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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
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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.
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