For the first time in the history of the legal profession, the Arizona Supreme Court has approved nonlawyer ownership of a law firm.
Trajan Estate is one of the first law firms with a nonlawyer owner to be approved by the Arizona Supreme Court. Trajan Estate works closely with Trajan Wealth to serve clients' investment and estate planning needs under one roof.
The state Supreme Court in August 2020 approved eliminating an ethics rule that prohibits non–lawyers from fee sharing and from having economic interests in law firms. The rule change took effect Jan. 1.
Payne Huebsch and Trajan Estate, a legal service provider focused on estate planning, were the first to be approved, the Associated Press reported.
While other states, such as Utah and California, have toyed with allowing some alternative business structures in some form, Arizona is the first to get rid of the rule entirely.
“Now I can wear them all together and say, ‘Yes, we can represent you on a legal matter’ without any significant formalities, other than increasing the scope of the services we provide to them,” Mike Payne said.
As both a certified public accountant and attorney, Payne runs two firms — Payne Huebsch for accounting and Payne Law as a solo attorney. This new structure allows Payne and the other attorney on staff at the accounting firm to also offer legal services.
Jeff Junior, the owner of Trajan Wealth, which provides financial advisory services under a fiduciary advisor model, stated, "We have been referring clients to estate attorneys for years. It's great to now have the ability to continue such an important aspect of clients' lives. As the first company ever to be approved for this structure, I am confident in saying this will prove to be very beneficial to anyone preparing for their financial future."
Vice Chief Justice Ann Scott Timmer chaired the task force that looked at the court’s delivery of legal services, which also led to a rule change creating legal paraprofessionals – non–lawyers who are licensed to provide some legal services.
The group that looked at the alternative business structures for legal services shared a sentiment that lawyers have an ethical responsibility to make sure legal services are available to the public and to change the rules if they stood in the way of that, according to the task force’s report.
“It’s exciting to launch the first ABS entities, and I am certain that such arrangements will serve both the public and legal community in the delivery of quality legal services,” Timmer said in a prepared statement.
Court of Appeals, Division One Chief Judge Peter Swann sat on the task force and strongly disagreed with eliminating the rule, writing that a better approach to reform would be tackling the systemic issues that make the courts inaccessible and expensive, not adding non–lawyers to the mix and getting rid of an ethics rule.
“Such a proposal would make Arizona unique in the nation, and a leader in the race to the bottom of legal ethics,” Swann wrote.
Swann wrote that: “The relationship between attorney and client is the most sacred of fiduciary relationships,” one not shared by investors, whose interests might conflict with the client.
Despite some changes to the ABS structure since the report came out, Swann still opposes the overall idea.
“I am heartened that the Supreme Court did create an entity regulation structure that definitely improves on the original proposal, but the reservations I have about the system globally remain in place,” Swann said.