A proposal before the American Bar Association that would encourage states to consider "new approaches" in the practice of law is facing mounting opposition by some state bar leaders who say it will lead to outside investment of law firms and nonlawyers practicing law.

New York bar leaders, in particular, are seeking to lead a coalition of opposition. They've sent a letter to the ABA House of Delegates—the national bar group's main policy-making body—outlining their concerns before the delegates vote on the proposal Feb. 17 in Austin.

"We ask you to join us in opposing Resolution 115," said the letter, shared with ABA delegates Jan. 30. Signed by Stephen Younger, former president of the New York State Bar Association, and other state bar leadership, the letter warned that "Outside ownership of legal providers would present a minefield for the profession."

State bar associations from Ohio, New Jersey, Illinois, Pennsylvania and Delaware have all taken official positions opposing the resolution, according to Younger, a partner at Patterson Belknap Webb & Tyler.

In an interview, David Miranda, a past president of the New York State Bar Association who also signed the letter, said he believes delegates from at least a dozen states oppose the resolution. 

"There is broad-based opposition to this across the country," Miranda said, adding he believes the resolution's report "poses some very dangerous changes to the legal profession."

The proposed resolution, released in the last month, was prepared by the ABA's Center for Innovation, an entity partly funded by the bar group, and in partnership with four ABA standing committees. It calls for state regulators and bar associations to continue to explore regulatory innovations to improve the public's access to justice.

An associated report notes that regulators and bar associations in several states have proposed or adopted practice changes. For example, the report said, Utah has developed a so-called "regulatory sandbox" that will allow new kinds of legal services providers to operate on a pilot basis without concerns that they will be accused of unauthorized practice of law.

Still, the report stopped short of endorsing any one legal service provider model and said the resolution does not recommend amendments to existing ABA models rules, such as the Model Rules of Professional Conduct.  

"The point of the resolution is to encourage U.S. jurisdictions to consider regulatory innovations that foster new ways to deliver effective legal services and have the potential to improve the accessibility, affordability and quality of those services while preserving core protections," said the proposal's report, adding the resolution also calls for data assessment related to the "regulatory innovations" to ensure changes are data-driven and in the public interest.

While the resolution is broadly worded and encourages innovation more generally in the profession, Younger's letter sent to other delegates notes specific concerns. It was signed by other past presidents of the New York State Bar Association and current bar president Hank Greenberg.

"This proposal," the letter said, "would allow nonlawyers to provide legal services and would encourage the repeal of professional conduct regulations that prohibit lawyers from partnering and sharing fees with those who are not lawyers."

Miranda, in the interview, cited past proposals before the ABA to change rules regarding nonlawyer ownership of law firms, which have been soundly defeated. But Miranda said the version proposed this year is more extreme, pointing to language in the report about innovative models involving "technologists" or "substantial outside capital."

"We're not talking about [partnering with] accounting firms and architects. We're talking about internet companies and venture capitalists," he said. "You don't need to have fee-sharing when you're trying to provide access to justice to the poor. You don't need to have venture capitalists to fund it."

Even if the ABA House of Delegates votes to approve the resolution, it wouldn't automatically change rules in any state, and the proposal "is not something that will have any legs in New York," he acknowledges. 

A vote by the House of Delegates would allow the ABA to lobby, speak publicly on the issue and file amicus briefs. But Miranda said it would have further consequences, by "encouraging the gradual chipping away of the core values."

"If you are now faced with having to satisfy outside interests that are motivated by profit versus the client's interest, that changes things—that changes the profession," Miranda said. "The fact that the ABA through this report is encouraging something that would have a tremendous impact on the core values of the profession is very troubling."

Still, the report notes that traditional efforts to address the access to justice crisis—such as increased funding for civil legal aid and more pro bono work—"have not come close to fixing the problems that exist" and "the problems are becoming more severe."

Daniel Rodriguez, who is chair of the ABA Center for Innovation and whose name is on the report, declined to comment. A representative at the ABA was not available to comment.

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