The Second Circuit just put to rest Jacoby & Meyers’ lawsuit challenging New York’s prohibition in Rule 5.4 on nonlawyer investment in law firms. It’s not surprising, as the challenge seemed fatally flawed in some respects. What’s more important is that the whole thing is really moot now. Nonlawyers practice law all day, every day, in a variety of ways, without the bother of sharing their revenue with lawyers. Why buy stock in a law firm if you can get the same (or better) return and not deal with lawyers, and their ethics and structural rules?
Jacoby is a New York enterprise that operates storefront law offices in Southern California, Alabama, Florida, Arizona and New York. They focus on consumer law and personal injury. Think of LegalZoom, only with real offices and live lawyers. They challenged the law in New York, New Jersey and Connecticut, claiming that the restriction on the sharing of legal fees with nonlawyers found in the Rules of Professional Conduct violated various constitutional rights, including free speech and association, as well as the Dormant Commerce Clause.
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