Washington State is taking significant steps toward adopting alternative business structures (ABSs), a move that could modernize the legal profession in the U.S.
This initiative marks a departure from the traditional model of American law firms, as ABSs would allow non-lawyers to own and invest in law firms, promoting a more integrated approach to legal services.
ABSs have already revolutionized legal markets in countries like the UK and Australia by improving client service and operational efficiency. In contrast, the U.S. legal system has traditionally limited law practice to licensed attorneys who are state bar members.
Washington’s consideration of ABSs, following similar actions in Arizona and Utah, indicates a shift towards more flexibility and innovation in the U.S. legal industry.
The state has tasked its internal practice of law board, along with the Washington State Bar Association (WSBA), with drafting a proposal for a new pilot program.
This proposal, expected to be submitted next month, represents a major step toward adopting entity-based regulation, a departure from the traditional focus on individual lawyer regulation.
The pilot program will be data-driven, helping the court decide whether to make the reforms permanent. After two years, the program will undergo evaluation using scientific methods and data-driven techniques to assess its risks and benefits.
Participants will be required to follow ethical guidelines and regularly report data on their service delivery to the public. The pilot also addresses current restrictions on law firm ownership, which, though important for public protection, are viewed as obstacles to innovation.
