Arizona’s New Alternative Business Structures Law

Now three months into its existence, Arizona’s new Alternative Business Structures law is alive and kicking. At its regular meeting on March 9, 2021, the Committee on Alternative Business Structures recommended approval to the Arizona Supreme Court of its first two ABS initial license applications. The Court approved them just eight days later, on March 17. The new law, which became effective January 1, 2021, thus continues to generate entrepreneurial and investment opportunities relating to the practice of law — and not just in Arizona.

In particular, the Arizona Supreme Court did away entirely with Arizona’s Ethics Rule 5.4, which barred (a) fee-sharing between lawyers and non-lawyers, (b) partnering between lawyers and non-lawyers to practice law, and (c) working in or with a law-practicing entity owned in whole or part by non-lawyers. Simultaneously, it enacted the new law, Arizona Code of Judicial Administration § 7-209, permitting and regulating “Alternative Business

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