ABA Votes to Let Lawyers Run Businesses

The American Bar Assn. voted Wednesday to allow lawyers to run non-legal businesses outside of their law firms.

The 190-183 vote by the ABA’s policy-making body, the House of Delegates, reverses a decision it made just last year to restrict lawyers from operating ancillary businesses.

Last year’s rule said lawyers could offer ancillary services only within their law firms, and only to law firm clients.

That restriction went into effect after some ABA members argued that a lawyer who conducts businesses other than the practice of law could lose his “moral, ethical and professional compass.”

Under the new resolution, ABA members argued that there was no evidence that ancillary businesses are responsible for “bringing the legal profession into disrepute.”

The decision is part of the ABA’s ethics code, called the Model Rules of Professional Conduct. The rules are advisory and it is up to each state whether to adopt them.

In recommending that the ancillary business restriction be dropped, eight ABA committees said that no state bar association had adopted last year’s rule.

The committees said that even if no states ever adopted the restriction, its existence is a “sweeping condemnation of traditional activities affecting all practitioners engaged in any ancillary services.”

Lawyers across the country for generations have been providing trust, real estate, insurance and a variety of other services to both law firm clients and non-clients.

The committees said that lawyers in small towns and rural areas are particularly affected by restrictions because some depend on ancillary business for survival.