Pera Interviewed by Financial Times on Alternative Business Structures

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Adams & Reese Partner Lucian Pera, one of the nation’s leading legal ethics practitioners, was interviewed by the Financial Times on “The Rule Change That Could Blow Open U.S. Law.”

The article discusses Alternative Business Structures (ABS), a legal service entity (typically a law firm) with an ownership, management, or legal fee-sharing arrangement including both lawyers and individuals who are not licensed to practice law. In January 2021, ABSs were authorized by the Arizona Supreme Court.

In the first four years of the program, over 125 ABS’s have been licensed, including KPMG, one of the Big Four accounting and consulting firms in the U.S. When KPMG was granted an ABS license in February, it sent a big news splash through the legal services industry, with headlines even extending globally. Based in London, the Financial Times is a British daily newspaper that focuses on business and economic current affairs.

“[KPMG’s law application] has clearly affected the imaginations of innovators and investors,” said Pera to the Financial Times. “It’s made a lot of people broaden their horizons.”

Recently, Pera published “The Playbook: How to Extend the Reach of an Arizona ABS Law Firm to the Entire United States,” in which he provides a practical survey of tools and models now used by innovators to deliver legal services and extend the reach of ABSs.

Lawyers are governed by a patchwork of state rules, and Arizona is one of only three jurisdictions, along with DC and Utah, to allow some level of nonlawyer ownership of law firms. The other 48 jurisdictions adhere to ABA Model Rule 5.4, which prohibits partnerships or fee-sharing with nonlawyers. Under the view adopted by most jurisdictions, an Arizona ABS cannot establish branch offices or operate seamlessly in other U.S. jurisdictions, as traditional, lawyer-owned law firms may.

Despite this restriction, Pera says at least four techniques allow ABSs to expand their work beyond Arizona, including a fifth technique to allow nonlawyer support of a law firm without implicating ABSs at all. 

At Adams & Reese, Pera is a Partner in the national law firm’s Memphis office. For more than 30 years and licensed in Tennessee and Arizona, Pera has practiced in commercial litigation, media law, legal ethics, and lawyer regulation – advising lawyers, law firms, and businesses on legal ethics, compliance, risk management, and innovative legal service models. Within that practice, Pera counsels clients on whether an ABS fits their business model to deliver legal services, and the geographic reach of an ABS under current law.