State Bar & Bar Associations,
Law Practice,
Ethics/Professional Responsibility
Nov. 15, 2021
ABA allows passive investment in alternative business structures
The American Bar Association recently undertook the question of whether a lawyer may passively invest in a law firm with nonlawyer owners, even when the lawyer practices in a jurisdiction that does not allow nonlawyers to own an interest in a law firm.
Laura C. Riparbelli
Senior Associate
Hoge Fenton Jones & Appel Inc.
Laura is a member of Hoge Fenton's Employment Law practice group and Business Litigation practice group.
The American Bar Association recently undertook the question of whether a lawyer may passively invest in a law firm with nonlawyer owners, even when the lawyer practices in a jurisdiction that does not allow nonlawyers to own an interest in a law firm. ABA Formal Opinion 499 confirms that lawyers may make such passive investments, but only after carefully abiding by various rules.
Historically, ABA Model Rule 5....
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