In
2020,
the
Arizona
Supreme
Court
established
its
Alternative
Business
Structure
(ABS)
program
which
allows
nonlawyers
to
have
an
economic
interest
or
decision
making
authority
in
a
law
firm.
According
to
the
2019
Task
Force
on
the
Delivery
of
Legal
Services
report
which
recommended
the
creation
of
the
ABS
program,
there
is
a
decline
in
the
representation
of
individuals
in
the
“people
law”
sector.
The
report
claims
that
this
is
partially
attributable
due
to
the
existing
ethics
rules.
Around
that
time,
courts
in
some
states,
including
California
and
Utah,
set
up
task
forces
to
study
amending
their
professional
ethics
rules
to
address
the
“access
to
justice”
problem.
Specifically
the
lack
of
legal
services
for
low-income
individuals
and
rural
communities.
In
addition
to
establishing
ABS
ownership
models,
these
committees
considered
establishing
nonlawyer
practitioners
who
would
practice
exclusively
in
underserved
practice
areas.
But
skeptics
argued
that
the
proposals
mentioned
above
would
either
not
change
anything
or
at
best
marginally
reduce
legal
fees
mainly
because
of
overhead.
Also,
there
was
concern
that
venture
capitalists
or
tech
startups
would
use
this
opportunity
to
set
up
business
structures
where
lawyers’
professional
judgment
would
be
compromised
despite
promises
otherwise.
A
few
days
ago,
the
Big
Four
accounting
firm
KPMG
applied
for
Arizona’s
ABS
license.
While
the
ABS
committee
initially
approved
their
request,
the
Arizona
Supreme
Court
has
put
the
application
on
hold
until
KPMG
responds
to
the
court’s
request
for
additional
information.
If
approved,
KPMG
is
likely
to
use
this
opportunity
to
augment
its
existing
practice
areas
such
as
tax,
audit,
business
consulting,
and
mergers
and
acquisitions.
It
is
unlikely
they
will
expand
into
new
practice
areas
such
as
immigration,
family
law,
criminal
defense,
debt
collection,
and
eviction
matters.
Looking
at
the
court’s
ABS
directory,
the
large
number
of
these
ABS
firms
since
the
program’s
inception
in
2020
may
suggest
that
the
program
is
successful.
However,
only
a
few
firms
listed
their
contact
information
and
website.
And
some
of
these
firms
based
on
their
name
alone
suggests
that
they
handle
personal
injury
or
product
liability
cases.
Of
the
few
ABS
firms
that
have
posted
their
websites,
most
are
injury
firms.
It
is
unclear
how
many
ABS
firms
practice
in
the
“People
Law”
areas
the
task
force
report
expressed
concern
about.
Why
are
a
large
number
of
injury
firms
operating
as
an
ABS?
Some
of
these
firms
probably
have
office
managers,
administrators,
or
other
nonlawyers
who
effectively
ran
the
firm.
Being
in
an
ABS
system
would
allow
them
to
have
greater
control
and
legally
get
a
share
of
the
firm
profits
as
opposed
to
performance
bonuses.
But
the
more
pertinent
question
is
whether
allowing
nonlawyers
to
own
law
firms
will
bridge
the
access
to
justice
gap.
The
task
force
report
doesn’t
provide
an
answer.
Instead,
it
simply
states
that
the
current
ethics
rules
are
terrible
and
doing
something
is
better
than
doing
nothing.
The
basic
problem
is
that
if
most
of
your
clients
are
good
people
who
don’t
have
money,
your
law
practice
will
not
last
long.
And
now,
student
loan
servicers
will
start
collecting
and
defaulters
will
risk
wrecking
their
credit
score,
or
worse,
face
a
lawsuit.
It’s
been
five
years
since
Arizona
started
its
ABS
program.
While
it
was
designed
to
improve
access
to
justice
for
low-income
people
with
legal
problems,
it
seems
to
have
increased
access
to
justice
for
car
accident
or
tort
victims.
And
if
KPMG
gets
its
approval,
the
other
three
of
the
Big
Four
and
other
large
accounting
firms
will
likely
follow
suit,
thus
ensuring
that
Fortune
500
companies
have
better
access
to
M&A
tax
advice.
Steven
Chung
is
a
tax
attorney
in
Los
Angeles,
California.
He
helps
people
with
basic
tax
planning
and
resolve
tax
disputes.
He
is
also
sympathetic
to
people
with
large
student
loans.
He
can
be
reached
via
email
at
[email protected].
Or
you
can
connect
with
him
on
Twitter
(@stevenchung)
and
connect
with
him
on LinkedIn.