The American Bar Association has rejected any proposal to change its ban on non-lawyer ownership of firms. The ABA Commission on Ethics 20/20 decided last week to uphold the prohibition after a three-year of consultation with the profession.

US authorities have been under pressure from some firms to relax the rules and follow the lead of England, Wales and Australia in allowing alternative business structures. In December, the commission opened a discussion paper describing a limited form of court-regulated, non-lawyer ownership of firms.

It would have allowed non-lawyers, who were employed by a law firm and assisted the firm’s lawyers in the provision of legal services, to have a minority financial interest in the firm and share in its profits.

Commission co-chairs Jamie S. Gorelick and Michael Traynor this week confirmed the ABA will not propose the changes on a permanent basis. ‘The commission considered the pros and cons, including thoughtful comments that the changes recommended in the discussion draft were both too modest and too expansive, and concluded that the case had not been made for proceeding even with a form of non-lawyer ownership that is more limited than the DC [District of Columbia] model,’ Gorelick and Traynor said.

Although it will not propose any changes to ABA policy on non-lawyer ownership of firms, the commission will continue to consider how to provide practical guidance about law problems that are arising because some jurisdictions, including the District of Columbia and a growing number of foreign jurisdictions, permit non-lawyer ownership of law firms.

‘These are current problems that need pragmatic attention,’ Gorelick and Traynor said.

The commission previously released draft proposals on these issues, and will decide at its October meeting whether to submit formal proposals to the ABA House of Delegates for consideration in February next year.