I wrote yesterday in regards to the Puerto Rico Supreme Courtroom’s adoption of the responsibility of know-how competence, completed as a part of its promulgation of recent guidelines {of professional} conduct to switch a code of ethics that had ruled legal professionals’ skilled conduct in Puerto Rico since 1970.
Whereas Puerto Rico modeled its new Guidelines of Skilled Conduct on the American Bar Affiliation’s Mannequin Guidelines, it diverged from the ABA in two vital respects.
One, as I defined in yesterday’s put up, was so as to add a separate rule dedicated to the responsibility of know-how competence, somewhat than handle the responsibility by way of a remark to the final rule on competence, because the ABA does.
The opposite — and probably extra vital — 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 eradicated the ban on non-lawyer possession 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 common prohibition in opposition to 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 might follow in a legislation workplace the place an possession curiosity is held by a non-lawyer provided that:
The legislation workplace gives for the collective achievement of the accountability to supply free authorized providers to indigent individuals;
Each non-lawyer with an possession curiosity should be sure that the workplace is operated solely by individuals admitted to the authorized occupation in Puerto Rico. The authorized practitioner should characterize the non-lawyer proprietor in exercising all voting rights and all different issues associated to the legislation workplace. They need to additionally guarantee compliance with the foundations {of professional} accountability and notify the Supreme Courtroom as soon as the association begins. By January 15 of every 12 months, they need to file with the Clerk of the Supreme Courtroom 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 earnings acquired by that individual within the earlier calendar 12 months;
Neither the non-lawyer proprietor nor any designated agent shall have interaction within the unauthorized follow of legislation. Moreover, the one worth supplied by the non-lawyer proprietor in change for his or her possession curiosity should 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 intervene with the unbiased skilled judgment of the authorized practitioner or the attorney-client relationship;
Data 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 might purchase not more than 49% of the shares of the legislation workplace.
Not Supported By Guidelines Committee
Though the general improvement of the brand new conduct guidelines was achieved by way of the work of a particular, court-appointed committee, that committee had not really useful this variation to Rule 5.4.
The Supreme Courtroom didn’t present a rationale or rationalization of its determination to vary the rule on non-lawyer possession. Nevertheless, it did say that it’s going to 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 really useful 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, Affiliate 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 probably dangerous penalties it could carry.”
(Right here once more, translations are through ChatGPT.)
“[A]llowing this supply of funding in Puerto Rico legislation corporations might characterize 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 traders in legislation corporations would usually be pushed by purely financial pursuits, “which doesn’t assure an enchancment within the availability or high quality of authorized providers for the folks of Puerto Rico.”
He additionally raised the priority that the courtroom lacks disciplinary authority over traders who will not be attorneys. “Because of this, such traders might affect authorized selections 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.
“Up to now, we’ve not seen these sectors associate with legislation corporations to litigate on behalf of the setting or weak populations,” he wrote.
“We should not permit the precept of entry to justice for use as a pretext to perpetuate inequality or to excessively commercialize the follow of legislation.”
(Right here is the total, translated textual content of the portion of the dissent that addresses Rule 5.4.)
