of practicing law will likely lead to high volume, mediocre representation by the most cost effective means, with profit a greater influence upon the practitioner than client needs.

    Arizona’s adoption of disclosure rules in civil litigation and juror questions to witnesses were innovative and actually were positive and helpful changes. But innovation just to be the first is not always the best motivation.

    There are few drawbacks to letting other jurisdictions run the experiments and produce the data and fine tune the rules based upon results before giving the proposal consideration.

    Robert L. Greer
    State Bar No. 005372
    1423 S. Higley Road, No 113
    Mesa, AZ 85296
    rlgreer@rigglaw.com
    Tel: 480-539-9400
    Wayne Carroll
    New Member
    Posts:2 New Member

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    09 Mar 2020 02:49 PM
    39506 N Daisy Mountain Drive
    Ste 122-501
    Phoenix, AZ 85086
    (480) 733-6800
    mailto:wayne@inspiredideasolutions.com

    Thank you to everyone for engaging in this discussion. I doubt my voice will mean much as hundreds of attorneys are writing comments to oppose this including many with much more clout, experience and prestige than I have.

    I appreciate your views. I am sure there will be some bad actors, as there are now. I am amazed that at large firms, many of the attorneys who are running the firm are still expected bill hours and work on cases. A good business person is focused on solving problems in the business, not on working in the business. Yes a business is set up to make a profit, and yes I want to make a profit. I am not of the opinion that making a profit is bad, or that focusing attention on making a profit is bad. More profit gives you more power and freedom. CPAs have a very strong part of their ethics code that focus on the independence of their judgement. The proposal brings in some of that language in the legal profession. It may be helpful to set a requirement so that non-attorneys cannot own more than 49%of the business,  (in most states CPAs have this limitation) but that is an arbitrary number when you look at a very large firm. In a large business a 10% owner may be able to control much of the business.
    Perhaps the proposed regulations are not the solution, but I struggle with how to attract and retain someone to help me with sales and management, and usually a growing business will bring in partners at an early stage. There is no change to the rule that an attorney cannot do anything through another person that they are not allowed to do. Managers and sales people will be required to follow procedures that keep them within the ethics rules.  A well run law firm will have these procedures in place, whether or not it is an attorney doing the managing and selling. A poorly run firm will not have procedures, and is more likely to rely on state regulation to keep their employee attorneys ethical, than their own procedures. While the proposed rules open some opportunities, they are not without requirements, and I believe that it can encourage all law firm to be better by establishing procedures.
    I am also concerned that as the sole owner of a law firm, if I were to die unexpectedly, my wife would be required to immediately sell the business we have both worked for years at building. She has learned the business skills and knows how to hire and run the business, but she is not allowed to unless I am alive. She is in effect a 50% owner of the business, but she is not recognized as an owner by the State Bar, and would not be allowed to hire attorneys and remain an owner if I died.
    The rule change can also allow attorneys to sell their business easier, as they are not limited to only selling to other attorneys.  E-myth, a well known business book says that the only reason to start a business is to sell it. I understand that most attorneys do not think of their firm as a business, but I believe that creates many problems of its own, and I want to help with a solution to that problem.

    Wayne Carroll
    Licensed Arizona Attorney
    Justin L. Wyatt
    New Member
    Posts:1 New Member

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    10 Mar 2020 10:44 AM
    Justin L. Wyatt
    Wyatt Injury Law, PLLC
    5333 N. 7th Street, Ste A-210
    Phoenix, AZ 85014
    (602)354-7346
    SBA# 032215

    I would like to add my voice and opinions to the long list of those opposed to the petition and proposed rule change to allow non-lawyer ownership of law firms.

    While this petition facially appears to be a novel mechanism of "reducing the barriers to legal services," and asserts to be an altruistic method of opening legal doors to those less fortunate, it is easy to sense that the true underlying motives are actually far more based on economics for certain parties, and are indeed more sinister. The significant reality and actual consequences of such a change cannot be overstated. I am left scratching my head as I attempt to reconcile the asserted goal with this proposed rule change, and am left convinced that this is not the proper mechanism to further the goal of providing quality legal services to underprivileged. This proposed change simply will not do what it is claimed to do, but will undoubtedly have other significant negative results. I have yet to see or read anything that actually indicates such a drastic rule change would actually serve the goal of reducing barriers to legal services. There appears to be no evidence of such whatsoever.

    The barrier to competent legal representation is indeed real, and can certainly be challenging, but this barrier also serves to protect the quality of the product; indeed, what good is legal representation if it is not good?

    As our industry currently exists, we are free to operate our practices and can earn a profit, but this is done working under the constraints of certain ethical rules, which indeed provide guidance and boundaries, and dictate holding obligations to clients in the highest regard. If those constraints are removed, I shudder to think of that the legal field will quickly devolve into, where law firms are controlled not by what is “best” for the client, but what is best for the shareholder. Even those firms and attorneys who wish to hold strong and put their own client interests ahead of their own will eventually be pushed out by bargain law firms who will do the work for significantly cheaper, but ultimately at the expense of the client. This cannot be allowed. The integrity of our industry, and the ideology of ethical legal representation is at stake.

    It speaks volumes that there are no other states or jurisdictions currently that allow non-lawyers to have ownership/control over law firms. The reasoning is simple; because it’s a terrible idea, and as stated repeatedly by many before me, mixed ownership or mixed loyalties has one result; the product suffers, and the client loses. This flies in the face of the altruistic theory of “reducing the barriers to legal services.” Instead, it allows corporate abuse of those who don’t know better, can’t afford better, and oversight is lost.

    Lastly, if this door is opened, I fear that it cannot be contained. Sharks will smell blood in the water, opportunity to make profit with low barrier to entry, and this industry will be exploited. This is bad for the public and bad for the profession. The ethical rules, as currently existing, should be respected, protected, and upheld, and change considered only after serious investigation, deep discussion, and thorough evaluation of the eventual impact. I fear that this proposed change is being pushed through extremely quickly, without the proper due diligence and oversight, and if allowed, the results would be catastrophic.
    Aditya Dynar
    New Member
    Posts:3 New Member

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    10 Mar 2020 12:25 PM
    R-20-0034 Comment in Support

    I support the rule-change petition without hesitation.

    I am an attorney licensed in Arizona.

    I also currently serve as a Governor-appointed Board Member of the Arizona State Board of Dental Examiners and the Arizona State Board of Psychologist Examiners.

    The views expressed in this comment are my own and not those of my employer, or of the state licensing boards on which I currently serve.

    I support the rule-change petition for the following reasons:

    Many comments in opposition focus, not on the actual words of the proposed changes, but rather on what the Petition says about those proposals. Such a shift in focus may not be the best way to evaluate the rule-change petition. The first and foremost place to look for what the Petition proposes is to look at the plain words in the markup version of the proposed changes.

    There are at least four prominent features of the proposed changes that should address the vast majority of the concerns expressed by those opposed to the proposal.

    1) The new ABS entities are required to “emplo[y] at least one person who is an active member in good standing of the State Bar of Arizona under Rule 32 who supervises the practice of law under ER 5.3[.]” Proposed Rule 31.1(b)(1).

    2) The “State Bar of Arizona, under the Court’s supervision” will have the authority to “assist the Court with the regulation and discipline of alternative business structures (ABS) and limited license legal practitioners (LLLP)[.]” Proposed Amendment to Rule 32(a)(2)(D).

    3) Both ABS and LLLP entities “are subject to the disciplinary jurisdiction of this court[.]” Proposed Rules 46(b), 46(c).

    4) The Petition proposes that the same high ethical standards contained in the Ethics Rules be applied to ABS and LLLP entities. See Proposed Amendments to ERs 1.0 through 5.7. In other words, employees or personnel who were not previously subject to the lawyer’s Ethics Rules will now be held to that high standard. See, e.g., Proposed Amendments to ERs 1.6, 1.8, 1.10, 5.1, 5.3 & Comments thereto.

    Traditional law practices are facing two recurring challenges, and this proposal will help firms effectively address them. Accounting or business development on the one hand, and emerging data privacy and technology needs on the other are two challenges that can be easily addressed by having an ABS or LLLP structure. Firms that are currently prevented from employing non-lawyer Chief Operating Officers (COOs) or Chief Technology Officers (CTOs) will be able to have such dedicated C-suite employees manage the business development and data privacy aspects of the firm. In turn, this will enable the lawyers in the firm to dedicate more distraction-free time to providing legal services to their clients. Allowing for such a welcome change in the business structure of a firm will enhance the quality of legal services provided in Arizona.

    Respectfully submitted,

    /s/ Aditya Dynar
    Aditya Dynar
    AZ Bar No. 031583
    2300 W. San Angelo St. #1112
    Gilbert, AZ 85233
    (480) 818-5499
    Aditya.Dynar@gmail.com

    James B Penny
    New Member
    Posts:1 New Member

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    11 Mar 2020 10:43 AM
    James B. Penny
    Law Office of James B. Penny, LLC
    333 N. Wilmot Road, Suite 340
    Tucson, AZ 85711
    520.618.5386
    Bar No. 015236

    I am currently the Chair of the Client Protection Fund Board of Trustees and a past member of the State Bar’s Board of Governors. Access to justice is an important issue, but not more so than protecting the public with respect to the provision of legal services. I oppose the proposed amendment to ER 5.4, because it sacrifices protection in favor of theoretical access and, therefore, does not serve the public’s interest.

    One of the requirements to become a licensed attorney is passing a character and fitness review. Another is successfully establishing a working knowledge of the ethical rules. The ethical rules hold lawyers to a minimum standard. Lawyers who violate those rules, risk more than economic sanction; they put their right to practice law on the line.

    Under the current rule, since every owner and decision maker of a law practice is a lawyer, the ethical rules hold them personally and directly responsible for ensuring that the actions of the entity are consistent with the ethical rules. Those lawyers possess both the organizational power and the motivation to do so. Protecting the public, therefore, can best be served by holding those at the top accountable for the actions of those throughout the organization.

    The proposed amendment would allow non-lawyers to own and operate businesses that engage in the practice of law. Those owners would not be subject to character and fitness review and would have no duty to be accountable under the ethical rules. Instead, the Task Force significantly dilutes the public’s protection by proposing that any such businesses merely designate an attorney who would be responsible for establishing policies and procedures. As a result, any accountability would fall down the organizational chart to an employee, without the same authority and control of the non-lawyer owners. The owners, who are the true decision makers and who gain the most financially from unethical decisions, would have no personal and direct exposure or accountability.

    The Task Force recommends nothing to regulate those firms owned by nonlawyers. Instead, it recommends that the Supreme Court convene a group in the future to “explore entity regulation” for such firms. In kicking this can down the road, the proposed amendment to ER 5.4 leaves those entitles unregulated and, therefore, the public unprotected.

    In my years with the Client Protection Fund, I have seen the consequences to the public of unethical conduct and how critically important it is to hold lawyers personally and directly accountable for the provision of legal services. I do not believe that the public is best served by the proposed amendment to ER 5.4, and respectfully request that the Court reject it.
    George Riemer
    New Member
    Posts:3 New Member

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    11 Mar 2020 02:50 PM
    It should be noted that there are two other petitions pending that relate to Petition R-20-0034. They can be found under Code of Judicial Administration on the Supreme Court website. The initial comment period is March 30, 2020.

    ACJA 7-209 -Alternative Business Structures

    ACJA 7-210 - Limited License Legal Practitioner

    George A. Riemer
    Arizona Bar Member No. 017034
    grapho@outlook.com
    623-238-5039
    Eric
    New Member
    Posts:1 New Member

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    13 Mar 2020 11:30 AM
    I have practiced in Arizona for 30 years and am a certified specialist in workers' compensation with the State Bar of Arizona. I strongly oppose the Petition on numerous grounds. First, workers' compensation is an area of law in which most clients have lower income and are completely reliant on counsel’s competency to manage their cases. These cases often determine their lifetime benefits. Workers’ compensation is an area of law that is paved with administrative rules, statutes and case law that will trip up even the most capable lawyers that do not regularly practice in this area. In such an arena, indigent and unsophisticated injured workers will have no idea that the person practicing with a limited license has little to know idea what they are doing. The poor injured worker will only be distracted by the “bargain” they think they are getting.

    Additionally, allowing non-lawyers to own and manage law practices will create enormous pressure for young lawyers to work as instructed by the “boss” who is not trained nor held to the same ethical standards as the young lawyer. The almighty dollar will rule the day and lawyers will no longer be free to follow their desire to improve society which originally motivated them to attend law school.

    Eric Awerkamp
    1930 S Alma School Rd Ste A115
    Mesa, AZ 85210
    Phone: (480) 777-5595
    David Shtogren
    New Member
    Posts:1 New Member

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    13 Mar 2020 03:48 PM
    David J. Shtogren, Esq.
    9242 W. Union Hills Dr., Ste. 102
    Peoria, AZ 85382
    623-223-0686 (Tele) / 602-926-0915 (Fax)
    david@djsaccidentlaw.com
    www.djsaccidentlaw.com



    I am vehemently opposed to the Petition as it would eliminate ER 5.4 and ER 5.7 and amend ERs 1.0 through 5.3, to permit non-lawyers to own and manage law firms.

    It would be calamitous to allow non-lawyers to own or invest in law firms. ER 5.4 protects the public by maintaining the legal professionalism and allowing lawyers to preserve the independence of non-lawyer judgment, which it has done for many a year. By allowing non-lawyer ownership in firms, you would be eroding the protection of the public encompassed in ER 5.4. I do not see how eliminating ER 5.4 would benefit the public. How would it bring legal services to underserved legal areas or reduce legal costs when the investors are driven by profits and return on investment? For-profit corporations look at the bottom line before all other things, so for-profit corporations will not offer pro-bono or low-cost legal services to the general public – they will operate on a "mill" basis keeping costs as low as possible and perhaps to the detriment of the client. By allowing non-lawyers to invest or own law firms there would be a negative end result. It would result in there being only a few national law firms as sole practitioners, small and even larger law firms could not compete with money behind large commercial operations. Thus, in my mind, eliminating ER. 5.4 would have a hugely negative impact on access to justice.

    I am opposed to the proposed creation of the Limited License Legal Practitioner (LLLP) and Alternative Business Structure (ABS) as I am not convinced either is needed to fill any gap in legal services. The Petition claims that "[t]he purpose of creating this new tier of licensed legal service provider is to fill a gap that exists between medium- and low-income individuals needing legal services and the cost of securing those services from the traditional legal market." What exactly would LLLPs or an ABS be able to do, and what access to justice gap is eliminated with the creation of LLLPs or an ABS? I do not believe the issue of creating LLLPs or ABSs has been thoroughly researched about the impact on the general public of receiving legal advice from a non-lawyer. I can, however, foresee that such creation will lead to a negative effect on the general legal consumer as you have a person providing legal advice without having the benefit of law school or the same ethical considerations as a licensed attorney. What would stop a disbarred lawyer from becoming an LLLP or starting an ABS and basically practicing law again?

    While I am all for bringing legal services to underserved areas and reducing legal costs, this Petition is not how to accomplish this task.
    ILerma
    New Member
    Posts:1 New Member

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    13 Mar 2020 04:52 PM

    Ilya E. Lerma
    SBA 019573
    ilya@ilyalaw.com
    physical address: GATE6 Offices 16624 N. 90th Street, Scottsdale, AZ 85624
    mailing address: 610 E. Bell Rd., Ste. 2-484 Phoenix, AZ 85022
    602.899.3035

    I join in the overwhelming chorus of practitioners opposing the Petition and the elimination of ER 5.4. My colleagues and Judge Swan have beautifully articulately concerns over what seems to be a well-intentioned but strongly misguided effort at creating access to legal services.

    In the application of law, we are frequently called upon to consider lesser-intrusive measures as alternatives and it appears that better and perhaps more strongly contemplated alternatives to availing poor an indigent clients may not have been fully explored. Obviously, the public is served with access to justice, but there seems to be little rationale as to how opening the door to non-lawyer owned firms ensures that this occurs. The comments of Mr. Trachtenberg addresses the long-term view of clients harmed and overall financial impact and risks to the legal system to which I wholeheartedly agree.

    The great privilege of practicing law is counter-weighted with our ethical duties guiding and conforming behavior in the representation of clients. After 20 years of practicing law, it is infrequent that a question of ethics is not presented on every single file. For example, diligence and competence, the most fundamental of obligations can be compromised by matters confronting any professional such as illness. If serious or otherwise lengthy, the professional must weigh their ability to competently and diligently continue representation. What non-lawyer must faithfully examine and re-examine or otherwise face discipline or other serious professional consequences? These ethical duties are the very essence that support the confidence people can have in the legal system. To undermine these most fundamental principles so that more people can have access, begs the question, "Access to what?" What is gained when people have access to a system that does not meets its most basic promises of diligent and competent representation? Or perhaps just as bad, a system which will allow non-lawyers an entirely different standard of conduct as compared to their professional counterparts. Of course, this is only one concern among the myriad raised and addressed in other comments.

    The Petition, and more specifically, elimination of the ethical rule does creates far more problems than it seeks to resolve.It is with my strongest conviction that I urge rejection of the Petition.
    Sincerely,
    Ilya Elena Lerma
    Christopher Zachar
    New Member
    Posts:2 New Member

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    16 Mar 2020 10:49 AM
    I have read R-20-0034, the proposal to eliminate ER 5.4. I must voice a strong objection to this proposal.

    Several years ago, the restrictions were eased for reciprocity for out of state lawyers to become licensed in Arizona, creating an unfavorable multitude of lawyers not qualified to represent injured victims in Arizona. As an attorney who took and passed the rigorous Arizona bar exam and has practiced for 28 years representing injured victims in Arizona, I have witnessed the devastating outcome it has had for Arizona injury victims. There has been an influx of out-of-state firms marketing their services in the Phoenix market, and while this is likely profitable for those firms, it is the people of Arizona that pay the cost of being represented by attorneys who are not familiar with the rules, laws and practices of this state, and only care about making a quick fee.

    This proposal, if adopted, will open the floodgates to deep pocket (non-lawyer) investors to take advantage of and merely “profitize” what Arizona offers, at the expense of Arizona residents. With such motives made legal in Arizona, I am concerned as to the amount of profiteers it would bring and the corruption and unethical tactics that will come with a money-earning opportunity. Worse yet, a probable consequence is the poor outcomes from a shallow representation of our community’s injury victims.

    I am not as learned on areas of law other than personal injury, but there does not appear to be a shortage of quality professionals in any area of Arizona law. Likewise, there does not seem to be any dearth in a consumer’s ability to find both quality and affordable legal services and representation in Arizona. Eliminating ER 5.4 may bring more “services” to Arizona consumers, but it will invariably hurt unwitting consumers and lower the overall quality of legal services that these consumers currently receive.

    I join in the comments and objections stated by Geoff Trachtenberg, Jacqueline Rambo, Dianne Post, Frank Verderame, Jason Kelly, Robert Bohm, Brian Snyder, Emily Kile, and Eric Post, who have all eloquently pointed out the problems posed by this proposed rule change, and cited examples of the problems we face now as a result of legal document preparers and other unlicensed, unqualified individuals who already attempt to practice law in Arizona. The outcome these individuals usually achieve for their clients is failure or worse, and the proposed rule change will only lead to more of the same.

    The access-to-justice gap must be closed through other means. Allowing unlicensed individuals to own law firms will not achieve the desired result. I urge the Committee to reject this proposal, for the good of Arizona’s residents and for the good of the established and hardworking Arizona attorneys that currently serve their needs.

    Christopher J. Zachar, Esq.
    Zachar Law Firm, P.C.
    714 E Rose Ln, Phoenix, AZ 85014
    Phone: (602) 494-4800
    Michael York
    New Member
    Posts:1 New Member

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    16 Mar 2020 05:52 PM
    Michael York
    2175 N Alma School Rd Ste B107
    Chandler, AZ 85224
    Phone: (480) 222-2020

    The proposed rule change attempts to achieve "Access to Justice" when actually, at best, it may only marginally increase "Access to the System." Even assuming the proposed Rule change accomplishes greater access to our Courts (which there is no evidence to suggest it will) what then? Are we to assume that these people will actually achieve "Justice" simply because they have entered the door? For all of the reasons stated by my colleagues in the comments above, the more likely result of this measure will be incompetent representation, lack of accountability, and profit motive over real "Justice." I join those opposing this measure.
    Crispin Passmore
    New Member
    Posts:1 New Member

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    17 Mar 2020 05:36 AM
    My name is Crispin Passmore and I am from England & Wales. I am an experienced regulator and have been at the core of the re-regulation of the legal services profession/market here for over 15 years. I now run a consultancy business and work with legal regulators around the world, as well as regulators in other professions. I helped establish the Legal Services Board that drive initial reform in the UK, and was Executive Director at the SRA, responsible for reforming the regulation of a £30bn market of solicitors and law firms. I have also been an Executive Director in our legal aid scheme - worth £2.4bn per annum - and run a non-profit focused on access to justice. I support a number of US States that are reforming regulation - and want to stress that I do this without charge so as to support global access to justice.

    The access to justice crisis in the US is pretty much identical to other advanced economises but is intensified by the structure of your legal market. You do not need me to tell you about the evidence in your own country but I would stress that increasingly the picture we are building is that small business face almost identical access to justice challenges as disadvantaged individuals. Reform is needed to support the growth of our economies as well as to tackle A2J.

    In the UK I invented and designed the world’s first regulatory sandbox for the legal market:SRA: innovate. It had a significant impact (and continues to do so) even in the hugely more liberalised profession that we operate within in E&W. Our economises are based upon growing supply to increase innovation and productivity and only a significant liberalisation combined with targeted and effective modern regulation can help tackle that.

    I want to support the work that has led to the petitions to amend your rules. Non lawyer ownership amends economic rules and ethic rules remain in amended: obligations to act in the clients best interests, support the rule of law and proper administration of justice apply to all.

    To argue, as many lawyers have done, that allowing non lawyer ownership risks unethical impact on law firms concerns me for two reasons. First it suggest that lawyers ethics is so weak that they can be led astray by almost anyone. Second is suggests that lawyers ethics are higher than other professions and business people: there is simply no evidence to support that in any economy or society. We regulate lawyers with ethics codes because of the risk they do not act ethically - not because they are so ethical but because they are doing work where temptations to act unethically are significant and impacts for that unacceptable. The history of large law firms going bankrupt and lawyers running off with client money should see off any argument about ethical superiority. It would be remarkable that we had grown our legal professions exponentially in recent decades if we could only choose people with ethical superiority.

    I would also like to stress that the decision before you is not whether alternative providers enter the legal market. We are too late to that particular party: 25 million US adults have an account with Rocket Lawyer and Axiom is now over 20 years old. The choice is simply if we embrace and properly regulate these businesses and set them free to employ and work with lawyers properly so that they can increase the supply of lawyers to a disastrously underserved market. I have blogged on this and much more on my website. The history of our economies leads to a simple choice: we can choose change or irrelevance.

    I have made a detailed submission to California to set out some learnings from the UK and attach a copy of that to support your consideration of international evidence. I would be delighted to talk further about that experience and help you drive forward the change that Arizona can benefit from, putting you ahead of other US States and getting first mover advantage. I do not propose to comment on specific rule changes - your experts within the Courts are best placed to get the drafting correct, but I want to be clear in my support for the policy direction.

    Best wishes at this tough time: good legal services for the poor are going to be ever more important as we handle economic disruptions across the world. I am sure that Arizona can be at the heart of improving opportunities for all. I commend the petitions to you.

    Crispin

    Crispin Passmore
    Passmore Consulting Ltd
    +(44) (0) 7834 856 564
    Crispin.Passmore@passmoreconsulting.co.uk
    Cal Raup
    New Member
    Posts:1 New Member

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    19 Mar 2020 02:28 PM
    I oppose the proposed changes and any change that dilutes the high professional standards we all have cherished for our entire careers. Anyone coming from the business world to the legal profession must be required to meet the high ethical standards to which we all are held. That requires a legal education, licensing and regulation. This proposal does not meet those requirements. I see lawyers I highly respect appear to be in unison in their opposition to this proposal.

    I come from a long defense background; I now practice on the plaintiff's side. Looking at the proposal from both perspectives, I find no merit whatsoever in making these changes.

    Calvin L. Raup Bar #004424
    531 E. Thomas Rd. Suite 104
    Phoenix, AZ 85012
    Daniel Esparza
    New Member
    Posts:2 New Member

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    19 Mar 2020 05:05 PM
    From economic, practical, and social-justice viewpoints, these proposed changes are all positive and will likely result in greater rule of law for all who come in contact with the Arizona legal system. I have represented a number of clients who could not find another lawyer willing to represent them due to the cost barrier. Had I not helped them at a significant discount or pro bono, they would not have received the justice guaranteed to them by the law we hold so dear. Unsophisticated client (including non-English speakers) will frequently be forced to deal with relatively simple areas of the law but which they are not equipped to handle pro per for one reason or another. They do not need a Thurgood Marshall, they just need a competent hand, which this change will make available. And might I add, there will always be a need for fully trained lawyers just as there will always be a need for cardiologists --- they just do not need to be your primary care physicians.

    A last point: allowing nonlawyers to work more closely with lawyers will benefit many legal areas. Some more than others. As long as the right to control representation is not compromised, this will only benefit the client.

    Daniel Esparza, JD, MBA
    Skymark Advisors Law Group, LLC
    10225 W THUNDERBIRD BLVD STE A
    Sun City, Arizona, 85351-6111
    623-377-9577
    http://law.skymarkadvisors.com
    Daniel Esparza
    New Member
    Posts:2 New Member

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    19 Mar 2020 08:58 PM
    The use of LLLPs has great potential to reduce the unauthorized practice of law. I find that many people try to get around using lawyers due to cost. Having access to a trained provider of legal services, under the supervision of an attorney, will do much to combat this tendency. Similarly, allowing nonlawyers to work with lawyers, within a clear regulatory framework, will help keep nonlawyers from falling into the temptation to wade into the practice of law. I have dealt with both circumstances, and that is why I support these proposals.

    Daniel Esparza, Esq.
    Skymark Advisors Law Group, LLC
    10225 W THUNDERBIRD BLVD STE A
    Sun City, Arizona, 85351-6111
    623-377-9577
    http://law.skymarkadvisors.com
    LoriZucco
    New Member
    Posts:2 New Member

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    20 Mar 2020 10:05 AM
    Lori Zucco, on behalf of the Cochise County Bar Association, PO Drawer CA, Bisbee AZ 85603, 520-432-8700, lzucco@cochise.az.gov, Bar #017572

    Submits the following from the Cochise County Bar Association's Ad Hoc Committee to Comment on Petition for Rules Changes:

    We write in strong opposition to Recommendations 1, 6, and that portion of 9 that would allow legal document preparers speak in court. We do so not because we want to oppose the goal of improving access to justice. Quite the contrary. We oppose these proposals because they are simply bad plans – plans that will not improve anyone’s access to genuine justice. These plans, if adopted, will in all likelihood work to the detriment of those without effective access to the justice system.

    The three of us are retired judges, all with substantial experience serving on the bench of the Superior Court in Cochise County. We have been authorized by the Cochise County Bar Association, on its behalf, to submit a comment in opposition to the proposed rule changes.

    We agree with many of the thoughtful statements that have been offered in opposition to these recommendations, particularly those of Judge Peter Swann, Geoffrey M. Trachtenberg, Dev Sethi, and Ilya Elena Lerma.

    Recommendation 1 would apply the Golden Rule to the Arizona legal system. And no, we don’t mean the good version of the Golden Rule (“Do Unto Others As You Would Have Them Do Unto You”); rather, we mean the good version’s evil counterpart (“Them’s As Gots the Gold Makes the Rules”).

    Recommendation 6, and that part of Recommendation 9 that would allow document preparers to speak in court, would not improve access to justice for anybody. Rather, they would extend the reach of incompetence so that more a far greater segment of the public can be victimized. Recommendation 6, if adopted, would set Arizona on a path to permit minimally-trained non-lawyers to give advice, counsel, and in-court representation to people who may not grasp the implications of these non-lawyers’ limitations. LLLPs will market their services to those of limited means who seek legal assistance in a vast array of significant matters with potentially serious consequences. Undoubtedly, some of the clients of such LLLPs will get what they pay for. But it seems highly probable to us that many vulnerable people in stressful situations will be preyed upon by ill-trained or unscrupulous LLLPs.

    Regarding that portion of Recommendation 9 to allow document preparers to speak in court, no one should be lulled into a false sense of security just because the document preparers will only be able to speak if “authorized” by the court. Is there anyone who doubts that non-lawyer justices of the peace – and even a few law-trained superior court judges – will freely “authorize” document preparers to say anything they want?

    Karl Elledge
    State Bar No. 005844

    Wallace R. Hoggatt
    State Bar No. 006012

    Charles A. Irwin
    State Bar No. 010301

    Cochise County Bar Association
    Ad Hoc Committee to Comment on Petition for Rules Changes
    C/O Wallace R. Hoggatt


    Lincoln Combs
    New Member
    Posts:1 New Member

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    20 Mar 2020 03:17 PM
    Lincoln Combs
    602-530-8022
    lincoln.combs@gknet.com
    Gallagher & Kennedy
    2575 E. Camelback Road, Suite 1100
    Phoenix, AZ 85016-9225
    Main: 602-530-8000
    www.gknet.com

    I oppose the Petition for all of the reasons expressed in other comments, and likewise join in Judge Swann's eloquent dissent from the Task Force's recommendations. The Task Force's recommendations and resulting Petition would enact sweeping changes to the practice of law in Arizona, but appear to be based solely on a single academic study. I strongly disagree that allowing non-lawyers to essentially practice law and own law firms will have the intended result of increasing access to justice, and the unintended consequences of deregulation are likely to be both massive and harmful to both that goal and the legal profession generally.

    The tone of the Task Force's recommendations addressing the very real problem of increasing access to justice and supportive comments like our Welsh colleague Mr. Passmore's statements are to the effect of "innovation and change will make it better!" But who will be doing the innovating? Surely the change will be led by profit-seeking corporations unbound by ethical standards seeking to maximize revenue from their clients. The ethical failings of lawyer that exist under the current ethical regime and that Mr. Passmore highlights do not justify destroying that regime. Indeed, it seems like a strange remedy for the problem of increasing access to ethical, competent attorneys by abrogating the ethical rules and replacing them with the profit motive.

    It is worth noting that the California State Bar recently rejected a much more limited deregulatory proposal that is not nearly as broad as the Petition.

    https://www.law.com/legaltechnews/2...0220172851

    The Court should follow suit. Ideological experiments in free market access to legal services should be at most very limited in scope and subject to intense long-term study before being imposed on the entire Arizona legal system. The Petition skips those steps and proceeds right to massive change.

    Finally, I plead with the Court not to consider such an enormous change during the current pandemic crisis. Change to all aspects of life in America and Arizona is already being imposed by the coronavirus and resulting necessary governmental efforts to combat its spread. The unintended consequences of the current crisis will not be fully realized for months or years to come. Now of all times is not the time for the Court to experiment with a radical alteration of the practice of law in Arizona.

    Respectfully, the Petition should be denied.

    Geoff Trachtenberg
    New Member
    Posts:3 New Member

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    20 Mar 2020 04:28 PM
    First, I'd normally not say anything, but it's troubling when those who urge for an ethical rule change before this Court do not themselves appear to be following existing ethical rules. Skymark Advisors Law Group, LLC is an example. The entity, whose principal lawyer commented in favor of the Petition, is currently owned and controlled by a lawyer and a non-lawyer.

    This is revealed on the website listed in the comment itself, skymarkadvisors.com, which notes the "principles [sic] of this firm [are] Jared Farnsworth CFP® and Daniel Esparza Esq.,” and confirmed by public filings with the Arizona Corporation Commission (the “Commission”) for Skymark Advisors Law Group, LLC. [Footnote: To be sure, there are two business entities the Commission’s website—Skymark Advisors Law Group, LLC and Skymark Advisors, LLC—but both list the same lawyer and non-lawyer principals at the same address.]

    Unless I’m misunderstanding something, this business arrangement violates our existing rules. To that extent, this Court and its rule-making process should not be used or blindly influenced by those who merely seek to sanction their desired business models, especially by those who seem to have already disregarded the Court’s rules.

    Second, I’d like to point out that a much less radical approach to the current Petition was being considered in California, which was contemplating a “regulatory sandbox” to allowing non-lawyers to own and operate law firms. This more conservative proposal was just recently “put on ice" for additional study after more the 3,000 lawyers and trade groups criticized the proposed changes as posing potential dangers to the justice system and legal consumers. Arizona should do the same.

    Third, the article linked below is instructive in that it shows what happens when private equity took over the dental profession, something I’d raised in my initial comment. In my view, the “access to justice” mantra is being co-opted as Trojan Horse; it’s being used by private equity and hedge funds who desire to squeeze every last dollar out of the legal practice—it has nothing to do with providing legal services at a lower cost or to the underserved.

    https://www.usatoday.com/in-depth/n...edBN6FQVes

    And fourth, this Court recently decided Ansley v. Banner Health, 2020 WL 1126300 (March 9, 2020), which ended a lengthy dispute with Arizona hospitals seeking to "balance bill” AHCCCS patients. The matter was essentially handled pro bono on the expectation that attorneys’ fees, if any, would be awarded under the private attorney general doctrine. They were and the Court recognized that the effort was “unquestionably of great societal importance.” My firm was the primary vehicle for this litigation and, while we are truly grateful for the award of fees, the simple fact is that we could never have undertaken this costly, decade-long project if we were beholden to non-lawyer shareholders or business people. Those kinds of people would not have seen the value in assisting these impecunious clients. Putting those types of business-people at the helm of law firms will kill our kind of socially-responsible law practice.

    Again, I’d urge you to please study this more (or pilot a sandbox approach) before experimenting with Arizona’s entire justice system by allowing non-lawyers to own or operate law firms.

    Geoffrey M. Trachtenberg
    Levenbaum Trachtenberg, PLC
    362 N. 3rd Avenue
    Phoenix, AZ 85003
    602-271-0183
    Bar No. 19338
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    25 Mar 2020 12:43 PM
    Gary L. Stuart
    Arizona Lawyers Foundation Board of Trustees
    7000 North 16th Street, Ste. 120
    Phoenix, AZ 85020
    602-281-1111
    gstuart@keyed.com or gary.stuart@asu.ed
    Attachments
    State Bar of Arizona
    New Member
    Posts:88 New Member

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    26 Mar 2020 03:00 PM
    The State Bar of Arizona hereby gives notice that it will file its comment during the second comment period. Further, the State Bar respectfully asks that the comment periods for this Petition and Petition R-20-0030 be aligned. Finally, on behalf of staff and its constituency, the State Bar requests a 60-day enlargement of time, or more as circumstances related to COVID-19 may warrant. This request for extension is made based on 1) the complexity of the proposed rule changes and associated ACJA code provisions, including still TBD portions, 2) stakeholder desire to provide meaningful input to the Court, and 3) curtailed meetings and shifted priorities during the prior and coming weeks due to the COVID-19 pandemic.

    Lisa M. Panahi, Bar No. 023421
    General Counsel
    State Bar of Arizona
    4201 N. 24th Street, Suite 100
    Phoenix, AZ 85016-6288
    (602) 340-7236
    patricia.seguin@staff.azbar.org
    Mark Sippel
    New Member
    Posts:1 New Member

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    27 Mar 2020 01:33 PM
    Mark Sippel
    707 E Beale St
    Kingman, AZ 86401
    Phone: (928) 753-2889

    How does non lawyer members managers etc who have the profit motive foremost help the "access to justice gap" The many other comments are on target. I cannot help but wonder if those who are in favor of this have little to no experience in mall firm, rural poverty practice. I seem to recall the bankruptcy and divorce firm debacle with non lawyers running the show. This rule change should be rejected.
    City of Scottsdale Prosecution
    New Member
    Posts:1 New Member

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    27 Mar 2020 01:49 PM
    Matthew S. Mueller, Assistant City Prosecutor II
    On behalf of Luis Santaella, Acting City Prosecutor
    City of Scottsdale
    3700 N 75th Street #B
    Scottsdale, AZ 85251
    (480) 312-2710

    The City of Scottsdale Prosecutor’s Officer strongly opposes the proposed Supreme Court Rule 31.3(c)(3) as it applies to municipal courts. The proposed change would vastly expand the existing rule to allow non-lawyers to represent a business or legal entity in not just Justice Court, but also in municipal courts where both civil and criminal cases are heard. Legal entities would be allowed to be represented in municipal courts in all circumstances under the proposed rule, which is contrary to Arizona case law and the general principle followed in federal courts and, frankly, the United States as a whole. See Rowland v. California Men’s Colony, Unit II Men’s Advisory Council, 506 U.S. 194, 201-02, 113 S.Ct. 716, 121 L.Ed.2d 656 (1993) (“It has been the law for the better part of two centuries… that a corporation may appear in the federal courts only through licensed counsel.”), and Jadair Inc. v. U.S. Fire Ins. Co., 209 Wis. 2d 187, 205, 562 N.W.2d 401, 408 (1997) (“A corporation is not a “natural person,” and therefore, Blueprint cannot fall within the term ‘any suitor’ for purposes of corporate self-representation.”).

    Courts have recognized that the principle that a corporation must represented in court by an attorney has its basis in common law. See Nixon, Ellison & Co. v. Sw. Ins. Co. of Cairo, 47 Ill. 444, 446 (1868) (“We find that as early as Lord Coke's time it was the recognized doctrine that a corporation aggregate could not appear in person to an action. 1 Coke Litt. 66 b. And we find the same rule announced in Comyn's Digest, Pleader 2, B. 2, where it is said, speaking of a corporation aggregate: ‘But the corporation must appear by attorney, appointed under their common seal.’ And Chitty, vol. 1, p. 551, lays down the rule, that ‘A plea by a corporation aggregate, which is incapable of a personal appearance, must purport to be by attorney.’”). This general rule is followed by federal as well as State courts.

    The Arizona Supreme Court has long held that, “Absent statutory authority a corporation cannot practice law even in its own behalf. A corporation cannot appear in court by an officer who is not an attorney, and it cannot appear in propria persona.” Ramada Inns, Inc. v. Lane & Bird Advert., Inc., 102 Ariz. 127, 128, 426 P.2d 395, 396 (1967), citing Paradise v. Nowlin, 86 Cal.App.2d 897, 195 P.2d 867; Tuttle v. Hi-Land Dairyman's Ass'n, 10 Utah 2d 195, 350 P.2d 616; Nicholson Supply Co. v. First Federal Savings, Fla.App., 184 So.2d 438; Niklaus v. Abel Construction Co., 164 Neb. 842, 83 N.W.2d 904. Additionally, “Until a corporation appears in court by counsel, its appearance is defective.” State v. Eazy Bail Bonds, 224 Ariz. 227, 229, 229 P.3d 239, 241 (Ct. App. 2010), citing Boydston v. Strole Dev. Co., 193 Ariz. 47, 50, ¶ 12, 969 P.2d 653, 656 (1998) (“a corporation may cure its defective appearance after being given a reasonable opportunity by the court to do so”).

    Consistent with this principle, the current Supreme Court Rule 31(d) provides for only a limited number of exceptions to the practice of law by non-lawyers. It should be noted that none of these exceptions concern criminal proceedings. In fact, Rule 31(d)(3), which the proposed Rule 31.3(C)(3) would significantly expand, only applies to Justice Courts and police courts, not municipal courts, and even then, in very limited circumstances. The current requirement that the legal entity must be “an original party to or a first assignee of a conditional sales contract, conveyance, transaction or occurrence that gave rise to the cause of action in such court, and the assignment was not made for a collection purpose” makes clear that the rule only anticipated legal entities participating in civil proceedings in Justice or police courts through a non-lawyer. AZ ST S CT Rule 31(d).

    The proposed Rule 31.3(c)(3) contains no such limiting language and would completely overturn this longstanding precedent. Under the proposed rule, a corporation cited with a criminal violation or made a party to a civil action can represent itself in municipal court in any proceeding. Such an expansion would create confusion, particularly for larger corporations: what proof must the court require of the corporate representative to show that he has authority to represent the corporation or his or her business partners under proposed Rule 31.3(c)(3)(B)? How, or should, municipal courts protect the interests of the legal entity against a representative who lacks the legal skills, character, or basic competence to appear in court? Would municipal courts find themselves compelled to give more leeway to non-lawyer representatives of corporations regarding poorly drafted pleadings or arguments or behavior in courts? How would these non-lawyer representatives be held responsible for what would be considered unethical behavior if committed by attorneys, especially in criminal matters?

    This additional confusion and burden on municipal courts is unnecessary and should be avoided at all costs. Allowing those that do not have sufficient legal knowledge to represent businesses and other legal entities in court will create significant inefficiencies for municipal courts as they attempt to address their cases without a full understanding of in civil or criminal procedures. We therefore strongly oppose this proposed rule change.
    Victor Garnice
    New Member
    Posts:2 New Member

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    27 Mar 2020 04:15 PM
    Interestingly, the State Bar's own "Arizona Attorney Daily 5" daily email included the following article:

    "Dental chain overbites in bid for profits

    "Private-equity firms have bought dental offices and drilled down on dentists to floss more profits out of patients – leading to overtreatment allegations. One company may take the crown, though. Its patients say dentists told them they needed fillings for several cavities – when they had none. One woman sued after a dentist did seven root canals on her 3-year-old son. Former employees say they were pressured to bridge the gap between financial targets and scheduled treatments. Regulation of these chains is nonexistent or toothless. Though unheard of 20 years ago, private-equity dental chains now make up 16% of the market."

    It linked to the full story at https://www.usatoday.com/in-depth/n...36783002/.

    Certainly the expansion of these dental offices increased consumer access to dental services and increased competition. But at what cost to the consumers and their trust in, respect for and reliance upon the professionalism of the practitioners in the profession?

    This should serve as a cautionary tale and should make any supporter of the proposed Rules changes have serious second thoughts.

    Victor Garnice
    Arizona Bar No. 004485
    14648 N Scottsdale Rd Ste 130
    Scottsdale, AZ 85254
    Phone: (480) 556-5800
    PCBA
    New Member
    Posts:3 New Member

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    27 Mar 2020 05:01 PM
    Commenter:
    James W. Rappaport

    Committee:
    Pima County Bar Association, Rules Committee

    Mailing address:
    177 North Church Avenue
    Tucson, AZ 85701

    Phone Number:
    520-623-8258

    Email address:
    jwrappaport@gmail.com

    Bar Number:
    031699
    Attachments
    Denise Blommel
    New Member
    Posts:1 New Member

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    28 Mar 2020 03:59 PM

    I have been a proud member of the State Bar of Arizona since 1978. I have been active in both the State Bar Sections, serving as Chair of the Employment & Labor Section and Co-Chair of the Workers’ Compensation Section, and State Bar CLE, serving as a frequent presenter and co-chairing a track at CLE by the Sea as well as being an author of the Arizona Employment Law Handbook. I am honored to have won the Member of the Year award in 1999 and the Employment & Labor Section Member of the Year award in 2014.

    I am respectfully opposed to Supreme Court Rule Change Petition R-20-0034 (“Petition”) Section VI with respect to “expanding the universe of legal professionals” to create the Limited License Legal Practitioner or LLLP.

    I have been hearing about an “access to justice gap” ever since my law school days. The Petition and the Task Force make the assumption that there are too many pro per litigants because they cannot afford legal services. Indeed, Arizona’s poverty rate exceeds 20% of the population and the lack of sustainability rate (families earning less than the social services safety net costs) is even greater. There is no cost for lawyers for those indigent eligible for government-subsidized services, other than waiting in line due to underfunding of legal services agencies. The major concern is with the vast middle class whose wealth index has been decreasing over the decades.

    I wonder if the plethora of unrepresented parties is due strictly to the unaffordability of legal help or whether other factors have been investigated. In my career representing employees, small businesses, association members, and injured workers, it appears that an overwhelming number of people want “their day in court” and will not accept legal advice. An overriding American cultural icon is individualism or Do It Yourself. The courts understand this by providing helpful information in kiosks and online.

    Another cultural icon is the concept that services are free. The healthcare industry is continuously challenged by this issue. In other words, it is probable that the simple cost of legal services, of which many in what remains of the middle classes can pay, is not the sole driver behind the unrepresented parties. I believe many Arizonans simply do not want to pay a lawyer to help them or are frustrated when a lawyer tells them something they do not want to hear. This is not an access to justice gap – this is a choice. And, providing another tier of legal professional will not have any impact upon this issue.

    I am concerned that the Task Force and the Petition did not mention the State of Washington’s eight-year failed experiment with Limited License Legal Technicians as outlined in Rebecca Donaldson, “Law by Non-Lawyers: The Limit to Limited License Legal Technicians Increasing Access to Justice," 42 SEATTLE U. L. REV. 1 (2018). I understand that the LLLTs in Washington are struggling to earn a living, charging by the hour just like the lawyers, and not increasing the access to justice by the marginalized. There appear to be less than 50 of these LLLTs after eight years. I must ask why we are reinventing the wheel, especially because the Washington wheel appears to be broken.

    As a member of the American Bar Association, I know that the House of Delegates recently endorsed regulatory innovations to improve access to justice. However, ABA Resolution 115 contains two cautions:

    FURTHER RESOLVED, That the American Bar Association encourages U.S. jurisdictions to collect and assess data regarding regulatory innovations both before and after the their adoption of any innovations to ensure that changes are effective in increasing access to legal services and are in the public interest of clients and the public; and
    FURTHER RESOLVED, That nothing in this Resolution should be construed as altering recommending any changes to any of the ABA Model Rules of Professional Conduct, including Rule 5.4, as they relate to nonlawyer ownership of law firms, the unauthorized practice of law, or any other subject.

    The Petition does not provide for the collection of data. Rather, it passes off the “details” of the LLLP program to working groups (see footnote 20 on page 33). Politicians call this “kicking the can down the road.” Additionally, the Petition requests specific changes, contrary to ABA Resolution 115, to Rule 5.4 and the unauthorized practice of law.

    Some of those LLLP “details” are critically important to the public as well as to the members of the State Bar. If these “professionals” are going to give advice and appear in court or before administrative agencies, what kind of education will they be required to have? Please remember that about one-half of the teachers in Arizona do not have basic qualifications because of the underfunding of schools, poor teacher pay, and few barriers to entry to that profession. Some of those teaching have no college degree.

    Who will pay for the LLLP education and training? How will the limited practice areas be chosen? Who will pay for their licensing and discipline? Will they have to undergo testing? There is evidence that the Washington LLLT program has failed to achieve the access to justice which ostensibly is the reason for the creation of the LLLP.

    The Petition states that there is no evidence that LLLPs will hurt the income potential of lawyers. However, there is no citation to the Seattle University law review article or empirical market evidence from an eight-year timeframe in Washington. I am also concerned about the creation of a new bureaucracy to license and discipline LLLPs.

    There is an important social justice aspect to this situation. It is blatantly unfair to the poor and marginalized to give them “help” from unqualified people who are not real lawyers. To say that it is “innovative” and “assisting the little guy/gal” to give them poor help rather than no help, is to perpetuate the gap between the classes in modern America. If one has no money, one can only afford an individual who never went to law school and is just trying to make a buck like everyone else. This is unfair – to the law schools, to those of us who went to law school and passed the bar, to those of us who give pro bono services, and to the poor and marginalized who will just have to be satisfied with “half a loaf.”

    Please do not approve Section VI. Thank you for your consideration.

    Denise M. Blommel, Attorney
    Denise M. Blommel, PLLC
    6945 E. Sahuaro Drive, Suite 125
    Scottsdale, AZ 85254
    480-247-7477
    denise@azlaborlaw.com
    www.azlaborlaw.com



    Rohan Pavuluri
    New Member
    Posts:1 New Member

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    30 Mar 2020 09:50 AM
    Rohan Pavuluri
    Upsolve, CEO
    1180 6th Ave. New York NY 10036
    Phone: (646) 653-0918

    I am writing to support the elimination of ER 5.4 and the introduction of a new category of nonlawyer legal-service provider, the limited license legal practitioner (“LLLP”). These measures would allow for Arizona to responsibly introduce new kinds of free and low-cost assistance for low-income and working-class families who cannot afford lawyers.

    My name is Rohan Pavuluri, and I’m the CEO of Upsolve, a nonprofit that helps low-income families who cannot afford lawyers file bankruptcy for free, using an online document assembly tool. Over the last four years, Upsolve has become the largest bankruptcy-related nonprofit in the United States, relieving nearly $200 million in debt for thousands of low-income families. Since January 1, 2019, Upsolve has relieved over $5.3 million in debt for Arizona residents, making Upsolve one of the largest nonprofits for bankruptcy in Arizona.

    I co-founded Upsolve during my time at the Harvard Law School Access to Justice Lab. Upsolve has raised nearly $3 million in funding from organizations that include the Legal Services Corporation, Hewlett Foundation, and Public Welfare Foundation. Along with my day job, I hold volunteer positions on the legal innovation committee of the American Academy of Arts and Sciences and the Emerging Leaders Council of the Legal Services Corporation.

    There are not enough free or affordable lawyers in America to meet the demands of poor and working-class families who require civil legal assistance. And there never will be, given just how much the demand for free and low-cost lawyers exceeds the supply. It is not a political reality that we’ll ever have enough funds to support a free legal aid lawyer for everyone who needs one.

    The current state of regulations means that poor and working-class families, by and large, cannot get meaningful assistance to solve their legal problems from any person or company that is not a lawyer. These regulations may seem reasonable, but they are, in reality, one of the greatest civil rights injustices of our day. They limit the supply of help available. They ensure that countless poor and working-class families cannot access their basic legal rights. They guarantee that Arizona residents do not have equal protection under the law.

    The Supreme Court of Arizona is in a unique position to do something similar to those who first spoke up against Separate but Equal, a policy that at the time appeared reasonable to many in power, just as today’s policies against non-lawyer assistance seem reasonable. The truth of Separate but Equal is that it ensured unequal access to democracy for black people. The truth of today’s regulation on the practice of the law is that it ensures unequal access to democracy for poor and working-class people.

    Think about having to go see a doctor for every small ache or pain rather than being able to go buy Advil yourself. In the law, we must encourage people to use more affordable limited license legal practitioners when they have a problem where limited license legal practitioners will do. Telling a poor person to go find a lawyer they obviously can’t afford is out-of-touch, unjust, and just doesn’t make sense. We must not let perfect be the enemy of good.

    Consumer protection is important. All the other concerns on this forum are reasonable. That is the purpose of thoughtful regulations proposed by the Petitioner. Nobody is suggesting we immediately open the floodgates to unregulated interventions with regards to Alternative Business Structures and Limited License Legal Practitioners. Indeed, lawyers will always be at the center of these interventions. The legal fees that poor people must pay today to preserve their life, liberty, and property resemble the poll taxes that used to stop people from voting. One of the only ways to get rid of these modern-day poll taxes is to allow new kinds of regulated non-lawyer assistance, working side-by-side with lawyers, to provide meaningful legal assistance at lower costs or for free.

    At Upsolve, I have spent the last four years of my life dedicated to providing a technology solution to low-income families trapped in debt who need access to our bankruptcy system. Our free internet application uses technology to gather and input user’s information into the standard Chapter 7 bankruptcy forms. We do not provide legal advice or representation. 98 percent of the people who file for bankruptcy using our document assembly tool are able to obtain a discharge. This is about the same rate of success for attorney-represented debtors, and it’s far above people who file for bankruptcy on their own without any kind of assistance.

    My lived experience, combined with the data we’ve collected, has taught me that for certain areas of the law non-attorney assistance can provide access to justice at scale for poor people who can’t afford lawyers, achieving similar outcomes in the routine, simpler, more non-adversarial parts of poverty law, which is where Alternative Business Structures and LLLPs would shine. While Upsolve is a non-lawyer document assembly tool that is able to operate in the existing regulatory framework, there are numerous forms of effective, safe non-lawyer assistance that cannot exist in Arizona. The latitude the Arizona provides to its estate agents serves as a powerful precedent for what’s possible and what the public wants. I have no doubt that if these measures were a ballot initiative in Arizona, they would pass in a landslide.

    Lawyers will always be at the center of our justice system. I personally love our lawyers! But the promise of equal justice under the law is too big for lawyers alone. The only way we’ll ever have equal justice is if we allow other professionals, nonprofits, and private companies to take on the challenge, led by lawyers, and to do it in a responsible, accountable, and safe way. That’s the purpose of Alternative Business Structures and Limited License Legal Practitioners.

    Best,
    Rohan Pavuluri
    Upsolve, CEO
    National Center for Access to Justice
    New Member
    Posts:1 New Member

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    30 Mar 2020 10:58 AM
    National Center for Access to Justice
    150 W 62nd St, Suite 7-165
    New York, NY 10023
    (646) 636-6997
    calbinlackey@fordham.edu

    Comment on Petition to Restyle and Amend Supreme Court Rule 31; Adopt New Rule 33.1; and Amend Rules 32, 41, 42 (Various ERs from 1.0 to 5.7), 46-51, 54-58, 60, and 75-76


    The National Center for Access to Justice (www.ncforaj.org) is an independent, non-profit organization housed at Fordham Law School. We define “access to justice” as the meaningful opportunity to be heard, secure one’s rights and obtain the law’s protection. Using research, data and analysis, we identify ways the justice system fails to stand up for that ideal, and we support the most promising policy solutions.

    We write to express our strong support for the Task Force on the Delivery of Legal Services’ proposal that Arizona move forward toward creating a new, authorized class of Limited Licensed Legal Practitioners (LLLPs). We believe that this model of non-lawyer service delivery should be taken up in all states as a key component of the broader efforts that are necessary to increase access to legal services. Careful deliberation will be needed when defining the areas of practice that will be open to LLLPs, and the specific qualifications necessary to obtain a LLLP license in Arizona. The rule changes currently under consideration would establish the basic infrastructure necessary to allow consideration of the model to move forward.

    NCAJ takes no position at this time on the proposal to eliminate rule 31 or on the larger question of whether to permit non-lawyer ownership of or investment in law practices.

    In modern life, “the law is all over.” The law mediates people’s interactions with government, corporations, and each other. The Task Force’s report summarizes the literature establishing that access to legal services, whether from the private bar or the legal aid community, is beyond the reach of millions of Americans. Lawyers alone could never meet the tremendous scale of unmet need. It is intolerable that existing rules so broadly prohibit others—no matter how well equipped, and no matter how pressing the need—from stepping into the breach.

    In 2019, when California invited public comment on proposals for licensing non-lawyer providers, we read and analyzed hundreds of lawyers’ comments, most of them opposing the idea (we have not seen any non-lawyers oppose the proposed reforms in either state). In both California and Arizona, there have been three main lines of argument made against the licensing of non-lawyer providers. None are backed by any sort of evidence or data, and all are unpersuasive.

    First, opponents argue that an LLLP model will lead to dangerously incompetent legal assistance. Although this is an important concern, no empirical evidence establishes that a JD degree is essential to provide competent assistance with all legal problems. In Washington, the only state with a longstanding limited license practitioner program, there is no evidence of incompetence or unethical behavior by LLLTs. An LLLP program would not dispense with rigorous training but would tailor it to specific, urgent and relatively uncomplicated forms of legal assistance in defined areas of law.

    Second, opponents argue that a LLLP model will be ineffective as a response to unmet legal need. Somewhat ironically, many of these opponents point to Washington State, whose pioneering Limited License Legal Technician (LLLT) program has attracted fewer than 50 active practitioners. However, the LLLT program’s growth appears to have been curtailed because of its extremely burdensome licensing requirements— framed in part to assuage lawyers’ concerns about the competence of non-lawyer practitioners. The LLLT program’s requirements put a license beyond reach for many, and limit the prospects for low-cost or not for profit models of LLLT service delivery. The lesson, though, is that Arizona should take care to impose credentialing requirements that are truly necessary to LLLPs’ work.

    Third, some lawyers argue that the creation of an LLLP program will expose them to harmful economic competition. We agree with the Task Force that there is absolutely no evidence of this in either Washington or Utah—the only two states that have already adopted similar programs. We also believe that this view, insofar as it elevates concerns about lawyers’ incomes over concerns of people who are certain to be harmed because they are denied access to the courts, is irrelevant. The law does not belong to lawyers, and the ability of ordinary people to access legal help is a far weightier policy goal than the economic interests of the legal profession.

    An LLLP program would not “solve” the justice gap in Arizona. It represents one modest and essential step towards building the larger, multi-layered policy approach states need if they want to address the access to justice crisis. Some comments in response to the present petition argue that instead of embracing an LLLP program, the state should make its laws and its courts less mystifying and more accessible to ordinary people. Additionally, a growing movement urges (as the law in Arizona has already begun to recognize) the importance of providing a right to counsel in civil matters implicating people’s basic life needs. But there is no tension between these ideas and approaches—they are each core components of a larger reform agenda.

    Arizona need not look far to find an inspiring example of the kind of potential the LLLP program hopes to tap into. The state’s own pilot Licensed Legal Advocate (LLA) program is training and empowering advocates who already work with victims of domestic violence to provide legal advice. The program is an excellent example of how states can authorize, train and empower appropriately qualified non-lawyers to address people’s urgent, unmet legal needs. Plans to carefully evaluate the LLA program’s impact will allow states across the country to draw lessons from it as well.


    Carrie Ann Donnell
    New Member
    Posts:1 New Member

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    30 Mar 2020 11:40 AM
    Many members oppose the proposed rule changes because they fear personal financial loss. Their fears are theoretically logical, factually unfounded (according to the report of the task force), and deeply offensive. Theoretically, even if not factually, allowing alternative business structures in the legal profession and opening up certain legal services to nonlawyers could cause some customers to take their legal matters away from traditional (and expensive) lawyers, and instead to newly allowed business models and providers that offer better value. A great many more customers who could never afford legal services from traditional lawyers will theoretically AND in fact be availed of the opportunity to benefit from some legal assistance. Greater access to justice, even by a marginal amount, is certainly worth the sacrifice of inflated profits for traditional lawyers. According to the comments here, some lawyers expect the Arizona State Bar to "serve" its members by working to continue limiting potential competitors and excluding structures that might result in a better value for consumers of legal services. But economic protectionism has no place in the Arizona legal profession. Lawyers have no right to exclude potential competitors from their practice.

    As licensed professionals, we would all like to believe that we are uniquely qualified to serve our clients (after all, we acquired the skills we have today because we successfully endured a lengthy, costly, and intense experience -- completing years of academic study, scoring high enough on a multiday exam, and surviving an in-depth character assessment). Many of us would be wrong. Often, we are not, in fact, uniquely qualified to provide all of the legal services we offer. If we are honest, we can identify plenty of paralegals, legal assistants, exceptionally bright babysitters, and others nonlawyers who, with proper training far short of a law license, could easily exceed the level of service currently offered by some licensed attorneys. Those nonlawyers should be permitted to offer affordable options to the public.

    Likewise, nonlawyers should have the opportunity to participate in the legal profession at the structural level. As others have emphasized, the ethical rules will continue to impose weighty responsibilities on attorneys, who already routinely suppress their interests in profit-sharing, bonuses, billable hours, and other incentives in order to successfully fulfill their duty to their clients. Members who oppose the new rule changes because they are concerned about successfully navigating the ethical implications, need not join in them. They should not, however, presume their colleagues are as easily swayed. The rules should be swiftly changed to reflect the task force's recommendations.

    Carrie Ann Donnell
    President & CEO
    American Juris Link
    7000 N 16th St. Suite 120-155,
    Phoenix AZ 85020
    cdonnell@americanjurislink.org
    Responsive Law
    New Member
    Posts:2 New Member

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    30 Mar 2020 12:17 PM
    Tom Gordon
    Responsive Law
    1380 Monroe St, NW, #210
    Washington, DC 20010
    202-649-0399
    tom@responsivelaw.org


    We have attached Responsive Law's comments in support of the petition.
    Attachments
    Melissa
    New Member
    Posts:1 New Member

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    30 Mar 2020 01:07 PM
    Melissa Spiller-Shiner
    State Bar # 028975
    320 N. Commerce Park Loop, #100
    Tucson, AZ 85745
    520-276-3398

    This comment is submitted to respectfully oppose the petition to terminate ER 5.4 ad create a new category of nonlawyer legal service provider. Based on my decade of experience delivering legal services to the low-income population in Pima County – the exact population this petition proposes to assist – I believe that the changes will have a substantial negative impact on our vulnerable neighbors.

    As outlined, this proposal would create a class structure in the Arizona legal system. People with means get lawyers. People without means get less than. Less than a lawyer. Less than the knowledge gained from acquiring a law degree and the expertise that comes with the subsequent practice of law. Less than the standard to which we as lawyers should all hold ourselves.

    I’ve seen – and have had to try and reverse – the damage that a paraprofessional can cause in a self-represented litigant’s case. The people who most often use these services are desperate for assistance, turning to anyone who might help them navigate our complex legal system. The client pays the paraprofessional, who then drafts deficient legal documents such as petitions for dissolution or final decrees that cause a person to lose rights. In family law, this could be rights to the client’s children, or financial rights that come from properly calculated child support or a correctly prepared Qualified Domestic Relations Order. In minor guardianship cases, improperly completed documents can cause a proposed guardian to lose valuable time – disrupting their ability to enroll a child in school, or – for a sick child – get the child to the doctor on time. For a debtor facing a collections lawsuit, a deficient response could cause the debtor to be garnished in higher amounts than if a lawyer were able to advise them about garnishment and exempt property.

    The proposal for an LLLP suggests that that this potential treatment is okay for people who can’t otherwise afford a lawyer. And, that at least low-income people will receive something, even if it’s not at the same level of expertise as someone who may be able to retain a lawyer.

    Perhaps we could focus on innovative ways to make it easier for private practitioners to volunteer their time to fill the justice gap. There are many qualified legal services organizations in Arizona that need their help! These organizations depend on volunteer attorneys to serve low-income clients who have legal needs. Perhaps the legal community could funnel time, energy, and resources to bolster qualified legal service organizations, so that we’re able to recruit and manage more private bar involvement? The State Bar is taking steps to engage additional volunteer lawyers – such as retired and inactive lawyers – but there is more we can do as a profession that does not include reducing the standards of practice.

    Finally, for bar membership to properly consider and evaluate the proposed rule change, more information is needed. Specifically, how were the credentials for LLLP licensing determined? And, was this process for determining credentials transparent to the bar as a whole? What research was conducted to show that the suggested number of training hours would ensure the proper limited practice of law? Who will be responsible for any malpractice committed by the LLLP’s? Will the LLLP’s be required to obtain malpractice insurance? If carriers won’t cover them (because they are not licensed attorneys), where does that leave the general public? Who will oversee the discipline, when necessary, of the LLLP’s?

    We need to hold ourselves to a higher standard. Therefore, I oppose the current petition to terminate ER 5.4 and create a new category of nonlawyer legal service provider.
    IAALS
    New Member
    Posts:1 New Member

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    30 Mar 2020 02:54 PM
    Scott Bales, Bar. No. 010147
    scott.bales@du.edu
    (303) 871-6600
    Zachariah J. DeMeola
    zdemeola@du.edu
    (303) 871-6611
    IAALS
    John Moye Hall
    2060 South Gaylord Way
    Denver, Colorado 80208



    ARIZONA SUPREME COURT

    In the matter of: )
    )
    RESTYLE AND AMEND RULE 31; ) Supreme Court No. R-20-0034
    ADOPT NEW RULE 33.1; AMEND )
    RULES 32, 41, 42 (VARIOUS ERs FROM ) COMMENT
    1.0 TO 5.7), 46-51, 54-58 AND 75-76 )
    ____________________________________)

    We write on behalf of IAALS, the Institute for the Advancement of the American Legal System at the University of Denver, in support of the Petition to Amend Rules 31, 32, 41, (ERs 1.0-5.7, 46-51, 54-58, 60, 75 and 76, Ariz. R. Sup. Ct., and Adopt New Rule 33.1, Ariz. R. Sup. Ct. (the “Petition”). We urge the Arizona Supreme Court to eliminate Ethical Rule 5.4 and adopt the framework proposed in the Petition for regulating alternative business structures (ABSs). Doing so will facilitate the development of new, innovative business and service offerings, permit outside investment and/or multi-professional business models, and expand Arizona attorneys’ ability to offer legal services to their clients. Such a change could benefit the bottom line for Arizona attorneys and their firms, in addition to potentially expanding the reach of legal services to accommodate many unmet needs.

    A Consequential Rule Unsupported by Evidence

    Arizona Ethical Rule 5.4, identical to ABA Model Rule of Professional Conduct 5.4, ostensibly exists to preserve lawyers’ independent judgment, but it does very little to offer such protection. Many other rules already protect a lawyer’s independence in exercising professional judgment on a client’s behalf and free from control of others—a bedrock of any attorney’s ethical obligations. Instead, Rule 5.4 principally exists only to constrain business practices. Most of Rule 5.4’s provisions are not directed toward ethical behavior at all, but instead are economic rules that dictate how lawyers are allowed to structure their business with other lawyers and allied professionals.

    The rule prohibits lawyers from sharing legal fees with other others, prohibits others from having any financial interest in law firms, and prohibits lawyers from forming partnerships with anyone other than a lawyer if any of the partnership’s activities consist of the practice of law. These business practices are linked to independent professional judgment by the thinnest of unsupported assumptions. In fact, IAALS has not identified any evidence that these business practices inherently compromise the independent judgment of lawyers, and certainly not in any way that requires their categorical prohibition. And when the rule was originally drafted, there was no evidence that the corporations then supplying lawyers to clients were harming the public. Today, lawyers currently work within corporations, insurance companies, and accounting firms and have been doing so for years. There is no evidence that this arrangement destroys these attorneys’ independent judgment. Absent the need for Rule 5.4 to protect the independent judgment of a lawyer—protection amply afforded elsewhere in the rules—the lack of any real evidence behind Rule 5.4 is alarming, given that the rule’s economic restrictions have had severe consequences for lawyers and for people in need of legal services.

    Rule 5.4’s Detrimental Effects on Attorneys

    For example, the Rule has condemned law firms to systemic inefficiency. Lawyers are not allowed to bring in business partners with expertise in business, marketing, or technology. Instead, many lawyers spend much (if not most) of their day-to-day time on administrative tasks and work related to marketing and earning new clients. One report suggests that some solo and small firm practitioners earn just 1.6 hours in billable work per day, after factoring in the number of billable hours that never make it to an invoice and the amounts forfeited by unpaid bills. This restriction puts lawyers in the unenviable position of having to run a business with structural impediments to making services more efficient—a detriment unique to the legal profession.

    To make matters worse, lawyers’ ability to innovate or scale the services they provide is hampered by Rule 5.4’s prohibition on taking capital investments from sources outside lawyer partnerships. And because Rule 5.4 restricts lawyers to organizing legal services in sole proprietorships, legal partnerships, or LLCs, money paid for services is received as fees and profits are distributed to partners/owners at the end of the fiscal year, offering little in the way of incentive to forego distributions and invest in technology or other long-term solutions to better serve clients. In fact, while nearly every other industry is taking advantage of new technology, multi-disciplinary collaboration, and the ability to leverage to scale services, lawyers remain woefully behind.

    Handicapped by structural inefficiency and unable to leverage modern tools for growth, lawyers are at a severe disadvantage to competitors in an economy characterized by technologically adept consumers expecting solutions to be readily available and accessible. According to the 2019 Altman Weil Law Firms in Transition study, 63 percent of attorneys indicated their firms were losing business to corporate law departments and 14 percent reported losing business to alternative legal providers. And unregulated companies such as LegalZoom or Rocket Lawyer have the ability to scale in a way lawyers do not.

    Rule 5.4’s Detrimental Effects on Consumers

    The movement toward regulatory reform of the legal profession, a movement now reaching across multiple states, is driven not only by the need for a more sustainable model of practice for lawyers, but also the recognition that the American legal system faces a crisis in terms of public dissatisfaction and disengagement. The inefficiency of Rule 5.4’s economic regulations has significantly contributed to an environment where lawyers must charge fees that most people in the United States simply cannot afford.

    The United States ranks 99th out of 126 countries for accessibility to legal services, and the problem reaches far up the income scale. It is not only the poorest who lack access to legal services, it is also the middle class and small businesses. According to the ABA, in some jurisdictions over 80 percent of the civil legal needs of lower- to middle-income individuals are unmet. People want legal help, and they are not getting the help they need. When this reality collides with our ideal of “equality under the law” the sustainability of the legal system is threatened.

    Whether by choice or by circumstance, the American public is increasingly turning away from the legal system. Americans seek lawyers for help or consider doing so for only 16 percent of the civil justice situations they encounter, and 76 percent of cases in state courts involve at least one self-represented party. In his study on the legal services landscape, Professor William Henderson noted that “As society becomes wealthier through better and cheaper good and services, human-intensive fields such as law, medical care, and higher education become relatively more expensive,” but “[i]n contrast to medical care and higher education, however, a growing proportion of U.S. consumers are choosing to forgo legal services rather than pay a higher price.”

    What do these statistics actually mean? They mean that many people face major challenges to their financial security, living security, and their physical and mental health without any assistance, and, consequently, they often suffer significant adverse impacts on their lives. Evidence shows us that those forced to deal with issues such as evictions, mortgage foreclosures, child custody disputes, child support proceedings, and debt collection cases without legal help face disproportionately adverse outcomes.

    Lawyers, through pro bono and legal aid services, have worked to close part of the justice gap. But the need is just too great. An attorney’s average hourly rate is approximately $250, much more than most people can afford or want to pay, whichever the case may be. Providing just one hour of attorney assistance to every household facing a legal problem would require over 200 hours of pro bono work per year by every lawyer in the country. The cost of providing legal help under our current rules is too expensive for lawyers to provide legal assistance at the scale needed to solve the problem. This is because our current rules require lawyers, and lawyers alone, to bear all the risk and all the responsibility of law practice.

    Emphasizing the point, ABA President Judy Perry Martinez recently stated, “We need new ideas. We are one-fifth into the 21st century, yet we continue to rely on 20th-century processes, procedures and regulations.” Under today’s regulatory system, in most jurisdictions, anyone other than a lawyer providing legal services would be seen as engaging in the unauthorized practice of law and can be subject to sanctions—even if those services were actually helping, not harming, consumers. Most jurisdictions prevent lawyers from sharing fees or ownership interest with any other professional. Eliminating Rule 5.4 and allowing outside investment and/or multi-professional business models would foster innovation in a sector deeply in need of innovative thinking and benefit a customer base that is deeply in need of legal services. Thus, access to legal services for consumers and sustainable practices for lawyers appear to be two sides of the same coin. As Professor Henderson writes, “We have entered a period where we are either going to redesign our legal institutions or they will fail.”

    Evidence Supporting the Elimination of Rule 5.4

    There is already strong public support for the rule changes proposed by the Petition. Over 60% of Arizonans surveyed agreed that the current requirement that restricts the ownership of any business that engages in the practice of law exclusively to lawyers should be eliminated. In addition to public support, there is also ample evidence to suggest that these changes could lead to more innovation in the delivery of legal services, more available services for those who need them, and better quality services in general.

    Unlike Rule 5.4, the changes proposed in the Petition are not based solely on assumption. Research from England and Wales on ABSs operating under the Solicitors Regulation Authority (SRA) suggests that overall innovation among legal services providers, including innovation that reduces the cost of delivery legal services, is higher than among traditional providers. ABSs are three times as likely to make use of technology compared to other providers. Specifically, ABSs are twice as likely as other providers to use any of the following ten emerging technologies: interactive websites, live chat or virtual assistants, cloud or similar data storage mechanisms, ID-checking tools, custom-built smart device apps, technology assisted review (TAR), automated document assembly (ADA), robotic process automation (RPA), predictive technology, and smart contracts/distributed ledger technology (DLT).

    The beneficial impacts of technology on the quality of services is widely recognized, and technology has also been shown to reduce the costs of legal services delivery. Along with ABS entities, larger organizations and newer providers operating under the SRA were also more likely to innovate in a way that would result in more efficiency (reduced costs/increased profitability).
    A 2016 review of the Law Society of England and Wales similarly illustrated that ABS firms were active in numerous, diverse areas, including residential conveyancing, personal injury, ADR/other litigation, corporate/commercial, and others. Thus, the evidence shows that by allowing attorneys to partner with other professionals, those attorneys are far more likely to create efficiencies that lead to better client service and a more sustainable practice overall—a change that would be welcome for many attorneys, particularly among the solo and small firm practitioners who make up the bulk of the legal profession.
    Increased innovation in England is also leading to more available services for people who need them.

    Indeed, U.S. Supreme Court Justice Neil Gorsuch addressed this issue recently in his book “A Republic, If You Can Keep It.” Citing data from an experiment analyzing ABSs six years after permitting multidisciplinary firms and non-lawyer investment in England and Wales, Justice Gorsuch writes:

    [W]hile these entities accounted for only 3 percent of all law firms, they had captured 20 percent of consumer and mental health work and nearly 33 percent of the personal injury market – suggesting that ABSs were indeed serving the needs of the poor and middle class, not just or even primarily the wealthy. Notably too, almost one-third of the ABSs were new participants in the legal services market, thus increasing supply and presumably decreasing price. ABSs also reached customers online at far greater rates than traditional firms – more than 90 percent of ABSs were found to possess an online presence versus roughly 50 percent of traditional firms, again suggesting an increased focus on reaching individual consumers. Given the success of this program, it’s no surprise that some U.S. Jurisdictions have appointed committees to study reforms just along these lines.

    Moreover, the Petition’s proposed amendments ensure that a new ABS model in Arizona will not come at the cost of ethical duties or quality of service. And in other countries where ABS entities have existed for years, there is no evidence that they cause any more consumer harm than traditional firms. In fact, in New South Wales, Australia, which has allowed nonlawyer ownership under a management-based regulatory approach since 2001, there has been no increase in complaints against lawyers. Importantly, in Australian business structures where lawyers and other professionals share fees or ownership, all other professionals working with lawyers are held to the same ethical standards as the lawyer. And in England, where the ABS model has existed since 2007, “[t]here have been no major disciplinary failings by ABS firms or unusual levels of complaints.” To the contrary, the quality of legal services in England has improved, as measured by the 12 percent increase in the number of “first tier” complaints being resolved, and new business models, including ABSs, have better and more responsive consumer complaint processes.

    IAALS Supports Adoption of the Petition’s Proposals

    The profession is facing declining business at a time when there is enormous demand for affordable legal services. This contradiction exists because lawyers are locked into a 19th century model for delivering legal services. Now, more than ever, with disruptions and restrictions in place due to the COVID-19 pandemic, is time for change.

    The crisis we face demands action. Our Unlocking Legal Regulation project is about taking a bold step towards laying the foundation for a consumer-centered regulatory system that will ensure access to a well-developed, high-quality, innovative, and competitive market for legal services. Our vision is a legal system that works for all people by being accessible, fair, reliable, efficient, and accountable: a system that earns trust, because a trusted and trustworthy legal system is essential to our democracy, our economy, and our freedom. That is why we support eliminating Rule 5.4, and we urge the Arizona Supreme Court to adopt the proposals outlined in the Petition.

    Sincerely,

    Scott Bales
    Executive Director

    Zachariah J. DeMeola
    Manager





    Attachments
    ACC Executive Director
    New Member
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    30 Mar 2020 03:02 PM

    Matthew J. Neubert, Executive Director
    Arizona Corporation Commission
    1200 West Washington St.
    Phoenix, AZ 85007
    Phone: 602-542-4250/602-542-3931
    Email: sharpring@azcc.gov; mjneubert@azcc.gov
    Bar No.: 009225


    March 30, 2020

    Arizona Supreme Court
    1501 West Washington, Fourth Floor
    Phoenix, Arizona 85007

    Re: Petition No. R-20-0034

    Chief Justice Brutinel, Vice Chief Justice Timmer, and Justices Bolick, Gould, Lopez, Beene, and Montgomery:

    The Arizona Corporation Commission (“Commission”) submits these comments for the Court’s consideration in determining whether to adopt the changes to Arizona Supreme Court Rule 31 (“Rule 31”) included in Petition No. R-20-0034.

    Many parties who appear before the Commission use lay representation as permitted under Rule 31(d)(28), which allows a public service corporation, an interim operator appointed by the Commission, or a non-profit organization (collectively “organization”) to be represented by a corporate officer, employee, or member who is not an active member of the state bar under the following circumstances: (a) the organization must have specifically authorized the representation, (b) the representation must not be the representative’s primary duty to the organization, and (c) the representative must not receive separate or additional compensation (beyond reimbursement of costs) for the representation. Rule 31(d)(28) further allows the Commission or presiding officer to require counsel in lieu of lay representation if it determines that the lay representation is interfering with the orderly progress of the proceeding, imposing undue burdens on other parties, or causing harm to the represented organization.

    The Commission is also mentioned by name in Rule 31(d)(13), although it has relied upon that provision only to allow for lay representation in Commission securities cases, to which Rule 31(d)(28) generally does not apply. The Commission finds the current language of Rule 31(d)(13) to be unclear in that inclusion of the Commission in the first sentence of Rule 31(d)(13) is unnecessary, because the Commission has no involvement in tax-related proceedings, and the second sentence of Rule 31(d)(13) is a very broad exception that appears to have no relationship to the first sentence. Additionally, the Commission has received inconsistent opinions from Arizona State Bar UPL attorneys over the years when inquiring as to the meaning of Rule 31(d)(13).

    The Commission conceptually supports broadening the exception currently afforded by Rule 31(d)(28), as the proposed Rule 31.3(c)(5) would do, but requests that the following revisions be made to the language of the proposed Rule 31.3(c)(1), (c)(5), and (c)(6):
    • In Rule 31.3(c)(1), the definition of “legal entity” should be revised to include federal, state, county, municipal, and tribal governmental entities. It is not uncommon for a federal government entity or a tribal entity to desire representation by an individual licensed as an attorney in another jurisdiction. Additionally, small municipal entities may prefer to rely on lay employees for representation rather than outside counsel for budgetary reasons.
    • In Rule 31.3(c)(5), a comma should be inserted between “administrative agency” and “commission,” to distinguish between them.
    • In Rule 31.3(c)(5)(A), the “full-time” requirement should be deleted. A number of smaller utilities primarily use part-time employees in their operations. Additionally, an individual’s status as “full-time” with a legal entity does not necessarily correlate with an enhanced ability to represent the legal entity effectively in a hearing or other administrative proceeding.
    • In Rule 31.3(c)(6), an additional situation under which counsel may be required should be added—when lay representation is causing harm to the legal entity so represented. The Commission believes that this is what the current Rule 31(d)(28) language “or causing harm to the parties represented” was intended to address. The Commission suggests replacing “or” in the last line of proposed Rule 31.3(c)(6) with a comma and inserting the following after “parties”: “, or causing harm to the entity.”

    Additionally, the Commission requests that “the Arizona Corporation Commission” be removed from proposed Rule 31.3(d)(5), as the Commission is not involved in tax-related proceedings, and its inclusion there invites confusion.

    Finally, for the reasons set forth below, the Commission requests that the following revisions be made in Rule 31.3(c) to allow for the preparation and filing of technical or financial documents by qualified non-attorneys:
    1. Add the following language as a new subsection (c)(6) in proposed Rule 31.3:
    "(6) Arizona Corporation Commission.
    (A) A person may represent a legal entity in a proceeding before the Arizona Corporation Commission (“Commission”) if the representation complies with subsection (c)(5).

    (B) A person with expertise in the field of public utility regulatory compliance, public utility accounting or finance, public utility engineering, railroad engineering or safety, or pipeline engineering or safety may, on behalf of a legal entity regulated by the Commission:
    (i) Prepare for filing with the Arizona Corporation Commission or submission to a Commission Division a tariff, rate schedule, engineering report, or other technical or financial document within the person’s field of expertise; and
    (ii) File in a Commission docket, or submit to a Commission Division, the tariff, rate schedule, engineering report, or other technical or financial document prepared as permitted under subsection (c)(6)(B)(i)."

    2. Renumber the existing subsection (c)(6) in proposed Rule 31.3 to (c)(7).

    Utilities and other legal entities regulated by the Commission are often required to file with the Commission technical or financial documents, such as tariffs, rate schedules, or engineering reports. Regulated entities also may be required to submit such technical or financial documents to a Commission Division directly. It is common for these technical or financial documents to be prepared by hired consultants rather than attorneys or the personnel of the regulated entities. In the case of utilities, this is true largely because public utility operation and regulation is a complex and niche field, and it can be difficult for utility personnel to develop the level of regulatory expertise that experienced consultants have acquired. For smaller utilities, of which there are hundreds in Arizona, the training necessary to develop such expertise generally is cost prohibitive, as is hiring an attorney. For out-of-state competitive telecommunications utilities, which commonly operate throughout the United States, it is often most efficient to have one consulting company oversee regulatory compliance for all operations. Also, and importantly, the education, training, and experience of most attorneys does not impart the knowledge and expertise necessary to prepare such technical or financial documents.

    Nevertheless, because such a technical or financial document is prepared on behalf of a specific entity for filing with an administrative agency and could be a document intended to affect or secure the utility’s legal rights (e.g., a tariff may confer the right to impose certain requirements on customers or to receive recovery through rates for certain capital expenditures), the preparation of the document by a non-attorney consultant appears to constitute the unauthorized practice of law (“UPL”) under the current Rule 31(b)(3) and (5). Likewise, under the current Rule 31(b)(2), the act of filing such a document in a Commission docket or submitting such a document to a Commission division can be viewed as representing the utility in an administrative proceeding and thus UPL.

    The Commission believes that it would be beneficial to the regulated entities and the public interest to facilitate regulated entities’ use of experienced non-attorneys, including consultants, for the preparation and filing of technical or financial documents. The Commission further believes that the cost savings to affected utilities (from not being required to hire attorneys) would flow-through to the customers of those affected utilities in rates.

    Sincerely,


    Matthew J. Neubert
    Executive Director

    CC: Jane Rodda, Hearing Division Director
    Robin Mitchell, Legal Division Director
    Mark Dinell, Securities Division Director


    Jayne Reardon
    New Member
    Posts:1 New Member

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    30 Mar 2020 03:15 PM
    Jayne Reardon
    Two Prudential Plaza Suite 1950
    180 N. Stetson Avenue Chicago, IL 60601
    312-363-6210

    My name is Jayne Reardon. I am the Executive Director of the Illinois Supreme Court Commission on Professionalism, a member of the Chicago Bar Association-Chicago Bar Foundation Task Force on Access to Justice & Innovation, and a member of the Association of Professional Responsibility Lawyers Future of Lawyering Committee. I am a past member (2012-2015) and chair (2015-2018) of the ABA’s Standing Committee on Professionalism.

    I appreciate the opportunity to comment on R-20-0034. I have written and presented on these issues extensively. These comments are mine personally and do not necessarily reflect the viewpoint of any organization with which I am affiliated.

    I support and applaud the work of the Arizona Task Force in proposing regulatory changes to address the access to justice gap in America and the considerable stressors on lawyers. The evidence that a significant portion of Americans have legal needs that are unmet is indisputable. The evidence that lawyers, also, are generally failing to thrive under the current system is also compelling. As a self-regulated profession, action to address both situations, perhaps two sides of the same coin, is long overdue.

    For the reasons explained in my article, Alternative Business Structures: Good for the Public, Good for the Lawyers, St. Mary’s Journal on Legal Malpractice & Ethics, Vol. 7, Number 2 (2017), I am a proponent of regulatory changes, including adopting regulations directed to those who are not licensed lawyers but who are nonetheless delivering legal services. I ask you to consider the arguments in my article, including that Rule 5.4’s prescriptions about how lawyers can organize their business structures and proscriptions against fee sharing with those who are not lawyers are neither necessary nor sufficient to preserve the professional independence of a lawyer (as the title of the rule connotes).

    I would like to add three other points: 1) law as a profession is not defined by Rule 5.4; 2) because we are a self-regulating profession, we have an obligation to amend/create new regulations when warranted; and 3) the time for leadership is now.

    1) Rule 5.4 does not Render Law a Profession (Rather than a Business).
    In comments to the Arizona proposals, many lawyers react negatively to the proposal that Rule 5.4 be eliminated on the grounds that sharing fees, or business structures, with individuals who are not lawyers would undermine our profession and a lawyer’s independent professional judgment. I am not that cynical. There is no evidence that working alongside other professionals in delivering legal services would cause lawyers to lose their ethical backbones. Nor is there evidence that other professionals in a business entity with lawyers would have no ethics or would seek to undermine lawyers’ independent professional judgment.
    Rule 5.4 notwithstanding, lawyers currently must navigate situations in which there may be challenges to their independent judgment, such as where their fees are paid by a third-party insurer. We have many other rules addressing conflicts of interest, and the Arizona proposals properly seek to strengthen other rules as some are eliminated.
    Our status as a profession, or the extent of our professionalism, is not defined by whether we have any single rule of conduct, especially one like 5.4 which in large part can be characterized as an economic (not ethical) rule governing who lawyers may practice alongside or with whom they may share fees. Our profession has a comprehensive code governing ethical behavior, and this fact, along with other factors such as specialized training, makes us a profession.
    The Preamble to the Rules of Professional Conduct has much more to say about professionalism than the compliance-oriented rules. The Preamble reminds us that “a lawyer should seek improvement of the law, access to the legal system, the administration of justice and the quality of service rendered by the legal profession.” [6] These are important core values that set lawyers apart from other individuals who may be providing legal information or services.

    2) We have an Obligation to Amend/Create Regulations when Warranted.
    If we are of the mind that current regulations may be undermining “access to the legal system, the administration of justice, or the quality of service rendered by the legal profession” (Preamble [6]), then we have an obligation to change the regulations. We have done so in other contexts.
    Over the past several years, most state supreme courts have recognized that in the modern world, the quality of the service rendered by the legal profession must include some understanding of technology. 38 states now have adopted a version of comment 8 to Rule of Professional Conduct 1.1 stating that to provide competent representation to a client, a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology.
    Over a similar time, most jurisdictions have adopted the Uniform Bar Exam. In adopting the UBE, state supreme courts consistently cited the rationale that the legal field continues to evolve such that multi-jurisdictional or cross-border practice is common and the UBE provides a “portable score” that lawyers can use to apply for admission in other UBE jurisdictions. The state supreme courts should be lauded for recognizing that the UBE is a national standard that both protects the public and allows cross-border practice that effectively serves the public.
    Regulations should both protect the public and serve the public. Current Rule 5.4 does neither (at least well) for the reasons articulated in the Arizona Task Force Report. I highlight:
    • We live in a world that is increasingly complex in terms of laws and regulations, yet more and more people are shut out from accessing the legal system, and our current lawyers are scrambling both to remain competent and to find clients.
    • Investment in legal tech is skyrocketing. 2018 saw a 713% investment growth to over $1Billion and 2019 marked even higher investment levels.
    • Most of the investment is going to legal tech companies to improve efficiencies in law firms and corporate legal departments rather than the delivery of legal services. Evolve the Law published a directory of US Legal Tech businesses and 58 targeted Big Law and only 5 were consumer-facing. Most firms report regulatory and legislative hurdles as the most significant barriers to innovation.

    It is clear to me that our profession labors under a regulatory structure that is likely contributing to the profession’s inability to effectuate its core mission: to provide legal services to members of the public. Under the circumstances, it is our responsibility as a self-regulated profession to take bold but measured action to attempt to correct these problems.

    3) The Time for Leadership is Now.
    In terms of timing, some assert that the Arizona Supreme Court should not be one of the first states to adopt major legal regulatory reform. They may ask the Court to step away from leadership and wait for other states to act, especially due to the uncertainties of the pandemic.
    Now is not the time to abandon the courage of your convictions. We already can see serious effects of the pandemic on our citizens, courts, laws and constitutional framework. The crisis lays bare the deficiencies that have been present for too long. Circumstances call lawyers and judges to ever more strongly adhere to the pledge we made to uphold the Constitution and to discharge our duties to the best of our abilities.
    Thank you for all you are doing to advance professionalism.

    Responsive Law
    New Member
    Posts:2 New Member

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    30 Mar 2020 04:10 PM
    Tom Gordon
    Executive Director
    Responsive Law
    1380 Monroe St, NW, #210
    Washington, DC 20010
    (202) 649-0399
    tom@responsivelaw.org

    I have attached Responsive Law's comments in support of the Petition.
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    BSELLERS
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    30 Mar 2020 04:29 PM
    Charles Sellers
    4854 East Baseline Road, Suite 104
    480.833.1001
    csellers@hoalaw.biz
    026368

    Opposition to Petition R-20-0034

    I am strongly opposed to the adoption of Petition R-20-0034. The Task Force identified the growing “justice gap” as the impetus behind the proposed petition to change the ethical rules. According to the Task Force, the changes proposed by Petition R-20-0034 are intended to address the the legal needs of those “living in poverty, and the majority of moderate-income individuals”, which are not being met as the costs to obtain legal services continue to rise. I agree that the Task Force identified a problem that needs to be solved, but I strongly dispute that the proposed changes to the Rules will actually address the problem. While I support efforts to find ways to make legal services available to low-income individuals as well as those in poverty, the proposed Petition R-20-0034 will not be effective in accomplishing that goal. Indeed, the rule change may actually result in increased costs to the public for legal services by adding another layer of bureaucracy that must be supported by increased fees and pressure to provide unnecessary services. This change would also reduce the protections afforded to the public, such as a lawyer’s adherence to ethical rules and maintaining malpractice insurance, to which non-lawyers are not subject.

    The Task Force explained that small firm lawyers who have historically served the “PeopleLaw sector” and bridged the current “justice gap” currently find themselves unable to make an adequate living. The Task Force explained that Professor William D. Henderson from Indiana University “suggests that this lagging legal productivity may result in part from ethical rules that restrict ownership of law forms to lawyers because ‘ethics rules are the primary mechanism for regulating the market for legal services’.” However, to speak frankly, a suggestion from a paper written by a law professor setting forth a hypothesis that “may” have an impact on “lagging legal productivity” is not a solid foundation on which to make sweeping, unprecedented changes to the ethical rules.

    I could find nothing in the Task Force’s Report and Recommendation that provided reliable evidence to support the proposition that allowing non-lawyers to own law firms will bridge the justice gap and allow low-income and poverty stricken individuals to obtain legal services. Rather, the question remains as to whether non-lawyer business men and women will have any better success in providing legal services to those who cannot pay for them, even at a reduced rate. Additionally, there is no support for the Task Force’s recommendation that LLLPs will actually be able to fill the Justice Gap.

    An example of where such a system has failed in the professional context is in dentistry. The March 27, 2020 Arizona Attorney Daily 5 links to a USA Today article (https://www.usatoday.com/in-depth/n...36783002/) about a large dental chain backed by a Swiss owned private equity firm. The article states that the dental chain is part of a trend of dental offices being purchased by “private equity firms and turned into revenue-generating machines”. Unlike dentists that seek profitability, the private equity firms, the article states, subject the companies with “heavy debt at junk-bond-caliber interest rates”. Instead of doing what is best for the patient, as determined by the Dentist, there is pressure to perform unnecessary and excessive dental work to increase the profits to cover the overhead of the non-dentist private equity owners. Instead of lowering the cost of dental services, non-dentist ownership has resulted in the opposite. Why would the Supreme Court want to subject lawyers and their clients to a similar scheme?

    Further, while there remain significant questions as to whether the proposed amendments to the Ethical Rules will have any affect on access to justice by indigent and low-income individuals, the impact the amendment will have on lawyers’ ability to maintain adequate income and provide for their families is likely much more quantifiable. These proposed changes could potentially force small to mid-size firms out of business. According to the Task Force’s Report and Recommendations, small firms are already struggling to stay in business because the PeopleLaw sector cannot pay for legal services. Rather than changing the Ethical Rules to bring in additional competition (the LLLPs) to the small and mid-sized firms that are already struggling, the better approach would be to research how to help small to mid-sized firms better reach those who need legal assistance.

    In addition to the foregoing, our State is grappling with the effects of the COVID-19 Pandemic that has negatively affected the economy in significant ways. With the impending recession caused by COVID-19, the likelihood that attorneys will be out of work is high. Right now is not the time to pass sweeping changes that could compound the problem of lawyers out of work.

    A few years ago, the niche industry I work in witnessed first-hand the effects of a non-legal corporate entity that attempted to enter the legal field in the civil litigation practice arena where I practice. The non-legal corporation hired a young, unsuspecting attorney, offered a generous salary and promised an unending supply of legal work. The non-legal corporation then funneled all legal work for its many clients to its attorney employee. The end result was that the young attorney billed at the marked rate with no discount to the clients of the non-legal corporation, had no mentorship, and provided reduced-quality services. Additionally, the young attorney made only the offered salary while all the profits for the attorneys’ work were taken by the non-legal corporation. Once other attorneys in the industry realized what was going on, the State Bar was contacted and the operation was shut down. As I have seen it attempted already, this will be the most likely result of allowing non-legal corporations to own law firms. The indigent and low-income members of society will continue to have their legal needs unmet, while the profits that formerly provided motivation for attorneys to work hard and provide quality legal work will be eroded, while those attorneys struggling to work in the Justice Gap will be forced out of business.

    As such, I strongly object to Petition R-20-0034.
    YCBA
    New Member
    Posts:1 New Member

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    30 Mar 2020 04:33 PM
    On behalf of the members of the Yavapai County Bar Association, the association provides the following comments:

    1. I am strongly opposed. I have a son who is a small animal surgeon. He belongs to a clinic that has several Vets. They were bought out by venture capitalists and, while he made money on the sale, he says it was the worst mistake he has ever made. He now has non doctors telling him how to practice. This is exactly what will happen in the law. We should not be fooled thinking this might help offer legal services to the poor and near poor. Trauma surgeons will link up with PI lawyers. Non lawyers will have a say in the running of the office and it will all be about the bottom line.

    2. I am concerned with the current proposal that "non-attorney" practitioners be permitted to practice law, or be participating members in law firms. My personal experience has been negative, in that clients I have had who have worked with document preparers have come with a host of troubles, inconsistencies and liabilities that hey could have avoided.

    Many of the comments that I have heard attempt to liken the "attorney light" position with the medical field's allowing nurse practitioners to practice medicine in limited capacities. However, the fields vary enough that this is not a valid similarity. When we, as licensed attorneys train we take a host of coursework. Constitutional law, criminal law, contracts, torts - all before we can even sit to test to become licensed. Each state in turn has its own specific examination for state-specific laws and peculiarities. When we undertake to represent a client, each and every one of those areas of practice have to come into play to assist that client in understanding the full effect - and potential ramifications - of their actions. We have to rely on our education and training to assist that client in making not just a voluntary, but a knowing decision. That intensive coursework takes years to accomplish - not weeks or months. A prime example of the effect of this is with a review of the levels of specialization and the fact that a Family Law Specialization Certification is so difficult to achieve.

    Most certified document preparers and paralegals simply do not have that level of training. Many of the aforementioned are primarily trained in one specific area, and often simply process a certain "form set". While the main focus appears of this proposed rule is in family law, the concerns do cross between disciplines. Few, if any, have been trained in the emotional, physiological and/or psychological effects of the actions that a client must take. Even under the guidance of a licensed attorney, there should still be limits to matters to which a "lawyer light" could or should be assigned.

    I, like many in the practice believe that if such a person should be allowed to "practice law", that position should be permitted to appear in court to represent a client in procedural motions, but not substantive ones. That only under the direct guidance of a licensed attorney, participate in representation in settlement and pre-trial conferences. That they may continue to prepare documents including motions and discovery requests, but that the supervising attorney's signature must also be on the pleading. There should also be a limitation of liability for supervising attorneys. Perhaps most importantly, such "direct representation" should be permitted only after the applicant has had a number of years working under the direct supervision of a licensed attorney, and then only after passing some form of examination. In light of the fact that they will not have the training and education of a practicing attorney, that they be permitted to test in one legal discipline for which they have received such training (i.e. - Family Law, Personal Injury, Commercial Law, etc.).

    I personally believe a simpler manner of addressing the issue is to require licensed attorneys to provide a mandatory level of pro-bono representation. Perhaps for the purpose of training, have the "attorney light" position be assigned to these matters under the direct supervision of a licensed attorney. If the concern is easy and equal access to representation, requiring us to "give back" is truly the best manner to address this situation.

    Sincerely,
    Yavapai County Bar Association
    P.O. Box 11679
    Prescott, AZ 86303
    yavbarinfo@gmail.com
    EdwardGRenner
    New Member
    Posts:1 New Member

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    30 Mar 2020 04:42 PM

    Colleen Reppen Shiel
    Vice President, Deputy General Counsel FN1

    March 30, 2020

    The Supreme Court of Arizona
    1501 West Washington Street, Room 402
    Phoenix, AZ 85007

    In re: Rule 28 Petition to Restyle and Amend Rule 31; Adopt New Rule 33.1; Amend Rules 32, 41, 42 (Various ERs From 1.0 to 5.7), 46-51, 54-58, 60, and 75-76, Arizona Supreme Court No. R-20-0034
    First Comment Deadline: March 30, 2020

    Dear Supreme Court:

    The American Property Casualty Insurance Association (APCIA) is the primary national trade association for home, auto, and business insurers. APCIA promotes and protects the viability of private competition for the benefit of consumers and insurers, with a legacy dating back 150 years. APCIA members represent all sizes, structures, and regions – protecting families, communities, and businesses in the U.S. and across the globe.

    Property casualty insurers are among the highest-volume consumers of legal services and have a genuine interest in preserving the integrity of a fair, predictable, legal system. APCIA appreciates the opportunity to submit an initial comment letter, responding to Petition No. R-20-0034, In re: Restyle and Amend Rule 31; Adopt New Rule 33.1; Amend Rules 32, 41, 42 (Various ERs From 1.0 to 5.7), 46-51, 54-58, 60, and 75-76 (Petition). It is our understanding that the Task Force on the Delivery of Lega Services (Task Force) filed this Petition pursuant to Rule 28(a) of the Arizona Rules of the Supreme Court to propose adoption of New Rule 33.1 and revisions to the Rules 32, 41, 42 (various ethical rules from 1.0 to 5.7), 46-51, 54-58, 60, and 75-76.FN2 For the reasons set forth below, we urge the Arizona Supreme Court to reject the Petition to remove or limit Ethical Rules prohibiting nonlawyer law firm ownership, fee-splitting between lawyers and nonlawyers, and/or nonlawyer investments in law firms or litigation.

    While this letter is intended to highlight some of APCIA’s concerns, it is not intended to identify or address all potentially harmful unintended consequences of granting the Task Force’s Petition.

    First, APCIA opposes elimination of Ethical Rules (ER) 5.4 and 5.7. ER 5.4 serves a critical purpose to ensure the independence and ethical conduct of lawyers, as its title, the “Professional Independence of a Lawyer”, indicates. Comment 1 to ER 5.4 confirms its purpose is to protect the lawyer’s “professional judgment.”FN3 The Task Force proposes to redistribute public and professional judgment protections among existing rules, acknowledging the import of these protections, without subjecting non-lawyer owners or investors to the Ethical Rules. In addition to diluting the existing protection provided by ER 5.4, eliminating it will weaken the special fiduciary relationship between attorney and client, insert a new set of conflicts between practicing attorneys and firm ownership, and convert the practice of law into a mere service.FN4

    The Task Force relies for its petition, in part, on the District of Columbia’s version of ABA Model Rule 5.4, which allows nonlawyer ownership of, or investment in, law firms so long as the owner or investor provides a professional service to assist the law firm in providing legal services to the client. The Task Force also points to insurance company employment of staff lawyers to represent insureds as justification for its proposal to eliminate. The Task Force’s reliance is misplaced, however, because insurance companies have a pre-existing contractual relationship with their insured that typically includes a fiduciary duty to defend. Additionally, insurance companies have a direct financial interest, fully aligned with the interest of the insured, in the outcome of a case it is defending. This is distinct from outside nonlawyer ownership of law firms, and it’s a distinction with a meaningful difference. Insurers are regulated by the Arizona Department of Insurance, and staff lawyers are subject to and protected by ERs 1.8, 5.4 and 5.7. Eliminating ER 5.4 would erode the underlying foundational ethical obligations owed by lawyer to client.

    The same is true with regard to the Petition to allow fee-splitting with nonlawyer owners or investors that have no relationship to, and owe no professional obligation to, a client. The introduction of an outside entity having the ability to influence – if not directly control – decisions related to the client’s interests, without that entity having any contractual obligation to, or other relationship with the client, would inherently conflict with the lawyer’s ethical obligation to exercise independent professional judgment for the benefit of the client.FN5 Further, the Task Force acknowledges that the rules must only be changed “in a way that continues to protect the public”, yet rejects the sandbox approach because it would be difficult to manage and altogether neglects to propose a means of regulating the individual non-lawyer owners.

    Second, the Petition to allow an Alternative Business Structure (ABS) would open the flow of investment capital into law firms without the proposed benefit to the underserved. Philanthropists already have myriad ways to support or provide free or reduced cost legal services, so this new class of investment will be driven by investors and entrepreneurs, including Third Party Litigation Funders, that seek to create and grow capital. Similarly, shared service providers – such as accounting firms – will invest in Arizona law firms in anticipation of profit, not because of altruism. In addition to the anticipated conflicts noted above, the effect of granting the Petition will be to reduce services to the underserved and drive up legal fees because Arizona attorneys will have to provide a return on investment to the nonlawyer ABS investors. Finally, the risk that Third Party Litigation Funders use their substantial capital to encourage more litigation and indirectly reduce access to justice by clogging Court dockets with more lawsuits. Law firms and litigation should not be an investment vehicle.

    In support of this Petition, the Task Force suggests that ER 5.4, among other Ethical Rules, operates as barrier to innovation, such as the use of technology to enhance and expand legal services. Removing ER 5.4 is not the solution, however, because the legal landscape is replete with technology services such as computerized legal research, electronic discovery, firm websites, and apps. Clearly the existing rules are sufficiently flexible to permit innovation, as evidenced by the use of technology. In every case, however, the public is best protected when lawyers are required to exercise independent professional judgment to evaluate technology and innovation.

    Lawyers are ethically obligated to provide competent legal representation, to protect client confidentiality, and to represent clients zealously within the bounds of the law. Allowing nonlawyer law firm ownership or nonlawyer investment will put lawyers in the untenable position of having to answer to two masters with opposing interests. Allowing nonlawyers to own law firms would be put nonlawyers in possession of confidential client information without those nonlawyers being subject to Ethical Rules for protecting that confidential information. Instead, the Task Force proposes that a “compliance attorney” bear the burden and risk – including loss of license – of protecting all client confidences and eliminating every conflict. This does not provide a sufficient ethical check to protect client confidentiality. Even if nonlawyers agree to confidentiality and non-disclosure as a condition of law firm ownership or investment, they are not subject to discipline by the Arizona State Bar for any violation, nor is it clear that such conditions would fully protect attorney-client privilege.

    Proposals to loosen restrictions against nonlawyer law firm ownership and fee-splitting with nonlawyers, if granted, would put lawyer’s ethical obligations to their clients at risk and would also likely disincentivize lawyers from taking low value cases, contingent cases, and pro bono cases. Rather than increasing access to justice for underserved citizens, granting the Petition will close the door to justice for many.

    Thank you for the opportunity to comment and for your consideration of our perspective. We urge the Arizona Supreme Court to reject the Petition.

    Please contact me directly at colleen.shiel@apci.org with any questions.

    Sincerely,

    Colleen Reppen Shiel

    Colleen Reppen Shiel
    Vice President, Deputy General Counsel
    American Property Casualty Insurance Association


    Footnotes:
    FN1 Colleen Reppen Shiel, Vice President and Deputy General Counsel for American Property Casualty Insurance Association of America with a mailing address of 8700 W. Bryn Mawr Ave., Ste. 1200S, Chicago, IL 60631-3512. Phone (847) 297-7800. Email: colleen.shiel@apci.org. Illinois Bar No. 6193134.
    FN2 http://www.azcourts.gov/Rules-Forum
    FN3 ER 5.4 Comment [1] read in part “These limitations are to protect the lawyer's professional independence of judgment.” See https://www.azbar.org/for-lawyers/e...-conduct/.
    FN4 See, e.g., New York State Bar Ass’n: Report of the Task Force on Nonlawyer Ownership, 76 Alb. L.Rev. 865, 877 (2013) (“nonlawyer control of legal practice presents considerable risks to the legal system and the justice system…and should not be permitted”).
    FN5 See Arizona Bar Ethical Opinion 99-12, noting that a lawyer employed by an architectural firm may violate “ERs 5.4(c) and 1.8(f)(2) if the firm, in its role as the attorney's employer, in any way directed or regulated the lawyer's professional judgment in rendering legal services to clients. Even if the firm agreed to comply with these Rules by refraining from influencing the attorney's representation of clients, the structure of the proposed arrangement would allow the firm to indirectly influence representation of clients by controlling matters such as the attorney's time and workload.”
    Andy Moore
    New Member
    Posts:1 New Member

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    30 Mar 2020 04:47 PM

    I wish to register my opposition to this proposed rule change.
    I have practiced in Arizona for 25 years and my practice area is entirely in the area of Family Law.
    I do not envision the proposed changes enhancing the public's participation in Family Law matters. Instead, the proposed changes open up the carefully
    balanced field of law to allowing non-attorneys not only to do the things in the office the attorneys are best at doing, but further to allow non-attorneys to
    practice before the Court. It is my experience in the area of Family Law that the attorneys (the majority of whom are sole practitioners) consistently work to settle cases, avoid unnecessary expenses and move the cases forward expeditiously. The proposed rule changes are not necessary in that most practitioners are currently settling and negotiating in a professional manner with their clients.
    I urge the denial of these proposed changes.

    Andrew E. Moore
    Andrew E. Moore Law Firm, P.C.
    207 N. Gilbert Road, Suite 209
    Gilbert, Arizona 85234
    480-699-7454
    andy@aemoorelaw.com

    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    30 Mar 2020 05:54 PM
    Mauricio R. Hernandez (#020181)
    P.O. Box 7347
    Goodyear, AZ 85338
    (623) 363-2649

    The attached comment is filed opposing the petition to amend the subject rules.

    Attachments
    Brian Pursell
    New Member
    Posts:1 New Member

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    30 Mar 2020 06:13 PM
    Brian Pursell
    8118 E State Route 69
    Prescott Valley, AZ 86314
    Phone: (928) 227-2852

    I am shocked and appalled at the proposed rule changes and thus lodge my objection.

    It is unconscionable that the State or any organization would support these rule changes. The proposed changes would not only open the legal field to abuse and corruption, it would devalue all attorneys’ legal education, training, and experience.

    While I understand the goal and do not disagree with the sought after outcome, the way to reach the low / middle income people, is not by opening new types of legal position, but to address the matter outright with funding for legal aid or by more education for the public about existing programs. For example, Law Days, Divorce 101 classes, or Lawyer in the Library. Programs that I have personally volunteered for in the past and currently provide free services for.

    Nevertheless, to allow non-attorney ownership of any law office is outrageous. One only has to look to the medical field to see the future outcome. No entity invests in any enterprise without the expectation of financial gains. Thus, you have non-attorney entity pushing work product in the interest of financial gain and not in the best interest of the client. In the medical field setting, you have owners of medical practices pushing for doctors and nurse practitioners to increase monthly earnings, to order tests and procedures that are more profitable.

    While, even if there are checks in place, for example, subjecting the non-attorney owners to the same rules of an attorney, the pressure to increase profits will place the attorney in a position of violating ethical rules at worst, or at best billing unnecessary hours. For example, unnecessary, yet justifiable discovery. A firm can generate hours upon hours of billable time on discovery and justify it, yet it may not be necessary.

    In regard to the LLLP issue, it is nothing short of insulting and disingenuous. My main area of practice is family law. To have the State Bar support the creation of the LLLP is nothing short of having the State Bar tell me that my area of practice does not require the skill and the ability of an attorney. (Which I must note, that when the State Bar president gave a presentation at the local county bar meeting, he said.) I went to law school, I passed the bar, now it appears that all my efforts were in vain. Nevertheless, if this proposed rule change passes, let’s see how much access to justice an LLLP provides when I evoke Rule 2 and require strict compliance with the rules of evidence.

    In the end, the proposed rule changes will have a “big box” law firm with one attorney, six LLLPs, and 15 paralegals, operating at full capacity, while solo practitioners suffer.


    Martin Lynch
    New Member
    Posts:28 New Member

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    30 Mar 2020 06:16 PM
    Petition to remove Puppet Oath from SC Rule 32

    The proposed restyled AZ Supreme Court Rule 32(c)(4)(ii) for the regulation of the Legal Profession
    must be amended to bring Rule 32 into conformance with US Constitution Art 6 Clause 3 as follows.

    (ii) Upon admission to the state bar, a lawyer applicant shall also, in open court, take and subscribe an oath
    to support the constitution of the United States and the constitution and laws of the State of Arizona.

    (in the form provided by the supreme court.) <<< This language must be removed.

    Please see attached.

    Sincerely,
    Martin Lynch - WTPCS LLC
    1120 W Broadway Rd #55
    Tempe, AZ 85282
    602-550-6304
    Attachments
    Mark
    New Member
    Posts:1 New Member

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    30 Mar 2020 06:42 PM
    Opposition to Petition R-20-0034

    I am strongly opposed to the adoption of Petition R-20-0034. The Task Force identified the growing “justice gap” as the impetus behind the proposed petition to change the ethical rules. According to the Task Force, the changes proposed by Petition R-20-0034 are intended to address the the legal needs of those “living in poverty, and the majority of moderate-income individuals”, which are not being met as the costs to obtain legal services continue to rise. I agree that the Task Force identified a problem that needs to be solved, but I strongly dispute that the proposed changes to the Rules will actually address the problem. While I support efforts to find ways to make legal services available to low-income individuals as well as those in poverty, the proposed Petition R-20-0034 will not be effective in accomplishing that goal. Indeed, the rule change may actually result in increased costs to the public for legal services by adding another layer of bureaucracy that must be supported by increased fees and pressure to provide unnecessary services. This change would also reduce the protections afforded to the public, such as a lawyer’s adherence to ethical rules and maintaining malpractice insurance, to which non-lawyers are not subject.

    The Task Force explained that small firm lawyers who have historically served the “PeopleLaw sector” and bridged the current “justice gap” currently find themselves unable to make an adequate living. The Task Force explained that Professor William D. Henderson from Indiana University “suggests that this lagging legal productivity may result in part from ethical rules that restrict ownership of law forms to lawyers because ‘ethics rules are the primary mechanism for regulating the market for legal services’.” However, to speak frankly, a suggestion from a paper written by a law professor setting forth a hypothesis that “may” have an impact on “lagging legal productivity” is not a solid foundation on which to make sweeping, unprecedented changes to the ethical rules.

    I could find nothing in the Task Force’s Report and Recommendation that provided reliable evidence to support the proposition that allowing non-lawyers to own law firms will bridge the justice gap and allow low-income and poverty stricken individuals to obtain legal services. Rather, the question remains as to whether non-lawyer business men and women will have any better success in providing legal services to those who cannot pay for them, even at a reduced rate. Additionally, there is no support for the Task Force’s recommendation that LLLPs will actually be able to fill the Justice Gap.

    An example of where such a system has failed in the professional context is in dentistry. The March 27, 2020 Arizona Attorney Daily 5 links to a USA Today article (https://www.usatoday.com/in-depth/n...36783002/) about a large dental chain backed by a Swiss owned private equity firm. The article states that the dental chain is part of a trend of dental offices being purchased by “private equity firms and turned into revenue-generating machines”. Unlike dentists that seek profitability, the private equity firms, the article states, subject the companies with “heavy debt at junk-bond-caliber interest rates”. Instead of doing what is best for the patient, as determined by the Dentist, there is pressure to perform unnecessary and excessive dental work to increase the profits to cover the overhead of the non-dentist private equity owners. Instead of lowering the cost of dental services, non-dentist ownership has resulted in the opposite. Why would the Supreme Court want to subject lawyers and their clients to a similar scheme?

    Further, while there remain significant questions as to whether the proposed amendments to the Ethical Rules will have any affect on access to justice by indigent and low-income individuals, the impact the amendment will have on lawyers’ ability to maintain adequate income and provide for their families is likely much more quantifiable. These proposed changes could potentially force small to mid-size firms out of business. According to the Task Force’s Report and Recommendations, small firms are already struggling to stay in business because the PeopleLaw sector cannot pay for legal services. Rather than changing the Ethical Rules to bring in additional competition (the LLLPs) to the small and mid-sized firms that are already struggling, the better approach would be to research how to help small to mid-sized firms better reach those who need legal assistance.

    In addition to the foregoing, our State is grappling with the effects of the COVID-19 Pandemic that has negatively affected the economy in significant ways. With the impending recession caused by COVID-19, the likelihood that attorneys will be out of work is high. Right now is not the time to pass sweeping changes that could compound the problem of lawyers out of work.

    I' ve learned about the effects of a non-legal corporate entity that attempted to enter the legal field in the civil litigation practice arena where I practice. The non-legal corporation hired a young, unsuspecting attorney, offered a generous salary and promised an unending supply of legal work. The non-legal corporation then funneled all legal work for its many clients to its attorney employee. The end result was that the young attorney billed at the marked rate with no discount to the clients of the non-legal corporation, had no mentorship, and provided reduced-quality services. Additionally, the young attorney made only the offered salary while all the profits for the attorneys’ work were taken by the non-legal corporation. Once other attorneys in the industry realized what was going on, the State Bar was contacted and the operation was shut down. As I have seen it attempted already, this will be the most likely result of allowing non-legal corporations to own law firms. The indigent and low-income members of society will continue to have their legal needs unmet, while the profits that formerly provided motivation for attorneys to work hard and provide quality legal work will be eroded, while those attorneys struggling to work in the Justice Gap will be forced out of business. As such, I strongly object to Petition R-20-0034.

    Mark Waldron
    Bar No. 025814
    MAXWELL & MORGAN, P.C.
    Mesa Office
    4854 E. Baseline Road, Suite 104
    Mesa, AZ 85206
    Tucson Office
    6700 North Oracle Road, Suite 240
    Tucson, AZ 85704
    Mesa Phone (480) 833-1001
    Tucson Phone (520) 812-7841
    Fax (480) 969-8267

    mwaldron@hoalaw.biz
    Frank Verderame
    New Member
    Posts:3 New Member

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    30 Mar 2020 06:57 PM
    As i have followed the thread of comments on this proposed rule change, i have noticed that a majority of those comments in support of the rule change have come from organizations and individuals from outside of Arizona. Even Scott Bales has written to support the rule, but on behalf of an organization outside of Arizona. I have the utmost respect and personal admiration for Justice Bales. But, interests from outside Arizona should not have the deciding influence on legal practice and the citizens of Arizona. For those of us who have spent our lives and careers trying to protect Arizonans, the thought that interests from outside of Arizona are trying to manipulate the State Bar and the Supreme Court to make such a drastic change is offensive. i strongly urge the Supreme Court to reject the proposed rule change. Please do not subordinate the interests of Arizonans to outsiders with their own agenda.
    Frank Verderame
    fverderame@pvazlaw.com
    602-266-2002
    Scott Carpenter
    New Member
    Posts:1 New Member

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    30 Mar 2020 07:16 PM
    Scott Carpenter, Esq.
    Carpenter Hazlewood Delgado & Bolen, LLP
    Tempe, Arizona
    480-427-2844
    scott@carpenterhazlewood.com

    If the goal of these changes is to innovate the delivery of legal services, one attorney stands as proof that nonlawyer ownership of a law firm is not necessary in order to innovate the delivery of legal services to consumers of legal services. Richard Keyt, at www.keytlaw.com, and his law firm stand as unique proof that having nonlawyer ownership of a law firm is completely unnecessary to provide innovation in the delivery of legal services. Much of the discussion around innovation in the delivery of legal services surrounds "access" and rarely involves "access" to legal services for businesses, partnerships, and others involved in commerce. Much of the discussion centers on domestic relations and criminal law but, in the area of business structure and transactions, Richard Keyt has proven that lawyers can innovate in the delivery of legal services without any of the equity in a law firm being owned by a nonlawyer.
    Law schools do not require students to forever shut down their ability to think about clients and their economic needs when deciding to become a lawyer. Nothing about the bar exam requires lawyers to surrender an ability to align a lawyer's ability to provide services that are good for the client and to innovate the delivery of legal services throughout a lawyer’s legal career.
    The challenge with nonlawyer ownership of law firms is that nonlawyer money will seek to maximize return on investment. If that nonlawyer money sees that a law firm has historically had a profit margin of X%, the invested funds will seek to duplicate the return of X% into the future and work to increase it. Those invested funds will not easily tolerate less than a return of X%. In the context of plaintiff personal injury matters, if private equity money becomes interested in investing in plaintiff personal injury practices in Arizona and the belief is that a particular contingency fee law firm generally realizes a profit margin of Y% (on a Contingency Fee Percentage of Z% of the Total Recovery), the nonlawyer dollars invested are fungible with the dollars invested by the lawyer owners of the firm (and lawyers always invest their own money in these types of law firms). There is no differentiation between the investment dollars made by the lawyer owners and the nonlawyer owners. The contribution of the dollars to that firm by the nonlawyers and the lawyers cannot be differentiated. At that point, the only argument for nonlawyer ownership in the context of personal injury law firms is that, at the ownership conference room table, the nonlawyer will make a unique contribution to the success of the law firm that might increase access to justice by the clients of the firm. Will the nonlawyer of this hypothetical personal injury firm argue for more advertising at bus stops? What does increased access to justice look like and why will a nonlawyer necessarily increase it beyond the “access level” provided by lawyer owners? In the context of personal injury law firms, one need only look around. It is apparent that those injured in accidents receive messages throughout the day from many providers of legal services competing for consumers of personal injury legal services. Nonlawyer ownership of personal injury law firms is not necessary to increase awareness by injured Arizonans.
    Finally perhaps the notion of the rule change is that the existing rule embeds a misaligned incentive between a client’s needs and a lawyer’s motivation or requirements under the existing rules of professional responsibility. That is not the case. It is not true that lawyers are disincentivized by the existing rules to innovate the delivery of legal services. The existing rules, as evidenced by Richard Keyt’s behavior, provide plenty of room for innovation. Nonlawyer ownership of law firms is not necessary for innovation to blossom. Richard Keyt proves that is a false premise.
    The challenge for the Arizona Supreme Court is that the provision of legal services to the residents of Arizona is, for the most part, provided by lawyers in private practice. In that regard, there is no debate that each lawyer is entitled to practice law in a manner where his or her income exceeds his or her expenses – that he or she is entitled to make a “profit”. The “profit” equates to that “lawyer’s” compensation. Many lawyers innovate to maximize the “profit” while others innovate to pass along the benefits of the “innovation” to the client in the form of cheaper legal services. So long as the Arizona Supreme Court is not capping “profit” and so long as that “profit” is available to licensed attorneys and if that “profit” is made available in our free market economy to nonlawyers under the rule changes contemplated, there is no way to predict that the result of making that “profit” available to nonlawyers will be innovation that benefits consumers rather than innovation that increases “profit” for owners of the law firm business enterprise.
    The proposed rule changes do not pretend to require that “innovation” flow to the consumer of legal services rather than that the “innovation” flow to the equity owners as increased “profit”. So long as the proposed rule changes contain that fundamental flaw (that “innovation” can result in increased “profit” and need not result in increased access to legal services or “access to justice”), the rule changes, if enacted, will not necessarily increase access to legal services. The Arizona Supreme Court’s proposed rule changes provide evidence of a fundamental belief in the magnanimity of lawyers and nonlawyers who will be in business with each other and the belief that lawyers who do not share ownership with nonlawyers who innovate will do so solely to increase profit and decline to share the benefits of innovation with Arizona’s residents.
    There is no evidence that nonlawyer owners, when at an owner meeting of a particular law firm, will provide a contribution to that law firm that will achieve the result the Arizona Supreme Court seeks. Before undertaking a change of this type, evidence that nonlawyers will provide that contribution would be critical before subjecting the profession to the change contemplated.
    Penny
    New Member
    Posts:1 New Member

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    30 Mar 2020 09:31 PM
    Penny Koepke
    480-833-1001
    Maxwell & Morgan PC
    4854 E Baseline Rd Ste 104
    Mesa, Arizona, 85206-4636

    My name is Penny Koepke and while it pains me to admit I've been practicing for 27 years, it would pain me even more if this Rule change went into effect. I can understand the motivations behind the proposed changes, as in theory they sound arguably as good ideas. I concur most whole heartedly with Judge Swann's comments.


    A few of my questions include the following: I have three points to emphasize:
    1) What proof or data is there that having non-lawyers own law firms will improve legal services. My fear is that the push for profits will override ethics and best practices for the clients/consumer. There are already attorneys who churn files and overbill unsuspecting clients......when those not subject to the same ethical obligations are allowed to impact bottom line - wow ripe for abuses.
    2) If this was such a great idea, how come no other states are allowing this same business idea.... How are the non-lawyers going to be regulated? Nobody should vote for this rule change until they know exactly how the bar is going to regulate these future non-lawyer owners.
    3) I too have seen the debacle that non-lawyer document preparers can cause....it is a real shame and there is virtually no recourse.

    Both of these ideas will NOT advance the underlying reasons for the proposed changes. If the belief is that there is a lack of affordable access to legal services, then why not require more practical experience from law students before graduation, which will earn them credits and provide practical experience. Require all Arizona attorneys to provide a required number of hours of pro-bono work....

    Allowing for an expansion of non-lawyers performing work will cheapen the profession (not in the way intended) and send a message that studying rigorously and being a well rounded legal professional can be easily circumvented.

    The Committee should be commended for the hard work and thought that went into the proposals. They are unique and forward thinking. But likewise, the comments against adoption of these changes are unique and forward thinking and, in this practitioner's opinion, have the preponderance of the evidence behind them.

    Brian Morgan
    New Member
    Posts:1 New Member

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    31 Mar 2020 08:49 AM
    Brian Morgan
    Maxwell & Morgan, P.C.
    4854 E. Baseline Rd., Ste. 104
    Mesa, AZ 85206
    480-833-1001


    Opposition to Petition R-20-0034

    I appreciate the article written by Judge Swann in opposition to this petition. In addition to the reasons set forth below, I would like to incorporate Judge Swann's reasoning. I am strongly opposed to the adoption of Petition R-20-0034. The Task Force identified the growing “justice gap” as the impetus behind the proposed petition to change the ethical rules. According to the Task Force, the changes proposed by Petition R-20-0034 are intended to address the legal needs of those “living in poverty, and the majority of moderate-income individuals”, which are not being met as the costs to obtain legal services continue to rise. I agree that the Task Force identified a problem that needs to be solved, but I strongly dispute that the proposed changes to the Rules will actually address the problem. While I support efforts to find ways to make legal services available to low-income individuals as well as those in poverty, the proposed Petition R-20-0034 will not be effective in accomplishing that goal. Indeed, the rule change may actually result in increased costs to the public for legal services by adding another layer of bureaucracy that must be supported by increased fees and pressure to provide unnecessary services. This change would also reduce the protections afforded to the public, such as a lawyer’s adherence to ethical rules and maintaining malpractice insurance, to which non-lawyers are not subject.

    The Task Force explained that small firm lawyers who have historically served the “PeopleLaw sector” and bridged the current “justice gap” currently find themselves unable to make an adequate living. The Task Force explained that Professor William D. Henderson from Indiana University “suggests that this lagging legal productivity may result in part from ethical rules that restrict ownership of law forms to lawyers because ‘ethics rules are the primary mechanism for regulating the market for legal services’.” However, to speak frankly, a suggestion from a paper written by a law professor setting forth a hypothesis that “may” have an impact on “lagging legal productivity” is not a solid foundation on which to make sweeping, unprecedented changes to the ethical rules.

    I could find nothing in the Task Force’s Report and Recommendation that provided reliable evidence to support the proposition that allowing non-lawyers to own law firms will bridge the justice gap and allow low-income and poverty stricken individuals to obtain legal services. Rather, the question remains as to whether non-lawyer business men and women will have any better success in providing legal services to those who cannot pay for them, even at a reduced rate. Additionally, there is no support for the Task Force’s recommendation that LLLPs will actually be able to fill the Justice Gap.

    An example of where such a system has failed in the professional context is in dentistry. The March 27, 2020 Arizona Attorney Daily 5 links to a USA Today article (https://www.usatoday.com/in-depth/n...36783002/) about a large dental chain backed by a Swiss owned private equity firm. The article states that the dental chain is part of a trend of dental offices being purchased by “private equity firms and turned into revenue-generating machines”. Unlike dentists that seek profitability, the private equity firms, the article states, subject the companies with “heavy debt at junk-bond-caliber interest rates”. Instead of doing what is best for the patient, as determined by the Dentist, there is pressure to perform unnecessary and excessive dental work to increase the profits to cover the overhead of the non-dentist private equity owners. Instead of lowering the cost of dental services, non-dentist ownership has resulted in the opposite. Why would the Supreme Court want to subject lawyers and their clients to a similar scheme?

    Further, while there remain significant questions as to whether the proposed amendments to the Ethical Rules will have any affect on access to justice by indigent and low-income individuals, the impact the amendment will have on lawyers’ ability to maintain adequate income and provide for their families is likely much more quantifiable. These proposed changes could potentially force small to mid-size firms out of business. According to the Task Force’s Report and Recommendations, small firms are already struggling to stay in business because the PeopleLaw sector cannot pay for legal services. Rather than changing the Ethical Rules to bring in additional competition (the LLLPs) to the small and mid-sized firms that are already struggling, the better approach would be to research how to help small to mid-sized firms better reach those who need legal assistance.

    In addition to the foregoing, our State is grappling with the effects of the COVID-19 Pandemic that has negatively affected the economy in significant ways. With the impending recession caused by COVID-19, the likelihood that attorneys will be out of work is high. Right now is not the time to pass sweeping changes that could compound the problem of lawyers out of work.

    A few years ago, I witnessed first-hand the effects of a non-legal corporate entity that attempted to enter the legal field in the civil litigation practice arena where I practice. The non-legal corporation hired a young, unsuspecting attorney, offered a generous salary and promised an unending supply of legal work. The non-legal corporation then funneled all legal work for its many clients to its attorney employee. The end result was that the young attorney billed at the marked rate with no discount to the clients of the non-legal corporation, had no mentorship, and provided reduced-quality services. Additionally, the young attorney made only the offered salary while all the profits for the attorneys’ work were taken by the non-legal corporation. Once other attorneys in the industry realized what was going on, the State Bar was contacted and the operation was shut down. As I have seen it attempted already, this will be the most likely result of allowing non-legal corporations to own law firms. The indigent and low-income members of society will continue to have their legal needs unmet, while the profits that formerly provided motivation for attorneys to work hard and provide quality legal work will be eroded, while those attorneys struggling to work in the Justice Gap will be forced out of business. As such, I strongly object to Petition R-20-0034.

    Jon O'Steen
    New Member
    Posts:1 New Member

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    31 Mar 2020 09:29 AM
    Jonathan O'Steen
    State Bar #024043
    O'Steen & Harrison, PLC
    300 W. Clarendon Ave., Suite 400
    Phoenix, AZ 85013-3424
    602-252-8888
    josteen@vanosteen.com

    I am strongly opposed to the Petition, particularly the elimination of ER 5.4.

    In 1977, my father went to the U.S. Supreme Court in the landmark case that permitted lawyers and other professionals to advertise their services. He took on this case because of his sincere belief that consumers were harmed by not receiving helpful information about their legal rights. Studies have shown that this case increased access to the legal system and lowered the cost for the delivery of legal services by increasing competition. I share my father’s enthusiasm for increasing access to justice.

    The Task Force identified a problem and proposed a "solution" that not only will not improve the problem, but is likely to exacerbate it. A story published on Law.com last week about two publicly-traded British law firms bore the headline that “DWF Share Price Crashes as Keystone Cancels Dividends in Latest Virus Disruption.”

    https://www.law.com/international-e...isruption/

    The article noted that “the market reels in the face of the global pandemic.” A statement issued by Keystone Law to its investors included the following:

    As a Board we are monitoring the situation closely and will take all necessary actions to ensure the good health of the business through these challenging times. We remain confident of the Group’s ability to continue to deliver on its strategy for growth, taking advantage of the sizeable market opportunity which exists, once the current situation has passed.


    https://www.keystonelaw-ir.co.uk/co...020/270320

    The statement goes on to reassure investors that they “have no dependency on any single area of the economy or client.”

    I fall within the majority that believe client relations are more important than investor relations. In fact, investor relations has no place in this profession.

    One of the strengths of this Bar is the community feel and the willingness of its attorneys to help one another. I shudder to think how this would change under the proposed rule changes. Do we want to encourage the corporatization of legal services in Arizona to persons and entities with no legal training and no connection to our great state?
    As I read the comments to this proposed rule change, it strikes me that many of those in support have no connection to Arizona or its legal community. The opposition is strong among Arizona attorneys who are on the front lines of helping those less fortunate than us. Not only is this model unproven, but other states are walking back efforts to explore similar rules changes. California, which was considering a proposal far less radical than this one, slammed the brakes on its plans.

    Changes to our justice system to improve access merit strong consideration. Rushing through untested and radical plans--particularly during a pandemic that threatens to upend our economy--is not the solution. The Task Force itself pointed out that it had "limited time" to explore a "complexity of topics." The recommendations were not universally accepted, as addressed in a lengthy and passionate dissent authored by Judge Peter Swann. We must hit the brakes and give careful consideration, from a wide range of voices, as to what areas in this community are underserved and the changes we reasonably can make without harming the profession and the people we serve.
    William Bacon
    New Member
    Posts:1 New Member

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    31 Mar 2020 03:15 PM
    I am writing to join others who have expressed their opposition to that aspect of the Petition, eliminating ER 5.4, in order to permit nonlawyers to own, manage, and make decisions concerning legal disputes. While the goal of increasing access justice is laudable, there does not appear to be any empirical support for the proposition that this proposal will achieve that end.

    Whether the proposed rule will, in fact, increase access to justice seems to be based on supposition; on the other hand, it seems clear that allowing nonlawyers with financial incentives to have a stake in law firms will compromise a lawyer’s ability to exercise independent professional judgment in rendering legal services. The proposal sets up the scenario in which the nonlawyer supervises a lawyer without the ethical standards demanded of licensed attorneys.

    The proposed rule will set situations rife with potential conflicts of interest that are not adequate addressed, in my view.

    For all these reasons, and the many more expressed by other, I strongly oppose these provisions.

    William C. Bacon
    698 E. Wetmore Rd. #200
    Tucson, AZ 85705
    520-879-7165; 520-909-0906
    wbacon@goldbergandosborne.com
    004895
    Steve Harmon
    New Member
    Posts:1 New Member

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    31 Mar 2020 05:02 PM
    On behalf of Elevate Services, Inc.

    Dear Task Force Members,

    We commend the work of the Task Force and believe that removing barriers to innovation and competition in the delivery of legal services will improve choice and access for all consumers. We enthusiastically support the consideration of right and reasonable regulatory changes to modernize legal services in Arizona.


    Elevate is a law company offering consulting, technology, and services for law departments and law firms to improve efficiency, quality, and business outcomes. Headquartered in California with a large service delivery center in Phoenix, we have 1,200 employees serving over 100 Global 1000 law departments and 30 Global 100 law firms. We are proud to be known as legal service delivery innovators and of the reputation we have earned with our customers.


    Today Elevate operates under a variety of regulatory frameworks, including various departments of the U.S. Government and the Solicitors Regulation Authority (SRA) in England and Wales. We hold an Alternative Business Structure license granted by the SRA and are well-acquainted with the oversight and compliance obligations administered by that body. We reviewed the rule changes proposed by the Petition and find them consistent with the model already working well in England and Wales. We believe a well-regulated legal sector will ensure that legal services are performed with the public’s best interests in mind, encourage healthy competition, and improve the practice and delivery of legal services to the benefit of consumers.


    We embrace establishing and enforcing ethical and eligibility standards for legal professionals in law companies, approved to offer certain legal services, that are comparable to those required of lawyers in law departments and law firms. This protection will provide customers the confidence that their legal services providers conduct themselves to the highest standards at all times.



    We appreciate the dedication each Task Force member has invested personally and professionally into this vital endeavor, and we understand that your work is far from done. Thank you for stepping forward to address these important issues and for your leadership. We stand ready to assist you in any way we can as these initiatives move forward.


    Steve Harmon
    General Counsel
    Elevate Services, Inc.
    10250 Constellation Blvd
    Suite 2815
    Los Angeles, CA 90067

    Sarah Selzer
    New Member
    Posts:1 New Member

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    31 Mar 2020 05:03 PM
    I am writing to express my personal support of these changes because I read them to allow existing nonprofits to start providing direct legal services to their current clients without having to establish a separate, stand-alone law firm. I further understand that these changes would allow a non-profit to solicit financial support to subsidize their direct legal services. For example, a non-profit domestic violence shelter could hire a lawyer to represent its clients in non-criminal matters and the board of the non-profit could host a fundraiser to support these legal services.
    I support these changes because I think they provide nonprofits with another avenue to empower lives.

    Sarah Selzer
    Sarah@SarahSelzerLaw.com
    Bar No. 025747
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    01 Apr 2020 01:02 PM
    Regina M. Pangerl
    regina@pangerllaw.com

    I strongly oppose the proposed rule changes that would allow non-attorneys to represent clients in certain court proceedings and that would allow non-attorney companies to have an ownership interest in law firms or legal departments. As an attorney licensed in the State of Arizona since 2004, I have practiced family law, personal injury, and appeals. I do not see the need to authorize non-attorneys to represent clients in court proceedings, and I find that it will be a dangerous road to travel should this rule pass.

    It was not so long ago that the adoption of another rule change allowed document preparers to prepare legal documents on behalf of non-represented parties. I have had clients come to me with various problems that resulted from hiring document preparers. Some such errors can be fixed (often at an additional cost to the client) and other errors cannot be fixed ever, and sadly those clients are stuck with the ramifications of having hired a non-attorney to complete their court documents. Those clients were not protected. Instead, they were placed in a category of being at high risk for suffering damage at the hands of someone who was unqualified to prepare legal documents. Some errors caused by non-attorney document preparers have come at a great cost to such clients, who often have to live with very serious detrimental consequences of having hired someone who lacked appropriate legal training. Those clients have no remedy against the negligence of the document preparer who was there to allegedly help the client save money.

    I have also often found that some such clients have been given poor legal advice, when they should not have been given any legal advice at all, given the prohibition against legal preparers giving legal advice, even though they were preparing court documents. It quickly became evident to me that some legal document preparers crossed the boundaries of the limits placed upon them, to the detriment of the public. I see the type of problems that have arisen with document preparers only worsening with the passage of the proposed law to allow yet more non-attorneys to act in the capacity of “attorneys”. And I see the risk of harm to the public only increasing.

    I disagree that there are insufficient legal services out there for the less fortunate members of our community. Personally, I have donated hundreds upon hundreds of hours of free legal services to clients who could not otherwise afford it. Some of those services were offered pro bono to begin with, and other services started out as paying services only to be transferred into cases where I knew I would never be paid or would be paid very little for my services. I know of several colleagues who have done the same. In fact, it would likely be shocking to learn of the many hours that some of us solo and small firm attorneys donate to members of the community.

    Additionally, I have seen numerous pro per clients filling out simple court forms at the self-service centers of our local courts. They can even get assistance when needed. Some such parties have told me that the process is “easy” and that they had their questions answered and were perfectly comfortable filing their documents that way. Some such parties like the opportunity to represent themselves, as that allows them to “do it their way” and an opportunity “to represent themselves in court.”

    And importantly, I have witnessed time and time again that judges have been well trained to deal with pro per parties. I have seen many judges be incredibly patient with pro per parties, give them instructions, allow them leeway on the enforcement of the rules of procedure and the rules of evidence, and I have repeatedly witnessed judges being more than fair to pro per clients, leaving them with just as fair of a result as they would have received had they retained representation and sometimes even more so.

    Significantly, similar to my many other colleagues, I worked diligently and sacrificed much to obtain my law degree, to study and pass the bar exam, and to begin my new career and build upon it over the years. I am still paying many thousands of dollars in student loans, and I will be paying them for several years to come. It is wholly unfair to those of us attorneys, who had to work so long and so hard and sacrifice so much to obtain our right to practice law, to now suddenly lower the threshold to the point that one need not even have a law degree to be allowed to represent clients. While I understand that the new non-attorneys would only be allowed to represent clients in certain areas of the law, this is just the beginning of what could be a slippery slope to destroy our profession as we know it today.

    We as attorneys are held to such a high standard, as we should be, in order to protect the public. Yet, I find it most troubling that our state now wants to pass a law that lowers that standard significantly, which in turn will have the natural effect of failing to protect the public – something that is our utmost responsibility as attorneys in this great state of Arizona. The less fortunate members of our society deserve better than that. We can work hard to find other ways to provide legal services to those individuals in a way that will not lower the standards for those less fortunate individuals who need help with legal services.

    Lastly, I oppose the idea that non-attorneys or non-attorney companies should be allowed to have any ownership interest in a law firm. For years now, the ethical rules have prohibited such an arrangement, and for good reason. If we allow non-attorneys to begin having an ownership interest in law firms and begin making decisions about legal services, we will again be going down a dangerous road. No one other than qualified, licensed attorneys, who are in good standing with the bar, should be allowed to gain any control over the practice of law or any legal services. Large wealthy companies should not be allowed to take over the practice of law in our communities, simply because they are well-funded, well-established, or have intelligent minds working for them. Our law profession should not be taken over by other professions, nor be governed by them.

    I own a small solo firm in Phoenix. I have legitimate concerns about being pushed out of business should either one or both of these measures pass. The attorneys who are licensed to practice here in Arizona have been dedicated to upholding the standards expected of lawyers in our state, and we have worked diligently to protect the public. Let’s not take steps that would undermine our profession, that would increase the risk of harm to the public, that would lower the high standards expected of those who represent clients in the legal profession, and that might put many dedicated lawyers out of work.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    01 Apr 2020 01:13 PM
    Jason Solomon
    Executive Director, Center on the Legal Profession
    Stanford Law School
    (650) 723-9505
    jsolomon@law.stanford.edu
    Attachments
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    02 Apr 2020 08:32 AM
    Michael G. Kelly
    Arizona Mobile Attorneys
    14050 N. 83rd Ave., Suite 290
    Peoria, AZ 85381
    (623) 628-1110

    I wish to incorporate the many objections to this rule on the grounds of incompetence of non-attorneys and lack of protection for the public submitted by other commentators.

    By way of example I would point to other professions, such as Medicine and Pharmacy: Hospitals, insurance companies and, in the case of pharmacies, big retail (Target, Walmart, Frye's (Kroger), etc.) have taken these professions over. As a result, interests other than the interests of patients and the public are served. Doctors over-test, over-prescribe and over-bill often due to pressure from the entity for whom they work. Pharmacies are typically understaffed promoting mistakes. Pharmacists often fill illegitimate prescriptions and fail to report transgressors due to pressure from the business for whom they work to "satisfy complaining customers". There is every reason to believe that similar problems will occur with the legal profession. Independent professional judgment and sound ethical behavior cannot be compromised to provide investment opportunities for monied interests.

    I have seen many instances of documents that were poorly drafted by non-attorneys and the damage from these documents has been amply illustrated by other commentators. In my view it defies logic to believe that a non-attorney would perform any better in a courtroom where that person's task would be much more challenging than document drafting. Again, the interests of the public and of clients would be compromised for the special interests of a narrow group of persons.

    Ryan Skiver
    New Member
    Posts:2 New Member

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    07 Apr 2020 10:15 AM
    I oppose the rule change. While access to legal services is certainly important, this approach will change the profession of law to be focused more on the business aspects than professional aspects of representation. The conflicts of interest, both known and unknown, for every case will be nearly impossible to track and to prevent. Attorneys have a special relationship with their clients and a fiduciary duty to them that must remain protected and intact. I do not believe that same type of relationship and protection of the client's interests can remain under this new proposed rule change. Thus, I believe the proposed rule change should be rejected.

    Ryan Skiver
    THE SKIVER LAW FIRM
    3200 North Hayden Road, Suite 220
    Scottsdale, AZ 85251
    Telephone: (480) 626-1667
    Facsimile: (480) 482-7285
    email: rskiver@skiverlawfirm.com
    Hutson
    New Member
    Posts:3 New Member

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    09 Apr 2020 05:48 PM
    As an Arizona native, I share Frank Verderame’s opinion concerning comments pouring in from outside of our state. One must wonder why those comments are not directed to their own states. I also agree with everything that Geoff Trachtenberg and others have written and do not want to repeat what has already been said. When I have asked other attorneys why they have not commented on the Petition, they have responded that they have read the comments opposing the Petition, which they agree with, and do not know what more they can add, so they don’t. This Court should be aware, however, that those of us who have devoted our lives to the legal profession in Arizona overwhelmingly oppose the Petition.

    I will share just a bit of my background and experience. I recognize that I don’t have much clout compared to some others who have commented, if any, but I believe my experiences have not been necessarily unique from those experienced by countless Arizona lawyers.

    I was born in Arizona and went to high school in Arizona, various community colleges, the University of Arizona, and Arizona State University. In 2007, I started law school in Oklahoma. While in law school, the economy collapsed. When I graduated in 2010, my former spouse and I moved back to Arizona, because we love the state, and our families in Arizona. I passed the AZ bar exam. However, there were no jobs. And so, I owed about $160,000.00 - $200,000.00 in law school debt but could not find a job. I was not alone. It is not that I didn’t attend Harvard that I couldn’t find a job, it is that there were not any openings. Therefore, I volunteered at a very small firm. Eventually, I was offered a job at an extremely small salary, which I accepted. I worked for the firm for about a year, after which virtually everyone was laid off. At the time, there were still no jobs for new attorneys, so I figured I could try to find another position in another small firm where the same thing could happen, or I could start a practice myself. I started a practice.

    I found an executive suit that would work for me. After I signed the lease, I learned that a legal document preparer had the suit at the entrance of the building, which advertised to do basically everything. Oklahoma does not have legal document preparers, and I don’t recall them existing in Arizona before I went to law school and was shocked to learn that such a thing is permissible in Arizona. I had worked my tail off in law school and studying for the bar and owed close to $200K in debt and had a legal document preparer communicating to folks at the entrance of the building.

    Since then, my practice has grown. I have devoted my time, energy and focus into my legal career and take it seriously. In the first few years of being in practice, when the legal profession was over-saturated, my ex-wife asked me to find a job as a non-attorney or to work in government, because practicing law takes unique devotion and sacrifice. After having gone to law school and carrying the debt, however, we find that the practice of law is sacrosanct and devote our lives to being the best attorneys we can be to best serve the public. Having to satisfy some non-attorney’s business interest is not going to help but will only add more for attorneys to worry about.

    Over the years, there have been many times when I have seen legal document prepares in my Facebook feed advertising to the community that they can and will answer all questions and help people resolve their legal issues. There seems to be no limit as to what they can advertise or do. If there is a limit, those limits appear to be woefully ignored. At the same time, I cannot, nor would I, solicit folks in the community as they do.

    I have now been building a practice for approximately 8 years. I liked Oklahoma and considered staying there after law school but moved back to Arizona, because we like it more and our roots are here. Since I am a member of the bar and have spent years and countless hours trying to build a practice in Arizona and have worked hard to develop relationships within the community, I am not going anywhere. Arizona is my home. If, however, I could have foreseen the Petition and the havoc it may cause to our community, I may not have come back to Arizona and may have put forth my efforts in another state where my efforts would not be diminished. Thus, it is my belief that an unintended consequence of the Petition will be that it will strongly discourage young attorneys from coming to Arizona and from starting practices of their own. Lowering the bar will keep young attorneys away. Arizona will eventually become the state with the lowest professional standards and competencies than any other state in the union. And it is difficult to believe that is in the public’s best interest.

    Again, I oppose the petition.

    Randal Hutson (028522)
    The Hutson Law Firm, PLLC
    22849 N. 19th Ave., Suite 135
    Phoenix, Arizona 85027
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    22 Apr 2020 12:41 PM
    Catherine Kemnitz
    SVP, Global Head of Legal
    T. +1.917.237.2918
    C. +1.612.222.7052
    E. catherine.kemnitz@axiomlaw.com

    Axiom Global Inc. (Axiom) writes to comment on Arizona Task Force on the Delivery of Legal Services recommendations.
    Attachments
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    28 Apr 2020 09:02 AM
    T.Gerald Chilton, Jr.
    PO Box AC
    212 Crowe Street
    Superior, Arizona 85173
    (520) 689-9000

    I strongly object to and oppose Petition R-20-0034 for the reasons set forth on your Rules Forum of those that also oppose the pending petition.
    Thank you in advance for registering my opposition to your proposed rule change.
    Thomas Burnett
    New Member
    Posts:2 New Member

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    30 Apr 2020 05:16 PM
    Thomas Burnett
    State Bar # 026509
    1744 South Val Vista Drive, Suite 208
    Mesa, AZ 85204
    480-347-9116
    tom@burnettlawaz.com

    Comment to the April 27, 2020 Task Force Response:
    My Comment in Opposition relates to the Task Force’s recommendation to eliminate Ethical Rule 5.4 to allow non-lawyer ownership of law firms. As described below, eliminating ER 5.4 will not increase access to justice, will cause damage to the legal profession generally, and will only financially benefit lawyers and non-lawyer investors to the detriment of the underserved.

    On January 30, 2020, the Task Force released its Proposal. The first set of comments roundly disagreed with the Proposal, with a few exceptions, mostly from out-of-state interests. The Comments’ subject matter varied, some comments decried the negative effects the proposals would have on the legal system in general, others focused on the ethical clashes that would result from non-lawyer ownership of law firms, while others demanded answers to the question, “How does eliminating ER 5.4 increase access to justice?” On April 27, 2020, the Task Force issued its Response. The latter question was largely ignored in the Response. And for good reason: As Mr. Geoffrey Trachtenberg pointed out in his March 20, 2020 comment, “the “Access to Justice” mantra is being coopted as a Trojan Horse; it’s being used by private equity and hedge funds who desire to squeeze every last dollar out of the legal practice.”

    As it relates to ER 5.4 the Response addresses “Access to Justice” only briefly and attempts to use the Covid-19 pandemic as leverage. Literally, other than hyperbole, there is no explanation for how eliminating ER 5.4 would increase access to justice.

    Following is a summary of the Task Force’s comments regarding elimination of ER 5.4 and its relationship to “Access to Justice”, along with this authors response:
    1. Innovative ways to conduct business which helped law firms through the pandemic would not have been possible without an “infusion” of new technology and emergency changes to existing court rules
    a. Response: Yes, and this was all done without eliminating ER 5.4. It turns out attorneys, judges, and their wonderful staff can adopt new technologies, create innovative ways to conduct business, and respond to emergencies.
    2. “The Task Force recommendations, while not foreseeing the pandemic, fulfill its charge to ignite similar innovation into the traditional services and to expand access to justice, not just for low income and indigent persons, but for working- and middle-class persons.”
    a. Response: This is hyperbole. It doesn’t say how eliminating 5.4 would increase access to justice.
    3. “The effects of the pandemic will severely increase the need for legal services”.
    a. Response: How and why? Maybe the need for legal services will increase, maybe it won’t. But how does eliminating ER 5.4 increase access to legal services?
    4. “These proposals will be increasingly relevant and necessary to ensure the public’s legal needs are met.”
    a. Response: How?
    5. “Moreover, the financial impact of the pandemic on some law firms may be severe. The ability to partner with other professionals to create innovative ways to deliver legal services in addition to the ability to attract capital may well help firms survive and thrive in what will likely become a new normal.”
    a. Response: How does this relate to access to justice? Instead, it panders to attorneys and ignores reality: there are other, more reasonable, ways to gain access to capital and keep the legal profession alive during this time of crisis without eliminating ER 5.4.
    6. “Adopting the changes would allow Arizona to expand access to justice while protecting the public, the very charge the Task Force was given.”
    a. Response: How?

    At the end of the day, no explanation is provided, because there is none. Because it is illogical to believe that adding a second layer of “professionals” (the non-lawyer owner) to a law firm, would result in an increase in access to justice. An explanation does not exist because “Access to Justice” by eliminating ER 5.4 is private equity’s Trojan Horse. It is the same reason non-doctor/dentist ownership of medical and dental practices has not increased access to dental or medical care. It only results in worse dental and medical care. We have seen this play out: dentists/doctors can only meet with you for 10 minutes because that is the only time allotted under their investors’ business model. The primary care physician walks in the office to say hi and tell you what the diagnosis is before he hurries out of the room b/c if he doesn’t fit in 120 patients in one day, the owners are going to decrease his compensation.

    The only way to pay for the non-lawyer’s partnership interest is to increase profits. That does not translate to an increase in access to justice.

    Unlike the consumer product business model of selling widgets, where prices can decrease as competition increases when more companies produce the widget, in the legal, medical, and dental context, the “widget” is the professional’s service. It is the dentist’s work on your crown, the doctor performing a surgery, or a lawyer trying your case for which the client pays. The cost of legal representation doesn’t decrease as the layers of ownership increase- the opposite is true.

    Now that the room is cleared of the apparition that elimination of ER 5.4 has anything to do with "access to justice", we can have a candid discussion regarding what it is about: Money.

    1. In England non-lawyer ownership of law firms was introduced in 2011. Is nine (9) years long enough to determine if non-lawyer ownership of law firms increased access to justice? If it is, the following is what has happened in England: Overwhelmingly, the “infusion” of non-lawyer ownership was injected into the personal injury market. (1) Personal injury law firms have become publicly traded on the London Stock Exchange. But wait a minute? Like Arizona, personal injury cases in England are handled on a contingent fee basis. This is a “no win/no fee” structure which presents no barrier to the entry of legal services for no- and low-income clients. If the purpose of eliminating ER 5.4 is to increase access to justice, why are most non-lawyer ownership models entering a field with no economic barrier to entry for no- and low-income clients? Money.
    2. In England, while non-lawyer ownership in areas of law practice which present no economic barrier to entry for no- and low-income clients has ballooned, other areas have seen virtually no non-lawyer ownership, including the areas of “Civil Liberties, Immigration, and Financial Advice.” (2)
    3. In an interesting twist, In England, many of the non-lawyer owned personal injury law firms are owned by insurance companies. Once non-lawyer ownership was approved, liability insurance carriers have formed their own personal injury law firms to whom they refer their injured clients/insureds. (3)
    4. Speaking of England, citations to Crispin Passmore’s writings are quoted throughout the Response. The Response refers to Mr. Passmore as the former head of the Solicitors Regulation Authority in England and Wales. This is certainly true; but what is also true is that Mr. Passmore is the owner of “Passmore Consulting” a consulting firm which earns its business from consulting businesses in the UK; among other things, it provides consulting for law firms that want to adopt the non-lawyer ownership model (ABS model). His firm’s website states: “Regulatory reform is creating new opportunities in the UK and the US. I can help you explore these changes…” And “Around the world legal markets are starting to open. They are looking to England & Wales because of the regulatory reform and pace of change here. I am already helping other national regulators, investors, global legal business, UK law firms and a wide range of other legal service providers. Let me help you too.” (https://www.passmoreconsulting.co.uk/)
    5. The takeaway? Nine years of non-lawyer ownership of law firms have not improved access to justice in England. (4)

    Although the ABS model has existed in England for nearly a decade, there is zero evidence that non-lawyer ownership of law firms does anything but line investor pockets. Unfortunately for proponents of eliminating ER 5.4, lining investor pockets with legal fees, causing the personal injury and litigation fields to become “infused” with non-lawyer marketing and investor appetite, is not the stated purpose of the Task Force. The curtain has been pulled back and the wizard is just a group of profit-hungry investors.

    What may be effective in fighting access to justice inequality is an “infusion” of capital into Legal Aid and other services which provide free and low-cost legal help, the requirement that lawyers perform a minimum amount of pro bono work per year and a requirement that, as a portion of their annual CLE credits, some of those credits are directed toward an understanding of the legal needs of no and low-income clients. Oftentimes what is needed is a consistent reminder to compel good people to act.

    In summary, eliminating ER 5.4 will not increase access to justice, will cause damage to the legal profession generally, and will only financially benefit lawyers and non-lawyer investors to the detriment of the underserved.

    Endnotes:
    1. See “Nick Robinson, When Lawyers Don’t Get all the Profits: Non-Lawyer Ownership, Access, and Professionalism, 29 Geo. J. Legal Ethics 1, 20-21 (2016)
    2. Id at 21.
    3. Id at 22.
    4. See Robinson, at 23-28

    Nick Verderame
    New Member
    Posts:1 New Member

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    01 May 2020 10:47 AM
    Nick Verderame
    Plattner Verderame, PC
    316 E Flower St
    Phoenix, AZ 85012
    (602) 266-2002

    I strongly oppose the proposed Rule change to allow for non-attorney ownership of a law firm.

    The legal field is a profession, not just a business. While earning profits is a goal of any business, it is not - and should not - be the primary goal and focus of a law firm. Rather, justice, and all that comes with it, is the primary goal. Allowing for outside financial influences changes that priority structure and jeopardizes everything the legal profession has stood for (and on) for the history of its existence.

    We cannot put the profession position where outside influences are making litigation decisions based solely on share prices. We cannot put the profession in a position when a firm's actual decision makers are not governed by the State Bar. We cannot put the profession in a position where the unregulated owners of the firm work around Ethics Rules, so the firm can avoid regulation while protecting its attorneys who "hear no evil, and see no evil."

    Attorneys have always held ourselves to a higher standard because we are a profession, and we regulate ourselves. We hold the law in high regard. Meanwhile, we fight off unwarranted jokes and stereotypes about lawyers just being money hungry. Allowing this Rule change to go into effect not only chips away at the respect we have for the law, and it absolutely plays right into the negative stereotypes.

    By implementing this Rule change, you will encourage the degradation of the legal profession. It is the first step into making law firms like run of the mill businesses and venture capital firms - existing solely for the purpose of creating profits. The legal profession is better than this.
    Craig Simon
    New Member
    Posts:1 New Member

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    01 May 2020 10:58 AM
    Craig J. Simon
    2141 E. Broadway Rd. Ste. 113
    Tempe, Az 85282
    480.745.2450
    Craig@simonlawaz.com

    I oppose the Petition which would eliminate ER 5.4 and 5.7 and allow non-lawyers to co-own law firms. I have been a licensed attorney for 37 years and have been practicing in Arizona for nearly 22 years. The Petition may very well increase access to legal services, but at what price for those who are in need of competent legal services in a specialized situation when they walk into a box store mill for legal services.This has happened in the medical field where unlicensed people own medical clinics. The quality of care suffers which will likely occur in the legal profession in the quality of legal services.
    What may be effective in fighting access to justice inequality is an "infusion" of capital into Legal Aid and other services which provide free or low-costs legal assistance, the requirement that lawyers perform some pro bono work mandatory continuing legal education is critical. Non lawyers would not have to comply with the pro bono and CLE mandates.

    In conclusion, eliminating ER 5.4 will not increase access to justice, will cause damage to the quality of legal services by provided by the legal profession, and will only financially benefit lawyers and non-lawyer investors to the detriment of those not served by the legal community.
    Ian Neale
    New Member
    Posts:1 New Member

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    01 May 2020 01:23 PM
    Ian Neale, SBN 005201,
    ineale@bcattorneys.com
    602-234-9909.

    I am opposed to this in its entirety.
    Matthew Millea
    New Member
    Posts:1 New Member

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    01 May 2020 04:37 PM
    Matthew P. Millea
    301 East Bethany Home Road
    Suite B100
    Phoenix, Arizona 85012
    (480) 367-1921
    millealawfirm.com
    Arizona Bar No. 011620
    matt@millealawfirm.com

    I oppose the proposed rule change. There is no question that access to legal services is not what it should be. But the proposals here are likely to do what similar efforts have done in other professions-- reduce the quality of the services provided, while only attracting corporate investors who seek to skim money off a system they consider to be inefficient. Any true profession, that claims to put the interests of clients ahead of the professionals themselves, is going to be inefficient from the standpoint of a typical business. But that is what makes the legal profession what it is. I am proud to be a lawyer because I know what sacrifices it takes all of us to live up to the ideals of the profession. But I don't think that allowing non-lawyers to profit from providing legal services is going to make those services any less expensive. It will only lower the quality, and create even more distrust of the institution.
    I am a sole practitioner and have been for the last ten years. I do spend significant amounts of time running the business, as opposed to practicing law. But I see no reason to believe to believe that partnering with non-lawyers would improve the service I give to my clients. Nor do I think it would improve the quality of my life. It would increase my overhead significantly, leading to even more pressure to recover fees from clients as efficiently as possible. The practice of law is hard, and it always will be. It is supposed to be. We take on other peoples most serious problems and try to help them with them. We don't need these changes. They will not benefit the public or the profession. Please deny the petition.

    John Micheaels
    New Member
    Posts:1 New Member

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    02 May 2020 11:19 AM
    John Micheaels Beale, Micheaels, Slack & Shughart 7012 N. 18th St. Phoenix, AZ 85020 602-650-2465 jam@bmsslaw.com
    I write in strong opposition to the proposal to eliminate Ethical Rule 5.4. I have read the comments of Tom Burnett and incorporate and reiterate those comments herein. There has been presented zero evidence that allowing non lawyers to own and control law firms will in any way “expand access to justice” or “protect the public.” Certainly the Response submitted on behalf of the Task Force does not do so. How “infusing capital” into a private venture of any kind, let alone a law firm, “expands access to justice” or “protects the public” has yet to be articulated, let alone proven. Our profession and the public would be far better served if we directed our efforts at increasing financial support for our public judicial system, not by having profit-seeking non lawyers and corporations “infuse capital” into private law firms in order to reap more profit. Finally, before I could practice law I was required to take an oath that I would support the constitutions and laws of our state and country, support the fair administration of justice and legal representation for those unable to afford counsel, and treat the courts of justice and judicial officers with due respect. In taking that public oath I became a public (not private) citizen and officer of the court and the administration of justice. Non lawyers are neither constrained nor bound by this public oath. Many do not know of its existence. In my mind, no matter how far the practice of law and administration of justice may sometimes deviate from the principles set forth in our oath, it is this public oath that must continue to serve as the foundation for our profession and the practice of law. Thank you for considering my thoughts.
    Jennifer Cranston
    New Member
    Posts:1 New Member

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    05 May 2020 10:18 AM
    Jennifer Cranston
    2575 E. Camelback Rd., Phoenix, AZ 85016
    602-530-8191
    jennifer.cranston@gknet.com
    020640

    I oppose the petition’s proposal to eliminate ER 5.4, but support the concept of limited license legal practitioners. I appreciate the Task Force’s efforts and commitment to addressing access to justice. I also appreciate the thoughtful articles included in the Arizona Attorney Magazine on these topics. Based on the information presented, I cannot support non-lawyer ownership at this time. While the limited license proposal seems appropriately grounded in an effort to improve access to legal resources and seeks to accomplish this goal via a tested and measured approach, the recommendation regarding non-lawyer ownership does not. Thank you for considering these comments.
    Jeremy Ashworth
    New Member
    Posts:1 New Member

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    05 May 2020 10:36 AM
    Jeremy Ashworth
    State Bar #032977
    2701 East Camelback Road Suite 140
    Phoenix AZ 85016
    602-952-3104
    jashworth@lernerandrowe.com

    I join in opposing the petition. Geoffrey Trachtenberg, Frank Verderame, and Judge Swann all discuss the problems with letting this petition become the law. The ethical problems this will likely unleash causing harm to the public should be enough to stop it before it begins.

    SIP
    New Member
    Posts:2 New Member

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    06 May 2020 01:07 PM
    Scott I. Palumbo (current President of the Arizona Association for Justice/ Arizona Trial Lawyers Association)
    2800 N. Central Ave., Suite 1400
    Phoenix, Arizona 85004
    602-265-5777



    I have read the Petitioner’s Response and Amended Petition and remain as skeptical of the proposed rule changes as ever. As eloquently outlined by my colleague Thomas Burnett in his April 30, 2020 comment, the Response, “other than hyperbole, [offers] no explanation for how eliminating ER 5.4 would increase access to justice.”

    Indeed, Dean Emeritus Daniel Rodriguez, a member of the Task Force who was asked to write an article in the April 2020 Az Attorney Magazine in support of the proposed rule changes, was forced to concede that there is no concrete evidence supporting that allowing nonlawyer ownership of law firms would result in ANY increased access to justice: "Even among enthusiasts of nonlawyer ownership, as I am, we must candidly admit that we do not yet know whether the access to justice needle will be moved by permitting nonlawyer ownership. The evidence from the United Kingdom is ultimately indeterminate, even a dozen years after the enactment of the Legal Services Act that, among other reforms, permits nonlawyers to work with lawyers to form alternative business structures."

    So, if there is no evidence to support that these drastic and novel rule changes will make ANY difference, let alone a material difference, why is the Petitioner in such a rush to have them adopted? Why does the Petitioner rely so heavily on the biased opinions of Mr. Crispin Passmore? Why are most of those who have commented in favor of the proposed rule changes from outside Arizona? Why is this all being done via the “Court Rules Forum,” an antiquated and completely non-user-friendly system incapable of hosting an open and transparent debate about the issues?

    Sorry, but this whole thing doesn’t pass the smell test.
    Ken Gerber
    New Member
    Posts:1 New Member

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    07 May 2020 03:42 PM
    Kenneth Gerber
    State Bar #027387
    12133 W. Bell Rd., Suite 202
    Surprise, AZ 85378
    623-486-8300
    ken@gerberinjurylaw.com

    Please accept this comment as opposition to the proposed rule change. For the better part of the last 25 years, I have owned and operated law firms in two different states. I cannot see a benefit to our clients by adopting this change. I believe that it will only diminish the profession and the ability to provide ethical, responsible and strong advocacy for our clients. Non-lawyer control of law firms will change the focus from the practice of law to one of keeping the line moving at the register. I have watched as other professions have allowed this, only to see the quality of care diminish greatly.
    RMK
    New Member
    Posts:3 New Member

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    07 May 2020 04:04 PM
    Ronda M Kelso
    Burg Simpson Eldredge Hersh Jardine
    RKelso@BurgSimpson.com

    I write in strong opposition to the rule change which would permit non-lawyer ownership of firms and creation of a new level of legal practitioner. I have no new or earthshattering information not already shared. I am extremely concerned about the precedent Arizona would be setting if this type of ownership were to be permitted. We are a body of legal practitioners who thrive on ethical considerations and their resolution. To even consider that someone without the level of education we have attained be responsible for the ethical considerations, fiscal responsibility, and status as officers of the court is reckless. one of the purported rationales for this sweeping change is to increase the access to the court system. This is a dangerous way to create the appearance of competent representation.
    Kent Hammond
    New Member
    Posts:2 New Member

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    07 May 2020 04:30 PM
    I write in strong opposition to the proposal to eliminate Ethical Rule 5.4. I have read the comments of Tom Burnett and incorporate and reiterate those comments. No evidence has been presented that allowing non lawyers to own and control law firms will in any way “expand access to justice” or “protect the public.” Moreover, as noted by others, it is troubling that a majority of comments in support of the rule change have come from organizations and individuals from outside of Arizona.

    Kent Hammond
    Law Offices of Rudolph & Hammond, LLC
    8689 E. San Alberto Drive
    Scottsdale, AZ 85258
    Phone 480.951.9700
    Fax 480.951.1185
    kent@rudolphhammond.com
    www.rudolphhammond.com
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    08 May 2020 09:46 AM
    George A. Riemer
    Arizona Bar Member No. 017034
    garpho@outlook.com
    623-238-5039

    While it appears that both ABS and LLLPs will be approved by the Arizona Supreme Court as complex regulations have been released to implement both, I appreciate the fact that the Court is continuing to accept comments on both proposals. I offer the following additional comments.
    Attachments
    Jake Podolsky
    New Member
    Posts:1 New Member

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    08 May 2020 02:26 PM
    Jake Podolsky
    4140 E Baseline Rd Ste 101
    Mesa, AZ 85206
    Phone: (480) 757-5000

    I STRONGLY oppose the proposed creation of the Limited License Legal Practitioner (LLLP).
    AJM
    New Member
    Posts:1 New Member

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    08 May 2020 04:07 PM
    The American Bar Association has recommended against changes to Rule 5.4 as they relate to non lawyer ownership of law firms. I concur.

    I have been practicing law for nearly 20 years in Arizona. Prior to that I wrote an honors thesis on Multidisciplinary Practices (MDPs), a professional entity where lawyers and non-lawyers work together in the same business. The concerns of 20 years ago remain even more pronounced today.

    The concern is that a lawyer would be subject to influence by non-lawyer superiors whose decisions might be motivated by financial gain for the business, rather than concern for the client's needs. The fear is that where a lawyer's decisions are influenced by non-lawyers - who are not held to the same ethical standards - the client may receive inferior legal services or higher costs. For example, as a personal injury attorney owning a law firm, I always reduce my fee as a gesture of good faith. Nothing in the fee agreement requires me to do so. But, if my firm were owned by a non-lawyer, the reduction of the fees would be vetoed. This results in the antithesis of what this proposal seeks to accomplish, and instead results in higher costs for low income individuals.

    Similarly non-lawyer owners would not have been trained in the ethics of the law and may not be sympathetic to the type of concerns that lawyers are required to consider. Pro bono honors would diminish, thereby, again, resulting in less access to justice by individuals who need it the most.

    And, what of disbarred lawyers? If this proposal passes, could they own law firms? And provide legal advice? Will the very people the profession has deemed unfit to practice be the decision makers of the tomorrow?

    The proposed rule change then suggests a "compliance attorney”. This added cost to a small firm would necessarily raise the costs of doing business, and such costs would get passed to lower income individuals, again defeating the intended purpose of the Petition #20-0034.

    A.J. Mitchell
    14555 N. Scottsdale Road, Suite 170
    Scottsdale, AZ 85254
    480-595-6800
    Bar No. 021244
    Douglas Zanes
    New Member
    Posts:1 New Member

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    11 May 2020 11:40 AM
    Douglas Zanes
    AZ State Bar No. 018195
    4222 East Thomas Road, #100
    Phoenix, AZ 85018
    dzanes@zaneslaw.com
    602-999-9999

    I have attached my comment in favor of the rule changes proposed in R-20-0034. Although I am in favor of the recommended changes in there entirety, I have focused my comments on why I support the elimination of ER 5.4.
    Attachments
    Ryan Skiver
    New Member
    Posts:2 New Member

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    11 May 2020 02:18 PM
    Even with the Task Force's Response, I still vehemently oppose the recommendation to eliminate Ethical Rule 5.4 to allow non-lawyer ownership of law firms. The elimination of ER 5.4 will cause irreparable damage to the legal profession and will not increase the underserved population's access to justice. This is nothing more than an attempt by private equity and hedge funds who want another avenue to increase their income.

    Ryan Skiver
    Arizona State Bar Number 024552
    THE SKIVER LAW FIRM
    7201 E. Camelback Road, Suite 290
    Scottsdale, AZ 85251
    Telephone: (480) 626-1667
    Email: rskiver@skiverlawfirm.com
    Laura Hamblin
    New Member
    Posts:1 New Member

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    15 May 2020 11:23 AM
    Laura Hamblin,
    Laura J. Hamblin, JD, PLLC
    P.O. Box 11123
    Prescott, AZ 86304
    928-308-8394
    laurajhamblinjd@gmail.com
    AZ Bar #011875

    May 15, 2020

    Re: R-20-0034 - Comments on the Arizona Supreme Court’s Task Force on the Delivery of Legal Services’ Recommendations

    I agree with all of the recommendations from the Arizona Supreme Court’s Task Force on the Delivery of Legal Services. The task force recognized the need to make some dramatic changes to better serve our communities, and I applaud them for doing so.

    My legal career has been different than many lawyers and it has given me a perspective that I hope will be helpful to those who are evaluating whether or not to move forward on the rule changes, particularly the two most controversial recommendations; co-ownership of businesses that engage in the practice of law, and the development of “limited license legal practitioners” (LLLPs). For roughly twenty-five years, I worked as both in-house labor/employment law counsel and vice president of human resources for several nationwide retailers. During the last four years, I’ve had a solo part-time employment law practice and human resources consulting business.

    Task Force’s Recommendation #1—Allowing co-ownership of businesses that engage in the practice of law, while preserving the professional independence of lawyers and protecting the public.

    The recurring argument against this recommendation is that non-lawyer businesspeople, who don’t understand legal ethics and responsibilities, will be motivated by profit to pressure lawyers to disregard their ethical duties. That is such an unfair and broad generalization. Based on my experience working with nonlawyer executives and managers, with very few exceptions, they act professionally and with integrity, they respect my advice and understand the rigorous course of education required of lawyers, and they want to work within the lines of the law to earn their profits. There are exceptions, just as there are lawyers who violate the public’s trust and don’t follow the ethical rules. We see those examples every month in the Arizona Attorney magazine.

    Throughout my career, I reported to non-lawyers, or to both a non-lawyer and lawyer at the same time. The organizations that employed me were not businesses that engaged in the practice of law—they were sales and profit-oriented retail businesses. Still, I understood that I had to comply with legal ethics in my work. Only one time did my nonlawyer supervisor ask for my assistance in doing something that I knew would create serious liability for the company (my client). Fortunately, I was able to convince him to choose another option, but I was prepared to go against his directive if he had insisted otherwise.
    Regardless of the business model, lawyers must abide by our ethical rules and professional guidelines. I don’t see a difference between my non-lawyer supervisor asking me to do something I knew was wrong, or a supervising attorney at a firm pressuring other lawyers to bill unnecessary services or time to clients. In both situations, the lawyer who is in an ethically compromised position must push back.

    Also, both of my examples took place in profit-motivated organizations. It seems so disingenuous to hear lawyers argue that profit-driven organizations will compromise lawyers’ judgment. When I worked in-house, an attorney at a firm that we used as outside counsel told me that the firm jokingly named a recently remodeled floor of their building after my employer because we were such a “good” client. The legal profession is just as profit-driven as many other professions.

    As long as regulatory parameters are established to clarify the lines that aren’t to be crossed; and to provide safeguards to client confidentiality, lawyer independence and conflicts of interest; other business models should be permitted.

    Task Force’s Recommendation #6—Development of a tier of “limited license legal practitioners” (LLLPs). There is still much work to be done by the steering committee before we are able to thoughtfully evaluate this recommendation, but I fully support the concept.

    Being a solo practitioner has been an eye-opening experience, to say the least. I limit my employment law practice to employer-clients. Approximately 90% of my clients have less than 25 employees and many of those have less than 5 employees. Typically, the business owners handle the human resources function. They may have used a lawyer’s services to set up the business, but many of them ask their accountant or bookkeeping service for employment related legal advice. Those other professionals usually don’t field the questions, but sometimes they do, with mixed results.

    I’ve read many of the comments opposing the task force’s LLLP recommendation, which express concern about the quality of advice and work product that people might receive. I understand that concern; however, if we stick with the status quo of primarily high-priced legal services, people will continue to rely on Google, a bookkeeper, or their next-door neighbor for legal advice. Often, by the time a new client calls me they have already made many poor decisions because they relied on flawed advice from uninformed sources. There is a tremendous need for affordable, competent and easily accessible legal resources and guidance.

    I know that the area of employment law is not unique. Many people are just unable or unwilling to spend money on lawyers until they are over their heads with problems. The LLLP could possibly be a resource for people to turn to before they get to that point. For example, most larger employers have in-house human resources people (typically non-lawyers) who interpret and apply the laws to various employment situations. LLLPs might be able to do the same in a variety of other practice areas.

    Clearly, much more work needs to go into identifying LLLP practice areas and scope, as well as developing a regulatory framework for LLLPs; but I strongly favor the concept.
    Mike Moldoveanu
    New Member
    Posts:2 New Member

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    15 May 2020 12:36 PM
    I adopt the reasoning of all my colleagues who have responded in opposition of this Proposal. It is an absolutely terrible idea that does not advance justice for the undeserved.

    Mike Moldoveanu
    SB: 029914
    mmoldoveanu@goldbergandosborne.com
    Charles B. Williamson, esq.
    New Member
    Posts:1 New Member

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    15 May 2020 12:58 PM
    Charles B. Williamson, Bar Number 030654
    Clausen & Williamson PLLC
    2999 N. 44th St., Suite 318, Phoenix, AZ 85018
    charles@cwazlaw.com
    602-285-4463

    Attorneys are bound by the codified Ethical Rules, and for good reason. If left unchecked, there are those who would take advantage of clients and run amok. Law firms wield a tremendous degree of power, and they must be run SOLELY by attorneys who are bound by those ethical rules. Corporate ownership of law firms is the road to ruin. They hide behind phrases like "give the law back to the people," when they really want to strip the ethics out of the practice entirely. Would you let someone who never went to medical school practice brain surgery? Of course not! People realize that restriction is for safety. The restriction preventing non-lawyers from owning law firms is no less important to the economic safety of the citizenry. It just takes one unethical non-lawyer to do irreparable harm to a host of clients who would otherwise be responsibly and ethically served by an attorney-owned firm. Do not change this law. Protect the people of Arizona!
    Steven A. Cohen
    New Member
    Posts:1 New Member

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    15 May 2020 04:31 PM

    I have been admitted since 1978, and have been certified as a specialist in Injury and Wrongful Death Litigation. Although my expertise is in this area of the law, I believe that I have a good working knowledge of other areas as well. Looking at this Petition objectively, I am very much opposed to it, particularly the amendment eliminating ER 5.4 and 5.7, in order to, inter alia, permit non-lawyers to own and manage law firms, and to make decisions concerning legal disputes.

    Overall, I agree with the objections raised by those who have posted in opposition before me. Passage of this Petition would, in my view, lead to conflicts of interest that may not be immediately apparent, and which will create issues that will likely require an inordinate amount of time, money and judicial effort to resolve, further delaying the resolution of any underlying dispute, greatly impacting the litigants and further impacting the view of those whom we strive to represent and serve. As it is, the public’s perception of lawyers and the legal system has been affected by national events that have undermined the Rule of Law.

    This rule change is fraught with danger and should not be adopted. While our Court System, and our bar has taken the lead on many issues of national importance, and I am proud to have been a member of the Arizona Bar for more than 40 years, I must respectfully disagree with the proponents of these rule changes, and urge that the Petition be denied.


    Steven A. Cohen
    Bar No. 5400
    Cohen Law
    4250 N. Drinkwater Blvd.
    Suite 150
    Scottsdale AZ 85251
    602-677-3216

    Tom Ryan
    New Member
    Posts:1 New Member

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    16 May 2020 03:28 PM
    Thomas M. Ryan
    Law Office of Thomas M. Ryan
    565 W Chandler Blvd Ste 210, Chandler, AZ 85225
    Phone: (480) 963-3333

    I write in opposition to this plan. The idea of the commodification of justice is abhorrent to the rule of law. Allowing non-lawyer ownership of lawyers and law firms will effectively destroy the fiduciary nature of the practice of law. We can see the corrosive effect of money in the political system and the damage that has caused. The same financial pressures will be brought to bear upon lawyers. This proposed set of amendments is nothing more than the Citizens United for lawyers. This will not increase access to justice for those who need it the most. It will simply end up being another effective way to vacuum out the last bit of cash from the poor, the downtrodden, the broken and the oppressed. I would rather see our Court system simplify rules of procedure and roll back court fees for the poor and the middle class. Please do not adopt this mess.

    Mark Samson
    New Member
    Posts:1 New Member

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    18 May 2020 11:17 AM
    Mark Samson
    602-248-0088
    Keller Rohrback LLP
    3101 N Central Ave Ste 1400
    Phoenix, Arizona, 85012-2643

    As a 30 year Arizona practitioner, this proposed rule change is misguided and allowing non-lawyer ownership of law practices will add far deeper problems than it seeks to solve. It will reduce the provision of effective, professional representation by introducing the control of the attorney-client relationship by non-professionals who answer only to outside business considerations without the direct, personal influence of the ethical rules. I am also underwhelmed by the chances of the proposed change actually increasing the availability of legal services to under-served population groups. I endorse all of the prior responses against this rule change being made and ask the Court to consider their comments and the proof of the shaky likelihood of the change actually delivering increased legal services. At bottom, I think the proposed change will reduce the quality of all legal services.
    Frank Verderame
    New Member
    Posts:3 New Member

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    18 May 2020 11:34 AM
    Frank Verderame
    316 E Flower St, Phoenix, AZ 85012
    Phone: (602) 266-2002

    I have read the recent comments regarding this petition and must again register my opposition to the rule change. I agree with the comments recently submitted by Tom Ryan, Charles Williamson, and Steve Cohen. I am prompted to submit this additional comment after reading a comment in favor of the rule change by Laura Hamblin. While I respect the fact that her experience has been different from the majority of lawyers, , I feel that there is a dramatic difference between working with non-lawyers for whom you are employed, and non-lawyers for whom you are acting in a representative capacity in some fashion. Employers have restrictions on the demands that they can make upon employees that are rooted in law. That is clearly very different from a situation where a non-owner is also a non-lawyer, or group of non-owners are non-lawyers, and they have a greater stake or financial interest in the enterprise than the lawyer. The opportunities for abuse and scandal are significant. I believe that the State Bar has good intentions,fully expect the Bar will find itself having to deal with unexpected consequences. I strongly urge the court to reject this proposed rule change.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    18 May 2020 11:34 AM
    Colby R. Kanouse, Esq.
    Chuck Franklin Law
    1920 E. University, Suite 102
    Tempe, Arizona 85281
    Fax: (480)551-0407
    Phone: (480)551-0406 ext. 102
    Cell Phone: (480)343-1411

    I am opposed to the elimination or modification of ER 5.4. I believe it will create conflicts of interest in numerous respects, which over the long term will further erode the public’s trust in lawyers and the justice system as a whole. A lawyer’s independence is paramount and we cannot maintain that while serving both non-lawyer investors and clients, whose interests may not always line up. Although it is nice to think that lawyers would always do right by their client, even doing so would harm the interests of investors or co-owners of a firm, that is aspirational and not indicative of reality.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    18 May 2020 11:39 AM
    Kenneth K. Graham
    Arizona State Bar No. 007069
    100 N. Stone, Suite 508
    Tucson Az 85701
    (520) 622-7494

    I am strongly against this proposal. I have reviewed many of the other posts that have opposed the Rule change and agree with much of what they have said so i am not going to repeat here what has already been submitted.

    I will add that I have been practicing for 39 years now and this Rule change appears to be a wolf in sheep's clothing that seeks to "fix" a problem that is greatly exaggerated in a way that will adversely effect our profession by allowing non-lawyers to practice law. The proposed rule says it is needed because there is a problem with access to the justice system; however, to the extent this is true it fails to tailor a response to the problem that allegedly exists i.e. identify those areas where access is alleged to be missing and respond narrowly to those areas.

    Before taking the drastic steps set forth in the proposal, why not explore options such as getting our State Law colleges, or even the Bar itself, to offer forgivable loans to law students who are willing to dedicate a specified period of time to practice in the areas that are identified? I am sure there are other alternatives that should be pursued as well.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    18 May 2020 11:46 AM
    Jay L. Ciulla, Attorney
    SB # 017971
    The Ciulla Law Firm, PLLC
    2025 N. 3rd Street, Suite 165
    Phoenix, AZ 85004
    Telephone (602) 495-0053 Ext. 2
    Facsimile (602) 903-6787
    Email: jay@ciullalawfirm.com
    Web: www.phoenixazinjurylaw.com

    I strongly oppose R-20-0034 and the proposed changes to E.R. 5.4. This rule change proposal seems to be a solution in search of a problem. As a native of Arizona and an attorney with ownership of a local law firm, I believe that out-of-state big-money interests are attempting to take over the Arizona legal market from local lawyers. This will not increase access to justice. In fact, there is no evidence or logical nexus between changing the rules regarding law firm ownership and increasing access to legal services. This rule would change would facilitate ending the practice of law as we know it and this would cease to be a profession at all; this will merely be a business.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    18 May 2020 11:49 AM
    Jeff Sparks
    Bar No. 018924
    Law Office of Jeff Sparks
    125 Grove Avenue
    Prescott, AZ 86301
    928-541-9698
    Fax: 928-541-1179
    Email: arizonalawyer@cableone.net

    I strongly oppose the above referenced Petition. I adopt the other comments that have quite succinctly set forth the myriad of reasons the Petition should be denied.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    18 May 2020 11:58 AM
    Amy Owen, Esq. 029275
    Attorney, OWEN LAW FIRM, PLLC
    2198 E. Camelback Rd. Suite 310
    Phoenix, Arizona 85016
    480-788-3367
    Amy@amyowenlaw.com
    www.amyowenlaw.com

    I strongly OPPOSE the proposed rule change. I agree wholeheartedly with Nancy Greenlee, Geoff Trachtenberg, Ronda Kelso and Matt Fendon's comments on this topic.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    18 May 2020 12:18 PM
    Frederick C. Berry, Jr., J.D., CPCU, CLU
    State Bar of Arizona #003244
    Frederick C. Berry, Jr., P.C.
    1951 West Camelback Road, Suite 200
    Phoenix, AZ 85015
    602-274-5700 FAX: 602-254-0656
    www.FrederickCBerry.com

    Comment to the April 27, 202 Task Force Response:

    I was honored to serve as a Hearing Officer for the Supreme Court in disciplinary matters involving not only lawyers but document preparers and fiduciaries. That experience uniforms me that allowing non lawyers to own or participate in the ownership of an Arizona law firm will not serve the interests of consumers of legal services in Arizona.

    An important function of the Supreme Court is to regulate lawyers. That is a tough job but is made manageable by lawyers being bound by ethical standards and rules. Enterprising investors and non-lawyers are not governed by the overriding concern of compliance with these standards and rules. Instead they are motivated by enterprise and profit. I can say that being an enterpriser myself. If an enterpriser gets caught cheating, she or he can just walk away from the "failed" enterprise. Lawyers, on the other hand, know with certainty that they face disbarment and shame. This is no small distinguishing factor.

    I am opposed to the Task Force’s recommendation to eliminate Ethical Rule 5.4 to allow non-lawyer ownership of law firms for other good reasons mentioned by others. As described below, eliminating ER 5.4 will not increase access to justice, will cause damage to the legal profession generally, and will only financially benefit lawyers and non-lawyer investors to the detriment of the underserved.

    On January 30, 2020, the Task Force released its Proposal. The first set of comments roundly disagreed with the Proposal, with a few exceptions, mostly from out-of-state interests. The Comments’ subject matter varied, some comments decried the negative effects the proposals would have on the legal system in general, others focused on the ethical clashes that would result from non-lawyer ownership of law firms, while others demanded answers to the question, “How does eliminating ER 5.4 increase access to justice?” On April 27, 2020, the Task Force issued its Response. The latter question was largely ignored in the Response. And for good reason: As Mr. Geoffrey Trachtenberg pointed out in his March 20, 2020 comment, “the “Access to Justice” mantra is being coopted as a Trojan Horse; it’s being used by private equity and hedge funds who desire to squeeze every last dollar out of the legal practice.”

    As it relates to ER 5.4 the Response addresses “Access to Justice” only briefly and attempts to use the Covid-19 pandemic as leverage. Literally, other than hyperbole, there is no explanation for how eliminating ER 5.4 would increase access to justice.

    Following is a summary of the Task Force’s comments regarding elimination of ER 5.4 and its relationship to “Access to Justice”, along with this authors response:

    1. Innovative ways to conduct business which helped law firms through the pandemic would not have been possible without an “infusion” of new technology and emergency changes to existing court rules
    a. Response: Yes, and this was all done without eliminating ER 5.4. It turns out attorneys, judges, and their wonderful staff can adopt new technologies, create innovative ways to conduct business, and respond to emergencies.

    2. “The Task Force recommendations, while not foreseeing the pandemic, fulfill its charge to ignite similar innovation into the traditional services and to expand access to justice, not just for low income and indigent persons, but for working- and middle-class persons.”
    a. Response: This is hyperbole. It doesn’t say how eliminating 5.4 would increase access to justice.

    3. “The effects of the pandemic will severely increase the need for legal services”.
    a. Response: How and why? Maybe the need for legal services will increase, maybe it won’t. But how does eliminating ER 5.4 increase access to legal services?

    4. “These proposals will be increasingly relevant and necessary to ensure the public’s legal needs are met.”
    a. Response: How?

    5. “Moreover, the financial impact of the pandemic on some law firms may be severe. The ability to partner with other professionals to create innovative ways to deliver legal services in addition to the ability to attract capital may well help firms survive and thrive in what will likely become a new normal.”
    a. Response: How does this relate to access to justice? Instead, it panders to attorneys and ignores reality: there are other, more reasonable, ways to gain access to capital and keep the legal profession alive during this time of crisis without eliminating ER 5.4.

    6. “Adopting the changes would allow Arizona to expand access to justice while protecting the public, the very charge the Task Force was given.”
    a. Response: How?

    At the end of the day, no explanation is provided, because there is none. Because it is illogical to believe that adding a second layer of “professionals” (the non-lawyer owner) to a law firm, would result in an increase in access to justice. An explanation does not exist because “Access to Justice” by eliminating ER 5.4 is private equity’s Trojan Horse. It is the same reason non-doctor/dentist ownership of medical and dental practices has not increased access to dental or medical care. It only results in worse dental and medical care. We have seen this play out: dentists/doctors can only meet with you for 10 minutes because that is the only time allotted under their investors’ business model. The primary care physician walks in the office to say hi and tell you what the diagnosis is before he hurries out of the room b/c if he doesn’t fit in 120 patients in one day, the owners are going to decrease his compensation.

    The only way to pay for the non-lawyer’s partnership interest is to increase profits. That does not translate to an increase in access to justice.

    Unlike the consumer product business model of selling widgets, where prices can decrease as competition increases when more companies produce the widget, in the legal, medical, and dental context, the “widget” is the professional’s service. It is the dentist’s work on your crown, the doctor performing a surgery, or a lawyer trying your case for which the client pays. The cost of legal representation doesn’t decrease as the layers of ownership increase- the opposite is increased.

    I am Frederick C. Berry, Jr. and proud to have State Bar of Arizona number 003244.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    18 May 2020 12:32 PM
    J. Robert Tolman
    2173 E. Warner Road, Suite 101
    Tempe, AZ 85284
    Mobile: (602) 463-2437
    Telephone: (480) 625-4501 ext 102
    Facsimile: (480) 666-9333
    Robert@rtolmanlaw.com
    www.rtolmanlaw.com

    I oppose the elimination of ER 5.4 for a variety of reasons that have been adequately expressed and addressed by others. Essentially, my duty to my clients and my clients confidence in me should not be subject to outside influences. It is sacrosanct. Elimination of ER 5.4 will not serve to protect the rights of our citizens, and, of equlat if not greater significance, it will not promote the provision of legal services to the underserved in Arizona.

    State Bar of Arizona #003864

    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    18 May 2020 12:36 PM
    Mark A. Ryan AZ Bar No. 034023
    2200 E. Camelback Rd., Ste. 213
    Phoenix, AZ 85016
    phone: (602) 224-0005
    email: Mark@snyderwenner.com

    I write in strong opposition to the petition to eliminate ER 5.4. The elimination of ER 5.4 will create an irreparable harm to the legal profession through the introduction of non-lawyers who are not subject to the scrutiny of the bar. The elimination of ER 5.4 will be disastrous as non-lawyer investors will seek returns on their investments much like a shareholder to a corporation. If this petition were to pass, any access to justice sought by the elimination of ER 5.4 would be detrimental to its purpose of helping the underserved. That is due to the non-lawyer investor’s desire to make profits over the service to the client. This petition should be rejected.


    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    18 May 2020 01:27 PM
    Patrick Mause Bar # 024269
    Law Office of Patrick Mause, PLLC
    290 North Meyer Avenue
    Tucson, AZ 85701
    520-342-0000 (phone)
    520-342-0001 (fax)
    www.PMauseLaw.com

    I oppose the proposal to permit non-lawyer ownership of law firms. Permitting non-lawyers to own law firms will reduce accountability in legal proceedings; weaken the trust and confidence between lawyers, clients, and the courts; lead to poor outcomes for clients when profits become the driving force in law firms; and irreparably harm the practice of law. The thought of hedge funds owning law firms should send a chill down all our spines.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    18 May 2020 01:30 PM
    Amy Hernandez
    Bar No. 022892
    Dwyer Hernandez, P.C.
    1670 E. River Road, Suite 270
    Tucson, Arizona 85718
    520-209-1855
    ahernandez@dwyerhernandezlaw.com

    I would like to comment on the above proposed rule change that I oppose it completely. I join in Geoff Trachtenberg and Tom Burnett’s comments.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    18 May 2020 01:37 PM
    Sean Phelan, Bar # 024508
    Managing Partner
    Jensen Phelan Law Firm, P.C.
    711 Whipple Street
    Prescott, Arizona 86301
    928-778-2660 (phone)
    928-778-1379 (fax)

    As a practitioner in a small town, we are constantly aware of outside influences looking to change the nature of our community, including small town law practices. It is of utmost importance that law firm's be part of the community they practice within. Moreover, it is of utmost importance that lawyers practicing in small communities uphold all ethical obligations to their client, and in-turn the community. Allowing non-lawyers to own law firms will allow profit motives to take precedence over the needs of the community and the client.

    Please keep our ethical rule as is and let the practice of law be the responsibility of lawyers.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    18 May 2020 01:43 PM
    Law Offices of Ted Updike, PLLC
    Theodore R. Updike (07231)
    1839 S. Alma School Road, Suite 205
    Mesa AZ 85210
    480-838-9000


    I want to ELIMINATE ER 5.4
    Jeffrey Marks
    New Member
    Posts:4 New Member

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    18 May 2020 01:44 PM
    Jeffrey A. Marks
    4773 E Camp Lowell Dr,
    Tucson, AZ 85712
    Phone: (520) 327-5300

    My name is Jeffrey A. Marks, SBN 005670. I have already submitted my strenuous objections to the proposed rule changes. However, I have though of a way in which legal services could be provided at a reduced rate to lower income people. After a law student graduates from an ABA accredited law school, that student be permitted to practice lower- level legal matters until that lawyer passes the bar exam and is admitted. That would give a minimum of five or so months where the not-yet-admitted lawyer has the inducement to practice law and get experience, if the services are limited to lower income people. With minimal rules to regulate such a practice, I think such a plan would be beneficial to everyone. That should eliminate the need for the nightmare inducing thought of non-lawyers providing legal services. Considering the number of recent graduates waiting to take the bar exam, there should be hundreds of law graduates that should happily agree to be part of this. Also, please let me again reiterate my strong objection to non-lawyers owning any interest in law practices. If allowed, it does not take a rocket scientist to see that virtually all the investment would be in high-profit personal injury practices, which would then result in a concerted race to the bottom.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    18 May 2020 01:46 PM
    Kel Vrana
    Bar Number: 029017
    Vrana Law Firm
    1212 E. Baseline Rd. #108
    Tempe, AZ 85287

    There are much more successful and smarter lawyers than myself that will comment on this. However, by that same principle I cannot imagine telling a lay person that they are in good hands under the care of a non-lawyer for their legal matter. Even the most accomplished paralegals miss basic legal principles which a non-lawyer is not prepared to deal with. The only endorsement for the rule change I have heard is to give lawyers the benefit of selling their practice to a wider audience. This idea in and of itself is one founded in greed. This principle of greed seeks to overtake our industry with this rule change and there will be little that anyone can do about it. One needs to merely drive down the freeway to see the billboards littered with firms seeking to get business. The proposed rule change would see a litany of investors seeking to do just that with a focus solely on profit.

    In my experience, those that cannot pass the bar do not make good employees. Were this measure to pass the over 30% of applicants that were unable to pass the bar consistently the last few years will likely go for the low hanging fruit of LLLP. This has the potential to be disastrous, especially if those peoples are not required to carry professional liability insurance.

    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    18 May 2020 02:18 PM
    Brian T. Leonard
    THE LEONARD LAW FIRM, PLLC
    20830 North Tatum Boulevard, Suite 360
    Phoenix, AZ 85050
    (602) 419-3201 Main
    (602) 419-3314 Fax
    www.theleonardlawfirm.com

    I strongly DISAGREE with the proposal to eliminate ER 5.4. I believe eliminating ER 5.4 – ensuring the independence and ethical conduct of lawyers - and allowing non-lawyers to own law firms would severely harm the rights of the underserved by exposing them to substandard lawyering by non-lawyers that would, ultimately, impair their inalienable rights. All with no accountability. I fail to see how elimination of this safeguard, in any way, helps those in need of legal service in Arizona.

    I would also like to note that I agree with the thoughtful post of former State Bar of Arizona President, Geoff Trachtenberg, on February 18, 2020. Geoff DISAGREES with the proposal as well.

    Hutson
    New Member
    Posts:3 New Member

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    18 May 2020 02:21 PM
    I have read concern in the comments about whether LLLPs will be required to carry professional liability insurance. Even if they are, it would seem that claims for professional malpractice would be difficult to prevail on if the standard of care is merely that of a LLLP, which will surely be lower than the standard of care required of an attorney. If all an LLLP has to prove is that he or she acted as a reasonable and prudent LLLP and, therefore, can't be held to the same standard as an attorney to provide representation, then what? A reduction in the quality of legal services may lower the standard of care and leave aggrieved clients (or will they be customers) without an appropriate remedy. I highly doubt this would be communicated to the public. Would attorneys be expected to contribute to some additional client/customer protection fund?

    From what I gather, attorneys who are in the trenches doing good work for the public oppose the petition. It appears to be folks who are (a) in ivory towers, (b) academia, (c) out of state, (d) virtually retired, and/or (d) have unusual practices that support the changes. It is my hope that you will take their opinions/comments with a grain of salt.

    There is nothing said but bumper sticker slogans in support of it. What new attorneys would want to come to Arizona to practice in such a Mickey Mouse atmosphere that would result from the passing of the petition? Arizona should be seeking to create an atmosphere that attracts high-quality talent, not the reverse. Maybe law school loan forgiveness is a better option, or student loan forgiveness in exchange for pro bono hours?

    Also, I believe I read that the universities are willing and ready to create programs for LLLPS. Of course, they are. They charge exorbitant tuition rates and have a degree for virtually everything that can be imagined under the sun, regardless of the actual need in society and the student's ability to pay back the debt.

    Again, I oppose the petition in toto.

    Randal Hutson
    The Hutson Law Firm, PLLC
    22849 N. 19th Ave, Suite 135
    Phoenix, AZ 85027
    028522
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    18 May 2020 02:37 PM
    Rob K Poundstone, Bar No. 032188
    17505 N. 79th Avenue, Suit 411
    Glendale, Arizona 85308
    Tel: 602.254.3333┃Fax: 866.273.1859
    Web: www.PoundstoneScotten.com
    Email: Robert@PoundstoneScotten.com

    Comment to the April 27, 2020 Task Force Response:

    Please consider this my Comment Opposing the Task Force’s recommendation to eliminate Ethical Rule 5.4 thereby allowing non-lawyer ownership of law firms under the guise of providing access to justice “not just for low income and indigent persons, but for working and middle-class persons.”

    A simple comparison can be made to an institution that came to Arizona intent on providing greater access to the legal profession under the guise of "diversity". Similar to what this proposal allows, said institution was backed by investors requiring profit. In the end, the institution is no more and endless trails of devastation remain (i.e., lowing of bar exam passage rates, graduates with tremendous debt, unable to pass the bar, and an unusable education, at least as an attorney). In other words, "access" by infusing the profession with investor money, in the case of the institution, harmed the target consumer, not the other way around.

    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    18 May 2020 02:55 PM
    Nicholas J. Kuntz, Bar # 035759
    9885 South Priest Dr., Ste 104
    PO Box 14086
    Tempe, AZ 85284
    (602) 288-3325
    NKuntz@Evans.law

    First by allowing nonlawyers to own, manage and make decisions on behalf of law firms will all but eliminate any of the ethical safeguards put in place to protect clients and the court system. For a profession that is oft perceived publicly as only in it for the money, this is a step in an entirely wrong direction. Furthermore, nonlawyers simply are not trained and are not under the very real threat of losing their ability to practice a profession which they have studied and crated for years. A marketing person that gets disbarred as a “limited license legal practitioner,” can just go to another company and get another marketing job.

    Lastly, the process to become a barred attorney starts with most aspiring lawyers in high school and does not end until they pass the bar exam. Intelligent candidates are not enough. There must exist a dedication to ensuring that not just a student’s grades but their SAT, LSAT and ultimately bar exam scores are high enough to take them to the next level. While the process is near universally despised by law students and attorneys everywhere, the final product results in highly competent highly dedicated attorneys. By cheapening the process, removing any substantive bars to client representation or reclassifying who can provide legal representation to a client in Arizona, is harming the legal process in Arizona and diminishing the substantive rights of all Arizonians. The perceived and actual damage to Arizona’s court systems and the rule of law will be immeasurable.

    Thank you for your time and consideration.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    18 May 2020 03:00 PM
    Marlo K. Arnold
    Bowman, Smith & Kallen, P.L.L.C.
    113 Harold C. Giss Parkway
    Yuma, Arizona 85364-2210
    Tel. 928.783.8879 | Fax. 928.329.1816
    www.bsklawoffice.com

    I am an attorney here in Arizona and I am writing to comment on the proposed elimination of ER.5.4 For a litany of reasons too long to list in this email, I strenuously oppose the elimination of ER 5.4 Thomas Burnett of Burnett Law Office and Frank Verderame set forth the objections more succinctly than I could. I would endorse the points set forth in their comments. My Arizona bar number is 027233. My contact information can be found below, in my signature line. In case it needs to be in the comment itself, I am Marlo K. Arnold, Bowman, Smith & Kallen, PLLC, Attorney, 113 Harold C. Giss Parkway, Yuma AZ 85365, (928)783-8879.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    18 May 2020 03:04 PM
    R. Randall Johnson
    480.905.9114
    randy@vakulalaw.com
    bar #014814
    The Vakula Law Firm
    11240 North Tatum Boulevard
    Phoenix, AZ 85028

    I am opposed to this proposed rule because it’s harmful to the public, the legal system, and the legal profession.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    18 May 2020 03:09 PM
    Diana Ezrré Robles | Attorney
    Arizona Bar No.: 018337
    SNOW, CARPIO & WEEKLEY
    Office (520) 647-9000| Fax (520) 647-9688
    2135 E. Grant Rd., Tucson AZ 85719
    Diana@workinjuryaz.com | www.workinjuryaz.com

    While I applaud attempts to legitimately increase access to justice, I'm strongly opposed to the Petition, particularly the amendment eliminating ER 5.4, in order to permit nonlawyers to own, manage, and make decisions concerning legal disputes. The entire purpose of ER 5.4 is to "ensure the independence and ethical conduct of lawyers.” E.g., Jacoby & Meyers, LLP v. Presiding Justices of the First, Second, Third & Fourth Departments, Appellate Div. of the Supreme Court of New York, 852 F.3d 178, 181 (2d Cir. 2017). Indeed, the title of ER 5.4 is the “Professional Independence of a Lawyer,” and the Comment to the rule states that it is to protect the lawyer’s "professional judgment.” Simply put, the rule promotes quality and ethical lawyering. It is as well-grounded in the practice of law as is the universal requirement that those who practice law must be minimally educated and licensed before being allowed to dispense legal advice to the public. Surely, the cost of legal advice would be less expensive to the public, at least on its face, if anyone could practice law despite their lack of education or competence—but it wouldn’t take long to see that the reduced upfront cost came at another price.

    Whether or not the proposal actually decreases the cost of legal services, there’s no question that the proposal undermines the special fiduciary relationship between an independent attorney and their client. In doing so, it puts the public at risk. See New York State Bar Association: Report of the Task Force on Nonlawyer Ownership, 76 Alb. L. Rev. 865, 877 (2013) (concluding that “nonlawyer control of legal practice presents considerable risks to the legal system and the justice system . . . and should not be permitted in New York.”). Since the Task Force itself claims that our rules must only be changed “in a way that continues to protect the public,” see pg. 12, it’s baffling the Task Force summarily rejected a “sandbox” approach, favored by other jurisdictions considering such a change, which would at least give some empirical basis for whether the proposal was effective and whether the proposal poses, as Judge Swann observed, “a serious threat to the long-term health of the justice system.”

    The Petition proposes a “pound of cure” without even an “ounce of prevention.” Common sense tells us that a nonlawyer entity likely to be attracted to investing in a law firm would be financially dominant and have its own conflicting duties to shareholders or other owners. It’s also logical to conclude that such entities would not put their money to work in smaller, rural, and poorer communities, but would target taking over prosperous law firms in well-served urban markets or developing "law firms" in those well-served areas.

    Moreover, even with a “compliance attorney,” as suggested by the Petition, standing between the “nonlawyer owners and managers,” common sense tells us such an inherently-conflicted employee is nothing more than an artificial strawman. Do we really think a business’s “compliance attorney” will stand as a genuine barrier to profit-hungry owners who seek to interpose their views into an attorney's independent professional judgment?

    The Petition in allowing nonlawyer investors to own any type of law practice in Arizona is a recipe for disaster, and allows an experiment of our entire justice system. I sincerely hope the Court rejects the Petition insofar as it eliminates ER 5.4. Thank you for your time and attention to this matter.

    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    18 May 2020 03:14 PM
    Gene M. Cullan
    Cullan & Cullan
    20830 N. Tatum Blvd., Suite 360
    Phoenix, AZ 85050
    (602) 200-9999

    The purpose of this correspondence is to voice my objection to the proposal to eliminate ER 5.4. The Bar and Courts should always work to maintain the independence and ethical conduct of lawyers practicing law in Arizona. Independence will be compromised should ER 5.4 be eliminated allowing non-lawyers to own and operate law firms. Those in need of legal services deserve better than some large corporation overlooking a client’s rights in favor of the non-lawyer’s bottom line.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    18 May 2020 03:22 PM
    John P. Ager, Esq.
    Sandweg & Ager, P.C.
    Medical Negligence Lawyers
    1221 East Osborn Road
    Suite 100
    Phoenix, AZ 85014
    (602) 648-3210

    I agree with the vast majority of comments opposing the proposed changes to ER 5.4. I do not see how non-lawyer ownership of law firms will make justice more accessible. Where will the money come from to pay the non-lawyers for their capital in such cases? Those who lack access to justice have issues for which legal representation is cost prohibitive. Creating a system where non-layer entrepreneurs must also be fed is not the answer to this problem. If an economic incentive existed for providing access to justice, lawyers would have already implemented that business model. Non-lawyers may be able to inject capital into the legal process, but that is not likely to result in better or more accessible legal services for those who cannot currently afford it.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    18 May 2020 03:25 PM
    Sarah R. Randolph, Esq.
    480.599.5051
    Sarah.R.Randolph@gmail.com

    I oppose the proposed rule change and feel strongly that it should not be approved.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    18 May 2020 03:28 PM
    Peter T. Donovan
    The Voightmann Law Firm, P.C.
    13880 N. Northsight Blvd., Suite 115
    Scottsdale, Arizona 85260
    (480) 348-5000
    (480) 348-5515 (fax)

    I would like to add my voice to the opposition to this proposed rule as it relates to the potential for non-lawyer ownership of law firms in Arizona. In my view, this proposed rule would not have a positive impact on the legal professional in Arizona. Non-lawyer ownership will create an impermissible risk of the client's interests not being put first. While access to legal services must certainly be improved this is not the way to go about it. Thank you for considering my input.
    Brei Law firm
    New Member
    Posts:1 New Member

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    18 May 2020 03:57 PM
    Jeffrey T. Brei
    State Bar # 019404
    4574 N. First Ave., #150
    Tucson, AZ 85718
    520-297-4411
    jeff@breilaw.com

    I oppose the proposed rule change. I do not feel that non-lawyers should be able to hold an interest in law firms. I do not believe that a non-lawyer investor or owner would always have the clients’ best interest in mind. I believe that this could turn law firms into money making mills that would not be held to the highest ethical standards. Please do not adopt Petition #20-0034.
    Brandon Millam
    New Member
    Posts:1 New Member

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    18 May 2020 05:38 PM
    Brandon D. Millam
    Bar #034696
    1313 E Osborn Rd., Suite 220
    Phoenix, Arizona 85014
    602 240 6711
    bmillam@doylelawgroup.com

    I write to voice my opposition to removing ER 5.4 and join in the well-stated responses provided by Judge Swann, Geoff Trachtenberg, Frank Verderame, Charles Sellers, and Thomas Burnett. Each has provided compelling and persuasive reasons not to adopt these recommendations.

    In terms of accomplishing the stated goal presented in the petition, why not consider raising the jurisdictional threshold of the justice courts, small claims court, and compulsory arbitration, and maybe provide some sort of relief to recent law graduates to work in CLS and in underserved communities? If cost is the problem, solutions like those seem more related to the stated goal than what is being proposed.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    19 May 2020 09:53 AM
    Stevie Scotten
    SBN 032825
    17505 N. 79th Avenue, Suite 411
    Glendale, Arizona 85308
    Tel: 602.254.3333┃Fax: 866.273.1859
    Web: www.PoundstoneScotten.com┃Email: Stevie@PoundstoneScotten.com

    I am opposed based on comments that have already been articulated.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    19 May 2020 09:59 AM
    Lawrence S. Rollin, Esq.
    Udall Law Firm, L.L.P.
    4801 E. Broadway Blvd., Suite 400
    Tucson, Arizona 85711-3609
    520-623-4353 (Main Office)
    520-792-3426 (Fax)
    520-844-1050 (eFax)
    520-444-7336 (Cell)
    LRollin@udalllaw.com
    www.udalllaw.com

    If 5.4 is eliminated, picture Goldman Sachs, KPMG, Allstate, and other big corporate machines providing legal services to consumers under their own name. In theory, you would be able to get a will with your mocha grande at Starbucks. Eventually, Amazon will be the only provider of legal services in the country. They can pick up your tort settlement documents when they drop off toilet paper.

    The purpose for the proposed rule change is only to increase potential revenue sources from companies who should not be providing legal services. The residents of AZ will be hurt by this rule change. It is not for their benefit.

    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    19 May 2020 10:04 AM
    Karl S. Pearson, Esq.
    PEARSON LAW, PLC
    4422 N. Civic Center Plaza
    Suite 202
    Scottsdale, AZ 85251
    (480) 820-1800
    kpearson@pearson-law.com

    I would like to register my strong opposition to the proposed rule change. While access to legal services is important, the proposed rule change will lead to conflicts of interest and the corrupting influence of money.

    Ultimately, our clients and the general public will be negatively impacted by the proposed rule change.

    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    19 May 2020 10:28 AM
    Weston S. Montrose, Attorney at Law
    4600 N. 12th St.
    Phoenix, AZ 85014
    602-346-9031
    wes@azilg.com

    I am opposed to the Rule. It is bad for the legal profession and bad for consumers.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    19 May 2020 11:42 AM
    David Friedman
    State Bar #029943
    Knapp & Roberts, P.C.
    8777 N. Gainey Center Dr., Ste. 165
    Scottsdale, AZ 85258
    480-991-7677
    Friedman@krattorneys.com

    This message is to strongly oppose the proposed rule changes. I am deeply concerned that, by opening up the floodgates to permit non-lawyers to own and operate law practices, whom are not subject to sanction by engaging in unethical conduct, a race to the bottom is likely to ensue. It would give rise to a conflict of interest existing between the licensed practicing attorneys in the firm, and its owners/managers, against whom there would be no recourse by the state bar, were they to encourage legal practices that could trigger sanction upon the individual attorneys.

    While we might hope that the licensed attorneys could reign in the unmitigated profit-driven motives of the owners/operators, when it comes to how the firm functions, as a practical matter, those who sign the paychecks ultimately call the shots.

    As it presently stands, if my supervising attorney, my managing partner, or my boss were to suggest I engage in conduct that would run afoul of ethical rules applicable to lawyers, but which is otherwise perfectly legal, I could now say to him or her, "This could jeopardize BOTH our law licenses. This could be sanctionable against us BOTH. Is whatever upside you had in mind, worth that risk?" In this way, the conversation would be between two individuals who each have something to lose, equally. This is an important guardrail that we presently have at our disposal.

    How does that conversation go if, instead, the low-level associate attorney is raising that concern to a non-lawyer boss, who has no license to personally lose except potential profits? The non-lawyer-owner/manager and the attorney would be operating by two different sets of rules, where the one with the power and hiring/firing authority has the less stringent rules of the two.

    But that is an intra-firm concern. What about between firms? Because we licensed attorneys all presently abide by one set -- the same set -- of ethical rules, to which we are all equally susceptible to sanction, the playing field is as fair as it can be in this regard. But alter that so that some firms are run by lawyers, and others not? We can reasonably expect to see a very different mentality take hold, driven by those unaccountable by personal licensure and the risk of losing that license.

    As to our clients, having a strictly defined, regulated legal profession means that customers know what they are getting, and provides recourse to those customers if they are treated unethically or unfairly. Bar complaints help hold licensed lawyers accountable, but a non-lawyer owner/manager would have no reason to be similarly restrained by such concerns.

    Moreover, lawyers are trained in law school to prioritize their clients needs over personal gain, where the two come into conflict. A non-lawyer-owned, non-lawyer-operated law firm would have little reason to keep such client-favored priorities in mind, if the company could conceivably be more profitable by cutting corners here and there. For those non-lawyer operated/managed companies, client service is likely to degrade into "customer service," which all too often is little more than "lip service."

    We as a State Bar must ask whether we are willing to sacrifice the ethical safeguards that have kept Arizona's practice of law fair and professional, or whether we will continue to hold our profession sacrosanct for the betterment of our communities and clients. I sincerely hope that the decision here is the latter.
    Don Burnett
    New Member
    Posts:2 New Member

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    19 May 2020 12:02 PM
    Donal E. Burnett, Esq. (#028800)
    Burnett Law Office, PLC
    1744 South Val Vista Drive, Suite 208
    Mesa, AZ 85204
    (480) 347-9116
    don@burnettlawaz.com

    I add this additional comment in response to the Amended Petition. As before, I strongly oppose the petition and the amended petition. They do not provide adequate explanation or real world examples of how eliminating Ethical Rule 5.4 will increase access to justice.

    While “access to justice” is what’s being marketed, it is not what’s being sold. Rather “access to the justice system” for investor capital is in actuality what has been packaged, and I suspect many boarding this untested ship called “Eliminate ER 5.4” are unaware that it is floating on hyperbolic waters with its course set to sail to the greed infested shores of Investor Island.

    Ironically, as Judge Swann noted in his “Con” article in the April 2020 Arizona Attorney Magazine, the “Pro” author “Ms. Cunningham acknowledges, this is ‘not an access to justice initiative’.” If the initiative to eliminate ER 5.4 is not an access to justice initiative – what is it? It can only be one thing, an initiative to bring big investor capital into law firms to push for increased profits and market share to benefit the investor – not to help the underserved. Yes, the underserved need greater access to justice, but non-lawyer ownership of law firms does not bridge this gap. If the goal is to provide more affordable legal services to clients, adding another layer of individuals to be paid is completely counterintuitive. There may be some scenarios where an attorney would like to have a friend or spouse come in and co-own the practice to take care of the business side of the practice – but the result would not make legal services more available and more affordable for their clients. The new co-owner still has to get paid. In reality, the friend or spouse co-owning a law firm is not the elephant in the room. The elephant is the investor wanting to benefit from the legal services of a lawyer to make the greatest return on their investment.

    The push for the elimination of Rule 5.4, whether intentionally or unintentionally, will solely benefit lawyers and investors, not the underserved. The evidence already shows non-lawyer ownership has not created any more “access to justice” in England, as noted in the comment posted by Thomas Burnett on April 30, 2020. Petitioner’s amended petition with proposed ABS regulations and licensing while attempting to address the obvious ethical concerns, does nothing to address HOW eliminating Rule 5.4 will increase access to justice. Why? Because it can’t and won’t. The following quote from a consultant in England says it all:
    "Tina Williams is chair of Fox Williams, which advises firms on ABS applications. She says the government’s aim was to reduce the cost of legal services, and in that respect the policy has failed. ‘With hindsight, it seems clear that the more flexible ownership of law firms (and access to external capital) permitted by ABS status does not of itself create innovation and competition,’ she adds.” https://www.lawgazette.co.uk/news-f...5.subject.

    Although many of those behind the push for eliminating ER 5.4 may have altruistic objectives, I suspect they have not taken a deeper look at the global consequences such a drastic change would bring. The uber hyperbole that “non-lawyer ownership of law firms will bring ‘Innovation and Infusion of technology’ into the legal field” is simply a snazzy tag line with no real meaning and has nothing to do with non-lawyer ownership of law firms or access to justice. Technology does not require ownership in a law firm to benefit the legal profession, nor does the legal profession require non-lawyer ownership to benefit from technology. “Innovation” and “Infusion of technology” in and for the legal field can be accomplished without eliminating Rule 5.4. The elimination of ER 5.4 will simply give non-lawyers access to another income highway with a push to see greater return on their investment.

    Further, I don’t believe the Petitioner’s attempt to remedy the ethical concerns with the use of a “compliance attorney” will in practice play out as hoped. The reality is that an attorney’s ethical obligations to his client and the court will unavoidably clash with the non-lawyer business investor. In the event of a conflict, or ethical breach, the compliance attorney may face being forced out or faced with lying to save his job. There is a reason the practice of law is self-regulated and governed by certain ethical rules; it’s for the independence of the attorney to do what they are bound to do both ethically and legally for their client and the courts – not their non-lawyer/investor business owner.

    Our Supreme Court has previously highlighted this conflict:
    “Many of the Canons of Professional Ethics which attorneys must observe most scrupuously are diametrically opposed to the code by which businessmen must live if they are to survive. Perhaps the most important applicable Canon states that 'The lawyer owes 'entire devotion to the interest of the client, warm zeal in the maintenance and defense of his rights and the exertion of his utmost learning and ability,' to the end that nothing be taken or be withheld from him, save by the rules of law, legally applied.' Excerpt from Canon 15, Canons of Professional Ethics.” State Bar of Ariz. v. Arizona Land Title & Trust Co., 366 P.2d 1, 90 Ariz. 76 (Ariz. 1961).

    Lastly, for such a drastic rule change, I suspect a majority of Arizona’s attorneys are not aware of this proposed rule change. And for those that are, I submit many do not understand the consequences the changes would bring to the legal profession. In addition, for those that are aware, many have struggled to figure out how to post a comment on the Rules Forum, which has been plagued, unfortunately, with glitches making it very difficult to post comments. Because of these issues, in the event the Court is considering adopting these proposed rule changes, I would urge that the petition be postponed until a better forum for open discussions or additional Hearings can be conducted to ensure more attorneys are aware of the Petition and to bring greater transparency to the changes, the issues involved, and the consequences of these changes.
    KB
    New Member
    Posts:1 New Member

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    19 May 2020 10:58 PM
    I join in the comments and opinion expressed by Judge Peter Swann, former State Bar of Arizona President Geoffrey Trachtenberg, and others in opposition to the proposed rule changes.

    I find no evidence in the petition, or amendments thereto, evidencing good cause to eliminate ER 5.4. In short, ER 5.4 no more infringes Arizonans access to justice than removing all Arizona Walmart stores would infringe their access to clothing and food. And unlike the discounts at Walmart, as Judge Swann eloquently wrote, bad legal advice is never a bargain. What’s worse? Without ER 5.4, and with the addition of non-lawyer practitioners, Arizonans may be none the wiser the person in charge of their legal claims or defenses is not in fact a lawyer, has far less training, less or no oversight, and may be simply encouraging unnecessary services to maximize the bottom line at the direction of non-lawyer ownership.

    Independence of a lawyer is a cornerstone of the legal profession. Arizona has gone to great lengths to remove influence from the court system since 1975 and the installment of Merit Selection. Even early legal scholars and founding fathers made abundantly clear, “the complete independence of the courts of justice is peculiarly essential in a limited Constitution.” Alexander Hamilton, Federalist Paper No. 78. That Petitioners seek to extinguish ER 5.4 without so much as a “spot test” in a sandbox so as not to cause permanent and widespread damage, on Arizonans in need no less, is myopic at best and reckless at worst.

    For decades, ER 5.4 has protected the public while many lawyers and law firms have thrived financially. That some may have provided ample justice while not enjoying as much financial success is no reason to sacrifice client protection so that entrepreneurs and hedge fund managers can take over and cash in. Moreover, non-lawyer ownership of law firms in no way guarantees an actual increase in access to justice. There exist any number of opportunities for entrepreneurship outside the actual practice of law where independence of judgment, Supreme Court regulation, confidentiality, attorney-client privilege, and conflicts of interest are not commodities to be balanced on a profit and loss statement.

    ER 5.4 should remain for the protection of the public. Assets and resources to assist Arizonans in actual need of access to justice would be better directed to entities long engaged in such provision of legal services (e.g., Legal Aid, Community Legal Services, etc.).


    Kellen W. Bradley (#030055)
    602-271-0183
    kb@LTinjurylaw.com
    Levenbaum Trachtenberg, PLC
    362 N. 3rd Ave
    Phoenix, AZ 85003
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    20 May 2020 09:31 AM
    Gregory A. Rosenthal
    Bar Number 012866
    Burch & Cracchiolo, P.A.
    702 E. Osborn, #200
    Phoenix, AZ 85014
    Direct: 602.234.8796

    Actually, it should ”concern” everyone. I write in opposition to the proposes rule amendment to allow non-lawyer owners of law firms. I find it to be bad, potentially catastrophic, public policy creating an avenue for profit minded investors to prey upon unsuspecting clients, removing the lawyer’s ethical and professional role from the relationship. I urge the committee to reject any proposed rule change that would allow non lawyer owners of law firms
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    20 May 2020 09:34 AM
    John M. Curtin
    Robbins & Curtin, pllc.
    301 E. Bethany Home Road, Ste. B-100
    Phoenix, AZ 85012
    Bar Number #011435
    (602) 285-0100
    (602) 265-0267
    john@robbinsandcurtin.com

    I oppose the amendment for the reasons stated by Geoff Trachtenberg and others.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    20 May 2020 09:37 AM
    Bimal Raj Merchant, Esq.
    Bar No. 026315
    Merchant Law Firm PLLC
    1001 N. Central Avenue, Suite 660
    Phoenix, Arizona 85004
    Phone: (602) 254-6010
    Fax: (602) 254-6352
    Email: brm@merchantlawaz.com
    Website: www.merchantlawaz.com

    I am hereby submit my opposition to the proposed rule change, and especially the deletion of ER Rule 5.4.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    20 May 2020 09:43 AM
    Joseph D'Aguanno (Bar # 020421)
    Trial Lawyer / Managing Attorney
    Gage Mathers
    2525 E. Arizona Biltmore Circle,
    Suite A-114
    Phoenix, AZ 85016
    (602) 258-0646 (602) 258-8287
    jd@gagemathers.com
    www.gagemathers.com

    I oppose the proposed Rule change, even as recently modified.

    For many years I complained about my inability to start a firm with non-lawyer family members. It seemed unfair that families can open businesses together in virtually every industry but law. The prohibitions on fee sharing and paying referral fees, and nuances to do so, seemed antiquated and contrary to modern methods.

    I underwent a damascene conversion after I read the proposed Rule changes, and almost choked when I was told part of the motivation for the Rule change was access to justice.

    Anyone who claims the latter point with a straight face is a prodigious liar and likely has ulterior motives. Look at the world of personal injury and the numerous obstacles that our system created for injury victims, especially for victims of medical negligence or injuries from public entities/employees, and the collections efforts those victims must endure for companies like local health care providers who get to put a lien on the personal injury recovery despite already being paid by health insurance; add on the costs for experts and discovery because companies like State Farm would rather spend more than $15,000 to defend a rear-end car crash claim than pay $10,000 to settle it.

    The hurdles in medical negligence cases have probably led to hundreds, if not thousands, of claims never seeing the light of day (and those providers continuing to injure patients) because medical malpractice litigation can cost an injury victim upwards of $150,000 to see a jury.

    You want to expand access to justice for injury victims, then remove these obstacles. You want to help injury victims of medical malpractice whose claims might only be worth $200,000, then lower their cost to access justice.

    Did the Task Force consider expanding the Legal Aid program and funding clinics at Arizona's law schools? Did the Task Force define what "access to justice" means and whether it differs by area of law? Did the Task Force consider that different areas of law have different pressure points that limit access to justice and maybe each would require a different approach?

    The comments to the proposed Rule change and experiences in other jurisdictions (e.g., California, Utah) show us two things: (1) one "solution" for all areas of law does not make sense, and (2) wholesale change to the Rule without a pilot project is foolish. We should, at a bare minimum, develop plans for each area of law that truly address the purpose of the Rule change.

    Instead of rushing to change the Rules, maybe we should pause, ask the right questions, and then use facts, logic, and sound reasoning to answer those questions.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    20 May 2020 09:50 AM
    M. Brennan Ray
    Certified Specialist in Real Estate Law
    Direct: 602.234.8794
    E-mail: bray@bcattorneys.com

    I am opposed to the proposed Rule change.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    20 May 2020 11:47 AM
    Sam Cullan
    Arizona Bar Number . 012673 - Admitted 1989
    Cullan & Cullan
    20830 N. Tatum Blvd., Suite 360
    Phoenix, AZ 85050
    (602) 200-9999

    I wanted to write to express my opposition to the proposal to eliminate ER 5.4. Respectfully I believe that non-lawyers should not be allowed to own or operate law firms. The current system works well. I suspect that the quality of legal services will decline greatly with negative consequences for those who most need competent legal counsel.
    ACC Executive Director
    New Member
    Posts:2 New Member

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    21 May 2020 09:36 AM
    Matthew J. Neubert, Executive Director
    Arizona Corporation Commission
    1200 West Washington St.
    Phoenix, AZ 85007
    Phone: 602-542-4250/602-542-3931
    Email: sharpring@azcc.gov; mjneubert@azcc.gov
    Bar No.: 009225


    May 21, 2020

    Arizona Supreme Court
    1501 West Washington, Fourth Floor
    Phoenix, Arizona 85007

    Re: Petition No. R-20-0034

    Chief Justice Brutinel, Vice Chief Justice Timmer, and Justices Bolick, Gould, Lopez, Beene, and Montgomery:

    On March 30, 2020, the Arizona Corporation Commission ("Commission") submitted extensive comments suggesting modifications to Petition No. R-20-0034's proposed language to replace the current Arizona Supreme Court Rule 31 (“Rule 31”). The Commission's comments appear not to have been considered in creation of the Amended Petition. Thus, the Commission again submits, for the Court's consideration, the following comments suggesting modifications to the proposed language to replace Rule 31:

    Many parties who appear before the Commission use lay representation as permitted under Rule 31(d)(28), which allows a public service corporation, an interim operator appointed by the Commission, or a non-profit organization (collectively “organization”) to be represented by a corporate officer, employee, or member who is not an active member of the state bar under the following circumstances: (a) the organization must have specifically authorized the representation, (b) the representation must not be the representative’s primary duty to the organization, and (c) the representative must not receive separate or additional compensation (beyond reimbursement of costs) for the representation. Rule 31(d)(28) further allows the Commission or presiding officer to require counsel in lieu of lay representation if it determines that the lay representation is interfering with the orderly progress of the proceeding, imposing undue burdens on other parties, or causing harm to the represented organization.

    The Commission is also mentioned by name in Rule 31(d)(13), although it has relied upon that provision only to allow for lay representation in Commission securities cases, to which Rule 31(d)(28) generally does not apply. The Commission finds the current language of Rule 31(d)(13) to be unclear in that inclusion of the Commission in the first sentence of Rule 31(d)(13) is unnecessary, because the Commission has no involvement in tax-related proceedings, and the second sentence of Rule 31(d)(13) is a very broad exception that appears to have no relationship to the first sentence. Additionally, the Commission has received inconsistent opinions from Arizona State Bar UPL attorneys over the years when inquiring as to the meaning of Rule 31(d)(13).

    The Commission conceptually supports broadening the exception currently afforded by Rule 31(d)(28), as the proposed Rule 31.3(c)(5) would do, but requests that the following revisions be made to the language of the proposed Rule 31.3(c)(1), (c)(5), and (c)(6):
    • In Rule 31.3(c)(1), the definition of “legal entity” should be revised to include federal, state, county, municipal, and tribal governmental entities. It is not uncommon for a federal government entity or a tribal entity to desire representation by an individual licensed as an attorney in another jurisdiction. Additionally, small municipal entities may prefer to rely on lay employees for representation rather than outside counsel for budgetary reasons.
    • In Rule 31.3(c)(5), a comma should be inserted between “administrative agency” and “commission,” to distinguish between them.
    • In Rule 31.3(c)(5)(A), the “full-time” requirement should be deleted. A number of smaller utilities primarily use part-time employees in their operations. Additionally, an individual’s status as “full-time” with a legal entity does not necessarily correlate with an enhanced ability to represent the legal entity effectively in a hearing or other administrative proceeding.
    • In Rule 31.3(c)(6), an additional situation under which counsel may be required should be added—when lay representation is causing harm to the legal entity so represented. The Commission believes that this is what the current Rule 31(d)(28) language “or causing harm to the parties represented” was intended to address. The Commission suggests replacing “or” in the last line of proposed Rule 31.3(c)(6) with a comma and inserting the following after “parties”: “, or causing harm to the entity.”

    Additionally, the Commission requests that “the Arizona Corporation Commission” be removed from proposed Rule 31.3(d)(5), as the Commission is not involved in tax-related proceedings, and its inclusion there invites confusion.

    Finally, for the reasons set forth below, the Commission requests that the following revisions be made in Rule 31.3(c) to allow for the preparation and filing of technical or financial documents by qualified non-attorneys:
    1. Add the following language as a new subsection (c)(6) in proposed Rule 31.3:
    "(6) Arizona Corporation Commission.
    (A) A person may represent a legal entity in a proceeding before the Arizona Corporation Commission (“Commission”) if the representation complies with subsection (c)(5).

    (B) A person with expertise in the field of public utility regulatory compliance, public utility accounting or finance, public utility engineering, railroad engineering or safety, or pipeline engineering or safety may, on behalf of a legal entity regulated by the Commission:
    (i) Prepare for filing with the Arizona Corporation Commission or submission to a Commission Division a tariff, rate schedule, engineering report, or other technical or financial document within the person’s field of expertise; and
    (ii) File in a Commission docket, or submit to a Commission Division, the tariff, rate schedule, engineering report, or other technical or financial document prepared as permitted under subsection (c)(6)(B)(i)."

    2. Renumber the existing subsection (c)(6) in proposed Rule 31.3 to (c)(7).

    Utilities and other legal entities regulated by the Commission are often required to file with the Commission technical or financial documents, such as tariffs, rate schedules, or engineering reports. Regulated entities also may be required to submit such technical or financial documents to a Commission Division directly. It is common for these technical or financial documents to be prepared by hired consultants rather than attorneys or the personnel of the regulated entities. In the case of utilities, this is true largely because public utility operation and regulation is a complex and niche field, and it can be difficult for utility personnel to develop the level of regulatory expertise that experienced consultants have acquired. For smaller utilities, of which there are hundreds in Arizona, the training necessary to develop such expertise generally is cost prohibitive, as is hiring an attorney. For out-of-state competitive telecommunications utilities, which commonly operate throughout the United States, it is often most efficient to have one consulting company oversee regulatory compliance for all operations. Also, and importantly, the education, training, and experience of most attorneys does not impart the knowledge and expertise necessary to prepare such technical or financial documents.

    Nevertheless, because such a technical or financial document is prepared on behalf of a specific entity for filing with an administrative agency and could be a document intended to affect or secure the utility’s legal rights (e.g., a tariff may confer the right to impose certain requirements on customers or to receive recovery through rates for certain capital expenditures), the preparation of the document by a non-attorney consultant appears to constitute the unauthorized practice of law (“UPL”) under the current Rule 31(b)(3) and (5). Likewise, under the current Rule 31(b)(2), the act of filing such a document in a Commission docket or submitting such a document to a Commission division can be viewed as representing the utility in an administrative proceeding and thus UPL.

    The Commission believes that it would be beneficial to the regulated entities and the public interest to facilitate regulated entities’ use of experienced non-attorneys, including consultants, for the preparation and filing of technical or financial documents. The Commission further believes that the cost savings to affected utilities (from not being required to hire attorneys) would flow-through to the customers of those affected utilities in rates.

    Sincerely,


    Matthew J. Neubert
    Executive Director

    CC: Jane Rodda, Hearing Division Director
    Robin Mitchell, Legal Division Director
    Mark Dinell, Securities Division Director
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    21 May 2020 10:03 AM
    Gian Duran
    4116 N 19th St,
    Phoenix, AZ 85016
    Bar No. 028933

    I am writing to oppose the above referenced rule change. Opening law firm ownership to non lawyers will result in worse representation for clients by leading to fast food style, quick churn legal services maximizing volume and profit at the cost of adequate representation. While well intentioned, the rule change will backfire.
    Burr Udall
    New Member
    Posts:1 New Member

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    21 May 2020 10:03 AM
    Burr Udall
    4801 E Broadway Blvd
    Suite 400
    Tucson, AZ 85711-3638
    Bar No. 739

    I am violently opposed to eliminating E.R. 5.4. The practice of law is a profession and we are supposed to be doing good to help the general public. The elimination of 5.4 merely and solely makes the legal profession a profit center for large corporations who have no interest in the public and their only interest is making money.

    Burr Udall
    Ann Ching
    New Member
    Posts:1 New Member

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    21 May 2020 11:55 AM
    Nancy Greenlee, Bar No. 010892
    Ann Ching, Bar No. 020407
    111 E. Taylor St., MC 9520
    Phoenix, AZ 85004-4467
    ann.ching@asu.edu
    (480) 727-6242

    We submit the attached comment to this Petition.
    Attachments
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    21 May 2020 03:23 PM
    Paul Hofmann, Esq.
    HOFMANN LAW OFFICES, PLLC
    7440 N. Oracle Rd., Bldg. 5
    Tucson, AZ 85704
    (520) 797-1041 ph
    (520) 797-1491 fx
    hofmannlaw@comcast.net

    I have been a practicing attorney for nearly 30 years and proudly come from a family of lawyers -- my father ended his career as a city magistrate, my brother and sister worked in the public sector, and my son recently passed the California Bar, and is now preparing to take the Arizona Bar. My life has revolved around respect for lawyers and the trust that our clients, and society, place in us. Unfortunately, I'm afraid that trust may soon disappear.

    This potential change in the ethical rules, specifically, to eliminate ER 5.4, will lead to damaging and unintended consequences. For instance, it will give non-lawyers the ability to inordinately control decisions that lawyers make in their practices every day, decisions that should only be based on the best interests of the client, not the whims of an investor. It will also undoubtedly hyper-commercialize an industry that has, for the most part, resisted such changes.

    I therefore strongly oppose the amendment.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    21 May 2020 03:59 PM
    John Trebon
    308 N Agassiz St
    Flagstaff, AZ 86001
    az. Bar number 005375
    928-853-0599
    trebon.john@gmail.com

    I oppose the proposed rule, which in essence allows corporate America to profit off the backs of lawyers, cheapen the quality of legal services, and demean both lawyers and the profession. Lower quality, more money on advertising than legal services, and a cheaper end product. Talk to any young doctor now working for medical groups owned by non-medical marketers. The doctors see more patients in less time, work longer hours, receive less pay, and go home worrying about patient care, and potential malpractice. NOT the model to follow, unless, of course, you are investors willing to make bucks Z your main goal.
    Chris Ford
    New Member
    Posts:1 New Member

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    22 May 2020 12:40 AM
    Chris Ford, SBN 029437
    Attorney at law
    530 E. McDowell Rd., Ste. 107-455
    Phoenix, AZ 85004
    602-368-5940
    cfordlaw@mac.com

    During the 1990s, multi-disciplinary practices (MDPs) were all the rage. Boosters touted the prospect of “one-stop shopping” for professional services. This had great appeal to some – especially those who were champing at the bit to profit off the backs of us lawyers. So it went until the Enron scandal hit in 2001 and the once-proud Arthur Anderson accounting/consulting firm went down in flames fueled by fraud, insider trading and cooked books. Could you imagine having been a lawyer tasked to supervise AA’s destruction of evidence and falsification of Enron’s financial records? or having to look the other way while Enron execs engaged in insider trading? If the ABA had permitted MDPs to be formed, such might have been the dismal fate of many a law school grad.

    The ABA met in the late 1990s in Los Angeles and considered modification of Model Rule 5.4 to allow non-lawyers to own law firms and/or profit from the practice of law, so as to facilitate the creation of MDPs. An opponent argued that were the proposal to pass, lawyers would be placed in the same position as doctors, whose practices (at least in the U.S.) are controlled by for-profit insurance companies, the result of which is that doctors must endure the ignominy of having high-school educated insurance bureaucrats telling them what they can and cannot to. The opponent pleaded: “Don’t let that happen to us!”

    I never forgot that meeting and therefore was shocked to hear that Arizona was considering a rule change that would eschew Model Rule 5.4 and allow businesses to own law practices. Imagine the nightmare scenarios. We go to law school and work like crazy to learn our profession for what? so we can have corporate bureaucrats and bean-counters substituting their judgment for ours? so we can be under the thumb of a hedge fund? Imagine the misleading marketing that corporations would come up with to sell our services. Imagine your corporate boss compelling you to “sell” the client all sorts of unnecessary legal services and having to do so to keep your job. Imagine answering to an insurance company bureaucrat with a high school education, just as doctors do. Imagine spending half your time trying to figure out how to “code” your bill to satisfy the insurance bureaucracy, just as doctors do, and having the insurance company reject your bills or simply fail to pay them about half the time, just as occurs with doctors. Are you aware that there is a whole industry of billers whose job is to navigate the insurance companies’ byzantine “code” system so doctors have even a hope of getting paid 50 cents on the dollar for their work? Would you like to introduce that sort of waste, busywork and economic loss into the legal profession?

    The speaker at the 1990s ABA meeting also pointed out that while some attorneys were excited to share in the profits companies involved in the then-occurring tech boom (which turned out to be a tech bubble), he advocated that we lawyers stay above the fray as professionals. An attorney cannot give clear-headed advice to the client when the attorney’s judgement is clouded by visions of dollar signs because s/he stands to share in the profits of the business s/he was hired to advise. No doubt some lawyers do that today, but turn away from Model Rule 5.4, and the range of ethics-challenged entanglements lawyers would find themselves in can be limited only by the imagination.

    To make matters worse, the proposed Arizona rule change also would create a class of non-lawyers pretending to practice law. Is it not bad enough that the state of Arizona sees fit to have non-lawyers serve as “judges” in the justice courts (When I first moved to Arizona and heard about that, I was aghast at the injustice of imposing this obviously outdated frontier concept on a increasingly modern, 21st century U.S. state)? Again, imagine the nightmare scenarios; actually, you don’t have to, because they already exist. In Latin America, a “Notario” is a government-appointed position of great importance and responsibility, and to qualify to serve as a Notario in Latin America, one must be a lawyer. In Spanish-speaking immigrant neighborhoods of U.S. cities, unscrupulous people obtain a notary public stamp then hold themselves out as “Notarios,” a profitable, if fraudulent, way to pretend one is a lawyer to Spanish-speaking clients. One can scarcely imagine the array of shady marketing schemes the newly established pretend-lawyers created by the proposed rule change would use to swipe business from real lawyers. Think: “Notario.”

    Then there is the problem of quality. I used to practice probate law, and I used to joke sarcastically that I loved when paralegals drafted wills, because the resulting product created lots of work for us lawyers. Why? Because it invariably was poorly drafted, giving us lawyers lots of enticingly vague or incomprehensible language to fight over and run up the tab on the estate or its challenger. The new phony-lawyer industry that would sprout from the proposed rule change no doubt would create new work for us, as the pretend lawyers no doubt would foul up many of the tasks they undertake, but at what cost to the public? and at what cost to the reputation of our profession? And who would suffer the most (hint: low-income and vulnerable people)? Is this proposal really worth the devastation it would visit on our profession, our position in the public’s eye, and members of the public would be taken in by these pretend-lawyers’ marketing schemes?

    I can only conclude that the real purpose of this double-barrel proposal is to destroy the practice of law in Arizona and make it extremely difficult for an average member of the public to protect his or her legal rights. I can only assume someone who is very powerful (or perceives him/herself to be so) and does not like being held in check by law practitioners hatched this dastardly plan. Please do not be swayed by this abomination. Join me in vehemently opposing it, or consider this: I am licensed in another state, so I at least have an out if this thing passes and our profession in Arizona is rent asunder. Do you?

    Dennis O'Berry
    New Member
    Posts:1 New Member

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    22 May 2020 08:12 AM
    Dennis O'Berry, Esq.
    Suzuki Law Offices
    2929 E. Camelback Rd., Ste. 224
    Phoenix, AZ 85016
    (602) 682-5270 ph
    (480-907-1571) fx
    dennis@suzukilawoffices.com

    I oppose this proposed rule change, particularly the elimination of ER 5.4. It seems the purported access to justice argument is just a ruse put forth by, or on behalf of, organizations seeking a new revenue stream rather than helping those with heretofore unmet legal needs.

    Jason Kelly
    New Member
    Posts:1 New Member

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    22 May 2020 10:09 AM
    Jason Kelly, Esq.
    Bar No. 020525
    4808 N. 22nd Street, Suite 200
    Phoenix, AZ 85016
    602-222-5512

    I write in response to the April 27, 2020, Task Force report. This report is filled with assertions that are either: (1) unprovable either way, (2) lacking in support, or (3) ignoring substantive differences when trying to make arguments based on analogies.

    The Committee writes, “Moreover, the financial impact on some law firms may be severe.” No one can argue with this statement – just as no one can argue with the statement that, “The financial impact of the pandemic may be economically beneficial to some firms.” (I also cannot prove that aliens did not build the pyramids in Egypt). Actually, I’d be willing to bet that, this year, some law firms will have an economically prosperous year and some will have an economically bad year. Further, law firms and court found innovations without the infusion of private equity. In point of fact, Zoom Pro costs only $14.99 per month. If a law firm cannot afford another $15 a month without the infusion of private equity, that law firm has other, more significant, problems.

    The next page suggests that the consternation of lawyers worried about private equity and non-licensed attorney is driven by an “existential” anxiety of de-valuing the practice of law. The concern is not some sort of ephemeral, esoteric concern hurting the pride of lawyers. Our country is founded on the rule of law, and, yes, the foundations of our country need to be protected by highly-trained and skilled individuals. Within our bar, there are attorneys who were able to earn their undergraduate degree, earn a law degree, perhaps earn other degrees, pass the bar who are still unable to fulfill the obligations required of them – one need only look at the back of our monthly Arizona Attorney magazine. Lowering the required standards (even if the standards for practice are “stiff”) cannot possibly increase the quality of the delivery of legal services.

    I still fail to see how allowing private equity and non-licensed practitioners would somehow increase “access to justice.” Criminal defendants have a right to counsel, personal injury plaintiffs do not need a nickel to hire a lawyer, and real estate agents already have a limited license to practice law. A narrow exception to domestic violence victims seems appropriate, but that is based on many years of research in our law schools delivering such services.

    Page 10 of the April 27, 2020, report gives us an insight into what having non-licensed advocates may look like. It reads, “That gulf [between the need for legal information and services and access to those services] has clearly widened during the pandemic.” There is no citation to anything here! It may be true, it may not be true. How do we know? Are the ethical rules really being changed on the basis of conclusory statements? My 1L legal writing professor used to say, “The more times you need to use the word ‘clearly,’ the less likely that your statement is clear.” Imagine making a statement like that in a motion, without any support in the brief. The judge would ask the writer for support for that statement. I ask the Task Force where there is support for that statement. Assuming that we find support for that statement, the follow up question is why non-licensed persons funded with private equity are needed to beat back the effects of the pandemic. And, after there is a vaccine and/or herd immunity, will non-licenses persons funded by private equity still be needed?

    I still do not understand why both of these broad initiatives are being proposed simultaneously at such a break-neck speed. As discussed above (and in my February 28, 2020 comment), narrow exceptions to the license to practice law, proven over the course of time, have proven to be beneficial in different areas. Narrowly-tailored, carefully-studies exceptions are inapposite to wiping away the general, centuries-old rule.

    The latest report also seems to suggest that having fiduciary obligations to private equity, non-lawyers is not different than a lawyer’s obligation to his other lawyer partners. This overlooks that the other lawyer partners in the law firm are all constrained by the ethical regulations.

    Captive insurance defense counsel have the same ethical motivation as the carrier’s financial motivation – to limit the client’s/insured’s exposure. And, even in those situations, conflicts can become problematic. See, e.g., Paradigm v. Langerman, 200 Ariz. 146 (2000); and see, Himes v. Safeway, 205 Ariz. 31, 40, ¶¶ 25-26 (App.2003). Is the Task Force truly envisioning a world where a lawyer will wall-off from his private equity partners in favor of his client? Working as an employee is substantively, qualitatively, and vastly different than accepting private equity money from a manager with obligations to his investors.

    Glaringly absent is any protection against an investment group holding interests in adverse law firms. Glaringly absent is any protection against an investment group owning both part of a liability insurer (or an errors and omission carrier) and a plaintiff’s personal injury (or professional malpractice – be it legal, medical, real estate, or otherwise) law firm. Glaringly absent is any protection against an investment group holding both an interest in a title insurance company and a bank or credit union trying to foreclose upon property insured by that title insurance company. Glaringly absent is any protection against an investment group holding both an interest in a bank doing foreclosures and a firm opposing those foreclosures. Glaringly absent is any protection against an investment group owning an interest in both credit collections companies and a firm doing consumer bankruptcies. Investment groups are so well diversified that such conflicts are inevitable; at some point in time, fund managers may actually see the benefit is diversifying in such a manner.

    I would submit that we need only to look at the evolution of corporate health care to decide whether persons with legal disputes should be treated like patients whose doctors are unable to spend time with them due to the financial dictates of non-doctors running their offices, clinics and hospitals.

    Perhaps the most troubling aspect of this entire process is that the April 27, 2020 report does not appear to take into account any of the concerns of the various and numerous persons who have submitted comments. Rather, this is a defense of the original report issued last fall. If the Task Force is going to push this through anyway, why even have comments. This process is a sad commentary on political discourse in our country. 2,500 years ago in Athens, debate was the highest form as discourse, as it was the crucible of truth through which two debating sides would take each other’s viewpoint into account and, together, journey toward truth. Sadly, discourse in America today is geared toward confirmation amassing evidence simply to serve one side’s own confirmation bias. Not a single concern of any practicing lawyer was addressed in this April 27, 2020 report, except to attempt to rebut a few. If this truly is the state of where our legal system and political discourse are at, perhaps there is no reason for "officers of the court" to continue defending the integrity of our rule of law. This is a true existential crisis worth considering.

    I have taken a strongly-worded stance against the proposals. At base – and even more so than my general opposition to the changes – I have great consternation with the lack of analysis that has gone into to such broad proposals. All that I am asking for is carefully considered and studied proposals, supported by data, to be subject to rigorous analysis and debate. We do not know the full impact of these sweeping changes, and if broad changes are made without appropriate forethought, we will not be able to put the lid back on the box.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    22 May 2020 12:00 PM
    JAMES J. SANDMAN
    1391 PENNSYLVANIA AVENUE, S.E., UNIT 501
    WASHINGTON, DC 20003

    I write to express my strong support for the recommendations of the Task Force on the Delivery of Legal Services.

    My views are based on my experience as a lawyer. I served for the past nine years as President of the Legal Services Corporation, the United States' largest funder of civil legal aid programs for low-income people. I practiced law with Arnold & Porter for 30 years, including ten years as the firm's Managing Partner. I am a past President of the 110,000-member District of Columbia Bar and a former General Counsel for the District of Columbia Public Schools. I currently chair the American Bar Association's Task Force on Legal Needs Arising Out of the 2020 Pandemic. I offer my views solely in my personal capacity and not as a representative of any entity.

    The civil justice system in our country is failing tens of millions of people every year. The Legal Services Corporation estimates that 86 percent of the civil legal problems oflow-income people receive no or inadequate legal help. The National Center for State Courts estimates that in approximately 75 percent of civil cases in state courts at least one party does not have a lawyer. The Self-Represented Litigation Network estimates that 30 million people each year participate in legal proceedings without a lawyer. These matters involve the most basic of human needs - shelter, family stability, personal safety, health, and economic subsistence.

    I believe significant regulatory reform is an essential component of addressing the justice gap. Reform needs to include two elements. First, we need to loosen onerous restrictions on the unauthorized practice of law that consign too many people who cannot afford a lawyer to no legal service of any kind - a classic case ofletting the perfect be the enemy of the good. The choice for the person who cannot afford a lawyer today is not an unlicensed paralegal. It is too often nothing at all. And we do this in the interest of "consumer protection." We need to permit competent, well-trained, regulated professionals who do not have a J.D. or membership in the bar to provide assistance in cases where people would otherwise have to fend for themselves. I am glad that you are moving forward with the Task Force's recommendation to develop a program to license such professionals.

    Second, it is important to liberalize the rules governing nonlawyer ownership of and financial interests in entities providing legal services. Investment in legal innovation that would better serve the public is currently obstructed not only by restrictions on the unauthorized practice of law, but also by the prohibitions on fee-sharing and nonlawyer investment in legal enterprises. As a result, the practice of law today looks very much like it did in the 20 th century, if not the 19th. We owe the public a system of justice that reflects the kind of access, effectiveness, and efficiency that innovation has brought to so many other industries and professions in 21st century America. Eliminating Rule 5.4, as the Task Force recommends, is an important step toward achieving that goal.

    The current Covid-19 pandemic makes this a particularly appropriate time to move ahead with regulatory reform. The crisis in unmet legal needs is about to become far greater and even more urgent, with more than 30 million people who have recently lost their jobs soon to face a flood of eviction, foreclosure, and debt collection cases. This is a time for action.

    I was glad to learn that Utah is moving ahead with its regulatory sandbox and is accepting expedited review of applications that provide low-cost or no-cost services to individuals and businesses. I hope Arizona will follow Utah's example.
    Attachments
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    22 May 2020 12:08 PM
    Richard B. (Moe) Biggs
    AZ Bar # 011396
    Busby, Bell & Biggs, P.C.
    1241 E. Prince Rd
    Tucson, AZ 85719
    Phone: 520-293-0344
    Fax: 520-293-8347
    Email: moe@busbylaw.com

    I want to state my objection to the Petition and the potential elimination of ER 5.4.

    I have read many of the comments already provided and agree adamantly with those in dissent of the Petition. While I appreciate the goal of making the courts and legal system more accessible to the general public, my concern is that mere access can lead to unintended injustices for those whom we thought we were protecting. It seems that allowing the legal system to become a commodity that can be sold by non-lawyer corporations or persons whose primary focus is profit and are not accountable to some ethical or professional standard is an option fraught with unintended and unfortunate consequences.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    22 May 2020 12:13 PM
    Michael J. Bell
    State Bar of AZ # 009020
    Busby, Bell & Biggs, P.C.
    1241 E. Prince Rd
    Tucson, AZ 85719
    Phone: 520-293-0344
    Fax: 520-293-8347
    Email: Mike@busbylaw.com

    I am writing in opposition to the Az Supreme Court petition for rule change, R-20-0034. The goal of increasing access to justice, giving legal services to more people at a cheaper price, is something all in the legal profession should be striving for. The proposed rule change will do little to accomplish that goal. The proposed rule change is not about assuring quality legal representation to those who otherwise could not afford it. It is more about the investment potential of the legal profession. Our healthcare system has tried this with the recent increase of urgent cares owned by non-medical people and I do not see anyone indicating that model has lowered the cost of medical care or improved the quality of medical care. The proposed rule change will likely only result in investors owning law firms that will be investment vehicles whose only purpose is to satisfy its shareholders. I do not see how the rule change has any focus on the wellbeing of individuals needing legal services.

    I am asking the Arizona Supreme Court to reject petition R-20-0034.

    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    22 May 2020 12:20 PM
    ERIC A. THOMSON
    7440 N. Oracle Rd., Bldg 5
    Tucson, Arizona. 85704
    e-mail: thomsonesq@msn.com

    This is to express my strong opposition to the proposal to amend the Ethical Rules and remove ER 5.4. There are two provisions of this rule that particularly protect the interests of the public at large and the elimination of which will gut that protection.

    Specifically, ER 5.4 (d)(3) disallows the practice of law in a professional corporation if a nonlawyer could direct or control the judgment of the lawyer. If this is eliminated, nonlawyers will assuredly control the judgment of lawyers in their practice. The State Bar goes to great lengths to protect the public and ensure that those who practice law are capable, both professionally and morally, to act as legal advocates and guardians. Once nonlawyers can direct the actions of their employee-attorneys, this protection will be eroded.

    ER 5.4(b) prevents a lawyer from forming a partnership with a nonlawyer if they practice law. This provision also protects the public and ensures the persons who practice law have been screened by the State Bar for moral fitness and academic capability. The elimination of this requirement would subject clients to the judgment of those who have not faced such scrutiny.

    The current system provides for professionals who have been evaluated for their fitness and places all attorneys in competition with each other in the private market, which means the public can gain access to the legal system in a fair and open manner. ER 5.4 should be preserved.
    Attachments
    Linda Tucker
    New Member
    Posts:1 New Member

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    22 May 2020 12:32 PM
    I have read the comments already provided and agree with all of those against the Petition. Allowing non- lawyers to, in effect, practice law without a license is a bad idea. Ask anyone who is an attorney who has had to fix what the paralegal or document preparer previously did. Moreover, the legal community will become a target by non-lawyers for investment purposes. The goal will be making as much money as possible, not providing legal services in an ethical, confidential, and competent manner.

    Linda S. Tucker
    The Tucker Law Firm
    1846 E Innovation Park Drive
    Oro Valley, AZ 85755
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    26 May 2020 08:44 AM
    Darren M. Clausen, Esq.
    AV Preeminent Attorney*
    Clausen Law Offices
    2730 E. Broadway Blvd. Ste. 240
    Tucson, AZ 85716
    520-327-5000 office
    520-268-9162 fax
    dc@clausenazlaw.com
    www.clausenazlaw.com

    I oppose this petition and adopt the comments of Thomas Burnett. I am a former Outstanding Pro Bono Attorney of the Month and Top 50 Pro Bono Award winner and have been a member of the State Bar of Arizona in active practice for over twenty years. This proposal does nothing to increase access to justice for the most vulnerable in our society.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    26 May 2020 08:50 AM
    Kurt Maahs
    Maahs Law Firm
    11201 N. Tatum Boulevard, Suite 300
    Phoenix, AZ 85028
    602-247-1730
    kurt@maahslawfirm.com
    AZ Bar number 028545

    I am strongly opposed to the Petition to permit non-lawyers to own or manage law firms. I understand the goal is to increase access to justice, but the good intentions to not make this a sound policy.

    I second the comments of many others in these comments, including past bar president Geoff Trachtenberg.

    Opening up the practice of law to non-lawyers, or even allowing them to manage attorneys, strikes at the heart of the profession. We have always been a proud profession because we have ethics and the interests of our clients must be put above our own. That does not happen in the business world, even if there is an attorney that is going to be "responsible" for the non-lawyers. People running a business expect financial results over the result of the client. Businesses are wired to make decisions much differently than lawyers. Many say that lawyers are terrible at business. That may be the truth because lawyers play by different rules for the benefit of our clients and our profession. We make decisions constantly that are beneficially to our clients, even if they are not beneficial to our bottom line. I have seen non-lawyers address those issues and they do not view them the same way. Businesses are about the bottom line with no duty to clients. I saw comments by an out of state administrator stating she was not so cynical to believe lawyers don't make business decisions. We do, but we have a greater duty to our clients under the ethical rules. I have, and I know many other attorneys, that have expended time and money because it was ethically right, even if it was a terrible business decision. That cynicism is grossly misplaced.

    I also understand that the purpose of the amendment is to allow service to the underserved. That may or may not happen. I find it hard to believe there will be businesses investing in low profit advice. What is certain to happen is that an influx of money from non-lawyers will become present in the larger metropolitan areas and even bigger towns. Places where sufficient legal resources exist. Non-lawyers will seek to control areas of the law that are the most profitable, not the least. The unintended consequence of this rule change will be the real result. It will end up causing real harm to citizens seeking legal services and not likely address the concerns of the committee.

    The quality of legal service will not be improved either. Bad legal advice is more costly than good advice. The problem is that the cost is on the back end and may not be known for years. The law is not paint by numbers. Facts differ and there are exceptions to every rule. Education and experience matter. It is why we have law schools, bar examinations, and continuing legal education. Allowing non-lawyers to offer services will reduce the quality of legal advice in the state. It will cause irreparable harm to those that receive the bad advice.

    Approximately 20 years ago, there was a push to allow non-lawyers to supervise and manage lawyers. That push came from the "Big 6" accounting firms as they sought to combine different types of services under one roof. While this proposal was being discussed, there was criminal conduct of one of these accounting firms, Arthur Anderson, and one of its clients, Enron. Not surprisingly, that movement was quashed. We all know that profit centered decisions and ethical decisions will come into conflict many times. It is foolhardy to believe that the ethical considerations of a single lawyer will trump the opinion or decision of a non-lawyer CFO or CEO, who have fiduciary duties to shareholders. The proposed rule change will allow companies to manage non-lawyers, with likely disastrous consequences that are foreseeable based on history.

    It also seems telling that many comments for this proposal come from out of state. That should be telling to the committee, as should the rejection of similar proposals by other states.

    If there are underserved areas of the state or of the law, perhaps there is a more narrowly tailored response that is appropriate, as some have suggested. Opening the floodgates hoping that only those the committee wants to come through is not the answer, and is far too broad of a solution for what seems to be a specific problem.

    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    26 May 2020 08:54 AM
    Alison R. Christian
    2800 N. Central Ave. Suite 860
    Phoenix, Arizona 85004
    Office: (602) 792-1700
    Direct: (602) 792-1706
    Fax: (602) 792-1710
    AChristian@cdslawfirm.com
    www.cdslawfirm.com

    I am the current President of the Arizona Association of Defense Counsel and wish to submit the following opposition to the proposed rule change on behalf of the AADC:

    The Arizona Association of Defense Counsel (“AADC”) is comprised of 48 law firms and 146 individual lawyers, for a total of 570 active defense members. The AADC opposes the proposed rule changes to allow non-lawyer ownership of law firms proposed by the Task Force on the Delivery of Legal Services. The AADC opposes these proposed rule changes for the same reasons set forth in the Honorable Peter Swann’s Opposition Statement in the Task Force on the Delivery of Legal Services Report dated October 4, 2019, which is hereby incorporated by reference.

    My Arizona bar number is 025410. If you have any questions about the AADC’s opposition, please feel free to contact me directly.

    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    26 May 2020 08:58 AM
    John F. Gordon
    66 W. Encanto Blvd
    Phoenix, AZ 85003
    6023199410
    SBA 005719 Retd Status

    I oppose this rule change. The reasons for my opposition are reflected in the multitude of other comments opposing the change.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    26 May 2020 09:05 AM
    Steve Lippman
    SBA # 015164
    1850 North Central, 17th Floor
    Phoenix, AZ 85004
    Direct: (602) 234-8781
    Fax: (602) 850-9781
    Email: sjlippman@bcattorneys.com

    I oppose the proposed rule change because the change will effectively invalidate the ethical rules related to maintaining the integrity of the legal profession. The proposed rule change would create a double and lesser standard for those not licensed as attorneys such that the integrity of the profession will suffer. Ethical obligations of attorneys start from day 1, the moment attorneys apply for admission to the Bar. ER. 8.1. That obligation begins with a duty of honesty. The duty of honesty may be the most important and fundamental duty of the legal profession. See Matter of Frequez, 162 Ariz. 328, 334, 783 P .2d 774, 780 (1989) (During a disciplinary hearing, the hearing committee recommended disbarment for a number of factors including, “The duty violated was the duty to avoid conduct involving dishonesty, fraud, deceit or misrepresentation. This duty is perhaps the most fundamental ethical duty of a lawyer and is correspondingly supremely important.”). In order to maintain the integrity of the legal profession, those practicing must abide by the ethical rules and there must be a means of stepping in when practitioners fall short of that duty. See ERs 8.3-8.5.

    When practitioners do fall short, it is the responsibility of practitioners around them to take appropriate steps to address the failure, including reporting to the appropriate disciplinary authority. ER 8.3. Disciplinary proceedings are arguably essential tools for ensuring the legal profession’s integrity because their stated objectives are “(1) maintenance of the integrity of the profession in the eyes of the public; (2) protection of the public from unethical or incompetent lawyers; and (3) deterrence of other lawyers from engaging in illegal or unprofessional conduct.” In re Scholl, 200 Ariz. 222, 224, 25 P .3d 710, 712 (2001). Disciplinary proceedings may also serve as more than a means of doling out punishment for ill-behaved attorneys. In some cases, the proceedings may help “in the rehabilitation of an errant lawyer.” Id., as well as “to instill public confidence in the Bar's integrity.” In re Phillips, 226 Ariz. 112, 117, 244 P.3d 549, 554 (2010).

    ERs 8.1-8.5 help ensure that lawyers are not only acting appropriately—being honest—but that they provide competent representation for their clients. My concern with the creation of the LLLPs is that a number of clients will no longer be protected by the Ethical Rules by which attorneys are bound in Arizona. Many people seeking more cost-effective legal services are presumably unfamiliar with the legal profession and therefore unlikely to understand the difference between a licensed attorney and an LLLP. Consequently, they will not understand that their “attorney” is not subject to the same level of scrutiny as licensed attorneys. As a result, many clients will likely unknowingly suffer from incompetent legal representation. Consequently, the proposed rule change will not only fail to provide access to the legal system at a more cost-effective rate, it will likely cause more harm to those seeking access by necessitating the involvement of licensed attorneys to address the mishandling of clients’ cases.

    A secondary concern of allowing LLLPs to practice without the same ethical responsibilities of licensed attorneys is the effect that it could have on the entire profession. “The duty of members of the bar to report, in appropriate circumstances, apparent misconduct by fellow attorneys is an important aspect of the legal profession’s relative autonomy and the concomitant ‘special responsibilities of self-government.’” Ethical Opinion 90-13. Without the universal application of ethical rules like ER 8.1-8.5, there is a risk there will be a movement for greater oversight. Such a change would likely have rippling effects on the entire landscape of the profession and those who endeavored to earn that autonomy by completing law school, studying the ethical obligations, passing the bar exam, and gaining admission to the Bar.

    While I recognize the intent behind the proposed change to ER 5.4 is good, the legal profession is better served by maintaining the current requirements for practice. Clients, individual practitioners, and the entire legal community benefit from universal application of the ethical rules. Unless and until there is a way to ensure that unlicensed practitioners are held to the same standards as licensed attorneys, Arizona courts should not entertain expanding the practice to those without the requisite training and standards of performance. The integrity of the profession must be maintained and we must ensure “public confidence in the Bar’s integrity.”


    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    26 May 2020 09:21 AM
    Submitted on Behalf of:
    Arizona Town Hall
    2400 W. Dunlap Ave., Suite 200
    Phoenix, Ariz. 85021-2815
    (602) 252-9600
    townhall@aztownhall.org

    By:

    Judge Patricia K. Norris (Ret.)
    Board Chair, Arizona Town Hall
    ASU Law Group
    111 East Taylor Street, Suite 120, MC8520
    Phoenix, Ariz. 85004
    (602) 496-1887
    Pat.Norris@asulawgroup.org
    (Bar Number 004980)

    Tara Jackson
    President, Arizona Town Hall
    2400 W. Dunlap Ave., Suite 200
    Phoenix, Ariz. 85021-2815
    (602) 252-9600
    tarajackson@aztownhall.org
    (Bar Number 013274)
    Attachments
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    26 May 2020 12:13 PM
    Timothy D. Ducar, Esq.
    Law Offices of Timothy D. Ducar, PLC
    7430 E. Butherus Drive, Suite E
    Scottsdale, AZ 85260
    (480) 502-2119 (voice)
    (480) 452-0900 (fax)
    www.azlawyers.com

    I write in strong opposition to abrogating ER 5.4.

    Every day, I go to work, striving to do my best for my clients. Doing so makes me feel satisfied in the good job I have done. It also keeps me from getting a bar complaint or getting sued for malpractice.

    Non-lawyers having a financial interest in a law firm would not have the goal of performing well, or the concern of a career-ending bar complaint, or the concern of getting sued for malpractice. For them, having an interest in a law firm would be a money making tool. If the non-lawyer actually was found to have put his/her interests above the client’s in an inappropriate way, and was told he/she could no longer hold an interest in a law firm, that person would simply take his/her money and move on to the next industry. As a result, allowing non-lawyers to have an ownership interest in law firms will negatively affect the quality of the legal profession as a whole, and the quality of the work product performed in the legal community.

    Regarding allowing non-lawyers to represent clients in limited circumstances, this, too, is not a well-reasoned suggestion. While I recognize that some people do not have access to the legal system, allowing non-lawyers to represent clients in some (yet undefined) circumstances will have a detrimental effect on many of the clients who wanted help, as well as the entire legal system in Arizona. For example, they undoubtedly will cause a class of documents to be filed that will be subpar, and may actually harm the client.

    For these reasons, ER 5.4 should not be abrogated.

    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    26 May 2020 12:20 PM
    Christopher D. Burk, Esq.*
    THE PATRIOT LAW FIRM CORP.
    2350 West Charleston Blvd. #202
    Las Vegas, Nevada 89102
    OFFICE - (702) 620-2020
    EFAX - (702) 623-5113
    CELL - (702) 908-6313
    www.fightforthelittleguy.com

    Based on what I have read thus far, I have to submit my opposition to R-20-0034.

    I can see no reason to allow non-attorneys to have ownership of law firms. It will result in the endless complaints and eventual instances of litigation for conflicts of interest. It will also increase the likelihood of malpractice complaints.

    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    26 May 2020 12:23 PM
    Mary K. Farrington-Lorch
    Law Office of Mary K. Farrington-Lorch
    3930 E. Camelback Road, Ste. 100
    Phoenix, AZ 85018
    602-254-0249
    Email: MaryKFL@farringtonlorchlaw.com

    I am simply confused, as to why non-lawyers should be allowed and permitted to have an ownership interest in a law firm. Is that, in fact, giving a non-lawyer, a non-legally trained person, the right to influence and direct the practice of law by duly trained, learned and licensed lawyers? Allowing non-lawyer firm ownership, could very easily place the direction of the practice of law, by a duly licensed lawyer and the lawyer’s ability to use their knowledge, skills and discretion, at risk. What if the non-lawyer has some motivating factor to direct lawyers, in the practice, which goes against ethics, the rules and the like. Thus, forcing lawyers to choose between earning an income and making ethically correct decisions, based on the rules, of law, ethics and precedent.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    26 May 2020 12:30 PM
    Jennifer Delgado
    Burch & Cracchiolo, P.A.
    1850 N. Central Ave., Suite 1700
    Phoenix, AZ 85004
    Bar # 020499

    I strongly oppose the Petition and believe allowing non-lawyers to own or share ownership in law firms will have a negative adverse effect on the practice of law and access to justice. I believe following this path is going to erode the quality of legal services in Arizona, devalue my license, and hurt the public. The fabric of our ethical duties will be stretched thin and more often than not, with competing profit interests from investors, will erode. While I understand the underlying issues that such a proposal is trying to address, allowing non-lawyers into the practice of law is not the solution.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    26 May 2020 02:04 PM
    Christopher Bistany
    Bistany Law Firm PLLC
    7373 E. Doubletree Ranch Road, Suite B-165
    Scottsdale, AZ 85258
    Office: (480) 757-0080
    Fax: (480) 757-0081
    E-Mail: chris@bistanylaw.com

    As an Arizona licensed attorney I OPPOSE the Petition to Eliminate ER 5.4, introduce LLLP’s, etc: R-20-0034.

    This is a very dangerous propose rule that will place the practice of law into the hands of individuals who are not qualified to practice law. It is that simple. It will result in great harm to the general public who seek legal representation. I adopt the comments made by Geoffrey Trachtenberg regarding this petition in full.

    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    26 May 2020 02:08 PM
    Andrew Abraham
    702 E Osborn Rd Ste 200
    Phoenix, AZ 85014
    Phone: (602) 234-9917

    I oppose the Petition which would eliminate ER 5.4 and 5.7 and allow non-lawyers to co-own law firms. I have been practicing in Arizona for over 35 years. The Petition may have been intended to increase access to legal services, but at what cost for those who are in need of competent legal counsel and have no idea how to retain someone who is qualified to provided needed advice. Not only does the quality of service suffer, but the services are often more expensive given the focus on law being a business vs a profession. We should not allow the legal profession to devolve to the point that it is a business run by non-lawyers; it hurts the legal profession, the public and the clients we serve
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    26 May 2020 02:10 PM
    Kurt Maahs
    Maahs Law Firm
    N. Tatum Boulevard, Suite 300
    Phoenix, AZ.
    602-247-1730
    kurt@maahslawfirm.com

    I am strongly opposed to the Petition to permit non-lawyers to or or manage law firms. I understand the goal is to increase access to justice, but the good intentions to not make this a sound policy.

    I second the comments of many others in these comments, including past bar president Geoff Trachtenberg.

    Opening up the practice of law to non-lawyers, or even allowing them to manage attorneys, strikes at the heart of the profession. We have always been a proud profession because we have ethics and the interests of our clients must be put above our own. That does not happen in the business world, even if there is an attorney that is going to be "responsible" for the non-lawyers. People running a business expect financial results over the result of the client. Businesses are wired to make decisions much differently than lawyers. Many say that lawyers are terrible at business. That may be the truth because lawyers play by different rules for the benefit of our clients and our profession. We make decisions constantly that are beneficially to our clients, even if they are not beneficial to our bottom line. I have seen non-lawyers address those issues and they do not view them the same way. Businesses are about the bottom line with no duty to clients.

    I also understand that the purpose of the amendment is to allow service to the underserved. That may or may not happen. I find it hard to believe there will be businesses investing in low profit advice. What is certain to happen is that an influx of money from non-lawyers will become present in the larger metropolitan areas and even bigger towns. Places where sufficient legal resources exist. Non-lawyers will seek to control areas of the law that are the most profitable, not the least. The unintended consequence of this rule change will be the real result. It will end up causing real harm to citizens seeking legal services and not likely address the concerns of the committee.

    The quality of legal service will not be improved either. Bad legal advice is more costly than good advice. The problem is that the cost is on the back end and may not be known for years. The law is not paint by numbers. Facts differ and there are exceptions to every rule. Education and experience matter. It is why we have law schools, bar examinations, and continuing legal education. Allowing non-lawyers to offer services will reduce the quality of legal advice in the state. It will cause irreparable harm to those that receive the bad advice.

    Approximately 20 years ago, there was a push to allow non-lawyers to supervise and manage lawyers. That push came from the "Big 6" accounting firms as they sought to combine different types of services under one roof. While this proposal was being discussed, there was criminal conduct of one of these accounting firms, Arthur Anderson, and one of its clients, Enron. Not surprisingly, that movement was quashed. We all know that profit centered decisions and ethical decisions will come into conflict many times. It is foolhardy to believe that the ethical considerations of a single lawyer will trump the opinion or decision of a non-lawyer CFO or CEO, who have fiduciary duties to shareholders. The proposed rule change will allow companies to manage non-lawyers, with likely disastrous consequences that are foreseeable based on history.

    If there are underserved areas of the state or of the law, perhaps there is a more narrowly tailored response that is appropriate, as some have suggested. Opening the floodgates hoping that only those the committee wants come through is not the answer and is far too broad of a solution for what seems to be a specific problem.

    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    26 May 2020 02:11 PM
    Annette Burns
    4808 N 22nd St Ste 200
    Phoenix, AZ 85016
    Phone: (602) 230-9118

    I oppose the changes suggested in R-20-0034. There is no connection between the elimination of ER 5.4 and access to justice. Non-lawyer owners of law firms will unquestionably harm the public and harm the practice of law by compromising professional ethics and professional judgment in order to answer to a non-lawyer owner. The elimination of this provision will do nothing but improve revenues for non-lawyers (and possibly lawyers as well) which will come directly from the pockets of consumers.

    As a family law attorney, I should approve of the inclusion of non-lawyer professionals to practice in certain areas of the law, including family law, because that inclusion will absolutely increase paying work for family law attorneys. Family law attorneys constantly receive new work which is necessitated only because someone (a) did not receive any legal advice to start with; (b) received legal advice that was not good; or (c) tried to use a document preparer or paralegal to do work that should have been done by an experienced lawyer. The inclusion of LLLPs to do family law work will absolutely increase paying work for attorneys who will be hired to "fix" what should have been done correctly in the first place. I am not, however, in favor of this change and the inclusion of LLLPs to practice law, because I can't ethically support something that is so contrary to the best interests of the public. There is certainly a need for more access to justice through low-cost and free services for the public, but allowing LLLPs to actually pretend to practice law will give the public the false impression that they're getting decent legal advice, which is misleading and harmful.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    26 May 2020 02:13 PM
    David M. Bell
    2800 N. Central Ave., Ste. 860
    Phoenix, Arizona 85004
    Office: (602) 792-1700
    Direct: (602) 792-1713
    dbell@cdslawfirm.com

    ABOTA opposition to eliminating Rule 5.4 and 5.7

    To the Arizona Supreme Court:

    The Board of the Phoenix Chapter of the American Board of Trial Advocates (ABOTA), submits these comments on and objections to the proposals in Petition R-20-0034 to eliminate ER 5.4 and ER 5.7. In doing so, we note and join in the comments and objections to eliminating these Ethical Rules, already submitted by several of our Chapter’s members, including Geoffrey Trachtenberg, Theodore Julian, Jr., Frank Verderame, John Micheaels, Kent Hammond, Chris Bode, Robert Greer, and Christopher Zachar.

    ABOTA and its members are dedicated to the preservation and promotion of the right to civil jury trial provided by the Seventh Amendment to the U.S. Constitution. The cornerstone to the preservation and promotion of that right is our profession. The ABOTA Code of Professionalism begins with, “ I Shall, Always remember that the practice of law is first and foremost a profession.” Our dedication to the practice of law as, “first and foremost a profession,” necessarily leads us to object to the proposal to eliminate of ER 5.4 and ER 5.7. Within our profession, ER 5.4 has long been recognized as a fundamental requirement in protecting “the lawyer's professional independence of judgment.” In addition to more specific rules addressing the client-lawyer relationship, confidentiality, advocacy and transactions with persons other than clients, ER 5.4 confirms that the firms we organize to provide our services must be dedicated to those professional obligations.

    Having reviewed the Petition, the Report and Recommendations of the Task Force on Delivery of Legal Services (“Task Force Report) we note that the Task Force was established to explore changes of various court rules and professional rules for the purpose of advancing access to justice. ABOTA has long supported expansion of access to justice and includes that goal in our Code of Professionalism: “I Shall…Work with the other members of the bar, including judges, opposing counsel, and those whose practices are different from mine, to make our system of justice more accessible and responsive.” In fulfilling that commitment, our members participate in the Volunteer Lawyer Program, serve as pro-bono “ABOTA counsel” to the probate courts in reviewing proposed settlements for claimants who minors, and accept representation for contingent fees or reduced fees and provide countless hours of pro-bono representation.

    While joining in the goal to advancing access to justice, we find no support in the Petition’s conclusions or the Task Force report’s conclusion that eliminating ER 5.4 and 5.7 will advance access to justice. On this point we join the Hon. Peter Swan’s “Opposition Statement” that the proposal to eliminate ER 5.4 and ER 5.7 are a detour from the Task Force’s stated goal of examining and proposing steps to improve access to justice for the under-served. The Petition and Task Force report both contend that eliminating these rules will permit innovation through alternative business structures (ABSs). The Petition and Task Force report fail, however, to provide empirical evidence or reasonable explanations of innovations in the access to justice that cannot be otherwise achieved by the cooperative efforts of lawyers and non-lawyers. The Petition and the Task Force report also fail to offer a reasonable explanation of how allowing non-lawyer investment in ABSs providing legal services, by eliminating ER 5.4, will lead to expansion of those services to individuals who cannot currently afford legal services. To the contrary, absent compelling evidence or explanation, it is far more reasonable to conclude that non-lawyer investment will flow to ABSs that provide services in the more lucrative sectors of the practice.

    Last, we share judge Swan’s concern in his “Opposition Statement” to the Task Force report that the resulting Petition glosses over the potential harm to the public perception of a justice system that strips away ethical constraints on lawyers in order to allow non-lawyers to own firms providing legal services. Public confidence in lawyers is already low; yet public confidence in the courts remains high. If the Arizona Supreme Court is perceived as eliminating ethical constraints on lawyers so that they can form ABSs that attract investment by sharing fees with non-lawyer investors, public confidence in the courts will be diminished.

    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    26 May 2020 02:16 PM
    J. Tyrrell Taber
    ASB# 005204
    2398 E. Camelback Rd.
    Phoenix, AZ 85016
    602 332-6010

    Petition Number 20-0034 is antithetical to the rules, considerations and aspirations of the the profession of lawyering.

    The pursuit of justice for those in need, through the providing of time and advice is what lawyers have done throughout time. This is an awesome responsibility handled by highly trained and skilled practitioners. As professionals, not businessmen, decisions are made about providing access to justice based on a creed that is not money driven. Recently, lawyers from all areas of practice stood up and provided free legal services to those suffering from the COVID-19 crisis. Entrusting this responsibility to non-lawyers with a profit motive will inflict untold damage on the citizens of Arizona.

    The distaste for this ill-conceived petition was initial best expressed by Judge Peter Swann, who has been joined by hundreds of lawyers throughout our state in a resounding rejection of this unwanted rule change. I add my voice to their ranks.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    26 May 2020 02:19 PM
    Daryl Manhart
    Burch & Cracchiolo. P.A.
    1850 N. Central Ave., 17th Floor
    Phoenix, AZ 85004
    602-234-9908
    DManhart@bcattorneys.com
    Bar no. 005471

    The Task Force report clearly reflects a lot of work and there is no denying that there are many members of the public who cannot afford legal services. Nevertheless, I propose the subject rule amendments be rejected with respect to both permitting nonlawyer ownership interests in law firms and allowing a category of nonlawyers to provide certain limited services now only permitted to be performed by lawyers. These are different and should be considered separately. The former is more objectionable than the latter.

    Nonlawyer ownership.

    It seems unlikely that permitting nonlawyer ownership can avoid negatively impacting the exercise of a lawyer’s professional judgment. The increasing role insurance adjusters already have in controlling the litigation defense in many cases suggests otherwise. The defense lawyer has a client, but the insurance company controls the defense. The insurance adjuster gets advice from the lawyer, but the lawyer cannot file a motion or perform research and expect to be paid unless the adjuster has first approved it. The client certainly gets professional representation, but it is not necessarily the full extent of what the lawyer’s professional judgment recommends. In terms of the quality of legal service, the client gets a level of service that is adequate, not necessarily the best, and the client did not get to make that decision. Permitting nonlawyer ownership of law firms may be expected to expand that nonlawyer control of the representation afforded. Moreover, in contrast to the insurance adjuster example where the nonlawyer control as to expense is still aligned with the client’s interest in a successful defense, a nonlawyer owner of a law firm is not motivated to control expense, but to maximize profit. Permitting such ownership can also be expected to permit nonlawyers to engage in conduct (i.e., soliciting) to benefit the firm that lawyers are forbidden to do without regulatory controls over the nonlawyers.

    Nonlawyer legal technicians.

    Some other states are already trying this, including the State of Washington which started a program several years ago, so far restricting such legal technicians to limited areas of practice. An article by R. Donaldson, Law by Non-Lawyers: The Limit to Limited License Legal Technicians Increasing Access to Justice, 42 Seattle University Law Review 1 (2018), concludes that the current Washington program may assist moderate income individuals in obtaining affordable legal services, but not low income legal consumers. There is also a report entitled “Preliminary Evaluation of the Washington State Limited License Legal Technician Program” (2017), available at http://www.americanbarfoundation.or...032117.pdf which concludes that Washington’s program has benefit, but also states that the cost of regulating to maintain that quality would require a bigger population of annual fee-paying technicians or lesser regulation of them. The public is not served by giving it a less expensive, but insufficiently regulated alternative.
    There seems to be a focus on allowing such legal technicians to assist in family law cases. Those undoubtedly have a large proportion of unrepresented parties. The rule proposal also discusses expanding services of legal document preparers to provide additional services in family law matters. As pointed out in the Opposition Statement accompanying the Task Force report, “the concept is not fully baked.” Approving a rule change first, then delegating to a steering a committee the task of developing, testing, and implementing whatever might be permitted, seems unwise.

    Other comments.

    Decades now of permitting lawyer advertising may not have hurt the public, but it has not expanded affordable legal services or driven down the expense in any area. Indeed, the most prolific advertising is for personal injury representation where contingent fees are the norm for plaintiffs, and such representation has long been affordable as long as a lawyer believes there is a viable case. That same motivation to expand affordable legal services underlies the current proposal, but there seems no reason to believe that these suggestions will accomplish that.

    A stated purpose is to “encourage innovation in the delivery of legal services.” That seems unlikely. Again referencing the Opposition Statement, “systemic reforms” instead may be what is needed to “create a simpler and more efficient [court] system.” A different approach might require more than just simpler procedures or court personnel to guide the nonlawyer through them. The inability of much of the public to afford legal representation would be better advanced by reforms that reduce the work needed. If a lawyer can handle a matter in less time, that will cost less, then a lawyer can serve more clients. For instance, in the litigation area, if dispositive motions were more often granted and upheld on appeal (i.e., failure to state a claim, statute of limitations, qualified immunity, no duty – not suggesting caps on damages; or on the other side, more objectivity or rigidity in what qualifies as a defense), lawyers could with greater certainty advise prospective plaintiffs or parties served as defendants whether there is a viable claim or defense and better estimate the expense to get to a ruling on a dispositive motion. While in the criminal law field with life and liberty at stake there is justification for the concept that it is better to let a guilty person go free than to convict an innocent one, there is room for a more practical approach on the civil side. Constantly eroding constraints such as limitations periods and expanding what conduct is subjectively actionable or defendable just make for more civil suits that take longer to resolve and are too expensive. More certainty as to outcomes would mean accepting that some parties will get debatably unfair outcomes, but that happens already. Trial court judges, juries, and appellate judges all make mistakes and we accept that system. It is not just procedures that need to be simpler to make the justice system affordable, but the common law and rule changes alone will be inadequate to address that.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    26 May 2020 02:24 PM
    Denise M. Blommel, Attorney Arizona 5388
    Denise M. Blommel, PLLC
    6945 E. Sahuaro, Suite 125
    Scottsdale, AZ 85254
    denise@azlaborlaw.com
    480-247-7477

    For all the reasons in my previous comment, I strongly oppose Petition R-20-0034.
    The changes proposed will have unintended consequences and will not improve the access to justice in our State.
    Thank you for your consideration of all the comments in opposition.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    26 May 2020 02:30 PM
    James W. Rappaport
    Pima County Bar Association, Rules Committee
    177 North Church Avenue
    Tucson, AZ 85701
    520-623-8258
    jwrappaport@gmail.com
    Bar Number: 031699

    Please find attached the Pima County Bar Association’s comment in strong opposition to the proposed rule changes.
    The Amended Petition should be resisted tooth and nail.
    Attachments
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    27 May 2020 07:46 AM
    JACK H. HIRSCH, ESQ.
    HIRSCH & LYON, P.L.L.C.
    1212 E. Osborn Road
    Phoenix, AZ 85014
    (602)264-7700 Phone
    (602)264-2621-Fax
    Jack@HLaccidentlaw.com

    I write this in opposition to Rule Change R-20-0034. I’ve been practicing law in AZ since 1988 and have seem many meaningful, purposeful, and well thought out changes over the years. I am fearful the changes being proposed have a much greater propensity of doing harm to the legal profession and the public, than the potential benefit that this Rule change may benefit.

    I find the State Bar has its hands full in trying to regulate and monitor the State Bar as this point. Enacting this Rule change will make it close to impossible to regulate and monitor those non lawyer and non lawyer entities that will be inevitably running matters with puppet lawyers.

    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    27 May 2020 07:57 AM
    Joel F Friedman, Esq.
    JOEL F FRIEDMAN, PLLC
    Arizona State Bar No. 007688
    610 E. Roosevelt St., Unit 133
    Phoenix, AZ 85004
    602-540-6366
    joel@compinaz.com
    joel.friedman82@gmail.com

    I am writing in opposition to the Petition to Abrogate ER 5.4 and other features of the
    proposal to expand opportunities for non-lawyers effectively to practice law.
    Attachments
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    27 May 2020 08:10 AM
    Norma Lebario, Esq.
    2058 S. Dobson Road Suite #1
    Mesa, AZ 85202
    Phone: (623) 321-0566

    I respectfully oppose the proposed amendment to Rule 31
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    27 May 2020 08:42 AM
    S. David Andelin #028183
    ESCAMILLA LAW GROUP, PLLC
    2058 S. Dobson Rd., Suite 1
    Mesa, AZ 85202

    I oppose the elimination / modification of ER 5.4 and 5.7 that allows for the Limited License Legal Practitioner to directly handle legal matters. Having worked in immigration law during law school, I repeatedly saw innocent persons being taken advantage of by non-attorneys. Sanctioning such practices will absolutely increase this activity, thereby harming the same people for which the modification is intended.

    I take my oath very seriously, and always weigh decisions in my practice with the Ethical Rules that govern those of us that practice law. I am confident that a non-attorney, who hasn’t spent years sacrificing his / her life to obtain a law degree and pass the bar, will not take his / her oath as serious as a licensed attorney.

    Honestly, it’s ridiculous this is even being considered.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    27 May 2020 08:49 AM
    Suzanne Ingold
    702 E Osborn Rd Ste 200
    Phoenix, AZ 85014
    Phone: (602) 234-8775

    Current ER 5.3:
    Current Ethical Rule 5.3 provides:
    (a) a partner, and a lawyer who individually or together with other lawyers possesses comparable managerial authority in a law firm shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that the person's conduct is compatible with the professional obligations of the lawyer;
    (b) a lawyer having direct supervisory authority over the nonlawyer shall make reasonable efforts to ensure that the person's conduct is compatible with the professional obligations of the lawyer; and
    (c) a lawyer shall be responsible for conduct of such a person that would be a violation of the Rules of Professional Conduct if engaged in by a lawyer if:
    (1) the lawyer orders or, with the knowledge of the specific conduct, ratifies the conduct involved; or
    (2) the lawyer is a partner or has comparable managerial authority in the law firm in which the person is employed, or has direct supervisory authority over the person, and knows of the conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable remedial action.

    2. Proposed ER 5.3
    The proposed version of Ethical Rule 5.3 provides:
    (a) A lawyer in a firm shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that the conduct of nonlawyers, including those who have economic interests in the firm, is compatible with the professional obligations of the lawyer. Reasonable measures include but are not limited to adopting and enforcing policies and procedures designed:
    (1) to prevent nonlawyers in a firm from directing, controlling or materially limiting the lawyer’s independent professional judgment on behalf of clients or materially influencing which clients a lawyer does or does not represent; and
    (2) to ensure that nonlawyers comport themselves in accordance with the lawyer’s ethical obligations, including, but not limited to, avoiding conflicts of interest and maintaining the confidentiality of all firm client information.
    (b) A lawyer having supervisory authority over a nonlawyer within or outside a firm shall make reasonable efforts to ensure that the nonlawyer’s conduct is compatible with the professional obligations of the lawyer.
    (1) Reasonable efforts include providing to nonlawyers appropriate instruction and supervision concerning the ethical aspects of their employment or retention, particularly regarding the obligation not to disclose information relating to the representation of the client.
    (2) Measures employed in supervising nonlawyers should take into account that they may not have legal training and are not subject to professional discipline.
    (3) When retaining or directing a nonlawyer outside the firm, a lawyer should communicate directions appropriate under the circumstances to give reasonable assurance that the nonlawyer's conduct is compatible with the professional obligations of the lawyer.
    (4) Where the client directs the selection of a particular nonlawyer service provider outside the firm, the lawyer ordinarily should agree with the client concerning the allocation of responsibility for monitoring as between the client and the lawyer.
    (c) A lawyer shall be responsible for conduct of a nonlawyer that would be a violation of the Rules of Professional Conduct if engaged in by a lawyer if:
    (1) the lawyer orders or, with the knowledge of the specific conduct, ratifies the conduct involved; or
    (2) the lawyer has managerial authority in the firm and knows of the conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable remedial action.
    (d) When a firm includes nonlawyers who have an economic interest or managerial authority in the firm, any lawyer practicing therein shall ensure that a lawyer has been identified as responsible for establishing policies and procedures within the firm to assure nonlawyer compliance with these rules.

    3. Proposed Commentary Language Re: Responsibilities Regarding Nonlawyer
    I am opposed to the rule change because there will be problems relating to supervision by nonlawyer owners and managers under the proposed version of ER 5.3. While the proposal suggests that a lawyer in the firm will be “responsible for establishing policies and procedures to assure that all nonlawyers comply with the lawyers’ ethical obligations,” Pet. at 15, no compliance can be ensured given that there will be inherent conflicts of interest under the new rules. These conflicts will arise due to non-lawyers’ influence based on economic interests in the firm. The Second Circuit recognized this exact principle in upholding New York State’s prohibition against “the involvement of unrelated third parties in the attorney-client relationship.” Jacoby & Meyers, LLP v. Presiding Justices of the First, Second, Third & Fourth Dep’ts, Appellate Div. of the Supreme Court of N.Y., 852 F.3d 178, 191 (2d Cir. 2017). In Jacoby & Meyers, the plaintiffs challenged New York’s ban on non-lawyer equity investment, arguing that allowing non-lawyer equity investment would increase access to justice by lowering the cost of legal services. Id. at 182.The court rejected that argument and found that prohibiting non-lawyer equity involvement in firms “serve[s] New York State’s well-established interest in regulating attorney conduct and in maintaining ethical behavior and independence among the members of the legal profession.” Id. Without such a prohibition, nothing will prevent the creation of incentives for attorneys to violate ethical norms, such as those requiring attorneys to put their clients’ interests foremost. Id.

    Proposed ER 5.3 sets aspirational goals to protect the professionalism and independence of lawyers. But, there is a powerful and critical difference between supervising a nonlawyer employee and ensuring that the lawyers in the firm are not swayed or improperly influenced by a nonlawyer who has a paramount, if not sole, economic interest in the firm. The potential for a conflict of interest—that is between a lawyer protecting her client and honoring the wishes of a nonlawyer who has an economic interest in the firm—is most at risk.

    The public policy reasoning underlying current ER 5.4 shows why proposed ER 5.3 will not work. “A nonlawyer might see the potential for financial gain by taking a certain course of action and, therefore, attempt to influence an attorney’s professional judgment. The nonlawyer wants to take the easy settlement, grab a legal fee and run.” Phil Pattee, Nonlawyers Are Useful, but You're the Attorney, Nev. Law., November 2008, at 37. In fact, “[i]n such a situation, the attorney has a partner trying to influence his or her professional judgment to the possible detriment of a client.” Id. While there can be all types of purported safeguards, nonlawyers are not lawyers, and they will not think through the ethical conundrums in the same way lawyers do nor are they required to. The potential that under the proposed rules that a nonlawyer may affect the professional judgment of a lawyer in the firm, as well as their ethical obligations, is enough to reject the proposed rule changes. No form of ER 5.3 can fix that.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    27 May 2020 08:55 AM
    Bryce Burnham
    Booth Udall Fuller, PLC
    1255 W. Rio Salado Pkwy #215
    Tempe, AZ 85281
    bburnham@boothudall.com
    ph: 480.830.2700

    I am in opposition to proposed rule R-20-0034, and believe that ER 5.4 should not be eliminated as it would negatively effect the professional independence of lawyers in Arizona.

    I believe removal of ER 5.4 would not serve the interests of the people of Arizona, and could misalign incentives such that business concerns of a law firm could overshadow the ethical obligations of the law firm. A law firm’s concern should be first for best interest of the client, and ER 5.4 helps maintain and preserve that proper focus.




    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    27 May 2020 09:21 AM
    Denise Quinterri
    161 E Inverness Dr
    Ore Valley, AZ 85737
    480-239-9807
    dmq@azethicslaw.com
    Attachments
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    27 May 2020 09:25 AM
    Timothy Sandefur (Bar # 033670)
    Goldwater Institute
    500 E. Coronado Rd.
    Phoenix, AZ 85004
    (602) 462-5000
    litigation@goldwaterinstitute.org
    Attachments
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    27 May 2020 09:51 AM
    Edwin C. Bull
    1850 North Central, 17th Floor
    Phoenix, AZ 85004
    Direct: 602.234.9913
    Email: ebull@bcattorneys.com

    As a 40 year member in good standing of the Arizona Bar (since October, 1980), I am strongly opposed to the proposed change to ER 5.4 that I believe would effectively turn legal services in Arizona into a business-driven “commodity” owned and controlled by corporate businesses rather than by independent lawyers/law firms. Lawyers have been and should continue to be ethically responsible for what we do (and do not do) to represent our clients – and we (as lawyers) should answer to our clients and to the Bar for our decisions, conduct and actions. We should not answer to the whims, business desires and balance sheets of a business-driven company that is in the “business” of legal services, rather than in the “profession” being a lawyer and an officer of the court.

    I certainly recognize the un-met needs of many people who need but cannot afford legal services at typical hourly rates. And I certainly am not opposed to obligating every member of the Bar with providing an appropriate (hours set by the Bar) number of pro bono (or reduced fee) services to those most in need. I am also perfectly fine with the Bar obligating any lawyer who claims to be too busy (or whatever) to provide such pro bono or reduced fee services, then they are responsible to contribute $X per hour for any pro bono/reduced fee hours that they did not provide. In turn, those collected dollars can be used to pay other members of the bar to provide the needed services. With pride and a sense of obligation, throughout my career I have provided (and continue to provide) pro bono representation to a homeless shelter, to various non-profit organizations, and numerous needy individuals. To me, providing pro bono services to those most in need is the right thing to do – for both ethical and human reasons.

    And finally, I am certainly not anti-business or anti-change for the better. In fact, I have spent most of my 40 years representing various businesses/corporations who are involved (mostly) in the real estate development business – and I appreciate the opportunity to represent those businesses and to have played a small role in many changes in the Phoenix-Metro area. However, when any of those businesses ask/order me (for whatever reason) to do or say something that they think is necessary/appropriate but I think is inappropriate, I steadfastly turn to my independent judgment and responsibilities as a lawyer to refuse to follow those “orders” from the business/corporation – at the risk of losing that client. However, if my “boss” were a business/corporation in the business of legal services, refusing to follow those “orders” would be at the risk of losing my job.

    I take a great deal of pride in being a member of the Bar and the legal profession. For me, to work for a legal services company would be a “job” rather than a “profession”. Please do not start down the path of taking the “profession” and “personal responsibility” out of being a lawyer in Arizona.

    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    27 May 2020 09:57 AM
    Tonya K. MacBeth, Esq.
    SBN #024140
    1850 North Central, 17th Floor
    Phoenix, AZ 85004
    AZ: 602.234.9926
    tmacbeth@bcattorneys.com

    Dear Committee Members,

    Please consider this opposition to the proposed rule change. It is unfortunate when noble goals are thwarted by the inevitable misdeeds by non-lawyers who are handed a golden opportunity for profiteering to the disadvantage of persons who are at a crisis-point in their lives. Few people are fortunate to secure the services of an attorney when their lives are not in disarray. This rule change opens up an entire buffet of overwhelmed and disadvantaged targets.

    Increasing access to legal services is a lofty goal. However, it can be done by other means. If the bar believes that everyone should have access to affordable legal services, require the members to provide those services. Don’t increase access by devaluing expertise of those who have been admitted to the bar and make them compete with big-pocketed-profiteers focused on market saturation, advertising, and decreased legal supervision.

    As a volunteer Judge Pro Tem, I believe in the obligation to serve the profession that has given so much to me. The bar could require its members to volunteer time or fees within their area of practice. The Rules committee could waive conflict rules for attorneys who are willing to give free court sponsored training sessions on family law rules and procedures for those who are self-represented. The Rules committee could include liability protections (like those provided for court-appointed mental health professionals) for those “appointed” to provide court-house training sessions for pro bono litigants. The volunteer Pro Tem list could be the first source of trainers and those ready to train-the-trainer. These services could be piloted in Family Court, then Probate, followed by civil court.

    Supervision and maintenance of professionalism is an important part of many attorneys’ law practices. I devote significant time to the supervision of my staff (paralegal and assistant) and the firm as a whole dedicates significant time to the supervision of the accounting, technology and marketing activities. All of these activities are carried out with the ethical responsibilities, rules, and an eye on the financial health of the organization. Through supervision, I have the ability to set the total cost for a dissolution action by determining the level of expertise required, the ability to use paralegal services under my supervision, and the time necessary to provide appropriate representation. However, with paraprofessionals working independently, the end result is lower expertise, not lower cost.

    Lower cost services are not the panacea for the access problem. A survey conducted with LLLT’s and LLLT candidates in Washington, found that “[a]assuming that potential clients would be willing to spend even half a paycheck on their LLLT services . . . none of Washington’s population living at or below 125% of the federal poverty line could afford an LLLT [and] only about 15 percent of those living at or below 200 % of the federal poverty line could afford one.” Becca Donaldson, Who Accesses Justice? The Rise of Limited License Legal Technicians, 4(5) HARVARD LAW SCHOOL CENTER ON THE LEGAL PROFESSION: THE PRACTICE, July 2018, https://thepractice.law.harvard.edu...s-justice/ [https://perma.cc/94T8-3456].

    The rule change is asking us to embrace our non-lawyer partners’ inherent profit motives and believe that the underserved will benefit. It is an illogical conclusion. Increasing the number of people who make money from a single client does not result in a lower cost for the client. The Second Circuit recognized this very principle in upholding New York State’s prohibition against “the involvement of unrelated third parties in the attorney-client relationship.” Jacoby & Meyers, LLP v. Presiding Justices of the First, Second, Third & Fourth Dep’ts, Appellate Div. of the Supreme Court of N.Y., 852 F.3d 178, 191 (2d Cir. 2017). In Jacoby & Meyers, the plaintiffs challenged New York’s ban on non-lawyer equity investment, arguing that allowing non-lawyer equity investment would increase access to justice by lowering the cost of legal services. Id. at 182.The court rejected that argument and found that prohibiting non-lawyer equity involvement in firms “serve[s] New York State’s well-established interest in regulating attorney conduct and in maintaining ethical behavior and independence among the members of the legal profession.” Id. Without such a prohibition, nothing will prevent the creation of incentives for attorneys to violate ethical norms, such as those requiring attorneys to put their clients’ interests foremost. Id. The compliance officer will be subject to the same pressure. “A nonlawyer might see the potential for financial gain by taking a certain course of action and, therefore, attempt to influence an attorney’s professional judgment. The nonlawyer wants to take the easy settlement, grab a legal fee and run.” Phil Pattee, Nonlawyers Are Useful, but You're the Attorney, Nev. Law., November 2008, at 37. By adding into this mix the ownership interests of persons who are not schooled in the responsibilities of practice, who are focused exclusively on profitability, you are injecting competing interests. These competing interests are not going to naturally coalesce around the non-income generating aspect of supervision or the obligation to maintain the integrity of the profession.

    The end result of the proposed rule changes is opening the practice of law to profiteers and extending to them the last vestiges of respectability attached to the legal community. The Bar works hard to protect the profession from our own bad actors. This proposal will only serve to open the door to those who could never be admitted to practice.

    Thank you for your dedication to the ideals of justice. We have other ways to meet the need beyond just diluting the services rendered. It is my sincerest hope that this rule proposal has opened the legal community to think outside the box to innovate in ways that demonstrate our dedication to the residents of Arizona and the profession.

    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    27 May 2020 10:04 AM
    Eric Hill
    2727 S Playa
    Mesa, AZ 85202
    Bar No. 029890
    (801) 518-6288
    erichill.law@gmail.com


    I am opposed to the Petition in its entirety for the reasons articulated by the other commenters in this forum.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    27 May 2020 10:17 AM
    Christine Davis, Bar No. 021046
    Ethics Counsel
    Lisa M. Panahi, Bar No. 023421
    General Counsel
    State Bar of Arizona
    4201 N. 24th Street, Suite 100
    Phoenix, AZ 85016-6288
    (602) 340-7236
    Attachments
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    27 May 2020 10:22 AM
    Edward G. Renner
    Assistant Vice President, Corporate Counsel
    edward.renner@apci.org
    o 847-553-3779
    m 312-371-4852

    Colleen Reppen Shiel
    Vice President, Deputy General Counsel FN1

    Dear Supreme Court:

    The American Property Casualty Insurance Association (APCIA) is the primary national trade association for home, auto, and business insurers. APCIA promotes and protects the viability of private competition for the benefit of consumers and insurers, with a legacy dating back 150 years. APCIA members represent all sizes, structures, and regions – protecting families, communities, and businesses in the U.S. and across the globe.

    Property casualty insurers are among the highest-volume consumers of legal services and have a genuine interest in preserving the integrity of a fair, predictable, legal system. APCIA appreciates the opportunity to submit an additional comment letter, responding to Petition No. R-20-0034, In re: Restyle and Amend Rule 31; Adopt New Rule 33.1; Amend Rules 32, 41, 42 (Various ERs From 1.0 to 5.7), 46-51, 54-58, 60, and 75-76 (Petition). It is our understanding that the Task Force on the Delivery of Lega Services (Task Force) filed its Response and Amended Petition pursuant to Rule 28(a) of the Arizona Rules of the Supreme Court on April 27, 2020.FN2 For the reasons set forth below, we again urge the Arizona Supreme Court to reject the Amended Petition to remove or limit Ethical Rules prohibiting nonlawyer law firm ownership, fee-splitting between lawyers and nonlawyers, and/or nonlawyer investments in law firms or litigation.

    While this letter is intended to highlight some of APCIA’s concerns, it is not intended to identify or address all potentially harmful unintended consequences of granting the Task Force’s Amended Petition. Several Arizona attorneys have provided fulsome commentary in opposition and we direct the Arizona Supreme Court to the comments of Geoffrey M. Trachtenberg, Esq., Thomas Burnett, Esq., Frank Berry, Jr., Esq., David Friedman, Esq., and the combined comment of Nancy Greenlee, Esq. and Ann Ching, Esq.

    First, APCIA renews its opposition to the elimination of Ethical Rules (ER) 5.4 and 5.7. ER 5.4 serves a critical purpose to ensure the independence and ethical conduct of lawyers, as its title, the “Professional Independence of a Lawyer”, indicates. Comment 1 to ER 5.4 confirms its purpose is to protect the lawyer’s “professional judgment.”FN3 The Task Force acknowledges the importance of these public and professional judgment protections but proposes to redistribute them among existing rules, without subjecting non-lawyer owners or investors to the Ethical Rules. In addition to diluting the existing protections provided by ER 5.4, eliminating the rule will weaken the special fiduciary relationship between attorney and client, insert a new set of conflicts between practicing attorneys and firm ownership, and convert the practice of law into a mere service.FN4 The Task Force’s Response adds no new argument and no new proof that eliminating ER 5.4 will not harm the public or the Arizona Bar. Instead, the Task Force relies on the current novel coronavirus (COVID-19) pandemic in support of its petition, claiming it will “severely increase the need for legal services” (Response, p. 8). The fact is, however, that 64,000 lawyers were terminated or furloughed in April 2020, so there are literally thousands of currently licensed attorneys available.FN5

    The Task Force mistakenly analogizes the elimination of ER 5.4 to allow ABSs to an insurer’s permitted use of employed staff counsel to represent its insureds. This is a false equivalence. Employed staff counsel are permitted to represent an insurer’s policyholder in Arizona where the insurer has a preexisting contractual obligation to provide the policyholder with a defense, and only where the interests of the insurer and the policyholder are aligned. Petitioner wants to commoditize litigation, creating a market for investors to buy in to litigation after a cause of action accrues, with the hope of realizing big returns on its investment. Existing ethics rules, including ER 5.4, protect against the injection of outside mercenary, and potentially conflicting, interests into the attorney/client relationship. Insurers that use employed staff counsel to defend policyholders have, by the nature of the preexisting relationship, a direct financial interest, fully aligned with the interest of the insured, in the outcome of the case being defended. This is distinct from nonlawyer ownership of law firms by strangers who have no interest in the outcome of a case absent an after-the-fact investment, and this is a distinction with a meaningful difference. Insurers are regulated by the Arizona Department of Insurance, and staff counsel are subject to and protected by Arizona’s Ethical Rules, including ERs 1.8, 5.4 and 5.7. Eliminating ER 5.4 would erode, rather than solidify, the underlying foundational ethical obligations owed by lawyer to client.

    The same is true regarding the Petition to allow fee-splitting with nonlawyer owners or investors that have no relationship to, and owe no professional obligation to, a client. The introduction of an outside entity having the ability to influence – if not directly control – decisions related to the client’s interests, without that entity having any preexisting contractual obligation to, or other relationship with the client, would inherently conflict with the lawyer’s ethical obligation to exercise independent professional judgment for the benefit of the client.FN6 Although the Task Force no longer opposes a “sandbox” approach, which would allegedly allow Arizona to proceed conservatively and walk back any unworkable changes, even this approach would create significant unintended consequences.

    Second, the Task Force suggests that an ABS is no different from a law firm, solo practice, in-house practice, or non-profit legal services provider because lawyers are working for fees or wages. That conflation, however, fails to contemplate the fact that a supervising attorney in a law firm is equally subject to censure, suspension, and disbarment for ethical violations of subordinate attorneys. In the ABS model, the owner investors can simply walk away from a failed ABS, subject at worst to a monetary fine. Thus, comparing attorney owners of law firms to non-attorney owner or investors of an ABS is not an apt analogy.

    Finally, we note that attorney’s ethical obligations follow them as they transition to a new firm, a new practice, or employment, as do the conflicts of interest prohibitions. Non-attorney owners of an ABS are not prohibited from owning an interest in multiple ABSs or other companies that might have a conflict with an ABS client, such as a Third Party Litigation Funder owning an ABS and separately funding the litigation of a client of that ABS. This presents the potential for insurmountable conflicting interests.

    Thank you for the opportunity to comment and for your consideration of our perspective. We urge the Arizona Supreme Court to reject the Amended Petition.

    Please contact me directly at colleen.shiel@apci.org with any questions.

    Sincerely,

    Colleen Reppen Shiel
    Vice President, Deputy General Counsel
    American Property Casualty Insurance Association

    FN1 Colleen Reppen Shiel, Vice President and Deputy General Counsel for American Property Casualty Insurance Association of America with a mailing address of 8700 W. Bryn Mawr Ave., Ste. 1200S, Chicago, IL 60631-3512. Phone (847) 297-7800. Email: colleen.shiel@apci.org. Illinois Bar No. 6193134.
    FN2 http://www.azcourts.gov/Rules-Forum.
    FN3 ER 5.4 Comment [1] read in part “These limitations are to protect the lawyer's professional independence of judgment.” See https://www.azbar.org/for-lawyers/e...-conduct/.
    FN4 See, e.g., New York State Bar Ass’n: Report of the Task Force on Nonlawyer Ownership, 76 Alb. L.Rev. 865, 877 (2013) (“nonlawyer control of legal practice presents considerable risks to the legal system and the justice system…and should not be permitted”).
    FN5 See U.S. Bureau of Labor Statistics May 8, 2020 Employment Situation Summary No. USDL-20-0815, table B-1 available at https://www.bls.gov/news.release/em...t.nr0.htm.
    FN6 See Arizona Bar Ethical Opinion 99-12, noting that a lawyer employed by an architectural firm may violate “ERs 5.4(c) and 1.8(f)(2) if the firm, in its role as the attorney's employer, in any way directed or regulated the lawyer's professional judgment in rendering legal services to clients. Even if the firm agreed to comply with these Rules by refraining from influencing the attorney's representation of clients, the structure of the proposed arrangement would allow the firm to indirectly influence representation of clients by controlling matters such as the attorney's time and workload.”


    Attachments
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    27 May 2020 10:53 AM
    Sergio Escamilla
    Escamilla Law Group, PLLC
    2950 N 91st Ave Ste C-103
    Phoenix, AZ 85037
    Phone: (623) 321-0566

    I hereby lodge my opposition to the elimination/modification of ER 5.4 and 5.7 and allow for Limited License Legal Practitioner (LLLP) to directly handle legal matters instead of matters being handled by a duly licensed attorney and allow non-lawyers to co-own law firms.

    Appreciating the need for access of justice, allowing for the creation of non-attorney LLLP’s waters down the legal service product the public would inevitably receive if this were permitted. Understanding that the intent is to allow underserved and socio-economically challenged populations better access to “justice” a water-down version of justice is not a better way to assist. Growing up the son of two Mexican immigrants in inner-city Los Angeles in what anyone would call an “underserved” and “socio-economically challenged” neighborhood and scenario, I have to speak up for that demographic. I plainly and frequently saw others in my community being preyed upon by unscrupulous para-professionals. Many times, immigration, family law, criminal, and tax “practitioners” would overcharge and often make misrepresentations to people in our community. Often, they would charge and take money for services we later found out were not possible for them to achieve. Many times, these para-professionals would charge the same or more as lawyers. This happened over and over and the phrase “notario fraud” is well known in Los Angeles. In 2017, the Los Angeles District Attorney’s Office started cracking down on people who targeted immigrants for scams, prosecuting eight cases that cheated at least 300 people out of $3 million. Speaking as the son of “under-served” parents and growing up “socio-economically challenged,” I respectfully oppose any watered down justice for this demographic. Respectfully, this demographic deserves the same access to lawyers that any other demographic deserves. There are other ways to offer access to justice by utilizing true attorneys that are duly licensed. I did this myself when I opened my first law office as a lawyer in one of the more under-served parts of Los Angeles. We can teach attorneys how to learn to properly “flat fee” for specific services. We can also teach lawyers how to better allow for monthly payments on certain types of cases. There are other means to explore. However and respectfully, I do not wish to veil “access of justice” as a reason to give this demographic in need of legal services sub-par, non-attorney, para-professionals help. Respectfully, that is not the answer.

    Further, I vehemently oppose allowing non-lawyers to co-own law firms. Attorneys are bound by ethical rules and guides, in addition to committing years of education and training to honing our skills and practice. Non-attorneys are not bound to the ethical rules attorneys are bound to adhere too. I can see an attorney and non-lawyer owner clash on issues related to a non-lawyer equity partner requesting the attorney to perform tasks that the attorney will not want to perform due to ethical considerations. Further, if a non-lawyer is an equity partner in the firm, it becomes easier for that non-lawyer to circumvent ethics by telling non-lawyer staff to perform certain tasks all while using firm letterhead and bypassing attorneys. In a way, they would have easy access to hijacking law firms into doing their bidding. This is troubling and scary, and quite frankly, an embarrassment to our profession should this materialize.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    27 May 2020 11:01 AM
    Lindsay Bautista
    565 W Chandler Blvd, Suite 215
    Chandler, AZ 85225
    #032984

    I oppose the Petition for the proposed rule changes. I reiterate the concerns of my colleagues that have previously expressed their opposition to the changes.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    27 May 2020 11:05 AM
    Juan Ramirez
    2950 N 91st Ave. Suite C-103
    Phoenix, AZ 85037
    (623)877-3600
    Juan@Elgphx.com

    I also strongly oppose the proposed petition. Particularly the amendment to abrogate ER 5.4. I disagree that this is a well-thought out proposal. I believe the good intentions are far out-weighed by the bad consequence that would result if this is approved.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    27 May 2020 11:20 AM
    Helen R. Davis
    Managing Partner
    The Cavanagh Law Firm, P.A.
    1850 N. Central Avenue
    Suite 2400
    Phoenix, AZ 85004
    602-322-4008
    hdavis@cavanaghlaw.com

    I would like to add my voice to strongly oppose the petition numbered R-20-0034. I do not wish to reiterate the extremely thoughtful and detailed comments that have been posted. Suffice it to say that I do not think this petition, especially regarding elimination of ER 5.4 to allow lawyers and non-lawyers to jointly own firms. I also very strongly oppose the provisions that will allow non-lawyer document preparers to speak for clients in family court. I agree that access to justice is important, but not at the expense of our profession and the protection of the public against shysters and incompetent persons.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    27 May 2020 11:25 AM
    Antonio Ceritelli
    2950 N, 91st Ave suite c-103
    Phoenix, AZ 58037
    6238773600
    antonio@elgphx.com

    I oppose the proposed changes due to the compelling arguments previously submitted by the opposition.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    27 May 2020 11:29 AM
    Cristina Perez Hesano
    State Bar No. 027023
    Perez Law Group, PLLC
    7508 N. 59th Avenue
    Glendale Arizona 85301
    602-730-7100
    cperez@perezlawgroup.com

    I write today in opposition of the proposed Petition. Should this Petition be passed despite the legal community's overwhelming opposition, a well-intended attempt to expand access to the legal system will create unintended and disastrous results. For one, there is no guarantee that eliminating ER 5.4 will result in the innovation of the delivery of legal services. However, what can be guaranteed is that a lawyer's ability to independently exercise his/her professional judgment on their client's behalf free from non-lawyers, will be stripped away should entrepreneurial relationships with non-lawyers be allowed. No evidence has been presented that allowing non-lawyers to own and control law firms and/or the creation of LLLPs will “expand access to justice” or “protect the public.” Additionally, ABS and LLLPs create a serious concern regarding sufficient training and monitoring of those employees placed within these entities, who would be the ones ultimately tasked with providing advice to individuals in the State of Arizona. Those in need of legal services will be left to gamble as to whether or not the person providing them the advice is knowledgeable and competent. Throughout the past decade, my office has seen and has consistently repaired the work of document preparers and "notaries." Historically, the Spanish speaking community has been harmed as a result of cheap and incompetent businesses promising "legal services." These businesses do not have the same ethical standards and regulations as attorneys and are often fueled by greed. I have repeatedly encountered members of this vulnerable community be the recipients of frauds committed against them and/or explainable and unjustified errors committed because they placed their trust in a person/business claiming to have the appropriate legal background. Giving legitimacy to entities such as ABS and LLLPs increases the potential to harm to the public and does not serve to "protect the public."

    This Petition if passed, will ultimately hinder the profession by limiting an attorney's ability to provide ethical and independent counsel for their clients. It will open the flood gates to any person who will not be held to the same ethical standards, who will not be required to have the same education and training, who can "affiliate" with a lawyer to produce revenue. The legal profession will be monetized and cheapened to a "one size fits all" standard.

    For these reasons, I ask that you not adopt this Petition.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    27 May 2020 11:37 AM
    Eric Hill
    2727 S Playa
    Mesa, AZ 85202
    erichill.law@gmail.com
    Bar No. 029890

    I would like to register my opposition to the petition in its entirety, and I join in the comments of those who have described the problems that it would create.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    27 May 2020 11:43 AM
    Monica A. Limón-Wynn
    1400 E. Southern Avenue, Suite 915
    Tempe, Arizona 85282-8008
    480.946.0680
    mlimon-wynn@mlwlawaz.com
    Arizona State Bar No. 019174

    I am business litigator and strongly oppose Petition R-20-0034 and its proposed amendments to eliminate ER 5.4 and allow non-lawyers to co-own and manage law firms and make decisions regarding client matters, and to create the Limited License Legal Practitioner (LLLP). If this amendment passes, there is no doubt in my mind that it will prove to be a disservice to the businesses and individuals in need of legal representation.

    I witnessed first-hand how the profit motives of a nonlawyer (i.e. a disbarred attorney) who owned a law firm (I was unaware of the disbarment) were diametrically opposed to a licensed attorney's perspective of prioritizing the client's interests in a litigation matter. Without the requirement to comply with all the same ethical rules as a licensed attorney (and the risks and consequences for failing to do so), clients' interests will suffer. If passed, this change will forever lower the ethical standards of the legal profession in Arizona. The numerous types of conflicts of interest alone should be reason enough to reject this amendment. I join the numerous attorneys urging its rejection. It will create FAR MORE problems than it purports to improve.

    As for the LLLP proposal it will not "fill the gap" for those in need of legal services -- it will widen it. The proposed changer is patronizing and minimizes the needs of middle- to low-income individuals of our community, or those for whom English is a second language. I have seen too many individuals and small business owners who thought they were being protected by a "professional" and now find themselves with a terrible contract. Respectfully, when is the last time that the drafters of this Petition represented a client who was the unfortunate recipient of services provided by a legal document preparer or other non-lawyer that left the client in a terrible predicament due to the lack of sufficient legal knowledge? Without experiencing the detrimental effect that can be suffered from someone who is providing legal advice when they lack the knowledge to do so, the last thing you should do is to promote and enable an environment that will create more victims. I have represented clients (including on a pro bono basis) who now find themselves a party to a lawsuit because they went the "inexpensive" route and paid a professional who was not a lawyer (governed by ethical rules) such as a "business broker," to draft an agreement for them to sell or buy a business. But, due to the "professional's" lack of legal knowledge and understanding as to how contracts are interpreted, how to protect a client's interests and what happens at trial, the client is in serious jeopardy. An inexperienced lawyer would at least be guided by the ethical rules to either refer the client to another lawyer with the right expertise or ensure that he or she enlisted the assistance of a skilled lawyer in serving the client's needs -- or risk being sued. The LLLP will create misplaced confidence for those clients in need of legal epresentation into thinking they are hiring a professional who can genuinely serve their legal needs. The answer is not to allow non-lawyer to provide legal advice and legal services, but to increase funding for Community Legal Services and to make funding available for innovative solutions such as the ASU Law Group.

    organizations, like the ASU Law Group.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    27 May 2020 11:49 AM
    Tonya K. MacBeth
    Burch & Cracchiolo, PC
    1850 North Central, 17th Floor
    Phoenix, AZ 85004
    602-234-9926
    SBN #024140

    Dear Committee,

    Please consider this opposition to the proposed rule change. It is unfortunate when noble goals are thwarted by the inevitable misdeeds by non-lawyers who are handed a golden opportunity for profiteering to the disadvantage of persons who are at a crisis-point in their lives. Few people are fortunate to secure the services of an attorney when their lives are not in disarray. This rule change opens up an entire buffet of overwhelmed and disadvantaged targets.

    Increasing access to legal services is a lofty goal. However, it can be done by other means. If the bar believes that everyone should have access to affordable legal services, require the members to provide those services. Don’t increase access by devaluing expertise of those who have been admitted to the bar and make them compete with big-pocketed-profiteers focused on market saturation, advertising, and decreased legal supervision.

    As a volunteer Judge Pro Tem, I believe in the obligation to serve the profession that has given so much to me. The bar could require its members to volunteer time or fees within their area of practice. The Rules committee could waive conflict rules for attorneys who are willing to give free court sponsored training sessions on family law rules and procedures for those who are self-represented. The Rules committee could include liability protections (like those provided for court-appointed mental health professionals) for those “appointed” to provide court-house training sessions for pro bono litigants. The volunteer Pro Tem list could be the first source of trainers and those ready to train-the-trainer. These services could be piloted in Family Court, then Probate, followed by civil court.

    Supervision and maintenance of professionalism is an important part of many attorneys’ law practices. I devote significant time to the supervision of my staff (paralegal and assistant) and the firm as a whole dedicates significant time to the supervision of the accounting, technology and marketing activities. All of these activities are carried out with the ethical responsibilities, rules, and an eye on the financial health of the organization. Through supervision, I have the ability to set the total cost for a dissolution action by determining the level of expertise required, the ability to use paralegal services under my supervision, and the time necessary to provide appropriate representation. However, with paraprofessionals working independently, the end result is lower expertise, not lower cost.

    Lower cost services are not the panacea for the access problem. A survey conducted with LLLT’s and LLLT candidates in Washington, found that “[a]assuming that potential clients would be willing to spend even half a paycheck on their LLLT services . . . none of Washington’s population living at or below 125% of the federal poverty line could afford an LLLT [and] only about 15 percent of those living at or below 200 % of the federal poverty line could afford one.” Becca Donaldson, Who Accesses Justice? The Rise of Limited License Legal Technicians, 4(5) HARVARD LAW SCHOOL CENTER ON THE LEGAL PROFESSION: THE PRACTICE, July 2018, https://thepractice.law.harvard.edu...s-justice/ [https://perma.cc/94T8-3456].

    “A nonlawyer might see the potential for financial gain by taking a certain course of action and, therefore, attempt to influence an attorney’s professional judgment. The nonlawyer wants to take the easy settlement, grab a legal fee and run.” Phil Pattee, Nonlawyers Are Useful, but You're the Attorney, Nev. Law., November 2008, at 37. By adding into this mix the ownership interests of persons who are not schooled in the responsibilities of practice, who are focused exclusively on profitability, you are injecting competing interests. These competing interests will not naturally coalesce around the non-income generating aspect of supervision or the obligation to maintain the integrity of the profession.

    The rule change is asking us to embrace our non-lawyer partners’ inherent profit motives and believe that the underserved will benefit. It is an illogical conclusion. Increasing the number of people who make money from a single client does not result in a lower cost for the client. The Second Circuit recognized this very principle in upholding New York State’s prohibition against “the involvement of unrelated third parties in the attorney-client relationship.” Jacoby & Meyers, LLP v. Presiding Justices of the First, Second, Third & Fourth Dep’ts, Appellate Div. of the Supreme Court of N.Y., 852 F.3d 178, 191 (2d Cir. 2017). In Jacoby & Meyers, the plaintiffs challenged New York’s ban on non-lawyer equity investment, arguing that allowing non-lawyer equity investment would increase access to justice by lowering the cost of legal services. Id. at 182.The court rejected that argument and found that prohibiting non-lawyer equity involvement in firms “serve[s] New York State’s well-established interest in regulating attorney conduct and in maintaining ethical behavior and independence among the members of the legal profession.” Id. Without such a prohibition, nothing will prevent the creation of incentives for attorneys to violate ethical norms, such as those requiring attorneys to put their clients’ interests foremost. Id. The compliance officer will be subject to the same pressure.

    The end result of the proposed rule changes is opening the practice of law to profiteers and extending to them the last vestiges of respectability attached to the legal community. The Bar works hard to protect the profession from our own bad actors. This proposal will only serve to open the door to those who could never be admitted to practice.

    Thank you for your dedication to the ideals of justice. We have other ways to meet the need beyond just diluting the services rendered. It is my sincerest hope that this rule proposal has opened the legal community to think outside the box to innovate in ways that demonstrate our dedication to the residents of Arizona and the profession.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    27 May 2020 12:08 PM
    Dominic Majors (#35020)
    Majors Law Group
    4667 S. Lakeshore Drive, Suite 5.
    Tempe, AZ 85282

    I write in strong opposition to the petition to eliminate ER 5.4. The elimination of ER 5.4 will create an irreparable harm to the legal profession through the introduction of non-lawyers who are not subject to the scrutiny of the bar. The elimination of ER 5.4 will be disastrous as non-lawyer investors will seek returns on their investments much like a shareholder to a corporation.

    I strongly oppose the elimination of ER 5.4.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    27 May 2020 12:19 PM
    Robert L. Greer
    Bar No. 005372
    1423 S. Higley Rd.
    Mesa, AZ 85206
    Telephone 480-539-9400

    I have followed with interest the comments by members of the bar addressing the proposed rule changes. I have not attempted a statistical analysis but the response of members of the bar is overwhelmingly opposed to the petition. The ratio is on the order of 50 to 1. The support of the members of the governing board of the State Bar for the comment on behalf of the bar is 13 in favor, eight opposed and two abstaining. There is a disconnect between the governing board in the membership of the bar – at least those who were concerned enough to comment. I think the differences are great enough to conclude that the governing board's support of the petition does not reflect the majority of the membership.
    Yolanda Fox
    Basic Member
    Posts:158 Basic Member

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    23 Jun 2020 09:44 AM
    Dave Byers
    Executive Director, Administrative Office of Courts
    Member, Task Force on the Delivery of Legal Services
    State Courts Building
    1501 West Washington
    Phoenix, Arizona 85007
    Telephone: (602) 452-3301
    Projects2@courts.az.gov

    Petitioner submits this Reply and Final Amended Petition pursuant to the staggered comment period and Rule 28, Arizona Rules of Supreme Court. This Final Amended Petition proposes to restyle and amend Rule 31; amend Rules 32, 41, 42 (ERs 1.0, 1.5-1.8, 1.17, 5.1, 5.3, 5.4, 5.7, 8.3), 43, 46-51, 54-58, 60, 63, 66-67, and 75-nd 76, Ariz. R. Sup. Ct.; and adopt new Rule 33.1, Ariz. R. Sup. Ct. The petition proposes substantial rule changes to implement recommendations resulting from the Task Force on the Delivery of Legal Services extensive review, fact-finding and analysis of the changing consumer legal market and the well-documented access-to-justice gap. This Final Amended Petition contains subsequent amendments resulting from extensive consideration by a subsequent workgroup on entity regulation established at the recommendation of the Task Force of comments to this forum and others.

    In coordination with this submission, amended proposals for ACJA 7-209 regulatory framework for ABSs) and 7-210 (containing the licensing, examination, Code of Conduct and other regulations for LLLPs) were posted in the Arizona Code of Judicial Administration Forum: https://www.azcourts.gov/AZ-Supreme...nistration

    For additional information contact Jennifer Albright, Sr. Policy Analyst, AOC at jalbright@courts.az.gov.
    Attachments


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