I wrote yesterday concerning the Puerto Rico Supreme Court docket’s adoption of the obligation of expertise competence, executed as a part of its promulgation of latest guidelines {of professional} conduct to exchange a code of ethics that had ruled attorneys’ skilled conduct in Puerto Rico since 1970.
Whereas Puerto Rico modeled its new Rules of Professional Conduct on the American Bar Association’s Model Rules, it diverged from the ABA in two important respects.
One, as I defined in yesterday’s publish, was so as to add a separate rule dedicated to the obligation of expertise competence, somewhat than tackle the obligation by a remark to the final rule on competence, because the ABA does.
The opposite — and doubtlessly extra important — divergence was to revise Rule 5.4 to permit non-lawyers to have possession pursuits in legislation corporations.
Till now, solely Arizona and the District of Columbia have allowed non-lawyer possession of legislation corporations. D.C. has allowed this since 1991, and Arizona eliminated the ban on non-lawyer ownership in 2020.
Utah additionally permits non-lawyer possession, however solely of entities permitted inside its regulatory “sandbox” program.
Puerto Rico’s Rule 5.4
Puerto Rico’s new conduct guidelines retain Rule 5.4’s normal prohibition towards a lawyer sharing charges with a non-lawyer. However with respect to possession, it provides a brand new part (b) that reads as follows (translation through ChatGPT):
(b) A authorized practitioner could observe in a legislation workplace the place an possession curiosity is held by a non-lawyer provided that:
The legislation workplace gives for the collective success of the accountability to supply free authorized providers to indigent individuals;
Each non-lawyer with an possession curiosity should be certain that the workplace is operated solely by individuals admitted to the authorized occupation in Puerto Rico. The authorized practitioner should symbolize the non-lawyer proprietor in exercising all voting rights and all different issues associated to the legislation workplace. They have to additionally guarantee compliance with the foundations {of professional} accountability and notify the Supreme Court docket as soon as the association begins. By January 15 of every yr, they need to file with the Clerk of the Supreme Court docket of Puerto Rico an affidavit stating the variety of attorneys within the agency, the dates and quantities of all investments made by the non-lawyer proprietor, and the income obtained by that individual within the earlier calendar yr;
Neither the non-lawyer proprietor nor any designated agent shall have interaction within the unauthorized observe of legislation. Moreover, the one worth offered by the non-lawyer proprietor in alternate for his or her possession curiosity have to be cash, and the proprietor or their brokers shall not present any providers to the legislation workplace, together with however not restricted to advertising and marketing providers;
The non-lawyer proprietor shall not intrude with the impartial skilled judgment of the authorized practitioner or the attorney-client relationship;
Info referring to the illustration of a shopper shall be protected as required by Rule 1.6;
The association described in subsection (2) shall not contravene Rule 1.5;
The authorized practitioner informs the shopper that an possession curiosity within the legislation workplace is held by a non-lawyer; and
Non-lawyer homeowners could purchase not more than 49% of the shares of the legislation workplace.
Not Supported By Guidelines Committee
Though the general growth of the brand new conduct guidelines was completed by the work of a particular, court-appointed committee, that committee had not advisable this variation to Rule 5.4.
The Supreme Court docket didn’t present a rationale or rationalization of its choice to vary the rule on non-lawyer possession. Nevertheless, it did say that it’ll conduct an analysis of the brand new rule’s effectiveness three years after it takes impact.
The courtroom assigned the duty of conducting that evaluation to the identical committee that drafted the advisable guidelines, now renamed because the Committee on Guidelines of Skilled Conduct.
One Justice Dissented
Whereas the courtroom didn’t elaborate on its causes for adopting the brand new Rule 5.4, one member of the courtroom, Associate Justice Luis F. Estrella Martínez, wrote an in depth dissent discussing varied parts of the brand new conduct guidelines, together with Rule 5.4.
Justice Estrella Martínez wrote that he didn’t agree with this variation “because of the doubtlessly dangerous penalties it could deliver.”
(Right here once more, translations are through ChatGPT.)
“[A]llowing this supply of funding in Puerto Rico legislation corporations may symbolize a big danger to the autonomy and independence of the skilled judgment of the attorneys inside them,” he wrote.
Justice Estrella Martínez expressed concern that buyers in legislation corporations would sometimes be pushed by purely financial pursuits, “which doesn’t assure an enchancment within the availability or high quality of authorized providers for the individuals of Puerto Rico.”
He additionally raised the priority that the courtroom lacks disciplinary authority over buyers who aren’t attorneys. “Consequently, such buyers may affect authorized choices with out being topic to the identical moral {and professional} obligations as attorneys,” he wrote.
Whereas acknowledging the fashions adopted in Arizona, D.C., and Utah, he thought Puerto Rico ought to have waited to look at their experiences earlier than adopting this variation.
“To this point, we now have not seen these sectors companion with legislation corporations to litigate on behalf of the setting or weak populations,” he wrote.
“We should not enable the precept of entry to justice for use as a pretext to perpetuate inequality or to excessively commercialize the observe of legislation.”
(Here is the full, translated text of the portion of the dissent that addresses Rule 5.4.)
