Arizona approves five more entities for new legal business structure

Arizona approves five more entities for new legal business structure

  • State high court approved regulatory changes one year ago
  • LegalZoom has applied for a license

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(Reuters) – The Arizona Supreme Court has licensed a new batch of entities to operate as alternative business structures, after the state loosened rules last year around law firm ownership.

The court this week approved applications submitted by KWP Estate Planning LLC, eLegacy Law PLLC, Legal Help Partners LLC, Radix Professional Services LLC and Singular Law Group PLLC, according to administrative orders posted on the court’s website on Wednesday.

The Arizona high court in August 2020 became the first state in the U.S. to scrap a rule that barred non-lawyer ownership of law firms, allowing lawyers and non-lawyers to co-own businesses that provide legal services through an alternative business structure (ABS) arrangement. There has long been resistance to changing rules that bar non-lawyers from having an economic interest in law firms, much of it based on concerns over the erosion of professional ethics.

The change in Arizona came as other states also consider regulatory reforms, noting goals of increasing access to justice and affordable legal services, and igniting legal innovation. In Utah, businesses can apply to participate in its legal “regulatory sandbox” program, which has let in nearly 30 entities since last year.

Before this week, the Arizona court had approved three other entities under the program, including Trajan Estates LLC and Payne Huebsch PLC in March, and MLR Professional Tax Services LLC in April.

Among pending applications in Arizona is LegalZoom, according to its general counsel Nicole Miller.

KWP Estate Planning will offer estate planning services to clients of wealth management firm Keystone Wealth Partners, according to a meeting agenda from earlier this month of the court’s ABS committee posted on its website, in which the committee staff recommended the court approve the five entities. The firm already provides wealth management and tax planning and preparation, so pulling the “estate planning in-house was the third leg of the stool when it comes to a well-rounded financial plan,” John Hagensen, its owner and founder, said in an email statement on Friday.

With the new licensure, Radix Professional Services will continue to offer legal services that are currently provided through a related law firm, Radix Law, and will have a two-thirds interest meant to “allow passive investment” in the firm, the agenda said. Legal Help Partners will operate as a personal injury law and mass tort law firm, owned by a lawyer and two marketing professionals, and eLegacy Law will provide online estate planning services. Singular will have subscription-based bilingual legal services to small businesses and consumers, the agenda said.

Read More:

New legal services rules make waves in Arizona and Utah as other states weigh reforms

Arizona clears way for non-attorney law firm co-ownership in bid to boost access

Utah legal innovation ‘sandbox’ expands to add AI contracts venture LawGeex, others

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