Marc Lieberman: Arizona May Have Nudged US Law Firms Toward Future IPOsNews | January 20, 2021
Kutak Rock partner Marc Lieberman recently authored an article, “Arizona May Have Nudged US Law Firms Toward Future IPOs,” for Law360. Effective Jan. 1, Arizona became the first state in the U.S. to permanently eliminate the commonly adopted ethical rule prohibiting nonlawyers from having economic interests in law firms. The Arizona Supreme Court categorized businesses with combined lawyer and lay ownership as alternative business structures which will need to be licensed by the court.
Mr. Lieberman’s article addresses one aspect of the alternative business structures that has received scant attention: the likelihood that once the fee-sharing prohibition is eventually eliminated in all U.S. states, including New York where most domestic stock exchanges are situated, prominent law firms may soon thereafter become listed on national exchanges and their shares publicly traded.
Mr. Lieberman examines the implications of this on the practice of law that need to be considered, including:
- The current situation in the United States where no law firm has its shares listed for trade on any securities exchange;
- The international counterparts of American law firms that are already listed for sale on public exchanges;
- The drastic changes to a law firm’s governance and compensation models arising from their restructuring as an alternative business structure; and
- The implications of the Big Four accounting firms, who already practice law in many foreign jurisdictions, entering the domestic legal market.